Tag Archives: Hillary Clinton

Beijing’s Common Cause With Washington In Myanmar

Myanmar stands as a good example of the cooperation and competition that characterizes the relationship between Beijing and Washington. Much of the commentary on Hillary Clinton’s visit to Myanmar, the first by a U.S. Secretary of State in half a century, has concentrated on how Washington wants to detach Beijing’s hold on Naypyidaw. This is seen as part of a grander plan on the part of the Obama administration to counter China’s growing influence in the region. Yet, to this Bystander, it seems that not only can the U.S. do no more than loosen Beijing’s grip, from tight to firm, but also that is now, on balance, in Beijing’s interest that Myanmar emerges from its international isolation.

That isolation has left China as Myanmar’s largest trade and investment partner. Construction of the Myitsone dam may have been suspended but work on six other Chinese-built dams continues. The road, rail and energy pipeline connections across between Yunnan province and Myanmar’s Bay of Bengal coast are being developed by the day. Chinese companies have a first mover advantage that could be readily exploited if international sanctions on Myanmar are lifted and its population of 60 million is provided with an opportunity to catch up with the economic progress of the rest of Southeast Asia.

Neither U.S. nor Indian firms are in any position to leapfrog Chinese ones in Myanmar, any more than Washington or New Delhi will leap ahead of Beijing politically. The security risk to China’s southwestern reaches is marginal compared to the potential economic and political gains.

Beijing certainly does not want a full-fledged democracy that is in Washington’s pocket on its doorstep. Yet it would not be adverse to a more broad-based government in Naypyidaw that could bring to an end Myanmar’s minority ethnic conflicts. These insurgencies are primarily being fought along the length of the border with Yunnan. China’s commercial interests in extracting Myanmar’s natural resources and sending cheap manufactures in the opposite direction are far better served by peace than strife. As we have noted before, Beijing does not want another flood of refugees from the fighting.

Nor would China be too sorry to see North Korea lose a fast friend and export trans-shipment point in Burma. That would only make Pyongyang more reliant on Beijing, and reduce by one the potential ranks of nuclear armed neighbors.  Meanwhile, Beijing and Naypyidaw are strengthening their military ties. Min Aung Hlaing, the new commander of Myanmar’s armed forces, may have pointedly made his first foreign visit to Vietnam, but he was in Beijing earlier this week to sign a memorandum of understanding with Chen Bingde, his PLA counterpart, to deepen military cooperation. He also met President-Assumptive Xi Jinping. Closer military ties will help China’s naval reach into the strategically important waters of the Indian Ocean.

State media has stuck an uncommonly neutral tone in its coverage of Clinton’s visit to Myanmar, highlighting her promotion of economic reforms and the need for ethnic conflicts to be resolved. Beijing has more common cause with Washington on both those fronts than those looking for a grander geopolitical game imagine.

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America Demotes China As Its Banker

How do you get tough on your banker? As we know from Wikileaks, that was the rhetorical question U.S. Secretary of State Hillary Clinton posed to Australia Prime Minister Kevin Rudd in 2009. She may not realize it but she has just changed banker, from Beijing to New York.

New figures from the New York Federal Reserve Bank show that its holdings of U.S. Treasury securities now exceed those of China (via FT). Thank the Fed’s quantitative easing, under which it has been buying up Treasury debt under several programs that the New York Fed conducts, the New York Fed now holds $1.1 trillion of U.S. government paper. China holds $896 billion-worth and Japan $877 billion, according to the U.S. Treasury’s most recent data on foreign holdings. Foreigners hold $2.6 trillion of U.S. Treasuries in all.

Once the Fed’s quantitative easing program is complete in June, the New York Fed may be holding $1.6 trillion in U.S. government debt, close to Beijing and Tokyo’s combined total.

Footnote: If China isn’t buying U.S. debt, what is it buying? Gold, or at least ordinary Chinese are buying it by the ingotful, according to the FT:

China’s gold imports are estimated to have more than doubled from a year ago in the run-up to Chinese new year, putting the country on track to overtake India as the world’s largest consumer of the precious metal.

We noted late last year that China’s gold bugs were shining bright. They have clearly not lost their luster. The FT quotes the estimate of one banker that China has imported 200 tonnes of gold over the past three months.

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Clinton Keeps Things On Even Keel On First Visit As U.S. Sec. Of State

Pragmatism is the order of the day in U.S. Secretary of State Hillary Clinton’s visit to China so far, and in that she reflects her boss, President Barack Obama. ‘We know where we disagree and will avoid those areas’ is the approach being taken, at least in public. Beijing will be happy enough with the don’t-rock-the-boat approach on this first engagement with the new administration, especially given Clinton’s outspoken remarks about human rights in the past. We’ll need to read the fine print on the working issues — Gitmo Uighurs, Strategic Dialogue, the yuan, and U.S. ambassador to Beijing — after the visit is concluded to get a more nuanced take on the overall tenor of the relationship.

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What Was Really Behind The Yuan’s Rise

With Hillary Clinton now in Beijing and the value of the yuan against the dollar an inevitable agenda item in her discussions with her hosts, a newly published working paper from the National Bureau of Economic Research throws new light on the yuan’s rise against dollar since the peg with the dollar was loosened a couple of years back.

In short, the conclusion is that the yuan’s appreciation was primarily due to the appreciation of the euro against the dollar, reflecting the composition of the basket of currencies that replaced the peg rather than any upward trend in the yuan itself — and by implication any U.S. jawing.

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Sweden Grants Asylum To One Gitmo Uighur

Sweden has accepted as a refugee one of the 18 Uighurs being held by the U.S. at Guantanamo Bay. Authorities ruled that Adel Hakimjan was not a terrorist and granted him permanent residency. (More from Dagens Nyheter in Swedish.)

The 17 Uighurs still being held at Guantanamo have all been cleared for release, but the U.S. cannot find any country willing to take them. Beijing holds them to be terror suspects and wants them to be returned.

The decision on Hakimjan comes ahead of U.S. Secretary of State Hillary Clinton’s visit to China during which the fate of the Uighurs being held in Gitmo is expected to be one of the topics of discussion.

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