Fathoming China's Foreign Policy

What on earth is China doing?  While smiling and proclaiming it wants good relations with its neighbors, China has embarked on a foreign policy frolic that lays claim to the entire South China Sea, has intercepted Malaysian seismic study vessels in Malaysian waters claimed by China, aggressively challenged Japan over islands lying within its self-declared maritime borders,  instigates a nationalistic fervor resulting in smashed windows and destruction of Japanese car dealerships in China and deliberately provokes other countries – the Philippines being a prime example – with its legally absurd sovereignty claims (considering it is a signatory to the Law of the Sea Treaty). 

One can only assume that the People’s Liberation Army has acquired a tad too much influence and control over the government policies.  Backlash is in the air - and water.

Every country in the region, as far away as India, now wants the US to increase its presence. The  newly elected Japanese government, while not actively hostile, is discussing rearmament and vows to take a more forceful stance toward China (not good considering the history involved).  The only exceptions for China are Pakistan and North Korea, not exactly the best group of friends.

This could not possibly be the result desired by Beijing.  It is exactly a case of “not what I say, but what I do” and what China is doing is irritating everyone – from Japan to South East Asia to India.

China Syndrome

Image via Wikipedia

Japan has ended its refueling mission in the Indian Ocean which was part of its support for the Afghan war. On the other side of the coin, this will be interesting from a foreign policy perspective if it comes to pass.

The Chinese navy is slowly extending its permanent blue water reach into new zones. Although ostensibly a mission merely to support the continuing war in Afghanistan (and therefore in support of the US military), this step really goes far beyond the naval mission against piracy that China has heretofore engaged. It creates a permanent presence. How this will play out with India, its regional rival, and Pakistan, its regional ally, if it actually happens?

On the other hand, will the US really, really agree to having its warships refueled by the Chinese? Somehow, it seems to me that this might be a sea lane too far.

Japan & Russia to End Word War II

In a little reported event on Sunday, the Russian and new Japanese governments have agreed to sign a peace treaty ending the last vestige of World War II.

Japan agreed to the peace treaty with no strings attached - a significant departure from previous negotiations. The fact that the issue of the South Kuril islands will not be linked to the treaty may stir up some political trouble in Japan; but, it seems that Japan is pushing the issue to back burner in order to concentrate on its economic position with China and re-entering South East Asia. Russia may also want to resolve any remaining issues with Japan precisely because Japan would be a counter to China. Russia is not particularly formidable in its eastern regions and a settlement with Japan would allow Russia to concentrate its efforts in the west.

Japan, Ukraine and the IMF

The iron lady of Ukraine and current Prime Minister, Yulia Tymoshenko, has asked Japan for financial help to reconstruct pipelines, infrastructure and the like. Japan. With an economy that is tanking. Japan, unsurprisingly, directed her to the IMF to which it has recently contributed a cool $100 million(adjusted for deflation, I guess).

OK. Aside from how this request to Japan makes the current Ukrainian government look, sending them to the IMF is, well, almost a non-starter, considering in the board game "International Aid" if the player lands on "go to IMF, do not pass go" it is a recipe for social trouble. Not something Ukraine needs at the moment. Not that I have much against the IMF, it is just that they seem to be in some "Dr. Who" time warp with financial requirements which appear largely designed to foment social unrest and revolution.

The IMF recently demanded as a requirement for the next tranche of funding to Ukraine that it show a budget with a deficit of no more that 3%. In this economic climate that is not only impossible, but counterproductive. France, for example, is projecting a 5.6% deficit. Germany appears to be ok, but that is unlikely to last. Italy has exceeded the EU mandated 3% deficit. England, well...

Of course, none of the above are asking the IMF for assistance. The IMF standards, at this point, do not reflect reality, as the unlucky Romanians are about to find out. The next tranche to Ukraine will likely be disbursed based on smoke and mirrors - and the social cost will be high.

Having said that - what was the Prime Minister thinking in asking Japan?