http://www.atimes.com/atimes/China_Business/GJ06Cb01.html



DNA chips bring personalized medicine to China
By Matt Young

Overcrowded hospitals and underserved patients are still part of Chinese healthcare-as-usual, but some researchers and businesses are introducing some of the most cutting-edge Western medical technology in an effort to personalize medicine in China. Known technically as pharmacogenetics (sometimes called pharmacogenomics), their research doesn't involve better bedside manners, but rapidly analyzing Chinese patients' individual genetic makeup, which can affect their response to drugs.

"If you look at the genetics of the Chinese population and Caucasians, you see a lot of differences," says Dr Michael Shi, director of biomarker development at Novartis Pharmaceuticals



Corp. But until recently, even in medical school, those differences were oversimplified. "Oh, those Westerners, they have big bodies," said Dr Shi, summarizing one maxim of old-school personalized medicine, along with the notion that Chinese generally have less body mass. As a result, Westerners used to typically get a higher drug dosage than Chinese, he said. But personalized treatment today has more to do with genetics than crude kilograms, and industry insiders are starting to see China as both a vast laboratory and potential market for this advanced health care technology.

The Chinese pharmaceutical market grew 28% from 2003 to 2004, to US$6.2 billion, according to a report by Accenture Ltd, which provides consulting services for multinationals expanding into China. The Chinese drug market is expected to be the world's fifth-largest by 2010, with $24 billion in annual sales, according to another report by Burrill & Company, which provides strategic Pharmacogenetics: Using DNA chips for medical diagnostics

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Hundreds of different DNA samples, called probes, are placed on the wells of a DNA chip, fabricated with the same methods used in the computer industry. The probes are selected to give medically interesting information; for example, one might be a version of a gene which is known to confer higher risk for colon cancer.

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The probes on the chip are coated with a patient's DNA sample. When the patient's DNA matches a probe, the spot will shine when fluorescent light is beamed on it, due to prior treatment with a fluorescent dye. This creates a distinctive pattern of spots which depends on the patient and the patient's condition.

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The treated chip is scanned by a machine, which converts the spots to data that can be examined by a physician.

Images courtesy Hoffman-LaRoche, Ltd. Used by permission.
analysis to life science companies interested in expanding into China. "Big Pharma" may soon help contribute custom genetic medical care to that marketplace. "[Pharmacogenetics] is the future of medicine, there's no two ways about it," said Dr Klaus Lindpaintner, head of the Roche Center for Medical Genomics.

Chips ahoy!
Dr Lindpaintner cited Hoffman-LaRoche Ltd's new AmpliChip CYP450 test as a way to screen certain genes to determine whether a person would react favorably or unfavorably to a drug. The chip has already penetrated into East Asia, hitting the Singapore market, although Dr Lindpaintner wasn't sure if it is available yet in China. "Some of the genetic variants that are being diagnosed with [AmpliChip] are more of an issue with Asian populations than they are in Western populations," Dr Lindpaintner said.

In the meantime, other gene chips are being developed in private biotech firms in the PRC, such as Beijing-based CapitalBio Corporation and Shenzhen-based Chipscreen Biosciences Ltd. Gene chips and other products appear to be fueling substantial growth at CapitalBio, where during a visit this year, Novartis' Dr Shi laughed with CapitalBio CEO Jing Cheng at not having taken a job offer there earlier. "Oh, it was so impressive," said Dr Shi, recalling hundreds of employees working on cutting-edge technology in a handsome business environment. He also remembered having been told that a Nobel laureate was working with the company.

CapitalBio celebrated its fifth-year anniversary in September with about 400 employees. Sales will likely grow 200% to 300% annually during the next few years, said David Sun, senior vice president of business development and marketing for CapitalBio. "As more and more pharma companies in the US and Europe are adopting outsourcing, some of these projects will transfer to China, spurring tremendous growth in the next few years," Mr. Sun said. "In CapitalBio, we are actively building our capabilities in pharmacogenetics to meet this growing demand."

Santa Clara, California-based Affymetrix, a market leader in DNA chips, partnered with CapitalBio in April, allowing the Beijing company to offer its full line of GeneChip products. CapitalBio isn't just a hanger-on, though; the company has enough unique capabilities to be a viable player in the gene industry, Mr Sun said. "We are the only company that is capable of providing personalized 4-D information [about a patient], at gene, protein, cell and tissue level, with its own products and services," Mr. Sun said.

But Dr Shi was once senior director of applied genomics for now-defunct Genometrix Inc, a gene chip company that ran out of capital and folded in 2001. Dr Shi is too bubbly a personality to have a chip on his shoulder from the affair, but his experience has taught him that CapitalBio's success is not going to be easy.

Meanwhile, Chipscreen has developed chips that screen for gene mutations known to be associated with diabetes in Asians, although the chips are currently undergoing testing. "We hope we will have the chance to identify the relationship between those mutations and the response or even adverse effects [to various treatments] among the population," said Dr Xian-Ping Lu, Chipscreen founder and CEO. "Eventually the conclusion will help to design a way of so-called personalized medicine as treatment."

But gene chips are more of a consequence of Chipscreen's core business: using chemical genomics to accelerate the discovery of new medicines. As a result, experiments with the chips are progressing slowly. "We have to go over 100 patients [to draw significant conclusions], and so far we haven't reached that number yet," Dr Lu said. "A major hurdle for this is financial." Chipscreen, a four-year-old company, doesn't have any income to spare, as it doesn't plan to log a profit for the next year or two.

Dr Hong-Hao Zhou, director of the Pharmacogenetics Research Institute at Central South University in China, sees a bright future in his country for gene screens because they help get the right dose of the right drug to patients, and because they're cheap. He has developed gene chips called "Personalized Pharmacotherapy Chips" to tailor therapy for hypertensive patients, although he doesn't expect them to be available in the market until perhaps next year. He performs gene screens at his clinic at a cost of $100, which, although costlier than a blood or urine test, only needs to be performed once in a patient's lifetime. "It's not so expensive, and it's exceptional for the patients," Dr Zhou said.

From diagnostics to drugs
So far, there have been limited and hard-won victories in developing customized drugs. Nitromed Inc received clearance from the US Food and Drug Administration in June to market BiDil as a treatment for heart failure in African-American patients. But Dr Lindpaintner said "it's one in a million" drug discovery that is "not going to happen that quickly again." He added that Roche would be uncomfortable with marketing drugs for specific ethnicities.

"Skin color or self-confessed ethnicity is nothing but a cheap surrogate for some underlying genetic variant that is more common in African-Americans than in Caucasians," Dr Lindpaintner said. As a result, Roche would likely never market a drug as Chinese-only unless it were lifesaving, worked exclusively for that ethnic group, and an underlying genetic cause could not be found, he said. However, Roche does internationally market Herceptin, which is a drug that has been shown to be effective in women with metastatic breast cancer who test positive for a specific version of a gene called HER2.

"[Herceptin] has become a major blockbuster," Dr Lindpaintner said. "If you have a medicine that may be applicable only to a smaller part of population but is uniquely well applicable ˇ¦­ then you tend to actually penetrate that market segment very completely." Sales of Herceptin totaled 851 million swiss francs (US$656.2 million) in the first half of 2005, up 24% from the drug's revenues in the first half of 2004. The drug also is effective in Chinese women, although it was not developed specifically for them.

"Bridging" studies, in which drugs are initially developed for Western populations and then are shown to be effective for Asian populations in clinical trials, are already common. But Dr Shi said some drug studies performed for Asian populations have had surprising results. For example, Iressa, a drug marketed by AstraZeneca PLC for lung cancer, has been limited in the United States to patients who are currently benefiting or have benefited from the drug. The US FDA doesn't consider the drug to be substantially effective. "But that drug has a higher clinical benefit in the Asian population compared with the Western population," said Dr Shi.

It's not a reach then to imagine that drugs specifically developed for Asians may not be far away, although China's lack of patent protection is still a turn-off for drug manufacturers. One thing researchers are keeping in mind, though: Asians aren't a homogeneous group. There are 56 official ethnic groups in China alone, which could make for a lot of bridging studies.

Fertile genetic ground
Similar to how the Galapagos Islands assisted Charles Darwin's discoveries about evolution with its array of endemic species, rural China may be able to spur modern-day genetic research with its unique gene pool, which could lead to further development of the biomedical industry.

"Immigration is not that intensive, in some areas of China", said Dr Zicai Liang, who currently is moving to Beijing from Sweden to work on genomics research at a Beijing University lab. "That means people have been living there for generations and if you have many members in the same family that have the same disease, then one can have a better chance to precisely position the gene responsible for the disease." This is the method that was used to, for example, isolate the Huntington's disease gene to the end of human chromosome 4 in 1983, by analyzing a large, extended family in the Lake Maracaibo region of Venezuela. In China, the Chinese National Human Genome Center at Shanghai identified a gene responsible for atrial fibrillation (AF), the most common chronic arrhythmia in humans, with the technique.

"Through analysis of a large family with inherited AF, we now have the first molecular explanation," said Dr Zhu Chen, the center's director, in the European Molecular Biology Organization's EMBO Reports journal. "At the same time, we identified a gene coding for an ion channel as a potential drug target. In China, we have to take advantage of our huge population, particularly in the western part, where we still have many isolated populations, representing a precious genetic resource."

But even rural Chinese could be worth as much as eventual customers to drug companies as guinea pigs. "In situations where patients themselves or their [families have] to directly pay [for healthcare], that is a situation where they can benefit from that [genetic] information to make better choices," said Howard McLeod, director of the Pharmacogenetics for Every Nation Initiative (PGENI), which seeks to assist public health decision making related to genetics in 20 countries. China will be among the eventual 104 countries that the initiative, funded primarily by the National Institutes of Health, plans to assist.

Roche, for one, is not flirting with the idea of gene research in China. The company is actively collaborating with prominent Chinese scientists at genome centers, and has been doing so for at least five years to see whether gene variants are associated with the presence or absence of certain illnesses, Dr Lindpaintner said. Eventually, such findings could lead to better diagnostic capabilities or better medicines, he said.

Specifically, Roche supported the Chinese National Human Genome Center in its work on diabetes and schizophrenia, according to the Burrill & Company report. Roche also recently established its fifth global research and development center in Shanghai. Meanwhile, AstraZeneca participated in a joint study with Shanghai Jiaotong University to identify the genes linked to schizophrenia, the report said.

