A South China Morning Post article of 9 July, 2014 substantiates the progress made since the game-changing new canal was first reported in October 2013 here When completed as expected in five years, the Nicaragua Canal will be able to accommodate the world's largest container ships now able to dock only at the world's deepest container port - Lianyungang outside Shanghai.
The Ortega government granted an extraordinarily generous 50-year concession, renewable for another 50 years, to a Chinese company based in Hong Kong (controlled by 41-year-old billionaire investor Wang Jing, whose commerical empirs sprawls over mining, infrastructure and telecommunications). See a report on Brookings Online dated 9 July, 2014.
This is one of several trans-continental infrastructural links of epic proportions converging on China as a global trade and transportation hub.
The other is a monumental railway project linking the port of Shenzhen to Kunming in western China and onwards to Myanmar, Bangladesh, India, Pakistan and Iran, and then across Turkey to Rotterdam in the Netherlands. Known as the “third Eurasian land bridge”, the proposed high-speed-rail network will span 15,000 kilometres, a much shorter and less geopolitically vulnerable journey than that by sea via the Indian Ocean through the Strait of Malacca. A branch line would begin in Turkey, crossing Syria and Palestine, and end in Egypt, providing a rail link from China into Africa. This is described in my South China Morning Post Op-ed of 14 October 2013 on "The Inexorible Tilt" here
Also part of China's global infrastructual ambition is a recently-reported high-speed vision here - a 'China-Russia-Canada-America line' to run for 13,000km across Siberia and pass under the Bering Strait through 200km tunnel.
All these planned or upcoming global rail links would feed into China's domestic empire of high-speed rail criss-crossing China's new and expanding cities at the four corners of the nation.
The ambitious global high-speed blueprint is in support of the "China Dream" of global renaissance as a Great Power.
So next time you wonder why investment continues to account for such a high proportion of China's economy, this global capacity building may be part of the reason.
Referring to a newly released IEAMedium Term Gas Market Report, an article in Foreign Policy highlights the following takeways -
(a) China is embracing a "Golden Age of Gas" with a vengeance, likley to account for half the increase in global demand for the rest of the decade, both through home production and more importantly through imports;
(b) The United States is unlikley to become the global dominant supplier just yet, but poised to grab about 5% of global gas trade and to disproportionally influence global gas prices through significally-lower domestic gas price levels;
(c) Europe is likely to remain reliant on Russia gas and is not about to turn things around with a "European shale gas revolution" due to offsetting declining production from traditional sources, a weak economy and infrastructural bottlenecks.
A collection of key reserach materials on the "Golden Age of Gas" can be accessed here
Greetings! May I first wish you a joyful and rewarding summer.
As the world order keeps on shifting, there is much restlessness in the air. The dust is far from settled over Ukraine. The Pivot to Asia, supported by a resurgent, if revisionist, Japan, is at loggerheads with an assertive China. The waters of the East and South China Seas are becoming more turbulent with sharpening territorial disputes.
Amidst the uncertainty, how sustainable is the China story, given the country’s enormous domestic and external challenges? What is going on behind the massive anti-corruption drive? On the currency front, is the RMB going to become fully convertible sooner than expected? Geopolitically, is a New Cold War around the corner? What is China's plan with Russia? Would the G20 be able to offer any solutions? What are the likely global trends out to 2040?
For these and other searching questions of the day, the following materials may offer you some food for thought, perhaps to be enjoyed at the poolside during your summer break.
Reading China's Tea Leaves 2014(Keynote Presentation at an Institutional Investor event, the Asia TraderForum Annual Meetingat the Four Seasons Hotel, Hong Kong)
"The power struggle behind China’s corruption crackdown" - (A Reuters Reporthere )
$14.5 billion of suspected ill-gotten gains seized in China's biggest corruption investigation of the century(Live TV interview on Skype with Aljazeera English Channel here )
Ascent of the RMB - A Roadmap as at May 2014(A report by ASIFMA (Asia Securities Industry & Financial Markets Association) )
China's new environmental law more promising than expected (An analytical commentary )
Are inclusive institutions the inevitable winner? (An analytical commentary)
China's Urban Dreams and the Regional Reality (Economic Intelligence Unit reports Click here )
Six megatrends that drive China today, for better or worse (From a McKinsey panel discussion on The One Hour China Book. Click here)
Star War weapons: China and US in global space arms race? (TV panel discussion on Inside Story with Aljazeera English here )
A reassessment of China's ballistic and nuclear deterrence capabilities (An article in The National Interest, Washington D.C.)
