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2016-01-26

The failures of the six parties on North Korea nuclear

Comments on Stephen Costello "US North Korea policy should acknowledge past success", 14-15 January 2016

The following are comments on the article and on some comments by others.

In hind sight, efforts of the five parties involved in the attempt to prevent and limit the North Korea’s nuclear programs achieved very little. China may need to bear a greater share of responsibility, given the reliance of North Korea on China in terms of trade and other support. However, blaming China for the current North Korea nuclear situation overstates the limited influence of China on North Korea. Further, China has probably faced with huge uncertainties in terms of how to best deal with North Korea and potential consequences of a failed state should North Korea collapse. Nevertheless, China should review its policy towards North Korea and its effects. Maybe a tough love approach is needed.

From the conventional geopolitical point of view, I would agree to the point that Chinese leaders do “have a vested interest in using the DPRK as a cushion between them and the South/USA.” Any independent minded person would say, why not?

Don’t the US have, at least from time to time, attempt to contain China? What the current US president said on at least couple of occasions, that he does not like for China to write the rules and the US’ exclusion of China in the TPP negotiations, re the TPP in the context of economics and trade?

Even in that context, China did not and does not like to see the development of the North Korea’s nuclear program that is not in China’s interests.

Any link for China’s policy to the North Korea’s nuclear program is misguided and wrong. It is to blame China but that is wrong and unlikely to be helpful.

China have probably been hoping that the North Korea leader may heed its hope not to go forward with its nuclear program, given its support to North Korea. But the later obviously has not been following China’s wish.

I would argue China’s policy amid uncertainties regarding North Korea has not achieved its objectives. It should have long ago reviewed its policy effectiveness and changed course. In real world, its never too late to adopt a better policy.

Corruption crackdown should be on corruptions

Comments on Kerry Brown "Xi widens corruption crackdown" 20/01/2016

From the description in this article, it seems the Lu case is a little disturbing: it appears to be more political, that is, different views, as opposed to corruptions. If this becomes a trend, then the anti corruption may stray into suppressing differences from the top views. As a result, it may run the risk of losing its popular support.

China's demographic challenges

Comments on Zhongwei Zhao "Tackling China’s demographic challenges", 21/01/2016

It is stated that: “Instead in the 1980s China’s Total Fertility Rates (TFRs) fluctuated between 2.2 and 2.9 children per woman. But by the early 1990s, the strong family planning program and profound socio-economic transformation led China’s fertility to fall below replacement levels for the first time. Since the mid-1990s, TFRs have generally remained below 1.6 children per woman.”

Those rates are far from the target of family planning policy, one couple one child, even taking into account children mortality rate. Are they correct?
In the last paragraph, it is remarked that: “Yet, whether this, and other development strategies, will be sufficient to cope with the great socio-demographic changes brought about by China’s rapid urbanisation, ageing population and persistently low fertility rate remains a debatable question.”
Surely, the persistent fertility rate will change after the change in the family planning policy to allow two children per couple, though it may take time to see real effects.

REply to comments by Rechard: I agree it will take long time, a generation’s perhaps, for the new born to become labour force. However, it is possible that people may have different incentives/motives in relation to supporting their old parents and raising children. That means people with another children may work harder or smarter if they can to raise the child. That, though tangentially, be positive to the economy, I would reckon.

How will the government provide more schools for them? That is part of the challenges China will face, though it is not insurmountable. China is transitioning to a more service dominated economy and the education sector will be part of that. Financially, China, like any or at least most countries, must prioritise government spending and education should be a priority due to its many positive effects and spill overs, not to mention its role as part of people’s basic “rights”.

How to tackle people living longer and population aging? In theory, it should not be too hard to do actually. When people live longer, their economic productive life will be longer accordingly. So government can introduce policies/incentives to encourage people who can still work to work longer.

One may say some people may not be able to continue their labour types of work. That may be true, but with adequate retrain, they Further, if old people have adequate superannuation, like the policy in Australia, most of them can live off their own superannuation, though it may take time, indeed very long time.