Aside from psychiatry, the areas of cancer and autoimmune disease are ripe for genetic discoveries, Dr McLeod said. Even traditional Chinese medicine has a role in pharmacogenetics. Dr Zhou recently discovered that Yin Zhi Huang, an herbal compound used to treat jaundice in Asia, does not allow the heartburn medication Prilosec to be metabolized properly for people with certain genetic makeups.

But groundbreaking research doesn't always attract industry support, as Dr Lindpaintner admits. "We need to have some sort of inkling as we start a project that a medicine will come [out] of this, not just some very fundamental bit of knowledge that eventually may help bring new medicines on the market," Dr Lindpaintner said.

Indeed, The Royal Society, a British independent academy dedicated to promoting excellence in science, reported in September that it would be another 15 to 20 years before the use of tailored genetic medicine is widespread. But Dr Shi doesn't entirely agree, saying that the practice of tailored medicine in oncology isn't nearly that far away. "It's today," he said, referring to the availability of the drug Herceptin and Novartis' Glivec, which is indicated for all stages of Philadelphia chromosome-positive chronic myeloid leukemia. Sales of Glivec were up 33% in the second quarter of 2005 to $537 million. "We are at the start" of pharmacogenetic developments, PGENI's Dr McLeod said, but "not the very beginning."

Matt Young is a Washington, DC-based freelancer and a staff writer for EyeWorld Magazine and EyeWorld Asia-Pacific Magazine.

Copyright © 2005 Matt Young. Used by permission.

(Copyright 2005 Asia Times Online Ltd. All rights reserved. Please contact us for information on sales, syndication and republishing .)

http://www.atimes.com/atimes/China_Business/GJ06Cb02.html

Ericsson to invest $1 billion in China

BEIJING - Swedish telecommunications giant Ericsson will invest US$1 billion in China over the next five years to further engage the world's largest mobile communications market.

The money will be used to improve Ericsson's manufacturing, research and development (R&D), and service in China, according to Ericsson President and CEO Carl Henic Svanberg. "We not only see China as an interesting market, but [as] a main hub for supply and a growing market when it comes to R&D," he told the Ericsson Strategy & Technology Summit recently.

The investment will allow Ericsson to win a third of the market for advanced equipment that allows faster downloads of movies,



music and games on handsets, according to Svanberg. "Users are demanding more mobile content, operators are looking for new revenue sources and media companies need new distribution channels. This is in line with our vision of an all-communicating world and we are confident that the mobile content industry has wonderful potential," said Svanberg.

The 53-year-old CEO said he expects China to start issuing licenses for such third-generation (3G) networks in the next six months, after correcting technical glitches. "What we can see is that the world would expect the networks to be up and running ahead of the Olympics and I think we are getting very close, and it's probably good timing now, if it comes out in half a year or so," he said. He added that China is likely to spend $10 billion to $12 billion on 3G networks within three years of the issue of licenses.

Svanberg also announced that in a strategic move in R&D cooperation, Ericsson has signed its first agreement with the Shanghai Research Centre for Wireless Communications (SHRCWC). Under the agreement, Ericsson will collaborate with SHRCWC in undertaking research projects on future telecommunications technology, such as Super 3G and 4G.

Ericsson already has 10 R&D centers in the country employing 1,100 engineers, said Mats Olsson, Ericsson's president for business in China. The company has built a center in Guangzhou for after-sales servicing of networks and has a facility in Qingdao focusing on fixed-line broadband networks. "We're in close co-operation with China Telecom and China Netcom in preparing for 3G," Olsson said. "We're also in development of service networks for China Telecom."

The company signed a cooperation deal with major Chinese telecommunications equipment provider ZTE in May on developing a 3G technology called time division synchronous code division multiple access (TD-SCDMA), a system supported by China. It is now widely agreed that TD-SCDMA is almost certain to be deployed in China, the world's largest mobile communications market, with over 300 million subscribers. The home-grown TD-SCDMA standard has been tested in several rounds of trials organized by the Ministry of Information Industry, and is believed to meet the requirements necessary for a commercial launch.

Ericsson, which on July 21 reported an 18% profit increase to 5.8 billion kronor ($749 million) in the second quarter of this year, said its Asia Pacific sales rose 8% in the period mainly on the back of growth in China and India. The company expects the global mobile-phone market to reach 2 billion users this year, adding almost 1 million a day, said Svanberg.

Ericsson is a Swedish telecommunications equipment manufacturer, founded in 1876 as a telegraph equipment repair shop by Lars Magnus Ericsson. In the early 20th century, Ericsson dominated the world market for manual telephone exchanges; the world's largest-ever manual exchange, serving 60,000 lines, was installed by Ericsson in Moscow in 1916. In the 1990s, Ericsson held a 35-40% market share of installed cellular telephone systems. Headquartered in Stockholm, Ericsson is considered to be part of the so-called Wireless Valley.

Like most of the telecommunications equipment industry, Ericsson suffered heavy losses after the telecommunications crash in the 2000-01 period and had to lay off tens of thousands of staff worldwide in an attempt to staunch the losses. The company became profitable again in 2004. Recently, the loss-making handsets division was divested into a joint venture with Sony, called Sony Ericsson. Ericsson now concentrates on its core systems: supplying infrastructure for all major wireless technologies and modernizing existing copper lines for broadband services.

(Asia Pulse/XIC)

Hu sets out blueprint for China's future
The Chinese President has consolidated his power heading into a
four-day party plenum Saturday. By Robert Marquand
http://www.csmonitor.com/2005/1006/p06s02-woap.html?s=hns

China Aims To Operate 'Super-Efficient' Nuclear Reactor In 2010
http://www.spacewar.com/news/nuclear-civil-05zzz.html

Beijing (AFP) Oct 05, 2005 - Chinese scientists aim to have a "super-efficient" nuclear reactor in 2010 that will relieve China's uranium supply problems, as part of a national plan to boost power generation, state media said Wednesday.

http://www.spacewar.com/news/superpowers-05o.html


U.S. Experts Fear Russia-China Axis

Chief of the general staff of the People's Liberation Army Liang Guanglie (L) listens to his Russian counterpart Yuri Baluyevsky (2-nd R) in Vladivostok, 18 August 2005. Longtime adversaries Russia and China launched their first-ever joint wargames in a show of military might they insisted was not aimed at any other country after the United States expressed concern. AFP photo.
by Leigh Baldwin
Washington (UPI) Oct 04, 2005
Recent joint military exercises between Russia and China have prompted fears that a new axis is emerging in Asia.
There is a real possibility of a sharp deterioration in Sino-American relations, Igor Zevelev, Washington bureau chief for Russia's RIA-Novosti news agency told United Press International.

If the Bush administration misinterpreted Chinese signals of self-assertion as belligerent expansionism, then the prospect of a new hostility between the United States and China reminiscent of the Cold War was not far off, he said.

Zevelev was speaking after a panel last week at Washington's conservative Heritage Foundation. The panel looked at Russia and China's recent joint military maneuvers on China's Shandong peninsula.

The Russian and Chinese governments described the 'Peace Mission 2005' joint military maneuvers, the first large-scale omens the two nations have ever held together from Aug. 18-25, as an anti-terrorism exercise. Coming at the same time as Hurricane Katrina hit Louisiana and New Orleans, the maneuvers received relatively little attention in the U.S. media.

"The scale of the operation suggests something more than anti-terrorism, as was claimed," said Stephen Blank, professor at the Strategic Studies Institute of the U.S. Army War College, in a statement to the conference.

The war games involved nearly 10,000 troops including 1,800 Russian military personnel, scores of advanced aircraft including Russian TU-95 and TU-22 heavy bombers, which can carry cruise missiles, and army, navy, air force, marine, airborne, and logistics units from both countries.

The nature of the exercises, involving amphibious landings on a theoretically hostile coast and mass drops of more than a thousand paratroops, raised some concerns that they were a dress rehearsal for a possible future Chinese invasion of Taiwan.

However, Taiwan is not China's only concern and of no significance at all to Russia, said Heritage fellow Harvey Feldman. "Russia has scant interest in Taiwan and no interest in getting entangled with the United States," he said, echoing Blank, who suggested the operation had a number of strategic aims.

The maneuvers were a chance for Russia to showcase advanced weapons for sale to China, he said.

Most important, though, was North Korea, Feldman said. "Any account of these exercises must consider the Korean dimension," he said.

North Korea is currently locked in international negotiations, aimed at persuading its government to halt its nuclear weapons program.

"The missing factor that should not be overlooked is that if negotiations break down, the United States might intervene," said Blank, suggesting that 'Peace Mission 2005' was meant as a deterrent to American involvement in the region.

According to Balbina Hwang, Heritage's Korea analyst, China is also preparing for the prospect of the downfall of the North Korean regime. Although strengthening economic support from China ensures this is unlikely, the Chinese were sending a "very strong signal" to South Korea and the United States about the future of a unified Korean peninsula, she said: China would not allow the straightforward incorporation of the North into the pro-Western South.

But geopolitics was not the full story, said Igor Zevelev, Washington bureau chief for Russia's RIA-Novosti news agency. There was a clear message behind the maneuvers, he said. But the two countries were not addressing the United States; nor were they addressing each other: Each had a message for internal consumption.

"Foreign policy is the process of continually reinventing states," he said. According to Zevelev, China and Russia both see themselves as great powers. The military exercises were aimed at affirming this status in the minds of their governments.

But how the message is received in Washington depends greatly on how the United States government chooses to decode it, Zevelev said and he urged a cautious U.S. response.

"Both Russia and China are interested in good relations with the United States. They are geared much more toward the United States than each other," he said, citing China's huge volume of American trade compared to its limited trade with Russia.

The United States has a tendency to automatic nervousness because Russia and China represent different and more centralized models of development to that privileged in American political thinking, he said.

"The United States sees itself as the source of universal values. China and Russia feel a right to chose their own path of development," Zevelev said.