A Rising China, India and the US - A Triangular Relationship in a Multipolar World (Feature article in The Global Analyst, India)
China and the US must avert conflict in the future by building trust now (Top-story Op-ed article in the South China Morning Post (SCMP) of 21 May)
Vietnam - Whys and wherefores over disputes with China (A CCTV Special Program (in Putongua with English subtitles))
What's behind Russia's massive energy deal with China? (SCMP article and live TV interview with RT) Click here
Implications of President Xi's visit to the EU (Live TV interview with RT)
"Ukraine: A Prize Neither Russia Nor the West Can Afford to Win" - Brookings (An analytical commentary)
A Second Cold War looms in the horizon (An analytical commentary)
New Silk Road: China, Russia strengthen trade ties amid Western sanctions (Live TV interview with RT)
Russia may lean on China's Union Pay system (Live interview with RT)
What next Ukraine? (A presentation to the EGN (Executive Global Network) Founding Chairmen's Group, Hong Kong)
The truth about the Diaoyu/Senkaku Islands (A China-centric documentary film)
G20's Vision 2020 - Can it Revive Global Growth? (Feature article published in The Global Analyst, India)
"China gasses up for a new Golden Age" (A medium-term outlook by the IEA on the Golden Age of Gas)
An Action Agenda for Sustainable Development - New MDGs needed (A report by the UN Leadership Council of the Sustainable Development Solutions Network (SDSN)
Global Strategic Trends - Out to 2040 (A report for the UK Ministry of Defense by the Development, Concepts and Doctrine Centre (DCDC))
How Hong Kong's political reform plan can be made more realistic(Top-story SCMP Op-ed article)
Mainland visitor's child urination incident in Hong Kong (Live TV interview on CCTV Beijing)
Cheer up and chill out
If too much serious reading gets you down, here is a repertoire of inspirational music videos which may provide you with an uplift in spirits
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Following my speaking engagement on 1-2 September on the Ascent of the RMB at Gothenburg University in Sweden, I will be staying in London through November. If you or your colleagues would like to touch base with me or involve me in any event or discussions in London, please give me a shout.
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Chairman and CEO, Andrew Leung International Consultants Limited (Founded in London) Brain Trust Member, The Evian Group (global think-tank), Lausanne, Switzerland Senior Analyst, Wikistrat, an online global strategic consultancy Gerson Lehrman Group (Global Experts) Council Member International Expert, Reuters Insight Community of Experts, Thompson Reuters China Futures Fellow, Berkshire Publishing Group, Massachusetts, USA Distinguished Contributor, Asymmetric Threats Contingency Alliance (ATCA) (global think-tank) Fellow of the Royal Society for the encouragement of Arts, Manufactures and Commerce (FRSA) Elected Member, Royal Society for Asian Affairs Visiting Professor, London Metropolitan University Business School Visiting Professor, Sun Yat-sen University Business School, China (2005-10) Senior Consultant, MEC International Global Commercial Agent, Changsha City, China Member, Board of Advisors of Denmark-based Executive Global Network (EGN), Hong Kong Member, Board of Advisors of The Global Analyst, India Member, Board of Multitude Foundation, a HK-registered charitable trust (The following until 19 May 2010, on permanent relocation back to Hong Kong) Governing Council Member, King’s College London, UK (2004-2010) Advisory Board Member, China Policy Institute, Nottingham University, UK (2005 -2010) Founding Chairman, China Group, Institute of Directors City Branch, London, UK (2006-2010) Vice Chairman, 48 Group Club, UK (2008-2010) Committee Member of RSA, London Region, UK (2006-2010)
Included in UK's Who's Who since 2002 Awarded the Silver Bauhinia Star (SBS) in the July 2005 Hong Kong Honours List
On its Progam "International Affairs in Depth", China Central Telelvision (CCTV) aired a Special Feature "Vietnam - Whys and Wherefores" on 30 May, 2014. It attempts to elucidate from China's perspective domestic and external factors leading to assertive confrontation against China's deployment of an oil rig near the Xisha/Paracel Islands, followed by spreading domestic riots against foreign-invested factories.