Having said that, what I mentioned is easy said than done. General policy prescriptions is not hard, but get them in place and implement them in the right way are much harder.

Initiatives of AIIB and One Belt One Road should be commended

Comments on Amitav Acharya "Building Asian security", 25/01/2016

It seems that the author may be premature in the view reflected in the follow paragraph: “Similarly, China professes a deep interest in enhancing regional economic interdependence. But its own initiatives, the Asian Infrastructure Investment Bank (AIIB) and One Belt One Road, challenge long-standing modalities of regional economic cooperation.”

As Andrew Sheng described in his post on 23 January 2016, the AIIB is an initiative after the refusal by the US congress to ratify the 2009 G20 agreement to widen the voting rights distribution of the IMF. It is a rational reaction to an irrational behaviour by the US congress.

China’s One Belt One Road initiative should be commended as opposed to be labelled as something abnormal.

The world is changing. As it happens in many countries, reforms are necessary to progress. In that contest, new world modality is not necessarily wrong.

Further, while the majority of the following statement seems correct, it is unclear or confusing in the part “stability in the balance of power”. What does it mean in a changing world? If the world is changing and the relative power changes with it, is it still “stability in the balance of power”?

No one can hold the world not to change.

Lack of leadership on democracy by world leader of democracy

Comments on Andrew Sheng "Navigating the rocky road to a multipolar order", 25/01/2016

The refusal to ratify the 2009 G20 agreement to widen the voting rights distribution of the IMF by the US Congress appeared to show hypocrisy on the part of the world leader of democracy. It showed that the US congress did not accept democracy when its influence is going to wane. It did not show leadership on its part. The fact that so many major EU countries joined the China initiative of Asian Infrastructure Investment Bank reflect the US congress is losing support from its traditional allies on its irrational behaviour on IMF voting rights reform.

2016-01-12

There are more reasons for Taiwan's economic failures

Comments on J Bruce Jacobs "Taiwan’s democracy grows stronger as KMT falters", 7/01/2016

In the second last paragraph, it is stated: “President Ma’s China plans have fallen apart. His Economic Cooperation Framework Agreement, signed with China in 2010, has not produced the forecast economic prosperity.”

What are the main reasons for this failure of producing the forecast economic prosperity? Do they have anything to do with the slowing Chinese economy and difficulties/challenges international economies have faced?

Realistically, would Taiwan be better off or worse off economically when it have a better relationship with China, given the size and its regional and international role of Chinese economy?

Dilemma for Taiwan's next president choice

Comments on Peter Drysdale "Taiwan’s political choice", 12/01/2016

From the following statement from this post, it seems to be indeed a real irony purely from the point of view of Taiwan’s economy: 

In fact, the profound political shift in Taiwan is more closely associated with the economy’s failing struggle to re-invent itself. With per capita income around US$22,000, Taiwan is above the middle income threshold, but it has been unable to emulate its neighbours like South Korea and Japan in Asia in climbing up the income scale. Its export-dependent manufacturing sector faces competition from South Korea from above and emerging economies, like China, from below. GDP grew a measly 1 per cent in 2014; wages are stagnating and unemployment, at 4 per cent, is considered high. The irony is that Taiwan’s tortured, ‘one-sided’ economic relationship with China — which Ma had been trying to correct — might well be a core element in Taiwan’s economic woes. While direct trade has opened up across the Strait, Taiwan has continued to restrict Chinese imports and investment, essential to enjoying the fruits of fuller integration into the regional and global economy. South Korea has imposed no similar burdens on its international competitiveness.

Is the restriction on Chinese imports and investment and its impact on its international competitiveness the key factor to Taiwan’s economic stagnation in the past up to now? If it is, then the expected new president will face a serious dilemma: accountable to an electorate that may like to see a more distant relationship with the mainland, and to develop strategies to kick start the economy where a distant relationship may work in an opposite way.
Yes, it is possible to diversify its economic relationship, but it will take time to achieve. More fundamentally, defying an inherent international comparative advantages under the current circumstances is likely for Taiwan to continue to pay a price.