All rights reserved. © 2005 United Press International. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by United Press International. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of United Press International

http://www.washtimes.com/national/20050928-112003-8646r.htm


China a 'central' spying threat
By Bill Gertz
THE WASHINGTON TIMES
September 29, 2005


China's intelligence services are mounting wide-ranging efforts to acquire U.S. technology and are among the most active of nearly 100 nations whose spying has undermined U.S. military advantages, according to a senior U.S. counterintelligence official.
China's "national-level intelligence services employ a full range of collection methodologies, from the targeting of well-placed foreign government officials, senior scientists and businessmen to the exploitation of academic activities, student populations and private businesses," Michelle Van Cleave, the national counterintelligence executive, said at a recent congressional hearing on foreign spying.
Miss Van Cleave said spies from nearly 100 nations are working to obtain sensitive U.S. technology, and "two countries that always rank near the top of the list are, of course, Russia and China."
Although private-sector spies are a problem, "state-directed espionage remains the central threat to our most sensitive national security technology secrets," she said.
Chinese intelligence agents are "very aggressive" in business and at obtaining information through elicitation. Additionally, "they're adept at exploiting front companies, [and] they also have very capable intelligence services that target U.S. national security secrets," she said.
Chinese intelligence efforts "take advantage of our open economic system to advance China's technical modernization, reduce the U.S. military advantage and undermine our economic competitiveness," Miss Van Cleave told the House Judiciary subcommittee on immigration, border security and claims.
Chinese and other state-run and private spies use a variety of simple methods to acquire U.S. technology, including e-mail, facsimile and telephone solicitation or in-person requests, she said. Other methods include visits by spies to U.S. businesses, military bases, national laboratories and private defense contractors.
The public identification of China and Russia as spying threats by a senior official is a departure from past policy, when the identities of foreign spies were kept secret to avoid upsetting diplomatic ties.
Miss Van Cleave declined to identify other nations involved in technology spying but said they include some of America's closest allies.
China's government also has obtained sensitive technology through the access that Chinese students, scientists and other specialists have in the United States, she said.
"Beijing has established a number of outreach organizations in China, and it maintains close relations with a number of U.S.-based advocacy groups that facilitate its interaction with experts here and probably aid in efforts to acquire U.S. technology," Miss Van Cleave said.
She said U.S. efforts to identify and stop the activities of foreign intelligence services have "to be more effective."
Larry Wortzel, a former defense intelligence official, told the subcommittee that China is methodical in its intelligence-gathering efforts in the United States.
"The U.S. faces an organized program out of China that is designed to gather high technology information of military use," Mr. Wortzel said.

Are China and other Asian powers forming an alliance based on geo-stratgegic and geo-economic interests as well as anti-Western values aimed against the United States? That seems the conclusions by an Australian analyst published today in the FT. What's interesting in this commentary is the underlying assumptions that depicts the U.S. as an innocent victim of Chinese and Middle Eastern machinations. It doesn't raise the possibility that U.S. hegemonic policies in the Middle East plus the efforts to place obstacles on Chinese efforts to gain access to energy resources (Cnooc/Unocal affair, for example) could help create the formation of such an Asian-Middle-East combination. I'm also pasting here another piece from the FT by the wise Martin Wolf who makes exactly that point, that U.S. policies could ignite a Chinese anti-American response. Leon Hadar



Asia’s alliance with the Middle East threatens US
By Anthony Bubalo
Published: October 5 2005 19:42 | Last updated: October 5 2005 19:42

Anew global alignment is emerging that will have profound implications for the shape of the international system. Asia and the Middle East are often acknowledged as the main theatres within which the key themes of contemporary world politics are played out. But frequently overlooked is the growing web of ties between these two regions – ties that have as a common theme resistance to US political, economic, military and even cultural hegemony.

The most prominent strand of this affiliation is energy. While Asia has long depended on the Middle East for oil and gas, the nature of that relationship is changing. Asia has become an even more voracious consumer of oil and gas, while the Middle East’s ties to its traditional energy partner, the US, have become increasingly strained. Today Chinese, Indian, Malaysian and Japanese energy companies are winning exploration and co-production contracts in the region. There are undoubtedly sound economic reasons for this. But it no doubt helps that these companies are free of the political baggage – human rights or nuclear proliferation concerns, for example – that constrains their US counterparts.

A second strand of the Middle East-Asia relationship flows from the first: a growing political and, potentially, strategic affinity. Take China’s energy investments in Iran and Sudan. They are not meant to be a poke in Washington’s eye. Chinese oil companies do better in these countries because US sanctions mean there is less competition from American players. But, given the centrality of energy security to Chinese foreign policy, an economic imperative soon becomes a political one. Thus, China has opposed oil sanctions on Sudan and resisted efforts to take the Iranian nuclear issue to the United Nations Security Council.

China’s attractiveness is not, however, limited to the Middle East’s rogues. The Sino-Saudi relationship has developed dramatically since Beijing secretly sold medium-range missiles to Riyadh in the mid-1980s. More recently a Chinese company was one of the first foreigners to gain gas exploration rights in the Kingdom. The sole US bidder withdrew, ostensibly for commercial reasons.

Of course, China is not yet a viable strategic alternative to the US in the Middle East. But this will change. It already has the ability to supply states such as Iran with weapons to “deter” US military designs. China is also acutely conscious of the vulnerability of its long sea lines of communication to the Middle East. As it develops its ability to project naval power – it has already helped Pakistan build a deep-water port on its west coast – the potential for Sino-US strategic competition in the Middle East will grow.

Faith and ideology are other emerging axes of the relationship. Washington tends to view Islamic Asia’s growing interest in Islamic fundamentalism exported by countries such as Saudi Arabia through the prism of the war on terror. This is simplistic. Instead of being driven solely by an interest in extremism, this complex phenomenon is partly a response to what Asian Muslims see as the penetration of their societies by a decadent and highly commercialised American culture.

This is just one example of efforts in Asia and the Middle East to find alternatives to globalisation’s pervasive American themes. There are others. Malaysia has been promoting reform in the Islamic world and will soon host the inaugural World Islamic International Forum – a “Davos for Muslims”. Meanwhile, Middle East regimes talk about the “China model” of open economies and closed political systems.

It would, of course, be wrong to see examples of an emerging Asian-Middle Eastern affinity as a formal anti-American alliance. But in many respects it does not matter. Regardless of whether the web of ties becomes institutionalised or remains disparate, formed through government and non-government bodies, the result will be the gradual erosion of US hard and soft power in both the Middle and Far East.

In the Middle East, America’s capacity to reward and sanction will be undercut by regional countries turning eastward for everything from political support in the Security Council to alternative markets. In Asia, a tendency toward more independent foreign policy will be reinforced by a growing sense that Asian and US interests in the Middle East do not necessarily coincide. And globally, it could well be conflict in the Strait of Hormuz rather than the Strait of Taiwan that sparks a much-anticipated Sino-US rivalry, ultimately challenging the unipolarity that has defined the past 15 years of international politics.


The writer is a research fellow at the Lowy Institute for International Policy in Sydney


Martin Wolf: US must worry about its own actions
By Martin Wolf
Published: September 27 2005 20:21 | Last updated: September 27 2005 20:21

The spectre of a rising China has returned to haunt Washington. This is the principal lesson I have drawn from a week just spent in the US. The attention of US policymakers has turned once again towards China. Relations between the world’s incumbent superpower and Asia’s rising giant are, indeed, of great importance. But the correct conclusions will not be drawn from this debate if Washington insists that the onus of change is on China alone. The US, too, must reconsider its role in the world.

I learned at first hand about the sensitivity of Washington’s “China question” from participation in a conference marking the launch of the Brookings Institution’s imaginative new China Initiative. A laudable aim of this initiative is to combat the hostility to China now surfacing in Washington.

Listing the anxieties is, alas, all too easy. Yet the US could reasonably regard China’s resurgence as a triumph. Indeed, this is precisely what Robert Zoellick, the deputy secretary of state, said last week.*

As Mr Zoellick remarked, since 1978 the US has supported China’s opening to the world and to the world economy. Moreover, “our policy has succeeded remarkably well: the dragon emerged and joined the world”. Singapore’s Kishore Mahbubani makes the same point more broadly: “As the main architect of the world order today, the US should be among the first to celebrate China’s progress.”**

Yet celebratory is exactly what many Americans do not feel: they view China solely through what Mr Zoellick called “the lens of fear”. Thus, Mr Zoellick’s speech had two audiences: the obvious one was China; the more important one was the US itself.

Mr Zoellick told China that it needs to change neither what it is nor what it aspires to, but how it behaves. If China is to be a “responsible stakeholder”, he suggests it needs to take account of its responsibility for the global system. Among instances of China’s failure to do so, Mr Zoellick lists its mercantilist attempts to “lock up” energy supplies, its support for unsavoury oil producers (such as Sudan), its toleration of “rampant theft” of intellectual property, its burgeoning current account surplus, its need to contribute to completion of the Doha round of trade negotiations and its potential role in halting proliferation of weapons of mass destruction.

Mr Zoellick’s remarks on China’s role have force. But more important still is what he says – and does not say – about the proper response of the US. He insists that the US “welcomes a confident, peaceful and prosperous China”. Alas, many Americans disagree with this view. Some regard China as a new Soviet Union;
>others regard it as a 19th century Germany, reborn.

Yet China is no Soviet Union: it seeks neither to spread anti-American ideologies, nor to struggle against democracy across the globe, nor to oppose capitalism, nor to overturn the international system. Equally, the balance of power politics of late-19th century Europe make no sense. Then they led to disaster. Today, as Mr Zoellick says: “We are too interconnected to try to hold China at arm’s length, hoping to promote other powers in Asia at its expense”. Still worse would be to try to halt China’s development altogether. That would be both morally wicked and practically calamitous.

Yet avoiding such stupidities is not enough. The US has to reconsider the systemic consequences of its actions.

Many Americans would, after all, now accept the following propositions about the appropriate US role in the world: as sole superpower and a uniquely moral force, the US has both the capacity and the right to act as it sees fit on the world stage. The US is exceptional, they believe, not just in its size and power, but also as a moral agent. This point of view suffers from two sizeable defects: the first is that few outside the US believe it is true; the second is that it cannot underpin a co-operative global order.

Of the great powers of the past several centuries, the US is indeed the most benign. Even so it is not hard to produce a list of its follies – and worse. For this reason, few outside the US would concede to the US the carte blanche it desires.

Moreover, these claims are incompatible with the requirement that principles of action must apply equally to everybody in the same position. This is true within societies and must also be true between them. Thus, “I should do what I want and you should also do what I want” is not a morally legitimate basis of action.