My interview appeared at two brief intervals in the latter half of the show. They can be viewed at aournd time-lapse counter reading 28:10 and 35:45 respectively.
The broadcast is in Putonghua (Mandarin) with English subtitles.
An article published on Brookings of 22 May, 2014 here argues that neither Russia nor the West could afford having UKraine exclusively. Russia is forking out some $10 billion subsidies a year for eastern Ukraine in buying its Soviet-era manufactures (railway cars). Much larger amounts would be needed to support the rest of the country if they were cut off from its western markets. Likewise, according to the article, the West may need to fork out some $274 billion a year to wean East Ukraine from economic dependence on Russia.
In a tabular form, various hypothetical outcomes are presented from one extreme - full Western integration of Ukraine, to the other - full Russian absorption. Considering the various costs involved, the article argues that the most likely outcome would be a Finlandized and federalized albeit sovereign Ukraine subject to varying degrees of Russian influence and devoid of any threat to Russia (i.e. any leaning towards NATO).
The Brookings article's prognosis apears credible. As it points out, the dice is more loaded in favour of Russia as it can resort to import substitution for Ukraine's defence export to Russia.
However, the article's arguments are based on the premise of exclusive integration on either side. This extreme hypothesis is not necessarily borne out by reality. For example, Germany remains extremely wary of sanctions against Russia as Germany accoutns for nearly a third of EU's exports to Russia where Germany is also a large investor. Click here Some 300,000 German jobs are at stake. So as Russia is already inextricably linked to Western Europe, the scenario of Ukraine totally isolated from the West does not appear likely. If so, the costs to Russia of absorbing Ukraine are probably over-estimated. Additionally, if push comes to shove, Russia may simply allow the living standards of West Ukraine to drop and equalize with those in the rest of Ukraine.
Nevertheless, with increasingly nuanced tactics of expressing recognition of Ukraine's latest election results while condoning Russia-friendly activists in East Ukraine, perhaps the "middle scenario" is exactly what Putin is now trying to achieve.
Notwithstanding the face-off between Russia and the West over Ukraine, the possibility of a Second Cold War emerging in Europe is often dismissed on grounds of Russia's perceived economic weakness, her vulnerability to sanctions, and declining support in the global commons. In short, the premiss is that unlike the last Cold War, Russia's hard power is now no match to America's economic and financial clout, supported by military supremacy. How valid is this thinking?
First,let's draw a comparison with China. The Middle Kingdom's military, notwithstanding recent rapid modernization and expansion, remains decades behind the United States. But is this sufficient to maintain the Age of Pax Americana? The answer is no. The reason is that with a more interconnected and globalized world, warfare takes many forms and is increasingly asymmetric and localized. China's A2/AD (anti-access, area denial) capabilities comes to mind, despite America's eleven ultra-modern aircraft-carrier battle groups and extensive global outposts. If American superiority is not stopping China's power projection, why should it stop an aggressive Russia on Putin's home turf? Moreover, if push comes to shove, Russia still possesses one of the world's most destructive arsenals with continental delivery abilities.
Second, following collapse of the former USSR, Russia is admittedly only a fraction of her former Cold War self. But she is in possession of a formidable weapon - an "empire of energy supply crisscrossing Europe. (See "Pipelines of Empire" on Forbes online by no less an eminent strategic thinker than Robert D Kaplan, an advisor to the Pentagon).Click here In anticipation of possible falling European demand for Russian energy, Putin is developing a much closer, though still guarded, relationship with China, the world's largest energy consumer for many decades to come. Russia became President Xi's first overseas port of call, where the two sides agreed to triple Russian oil exports to China to 45-50 million tonnes, possibly by 2018, making China sooner or later the largest consumer of Russian oil. This insurance policy is of no avail for the current Ukraine crisis. But likewise, short of an infrastructural miracle across Europe, it seems far-fetched to claim that American shale gas could replace Russian energy in Europe anytime soon.
Third,barring immediate security threats or a world-war, for which no world power has sufficient political appetite or financial firepower, nations treasure foremost the economy with all the jobs implied. For China, her global gravitas comes from the mere fact that 126 nations around the globe have China as the largest trading partner, compared with 76 in the case of the United States. Yes, Russia is no China. It doesn't trade as much. But she can hurt economies with her vast energy supplies to Europe, at least for now.