Yet precisely such double standards were inherent in the question from Donald Rumsfeld, defence secretary, last June: “Since no nation threatens China, one must wonder: why this growing investment? Why these continuing large and expanding arms purchases?”

To this, the Chinese can justifiably react by asking why the US needs to spend as much on its military as the rest of the world put together. With Canada and Mexico as its neighbours, why does it feel so threatened? To this the US would respond that it has special responsibilities as guarantor of world peace and, in any case, threatens no other nation. China, in its turn, could then ask who elected the US global policeman and why, given the public debate in the US about whether and how to curb its rise, it should trust its security to the US.

China will, in short, take both US behaviour and the principles that underlie it as the moral norms of the international system. If the US acts on the assumption that it is entitled to remove remote threats by force, so surely will China. A unilateralist US can surely expect an equally unilateralist China. The biggest question for the US is therefore not how China can be a responsible stakeholder but how the US itself can be one.

In deciding on any of its actions, the US must ask itself whether this is how it wants China, too, to behave in the coming decades. That is the fundamental debate on the US role in the world that must lie ahead. The US needs to decide whether it stands for the power of universal principles or the principle of unilaterally exercised power. It should do so, moreover, in the expectation that the China it will ultimately have is one that is no better than its own example deserves.

* Whither China: from Membership to Responsibility?, September 21 2005, www.state.gov; ** Understanding China, Foreign Affairs, September/October 2005.

China Central Bank Chief Sees More Trade Friction Ahead As Surplus Grows
http://www.terradaily.com/news/china-05zzzzzzzzg.html

With Secretary of Defense Rumsfeld about to make a long-delayed first official visit China in a few days, the following has just been reprinted on the front page of the China Daily, the official English language newspaper in Beijing. Militarism, it seems, has consequences, not just in Iraq. In this case, the Chinese are using Michael Klare to warn, we are on the way to stimulating an arms race with a new enemy likely to prove far more formidable than the economically sickly and ideologically confounded USSR. And this time we propose to conduct our war without the benefit of a broad coalition of allies.

Why does US rev up China threat?
By Michael T. Klare (The Nation)
2005-10-08

Ever since taking office, the Bush Administration has struggled to define its stance on the most critical long-term strategic issue facing the United States: whether to view China as a future military adversary, and plan accordingly, or to see it as a rival player in the global capitalist system. Representatives of both perspectives are nestled in top Administration circles, and there have been periodic swings of the pendulum toward one side or the other. But after a four-year period in which neither outlook appeared dominant, the pendulum has now swung conspicuously toward the anti-Chinese, prepare-for-war position. Three events signal this altered stance.

The first, on February 19, was the adoption of an official declaration calling for enhanced security ties between the United States and Japan. Known officially as the "Joint Statement of the U.S.-Japan Security Consultative Committee," the declaration was announced at a meeting of top Japanese and U.S. officials, including Defense Secretary Rumsfeld and Secretary of State Rice. The very fact that U.S. and Japanese officials were discussing improved security links at this time was deeply troubling to the Chinese, given their painful exposure to Japanese militarism during World War II and their ongoing anxiety about U.S. plans to construct an anti-Chinese alliance in Asia. But what most angered Beijing was the declaration's call for linked U.S.-Japanese efforts to "encourage the peaceful resolution of issues concerning the Taiwan Strait through dialogue." While sounding relatively innocuous to American ears, this announcement was viewed in Beijing as highly provocative, representing illicit interference by Washington and Tokyo in China's internal affairs. The official New China News Agency described the joint declaration as "unprecedented" and quoted a senior foreign ministry official as saying that China "resolutely opposes the United States and Japan in issuing any bilateral document concerning China's Taiwan, which meddles in the internal affairs of China and hurts China's sovereignty."

The second key event was a speech Rumsfeld gave June 4 at a strategy conference in Singapore. After reviewing current security issues in Asia, especially the threat posed by a nuclear North Korea, Rumsfeld turned his attention to China. The Chinese can play a constructive role in addressing these issues, he observed. "A candid discussion of China...cannot neglect to mention areas of concern to the region." In particular, he suggested that China "appears to be expanding its missile forces, allowing them to reach targets in many areas of the world," and is otherwise "improving its ability to project power" in the region. Then, with consummate disingenuousness, he stated, "Since no nation threatens China, one must wonder: Why this growing investment? Why these continuing large and expanding arms purchases? Why these continuing robust deployments?"

To Beijing, these comments must have been astonishing. No one threatens China? What about the U.S. planes and warships that constantly hover off the Chinese coast, and the nuclear-armed U.S. missiles aimed at China? What about the delivery over the past ten years of ever more potent U.S. weapons to Taiwan? But disingenuousness aside, Rumsfeld's comments exhibited a greater degree of belligerence toward China than had been expressed in any official U.S. statements since 9/11, and were widely portrayed as such in the American and Asian press.

The third notable event was the release, in July, of the Pentagon's report on Chinese combat capabilities, The Military Power of the People's Republic of China. According to press reports, publication of this unclassified document was delayed for several weeks in order to remove or soften some of the more pointedly anti-Chinese comments, to avoid further provoking China before George W. Bush's November visit there. In many ways the published version is judicious in tone, stressing the weaknesses as well as the strengths of China's military establishment. Nevertheless, the main thrust of the report is that China is expanding its capacity to fight wars beyond its own territory and that this effort constitutes a dangerous challenge to global order. "The pace and scope of China's military build-up are, already, such as to put regional military balances at risk," the report states. "Current trends in China's military modernization could provide China with a force capable of prosecuting a range of military operations in Asia — well beyond Taiwan — potentially posing a credible threat to modern militaries operating in the region."

This annual report, mandated by Congress in 2000, is intended as a comprehensive analysis, not a policy document. However, the policy implications of the 2005 report are self-evident: If China is acquiring a greater capacity to threaten "modern militaries operating in the region" — presumably including those of the United States and Japan — then urgent action is needed to offset Chinese military initiatives. For this very reason the document triggered a firestorm of criticism in China. "This report ignores fact in order to do everything it can to disseminate the 'China threat theory,'" a senior foreign ministry official told the American ambassador at a hastily arranged meeting. "It crudely interferes in China's internal affairs and is a provocation against China's relations with other countries."

While much of this was going on, the American public and mass media were preoccupied with another source of tension between the United States and China: the attempted purchase of the California-based Unocal Corporation by the Chinese National Offshore Oil Corporation (CNOOC). This attempt received far greater attention in the media than did the events described above, yet it will have a far less significant impact on U.S.-Chinese relations than will the Pentagon's shift to a more belligerent, anti-Chinese stance — one that greatly increases the likelihood of a debilitating and dangerous military competition between the United States and China.

What lies behind this momentous shift? At its root is the continuing influence of conservative strategists who have long championed a policy of permanent U.S. military supremacy. This outlook was first expressed in 1992 in the Defense Planning Guidance (DPG) for fiscal years 1994-99, a master blueprint for U.S. dominance in the post-cold war era. Prepared under the supervision of then-Under Secretary of Defense Paul Wolfowitz and leaked to the press in early 1992, the DPG called for concerted efforts to prevent the rise of a future military competitor. "Our first objective is to prevent the re-emergence of a new rival...that poses a threat on the order of that posed formerly by the Soviet Union," the document stated. Accordingly, "we [must] endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power." This has remained the guiding principle for U.S. supremacists ever since.

In this new century the injunction to prevent the emergence of a new rival "that poses a threat on the order of that posed formerly by the Soviet Union" can apply only to China, as no other potential adversary possesses a credible capacity to "generate global power." Hence the preservation of American supremacy into "the far realm of the future," as then-Governor George W. Bush put it in a 1999 campaign speech, required the permanent containment of China — and this is what Rice, Rumsfeld and their associates set out to do when they assumed office in early 2001.

This project was well under way when the 9/11 attacks occurred. As noted by many analysts on the left, 9/11 gave the neoconservatives a green light to implement their ambitious plans to extend U.S. power around the world. Although the shift in emphasis from blocking future rivals to fighting terrorism seemed vital to a large majority of the American people, it troubled those in the permanent-supremacy crowd who felt that momentum was being lost in the grand campaign to constrain China. Moreover, antiterrorism places a premium on special forces and low-tech infantry, rather than on the costly sophisticated fighters and warships needed for combat against a major military power. For at least some U.S. strategists, not to mention giant military contractors, then, the "war on terror" was seen as a distraction that had to be endured until the time was ripe for a resumption of the anti-Chinese initiatives begun in February 2001. That moment seems to have arrived.

Why now? Several factors explain the timing of this shift. The first, no doubt, is public fatigue with the "war on terror" and a growing sense among the military that the war in Iraq has ground to a stalemate. So long as public attention is focused on the daily setbacks and loss of life in Iraq — and, since late August, on the devastation wrought by Hurricane Katrina — support for the President's military policies will decline. And this, it is feared, could translate into an allergy to costly military operations altogether, akin to the dreaded "Vietnam syndrome" of the 1970s and '80s. It is hardly surprising, then, that senior U.S. officers are talking of plans to reduce U.S. troop strength in Iraq over the coming year even though President Bush has explicitly ruled out such a reduction.

At the same time, China's vast economic expansion has finally begun to translate into improvements in its net military capacity. Although most Chinese weapons are hopelessly obsolete — derived, in many cases, from Soviet models of the 1950s and '60s — Beijing has used some of its newfound wealth to purchase relatively modern arms from Russia, including fighter planes, diesel-electric submarines and destroyers. China has also been expanding its arsenal of short-range ballistic missiles, many capable of striking Taiwan and Japan. None of these systems compare to the most advanced ones in the American arsenal, but their much-publicized acquisition has provided fresh ammunition to those in Washington who advocate stepped-up efforts to neutralize Chinese military capabilities.

Under these circumstances, the possibility of a revved-up military competition with China looks unusually promising to some in the military establishment. For one thing, no American lives are at risk in such a drive — any bloodletting, should it occur, lies safely in the future. For another, there has been a recent surge in anti-Chinese sentiment in this country, brought about in part by high gasoline prices (blamed, by many, on newly affluent car-crazy Chinese consumers), the steady loss of American jobs to low-wage Chinese industrial zones and the (seemingly) brazen effort by CNOOC to acquire Unocal. This appears, then, to be an opportune moment for renewing the drive to constrain China. But the brouhaha over Unocal also reveals something deeper at work: a growing recognition that the United States and China are now engaged in a high-stakes competition to gain control of the rest of the world's oil supplies.

Just a decade ago, in 1994, China accounted for less than 5 percent of the world's net petroleum consumption and produced virtually all of the oil it burned. At that time China was number four in the roster of the world's top oil consumers, after the United States, Japan and Russia, and its daily usage of 3 million barrels represented less than one-fifth of what the United States consumed on an average day. Since then, however, China has jumped to the number-two position among the leading consumers (supplanting Japan in 2003), and its current consumption of about 6 million barrels per day represents approximately one-third of America's usage. However, domestic oil output in China has remained relatively flat over this period, so it must now import half of its total supply. And with China's economy roaring ahead, its need for imported petroleum is expected to climb much higher in the years to come: According to the Department of Energy (DOE), Chinese oil consumption is projected to reach 12 million barrels per day in 2020, of which 9 million barrels will have to be obtained abroad. With the United States also needing more imports — as much as 16 million barrels per day in 2020 — the stage is being set for an intense struggle over access to the world's petroleum supplies.

This would not be such a worrisome prospect if global petroleum output can expand sufficiently between now and 2020 to satisfy increased demand from both China and the United States — and in fact, the DOE predicts that sufficient oil will be available at that time. But many energy experts believe world oil output, now hovering at about 84 million barrels per day, is nearing its maximum or "peak" sustainable level, and will never reach the 111 million barrels projected by the DOE for 2020. If this proves to be the case, or even if output continues to rise but still falls significantly short of the DOE projection, the competition between the United States and China for whatever oil remains in ever diminishing foreign reservoirs will become even more fierce and contentious.

The intensifying U.S.-Chinese struggle for oil is seen, for instance, in China's aggressive pursuit of supplies in such countries as Angola, Canada, Indonesia, Iran, Kazakhstan, Nigeria, Saudi Arabia, Sudan and Venezuela. Until recently China derived very little of its petroleum from these countries; now it has struck deals with all of them for new supplies. That China is competing so vigorously with the United States for access to foreign oil is worrisome enough to American business leaders and government officials, given the likelihood that this will result in higher energy costs and a slowing economy; the fact that it is seeking to siphon off oil from places like Canada, Nigeria, Saudi Arabia and Venezuela — which have long sent a large share of their supplies to America — is the source of even greater concern, particularly if it results in a permanent shift in the global flow of oil. From a strategic perspective, moreover, U.S. officials worry that China's efforts to acquire more oil from Iran and Sudan have been accompanied by deliveries of arms and military aid, thus altering the balance of power in areas considered vital to Washington's security interests.

Initially, discussion of China's intensifying quest for foreign oil was largely confined to the business press, but now, for the first time, it is being viewed as a national security matter — that is, as a key factor in shaping U.S. military policy. This outlook was first given official expression in the 2005 edition of the Pentagon's report on Chinese military power. "China became the second largest consumer and third largest importer of oil in 2003," the report notes. "As China's energy and resource needs grow, Beijing has concluded that access to these resources requires special economic or foreign policy relationships in the Middle East, Africa, and Latin America, bringing China closer to problem countries such as Iran, Sudan, and Venezuela." Again, the implications of this are obvious: China's growing ties to "problem states" constitute a threat to U.S. security and so must be met with countermoves of one sort or another.

Two trends have thus joined to propel this new swing of the pendulum: a drive to refocus attention on the long-term challenge posed by China and fresh concern over China's pursuit of oil supplies in strategic areas of the globe. So long as these two conditions prevail — and there is no repeat of 9/11 — the calls for increased U.S. military preparation for an eventual war with China will grow stronger. The fact that Bush has seen his job-approval rating plummet in the wake of Hurricane Katrina might also tempt the Administration to play up the China threat. While none of this is likely to produce a true rupture in U.S.-Chinese relations — the forces favoring economic cooperation are too strong to allow that — we can expect vigorous calls for an ambitious U.S. campaign to neutralize China's recent military initiatives.

This campaign will take two forms: first, a drive to offset any future gains in Chinese military strength through permanent U.S. military-technological superiority; and second, what can only be described as the encirclement of China through the further acquisition of military bases and the establishment of American-led, anti-Chinese alliances. None of these efforts are being described as part of an explicit, coherent strategy of containment, but there is no doubt from the testimony of US officials that such a strategy is being implemented.

Elements of this strategy can be detected, for example, in the March 8 testimony of Adm. William Fallon, Commander of the U.S. Pacific Command (PACOM), before the Senate Armed Services Committee. "It's certainly cause for concern to see this continuing buildup [by China]," he noted. "It seems to be more than might be required for their defense. We're certainly watching it very closely, [and] we're looking at how we match up against these capabilities."

To counter China's latest initiatives, Fallon called for improvements in U.S. antimissile and antisubmarine warfare (ASW) capabilities, along with a deepening of military ties with America's old and new allies in the region. With respect to missile defense, for example, he stated that "an effective, integrated and tiered system against ballistic missiles" should be "a top priority for development." Such a system, in all likelihood, would be aimed at China's short-range missiles. He also called for establishment of a "robust and integrated ASW architecture" to "counter the proliferation of submarines in the Pacific."

Note that Fallon is not talking about a conflict that might occur in the central or eastern Pacific, within reach of America's shores; rather, he is talking about defeating Chinese forces in their home waters, on the western rim of the Pacific. That U.S. strategy is aimed at containing China to its home territory is further evident from the plans he described for enhanced military cooperation with U.S. allies in the region. These plans, encapsulated in the Theater Security Cooperation Plan (TSCP), were described by Fallon as "one of the primary means through which we extend U.S. influence, develop access and promote competence among potential coalition partners."

Typically, the cooperation will include the delivery of arms and military assistance, joint military maneuvers, regular consultation among senior military officials and, in some cases, expansion (or establishment) of U.S. military bases. In Japan, for example, PACOM is cooperating in the joint development of a regional ballistic missile defense system; in the Philippines it is assisting in the reorganization and modernization of national forces; in Singapore — which already plays host to visiting U.S. aircraft carriers — "we are exploring opportunities for expanded access to Singaporean facilities." And this is not the full extent of U.S. efforts to establish an anti-Chinese coalition in the region. In his March testimony Fallon also described efforts to woo India into the American orbit. "Our relationship with the Indian Integrated Defense Staff and the Indian Armed Services continues to grow," he noted. "U.S. and Indian security interests continue to converge as our military cooperation leads to a stronger strategic partnership."

All this and much more is described as an essentially defensive reaction to China's pursuit of forces considered in excess of its legitimate self-defense requirements — "outsized," as Secretary Rice described the Chinese military in a recent interview. One can argue, of course, about what constitutes an appropriate defense capacity for the world's most populous nation, but that's not the point — what matters is that any rational observer in Beijing can interpret Fallon's testimony (and the other developments described above) only as part of a concerted U.S. campaign to contain China and neutralize its military capabilities.

Chinese leaders are no doubt fully aware of their glaring military inferiority vis-à-vis the United States, and so can be expected to avoid a risky confrontation with Washington. But any nation, when confronted with a major military buildup by a potential adversary off its shores, is bound to feel threatened and will respond accordingly. For a proud country like China, which has been repeatedly invaded and occupied by foreign powers over the past few centuries, the U.S. buildup on its doorstep must appear especially threatening. It is hardly surprising, then, that Beijing has sought modern weapons and capabilities to offset America's growing advantage. Nor is it surprising that China has sought to buttress its military ties with Russia — the two countries held joint military exercises in August, the first significant demonstration of military cooperation since the Korean War — and to discourage neighboring countries from harboring American bases. (Uzbekistan asked the United States to shut down its base at Karshi-Khanabad after a meeting of the Chinese-led Shanghai Cooperation Organization in July.) But even if defensive in nature, these moves will provide additional ammunition for those in Washington who see a Chinese drive for regional hegemony and so seek an even greater U.S. capacity to overpower Chinese forces.

This is all bound to add momentum to the pendulum's swing toward a more hostile U.S. stance on China. But that outcome is not foreordained: Future economic conditions — a sharp rise in U.S. interest rates, for example — could strengthen the hand of those in Washington who seek to prevent a breach in U.S.-Chinese relations. These figures argue, for example, that Beijing helps keep U.S. interest rates low by buying U.S. Treasury bonds and that China represents an expanding market for U.S. cars, aircraft and other manufactured goods. But the pursuit of ever more potent weapons on each side could prove to be a self-sustaining phenomenon, undermining efforts to improve relations.

The debate over China's military power and the purported need for a major U.S. buildup to counter China's recent arms acquisitions will become increasingly heated in the months and years to come. As always, it will be fueled by claims of this or that Chinese military advance, often employing pseudo-technical language intended to exaggerate Chinese capabilities and discourage close scrutiny by ordinary citizens. If this trend persists, we will become locked into an ever expanding arms race that can only have harmful consequences for both countries — even if it doesn't lead to war. Questioning inflated Pentagon claims of Chinese strength and resisting the trend toward a harsher anti-Chinese military stance are essential, therefore, if we want to avert a costly and dangerous cold war in Asia.

- Taiwan To Begin Mass Producing Armoured Vehicles: Jane's
http://www.spacewar.com/news/taiwan-05zd.html

Taipei (AFP) Oct 09, 2005 - Taiwan will begin mass producing a locally-designed armored troop carrier in a bid to boost it defenses against rival China, Jane's Defence Weekly said.

- Taiwan planning spy satellite: report
http://www.spacedaily.com/2005/051010050019.lqhy091p.html

Taiwan Planning Spy Satellite: Report
http://www.spacewar.com/news/spysat-05k.html

Taipei (AFP) Oct 10, 2005 - Taiwan plans to launch a spy satellite costing 300 million dollars as a result of China's continued hostility towards the island, a newspaper reported Monday.