Fourth, Russia's influence in Central Asia is unmistakable. Witness the expanding regional reach of the Shanghai Cooperation Organization (SCO), of which Russia is a founding Member along with China. Current Members include Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, with Afghanistan, India, Iran, Mongolia, and Pakistan as Observer States; Belarus, Sri Lanka and Turkey as Dialogue States; and ASEAN, CIS states, and Turkmenistan as Guest Attendees. Moreover, the SCO has vastly widened its original scope to include trade, economic, diplomatic, cultural and military exchanges. In particular, there is a strong Islamic connection running through many of its Members at a time when Islamic influence in the world is on the ascendant. Turkey is anxious to become a full SCO member.. The strategic importance of Turkey, being a key member of NATO, goes without saying. This country connects Asia with Europe and is part of a "Larger West" conceived by Zbigniew Brzezinsky, a doyen of American foreign policy, as a key for America to maintain global balance (Strategic Vision, America and the Crisis of Global Power, Basic Books, New York, 2012)
Fifth,Russia may be weak with an aging and shrinking population. But as a vast country straddling two continents, she possesses immense wealth of natural resources, let alone territorial claims of reserves of resources in the Arctic Ocean.
Sixth,speaking of the latter, with the Canadian Northern Passage becoming more and more navigable with global warming, alternative trans-Atlantic and trans-Pacific shipping routes along the northern Russian coast are likely to become viable in the coming decades. These are likley to connect the rest of Europe through the Davos Strait and the Denmark Strait on both sides of Greenland. When this eventually happens, it would buttress Russia's strategic position at the expense of traditional shipping routes (and ports) in the Asia-Pacific. (How the World Will Change with Global Warming, Trausti Valsson, University of Iceland Press, 2006).
Seventh,ideology no longer dictates outcomes. China and Russia have embraced capitalism, or at least state capitalism. Meanwhile, global gravitas has shifted from the West to the East. The G20 now counts more than the G8. According to research by BBVA, a Spanish bank, the EAGLEs (Emerging and Growth Leading Economies, including Turkey) and NEST countries (upcoming-EAGLEs) are together expected to contribute 68% to world growth between 2012-2022. China and India are each expected to contribute a higher share than the U.S. The G7 economies together will add a mere 16%. Goldman Sachs estimates that by 2050, the six EAGLEs combined economic weight, what may be called the E6, would be over two and half times more than the economies of US, Japan, United Kingdom and Germany combined. (Annual Report 2013, Economic Outlook - Eagles, BBVA, Madrid, March 2013. Click here
Eighth,Putin regards the collapse of the former USSR only as a temporary set-back. He harbors a strong ambition to restore Russia to its formal eminence, if not preeminence, given the country's sheer size, resources and cultural heritage. Putin and many Russians remain unconvinced that Russia is so broke that the country can no longer stand up to the West or for that matter for its desired place in the world order of the 21st Century. It is evident that Putin is proving to be a far more visionary global strategist compared with many of his Western peers.
The ideological and power dynamics of the past Cold War will not be replicated. But Ukraine is a lynchpin of Putin's Russian re-aggrandizement. With the West's enforced isolation of Russia, a Second Cold War is beginning to loom in the horizon.
An insider, no-holds-barred, "realist" analysis of why Ukraine is such a crucial chess-board between the West and Russia was given by Andrei Fursov, Director of Russian Studies, Moscow University, and Member of the International Academy of Sciences on 1st April, 2014. While smacking of conspiracy theories and Russian nationalist revanchism, it nevertheless exposes the plausible depth of intrique behind some of the game-changing dyamics unfolding in the rapidly changing fluidity of Ukraine.
Putin's revanchist dream is also outlined in a research paper "Ukriane Wating for May 9th" by the European Centre for Information Policy and Security (ECIPS), London in May, 2014.
A China-centric documentary film produced by China film makers Chris D Nebe and JJ Osbun of the Monarex Hollywood Corporation here for the Mysterious China Series. The documentary premiered in Beverly Hills, LA on 11 March and in Beijing on 23 March 2014.
In their article "China Goes Ballistic" in The National Interest on 28 April, 2014, Andrew Erickson and Michael Chase shows how China has managed to achieve credible, survivable, versatile, and tactical ballistic and nuclear deterence from short through long range, which, albeit not matching the United States or Russia in quantity or sophistication, at least poses serious challenges to America's regional and global national interests.