China And North Korea Hail Relationship In 'New Era'
http://www.spacewar.com/news/korea-05zzzzp.html

Beijing (AFP) Oct 10, 2005 - Chinese President Hu Jintao Monday vowed to deepen ties with North Korea after the Stalinist state used a new Chinese-funded glass factory to hail its relationship with Beijing "in the new era".

http://www.thenation.com/docprint.mhtml?i=20051024&s=klare

Revving Up the China Threat
by MICHAEL T. KLARE

[from the October 24, 2005 issue]

Ever since taking office, the Bush Administration has struggled to define its stance on the most critical long-term strategic issue facing the United States: whether to view China as a future military adversary, and plan accordingly, or to see it as a rival player in the global capitalist system. Representatives of both perspectives are nestled in top Administration circles, and there have been periodic swings of the pendulum toward one side or the other. But after a four-year period in which neither outlook appeared dominant, the pendulum has now swung conspicuously toward the anti-Chinese, prepare-for-war position. Three events signal this altered stance.

The first, on February 19, was the adoption of an official declaration calling for enhanced security ties between the United States and Japan. Known officially as the "Joint Statement of the U.S.-Japan Security Consultative Committee," the declaration was announced at a meeting of top Japanese and US officials, including Defense Secretary Rumsfeld and Secretary of State Rice. The very fact that US and Japanese officials were discussing improved security links at this time was deeply troubling to the Chinese, given their painful exposure to Japanese militarism during World War II and their ongoing anxiety about US plans to construct an anti-Chinese alliance in Asia. But what most angered Beijing was the declaration's call for linked US-Japanese efforts to "encourage the peaceful resolution of issues concerning the Taiwan Strait through dialogue." While sounding relatively innocuous to American ears, this announcement was viewed in Beijing as highly provocative, representing illicit interference by Washington and Tokyo in China's internal affairs. The official New China News Agency described the joint declaration as "unprecedented" and quoted a senior foreign ministry official as saying that China "resolutely opposes the United States and Japan in issuing any bilateral document concerning China's Taiwan, which meddles in the internal affairs of China and hurts China's sovereignty."

The second key event was a speech Rumsfeld gave June 4 at a strategy conference in Singapore. After reviewing current security issues in Asia, especially the threat posed by a nuclear North Korea, Rumsfeld turned his attention to China. The Chinese can play a constructive role in addressing these issues, he observed. "A candid discussion of China...cannot neglect to mention areas of concern to the region." In particular, he suggested that China "appears to be expanding its missile forces, allowing them to reach targets in many areas of the world," and is otherwise "improving its ability to project power" in the region. Then, with consummate disingenuousness, he stated, "Since no nation threatens China, one must wonder: Why this growing investment? Why these continuing large and expanding arms purchases? Why these continuing robust deployments?"

To Beijing, these comments must have been astonishing. No one threatens China? What about the US planes and warships that constantly hover off the Chinese coast, and the nuclear-armed US missiles aimed at China? What about the delivery over the past ten years of ever more potent US weapons to Taiwan? But disingenuousness aside, Rumsfeld's comments exhibited a greater degree of belligerence toward China than had been expressed in any official US statements since 9/11, and were widely portrayed as such in the American and Asian press.

The third notable event was the release, in July, of the Pentagon's report on Chinese combat capabilities, The Military Power of the People's Republic of China. According to press reports, publication of this unclassified document was delayed for several weeks in order to remove or soften some of the more pointedly anti-Chinese comments, to avoid further provoking China before George W. Bush's November visit there. In many ways the published version is judicious in tone, stressing the weaknesses as well as the strengths of China's military establishment. Nevertheless, the main thrust of the report is that China is expanding its capacity to fight wars beyond its own territory and that this effort constitutes a dangerous challenge to global order. "The pace and scope of China's military build-up are, already, such as to put regional military balances at risk," the report states. "Current trends in China's military modernization could provide China with a force capable of prosecuting a range of military operations in Asia--well beyond Taiwan--potentially posing a credible threat to modern militaries operating in the region."

This annual report, mandated by Congress in 2000, is intended as a comprehensive analysis, not a policy document. However, the policy implications of the 2005 report are self-evident: If China is acquiring a greater capacity to threaten "modern militaries operating in the region"--presumably including those of the United States and Japan--then urgent action is needed to offset Chinese military initiatives. For this very reason the document triggered a firestorm of criticism in China. "This report ignores fact in order to do everything it can to disseminate the 'China threat theory,'" a senior foreign ministry official told the American ambassador at a hastily arranged meeting. "It crudely interferes in China's internal affairs and is a provocation against China's relations with other countries."

While much of this was going on, the American public and mass media were preoccupied with another source of tension between the United States and China: the attempted purchase of the California-based Unocal Corporation by the Chinese National Offshore Oil Corporation (CNOOC). This attempt received far greater attention in the media than did the events described above, yet it will have a far less significant impact on US-Chinese relations than will the Pentagon's shift to a more belligerent, anti-Chinese stance--one that greatly increases the likelihood of a debilitating and dangerous military competition between the United States and China.

What lies behind this momentous shift? At its root is the continuing influence of conservative strategists who have long championed a policy of permanent US military supremacy. This outlook was first expressed in 1992 in the Defense Planning Guidance (DPG) for fiscal years 1994-99, a master blueprint for US dominance in the post-cold war era. Prepared under the supervision of then-Under Secretary of Defense Paul Wolfowitz and leaked to the press in early 1992, the DPG called for concerted efforts to prevent the rise of a future military competitor. "Our first objective is to prevent the re-emergence of a new rival...that poses a threat on the order of that posed formerly by the Soviet Union," the document stated. Accordingly, "we [must] endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power." This has remained the guiding principle for US supremacists ever since.

In this new century the injunction to prevent the emergence of a new rival "that poses a threat on the order of that posed formerly by the Soviet Union" can apply only to China, as no other potential adversary possesses a credible capacity to "generate global power." Hence the preservation of American supremacy into "the far realm of the future," as then-Governor George W. Bush put it in a 1999 campaign speech, required the permanent containment of China--and this is what Rice, Rumsfeld and their associates set out to do when they assumed office in early 2001.

This project was well under way when the 9/11 attacks occurred. As noted by many analysts on the left, 9/11 gave the neoconservatives a green light to implement their ambitious plans to extend US power around the world. Although the shift in emphasis from blocking future rivals to fighting terrorism seemed vital to a large majority of the American people, it troubled those in the permanent-supremacy crowd who felt that momentum was being lost in the grand campaign to constrain China. Moreover, antiterrorism places a premium on special forces and low-tech infantry, rather than on the costly sophisticated fighters and warships needed for combat against a major military power. For at least some US strategists, not to mention giant military contractors, then, the "war on terror" was seen as a distraction that had to be endured until the time was ripe for a resumption of the anti-Chinese initiatives begun in February 2001. That moment seems to have arrived.

Why now? Several factors explain the timing of this shift. The first, no doubt, is public fatigue with the "war on terror" and a growing sense among the military that the war in Iraq has ground to a stalemate. So long as public attention is focused on the daily setbacks and loss of life in Iraq--and, since late August, on the devastation wrought by Hurricane Katrina--support for the President's military policies will decline. And this, it is feared, could translate into an allergy to costly military operations altogether, akin to the dreaded "Vietnam syndrome" of the 1970s and '80s. It is hardly surprising, then, that senior US officers are talking of plans to reduce US troop strength in Iraq over the coming year even though President Bush has explicitly ruled out such a reduction.

At the same time, China's vast economic expansion has finally begun to translate into improvements in its net military capacity. Although most Chinese weapons are hopelessly obsolete--derived, in many cases, from Soviet models of the 1950s and '60s--Beijing has used some of its newfound wealth to purchase relatively modern arms from Russia, including fighter planes, diesel-electric submarines and destroyers. China has also been expanding its arsenal of short-range ballistic missiles, many capable of striking Taiwan and Japan. None of these systems compare to the most advanced ones in the American arsenal, but their much-publicized acquisition has provided fresh ammunition to those in Washington who advocate stepped-up efforts to neutralize Chinese military capabilities.

Under these circumstances, the possibility of a revved-up military competition with China looks unusually promising to some in the military establishment. For one thing, no American lives are at risk in such a drive--any bloodletting, should it occur, lies safely in the future. For another, there has been a recent surge in anti-Chinese sentiment in this country, brought about in part by high gasoline prices (blamed, by many, on newly affluent car-crazy Chinese consumers), the steady loss of American jobs to low-wage Chinese industrial zones and the (seemingly) brazen effort by CNOOC to acquire Unocal. This appears, then, to be an opportune moment for renewing the drive to constrain China. But the brouhaha over Unocal also reveals something deeper at work: a growing recognition that the United States and China are now engaged in a high-stakes competition to gain control of the rest of the world's oil supplies.

Just a decade ago, in 1994, China accounted for less than 5 percent of the world's net petroleum consumption and produced virtually all of the oil it burned. At that time China was number four in the roster of the world's top oil consumers, after the United States, Japan and Russia, and its daily usage of 3 million barrels represented less than one-fifth of what the United States consumed on an average day. Since then, however, China has jumped to the number-two position among the leading consumers (supplanting Japan in 2003), and its current consumption of about 6 million barrels per day represents approximately one-third of America's usage. However, domestic oil output in China has remained relatively flat over this period, so it must now import half of its total supply. And with China's economy roaring ahead, its need for imported petroleum is expected to climb much higher in the years to come: According to the Department of Energy (DOE), Chinese oil consumption is projected to reach 12 million barrels per day in 2020, of which 9 million barrels will have to be obtained abroad. With the United States also needing more imports--as much as 16 million barrels per day in 2020--the stage is being set for an intense struggle over access to the world's petroleum supplies.

This would not be such a worrisome prospect if global petroleum output can expand sufficiently between now and 2020 to satisfy increased demand from both China and the United States--and in fact, the DOE predicts that sufficient oil will be available at that time. But many energy experts believe world oil output, now hovering at about 84 million barrels per day, is nearing its maximum or "peak" sustainable level, and will never reach the 111 million barrels projected by the DOE for 2020. If this proves to be the case, or even if output continues to rise but still falls significantly short of the DOE projection, the competition between the United States and China for whatever oil remains in ever diminishing foreign reservoirs will become even more fierce and contentious.

The intensifying US-Chinese struggle for oil is seen, for instance, in China's aggressive pursuit of supplies in such countries as Angola, Canada, Indonesia, Iran, Kazakhstan, Nigeria, Saudi Arabia, Sudan and Venezuela. Until recently China derived very little of its petroleum from these countries; now it has struck deals with all of them for new supplies. That China is competing so vigorously with the United States for access to foreign oil is worrisome enough to American business leaders and government officials, given the likelihood that this will result in higher energy costs and a slowing economy; the fact that it is seeking to siphon off oil from places like Canada, Nigeria, Saudi Arabia and Venezuela--which have long sent a large share of their supplies to America--is the source of even greater concern, particularly if it results in a permanent shift in the global flow of oil. From a strategic perspective, moreover, US officials worry that China's efforts to acquire more oil from Iran and Sudan have been accompanied by deliveries of arms and military aid, thus altering the balance of power in areas considered vital to Washington's security interests.

Initially, discussion of China's intensifying quest for foreign oil was largely confined to the business press, but now, for the first time, it is being viewed as a national security matter--that is, as a key factor in shaping US military policy. This outlook was first given official expression in the 2005 edition of the Pentagon's report on Chinese military power. "China became the second largest consumer and third largest importer of oil in 2003," the report notes. "As China's energy and resource needs grow, Beijing has concluded that access to these resources requires special economic or foreign policy relationships in the Middle East, Africa, and Latin America, bringing China closer to problem countries such as Iran, Sudan, and Venezuela." Again, the implications of this are obvious: China's growing ties to "problem states" constitute a threat to US security and so must be met with countermoves of one sort or another.

Two trends have thus joined to propel this new swing of the pendulum: a drive to refocus attention on the long-term challenge posed by China and fresh concern over China's pursuit of oil supplies in strategic areas of the globe. So long as these two conditions prevail--and there is no repeat of 9/11--the calls for increased US military preparation for an eventual war with China will grow stronger. The fact that Bush has seen his job-approval rating plummet in the wake of Hurricane Katrina might also tempt the Administration to play up the China threat. While none of this is likely to produce a true rupture in US-Chinese relations--the forces favoring economic cooperation are too strong to allow that--we can expect vigorous calls for an ambitious US campaign to neutralize China's recent military initiatives.

This campaign will take two forms: first, a drive to offset any future gains in Chinese military strength through permanent US military-technological superiority; and second, what can only be described as the encirclement of China through the further acquisition of military bases and the establishment of American-led, anti-Chinese alliances. None of these efforts are being described as part of an explicit, coherent strategy of containment, but there is no doubt from the testimony of US officials that such a strategy is being implemented.

Elements of this strategy can be detected, for example, in the March 8 testimony of Adm. William Fallon, Commander of the US Pacific Command (PACOM), before the Senate Armed Services Committee. "It's certainly cause for concern to see this continuing buildup [by China]," he noted. "It seems to be more than might be required for their defense. We're certainly watching it very closely, [and] we're looking at how we match up against these capabilities."

To counter China's latest initiatives, Fallon called for improvements in US antimissile and antisubmarine warfare (ASW) capabilities, along with a deepening of military ties with America's old and new allies in the region. With respect to missile defense, for example, he stated that "an effective, integrated and tiered system against ballistic missiles" should be "a top priority for development." Such a system, in all likelihood, would be aimed at China's short-range missiles. He also called for establishment of a "robust and integrated ASW architecture" to "counter the proliferation of submarines in the Pacific."

Note that Fallon is not talking about a conflict that might occur in the central or eastern Pacific, within reach of America's shores; rather, he is talking about defeating Chinese forces in their home waters, on the western rim of the Pacific. That US strategy is aimed at containing China to its home territory is further evident from the plans he described for enhanced military cooperation with US allies in the region. These plans, encapsulated in the Theater Security Cooperation Plan (TSCP), were described by Fallon as "one of the primary means through which we extend US influence, develop access and promote competence among potential coalition partners."

Typically, the cooperation will include the delivery of arms and military assistance, joint military maneuvers, regular consultation among senior military officials and, in some cases, expansion (or establishment) of US military bases. In Japan, for example, PACOM is cooperating in the joint development of a regional ballistic missile defense system; in the Philippines it is assisting in the reorganization and modernization of national forces; in Singapore--which already plays host to visiting US aircraft carriers--"we are exploring opportunities for expanded access to Singaporean facilities." And this is not the full extent of US efforts to establish an anti-Chinese coalition in the region. In his March testimony Fallon also described efforts to woo India into the American orbit. "Our relationship with the Indian Integrated Defense Staff and the Indian Armed Services continues to grow," he noted. "US and Indian security interests continue to converge as our military cooperation leads to a stronger strategic partnership."

All this and much more is described as an essentially defensive reaction to China's pursuit of forces considered in excess of its legitimate self-defense requirements--"outsized," as Secretary Rice described the Chinese military in a recent interview. One can argue, of course, about what constitutes an appropriate defense capacity for the world's most populous nation, but that's not the point--what matters is that any rational observer in Beijing can interpret Fallon's testimony (and the other developments described above) only as part of a concerted US campaign to contain China and neutralize its military capabilities.

Chinese leaders are no doubt fully aware of their glaring military inferiority vis-à-vis the United States, and so can be expected to avoid a risky confrontation with Washington. But any nation, when confronted with a major military buildup by a potential adversary off its shores, is bound to feel threatened and will respond accordingly. For a proud country like China, which has been repeatedly invaded and occupied by foreign powers over the past few centuries, the US buildup on its doorstep must appear especially threatening. It is hardly surprising, then, that Beijing has sought modern weapons and capabilities to offset America's growing advantage. Nor is it surprising that China has sought to buttress its military ties with Russia--the two countries held joint military exercises in August, the first significant demonstration of military cooperation since the Korean War--and to discourage neighboring countries from harboring American bases. (Uzbekistan asked the United States to shut down its base at Karshi-Khanabad after a meeting of the Chinese-led Shanghai Cooperation Organization in July.) But even if defensive in nature, these moves will provide additional ammunition for those in Washington who see a Chinese drive for regional hegemony and so seek an even greater US capacity to overpower Chinese forces.

This is all bound to add momentum to the pendulum's swing toward a more hostile US stance on China. But that outcome is not foreordained: Future economic conditions--a sharp rise in US interest rates, for example--could strengthen the hand of those in Washington who seek to prevent a breach in US-Chinese relations. These figures argue, for example, that Beijing helps keep US interest rates low by buying US Treasury bonds and that China represents an expanding market for US cars, aircraft and other manufactured goods. But the pursuit of ever more potent weapons on each side could prove to be a self-sustaining phenomenon, undermining efforts to improve relations.

The debate over China's military power and the purported need for a major US buildup to counter China's recent arms acquisitions will become increasingly heated in the months and years to come. As always, it will be fueled by claims of this or that Chinese military advance, often employing pseudo-technical language intended to exaggerate Chinese capabilities and discourage close scrutiny by ordinary citizens. If this trend persists, we will become locked into an ever expanding arms race that can only have harmful consequences for both countries--even if it doesn't lead to war. Questioning inflated Pentagon claims of Chinese strength and resisting the trend toward a harsher anti-Chinese military stance are essential, therefore, if we want to avert a costly and dangerous cold war in Asia.

China's Space Ambitions Potential Threat To US: Analysts
http://www.spacedaily.com/news/china-05zzzzzzzzr.html

Washington DC (AFP) Oct 11, 2005 - With China on the eve of launching its second manned spaceflight, Washington sees Beijing's space ambitions as an emerging security concern, with the potential for the Asian giant to boost its military capabilities and eventually challenge US dominance in space.

From abroad, challenges to US role as top innovator

Ramped-up R&D in China and India blunts economic edge of US.

By Mark Trumbull | Staff writer of The Christian Science Monitor

For decades, America was the preeminent destination for the world's innovators. Scientists of all kinds left their homelands to learn the ropes at top-flight US universities - and often stayed put to earn high salaries. Many countries struggled to stop this brain drain to the US.
But today, the giant sucking sound may be flowing in the other direction. Just this year, 325,000 Chinese earned engineering degrees. The US, by contrast, gave out just 60,000 - fewer than it did a decade ago. And international enrollment at US campuses has been falling.

These numbers symbolize an emerging risk that developing nations like India and China, fueled by high education and lower labor costs, could leapfrog US leadership in innovation.

But amid new calls to address a scientist "shortage," the need is not so much to match China and others numerically as to do something that may be even harder: to stay way ahead in the quality of research and the jobs it spawns.

"The jobs that exist are all going to go away," says Gerard Alphonse, who heads the US branch of the Institute of Electrical and Electronics Engineers. "What we need to do is create the new jobs that will not go away for the next 15 or 20 years."

Of course, not every American job is threatened. But innovation-intensive fields do face global competition, and success in those fields is widely seen as vital to a healthy economy with rising living standards.

If concern about a science gap sounds like a lament as old as the Russian Sputnik satellite, the backdrop today is quite different from the 1950s or even the 1980s, when Japan's economic rise caused American angst.

The reason lies in two factors: the growing number of nations with advanced skills, and a corresponding rise in the willingness of global corporations to locate research and production where profit opportunities are greatest.

"Companies are taking the latest tools and technologies to that foreign talent," says Ron Hira, an expert on outsourcing at the Rochester Institute of Technology.

The trick for nations like the US is to cultivate the kinds of research and related jobs that can't be easily done elsewhere.

Given the global strategies of today's corporations, some economists say there's no guarantee that the free marketplace will produce that result.

In a recent paper, Harvard University's Richard Freeman tackled the question, "Does globalization of the scientific/engineering workforce threaten US economic leadership?"

He outlines several trends that suggest the answer is yes.

• By 1999, China ranked behind only the US, Japan, and Germany in publications on four emerging technologies. By 2004, China was third and closing in on Japan in one of those fields, nano- technology.

• Companies are increasingly locating R&D facilities in China and India.

• The US share of the world's science and engineering graduates is declining rapidly.

On one level, this is simply a predictable reversal from an era of US hegemony as an economic superpower. In 1970, for example, American universities issued half the world's science and engineering doctorates. Now Europe alone outpaces the US in those doctorates, and China could be on pace to do so by 2010.

To be sure, the US remains the acknowledged world leader in technological innovation.

And in traditional economic theory, one nation's gain doesn't need to be another's loss. Economies can grow side by side, each specializing in the fields where they hold an advantage.

But the US and other industrialized nations face a new threat, Dr. Freeman says. If populous developing nations capitalize on their combination of technical advancement and lower costs, they could "do what the North-South trade models have assumed the South could not do: compete effectively in R&D intensive, high-tech industries."

Already, some signs appear troubling. Pay for electrical and electronics engineers fell in 2003 for the first time since surveys began in 1971. In that same year, their jobless rate hit 6.2 percent, well above the national average.

Few experts see easy solutions.

Some emphasize the "do-no-harm" approach, warning against government meddling in the private sector. Spur research along with the rest of the economy, they argue, by keeping a lid on taxes, healthcare costs, and litigation.

Others call for targeted policies to ensure America doesn't get left behind. Among the most common recommendations: Promote spending on research, recruit and retain talent from at home and abroad, and guard against provisions such as tax laws that help employers move jobs overseas.

The most basic need, some say, is for America to keep pioneering fields so cutting-edge that other nations, for the most part, can't do them.

"It could be interdisciplinary things, or it could be higher-level things," says Dr. Alphonse.

To do that, some say federally funded university research is crucial. That's because corporations tend to focus on applied science rather than basic science that lays the groundwork for new industries.

Federal spending on research in the physical sciences, when measured as a share of the national economy, has been falling for four decades, notes Don Giddens, dean of engineering at Georgia Institute of Technology, in Atlanta.

"There are some choices that we're making right now," he says, "that will hurt us."

China Opposes Taiwan's Representative To APEC Summit
http://www.spacewar.com/news/taiwan-05zf.html

Beijing (AFP) Oct 13, 2005 - China said Thursday it was firmly opposed to Taiwan President Chen Shui-bian appointing a parliament speaker instead of an economic minister to attend the Asia Pacific Economic Cooperation summit.

Former Leader Of Taiwan's Kuomintang To Visit China
http://www.spacewar.com/news/taiwan-05zg.html

Taipei (AFP) Oct 17, 2005 - Lien Chan, the former leader of Taiwan's main opposition Kuomintang (KMT), will make a private trip to China following his historic visit there earlier this year, his aide said Thursday.

http://news.independent.co.uk/world/asia/article320565.ece

China Crisis: threat to the global environment
Spectacular growth now biggest threat to environment
By Michael McCarthy, Environment Editor
Published: 19 October 2005
Western politicians queue up to sing its praises. Economists regard it with awe and delight. Other countries are desperate to imitate it. Yet there is another side to China's exploding, double-digit-growth miracle economy - it is turning into one of the greatest environmental threats the earth has ever faced.

An ominous sign of the danger is given in a groundbreaking report from Greenpeace, published today, which maintains that China is now by far the world's biggest driver of rainforest destruction. The report documents the vast deforestation driven by the soaring demands of China's enormous timber trade - the world's largest - as the country's headlong economic development sucks in ever-more amounts of the earth's natural resources.

Citing figures from the International Tropical Timber Organisation, the Greenpeace study says that nearly five out of every 10 tropical hardwood logs shipped from the world's threatened rainforests are now heading for China - more than to any other destination.

Yet deforestation is only one of the threats to the planet posed by an economy of 1.3 billion people that has now overtaken the United States as the world's leading consumer of four out of the five basic food, energy and industrial commodities - grain, meat, oil, coal and steel. China now lags behind the US only in consumption of oil - and it is rapidly catching up.

Because of their increasing reliance on coal-fired power stations to provide their energy, the Chinese are firmly on course to overtake the Americans as the world's biggest emitters of greenhouse gases, and thus become the biggest contributors to global warming and the destabilisation of the climate. If they remain uncontrolled, the growth of China's carbon dioxide emissions over the next 20 years will dwarf any cuts in CO2 that the rest of the world can make.

Even that, however, is not the ultimate threat from an economy which is growing at a rate the world has never seen before. According to Lester Brown of the Earth Policy Institute in Washington DC, the leading American environmental analyst, China's scarcely imaginable growth in the coming years means that the world's population will simply run up against the limits of the planet's natural resources sooner than anyone imagines.

If growth continues at 8 per cent a year, Mr Brown said, by 2031 China's population, likely to be 1.45 billion on current UN predictions, will have an income per person equivalent to that of the US today. He said: "China's grain consumption will then be two-thirds of the current grain consumption for the entire world. If it consumes oil at the same rate as the US today, the Chinese will be consuming 99 million barrels a day - and the whole world is currently producing 84 million barrels a day, and will probably not produce much more.

"If it consumes paper at the same rate we do, it will consume twice as much paper as the world is now producing. There go the world's forests. If the Chinese then have three cars for every four people - as the US does today - they would have a fleet of 1.1 billion cars, compared to the current world fleet of 800 million. They would have to pave over an area equivalent to the area they have planted with rice today, just to drive and park them."

Mr Brown, who has been tracking and documenting the world's major environmental trends for 30 years, went on: "The point of these conclusions is simply to demonstrate that the western economic model is not going to work for China. All they're doing is what we've already done, so you can't criticise them for that. But what you can say is, it's not going to work. And if it doesn't work for China, by 2031 it won't work for India, which by then will have an even larger population, nor for the other three billion people in the developing countries.

"And in some way it will not work for the industrialised countries either, because in the incredibly integrated global economy, we all depend on the same oil and the same grain.

"The bottom line of this analysis is that we're going to have to develop a new economic model. Instead of a fossil-fuel based, automobile-centred, throw-away economy we will have to have a renewable-energy based, diversified transport system, and comprehensive reuse and recycle economies. "If we want civilisation to survive, we will have to have that. Otherwise civilisation will collapse."

The Greenpeace report is one of the first major indictments of the catastrophic environmental effects the great Chinese industrial behemoth is starting to have on the rest of the world.

The ecological damage that China's breakneck industrialisation is having on the country itself has been widely recognised. In an interview earlier this year, China's deputy environment minister, Pan Yue, said five of the 10 most polluted cities worldwide are in China; acid rain is falling on one-third of the country; half of the water in its seven largest rivers is "completely useless"; a quarter of China's citizens lack access to clean drinking water; one-third of the urban population is breathing polluted air; and less than a fifth of the rubbish in cities is treated and processed in an environmentally sustainable way. But China's malign environmental "footprint" on other countries has been less widely reported.

John Sauven, forest campaigner for Greenpeace UK, said: "Western politicians, who think only in terms of gross domestic product, have seen China as some sort of economic wonderland. Tony Blair went to China with British businessmen in September and said how he wanted a slice of the cake. But the growth figures mask an environmental catastrophe. The Chinese are ripping the heart out of the world's irreplaceable rainforests to make cheap products like plywood for Western consumer markets."

The Greenpeace report details how, with incredible speed, China has become the world's largest plywood producer and exporter. Its export market has grown from less than one million cubic metres per annum in 1998 to nearly 11 million cubic metres in 2004.

China banned logging in large areas of its own natural forest in 1998 after catastrophic floods, themselves a direct result of deforestation, killed thousands of people. "This ban, coupled with massive growth in Chinese timber processing capacity and a liberalisation of trade barriers, led China to look overseas in its hunger for timber," says the Greenpeace report.

In one area of China investigated by the group, there were no fewer than 9,000 plywood mills taking in vast numbers of ancient hardwood trees from rainforests in countries such as Papua New Guinea, which are used merely to make plywood panels. Greenpeace contends that many of these trees, if not the majority, have been illegally logged.

The report, entitled Partners in Crime, does not blame only China - it accuses timber barons in rainforest countries of corruption in illegally supplying the wood, and builders' merchants and DIY outlets in Britain of culpable negligence in supplying plywood without establishing its origin. Chinese hardwood plywood imports to the UK have gone from 1 per cent of the total in 2001 to 30 per cent this year.

Greenpeace wants the EU, and failing that, Britain alone, to outlaw the import of timber which has not clearly been legally logged. At the moment there are no restrictions on illegally logged timber coming into Britain.

THE NUMBERS

Consumption

China - growing at nearly 10% a year - already consumes more grain, meat, coal and steel than the United States

Wealth

China's population will grow from 1.3 billion to 1.45 billion in 26 years - when per capita income will be equal to that of the US today

Oil

On current trends, China will by 2031 be consuming 99 million barrels of oil per day. Total world production today is only 84 million bpd

Forestry

China is already the biggest driver of rainforest destruction, says Greenpeace. Half of all rainforest logs head for China

Global warming

By 2025, China will overtake the US as the top emitter of the greenhouse gases causing global warming

Cars

By 2031, China would have 1.1 billion cars if it matches current US trends - bigger than the current world fleet of 800 million

Western politicians queue up to sing its praises. Economists regard it with awe and delight. Other countries are desperate to imitate it. Yet there is another side to China's exploding, double-digit-growth miracle economy - it is turning into one of the greatest environmental threats the earth has ever faced.

An ominous sign of the danger is given in a groundbreaking report from Greenpeace, published today, which maintains that China is now by far the world's biggest driver of rainforest destruction. The report documents the vast deforestation driven by the soaring demands of China's enormous timber trade - the world's largest - as the country's headlong economic development sucks in ever-more amounts of the earth's natural resources.

Citing figures from the International Tropical Timber Organisation, the Greenpeace study says that nearly five out of every 10 tropical hardwood logs shipped from the world's threatened rainforests are now heading for China - more than to any other destination.

Yet deforestation is only one of the threats to the planet posed by an economy of 1.3 billion people that has now overtaken the United States as the world's leading consumer of four out of the five basic food, energy and industrial commodities - grain, meat, oil, coal and steel. China now lags behind the US only in consumption of oil - and it is rapidly catching up.

Because of their increasing reliance on coal-fired power stations to provide their energy, the Chinese are firmly on course to overtake the Americans as the world's biggest emitters of greenhouse gases, and thus become the biggest contributors to global warming and the destabilisation of the climate. If they remain uncontrolled, the growth of China's carbon dioxide emissions over the next 20 years will dwarf any cuts in CO2 that the rest of the world can make.

Even that, however, is not the ultimate threat from an economy which is growing at a rate the world has never seen before. According to Lester Brown of the Earth Policy Institute in Washington DC, the leading American environmental analyst, China's scarcely imaginable growth in the coming years means that the world's population will simply run up against the limits of the planet's natural resources sooner than anyone imagines.

If growth continues at 8 per cent a year, Mr Brown said, by 2031 China's population, likely to be 1.45 billion on current UN predictions, will have an income per person equivalent to that of the US today. He said: "China's grain consumption will then be two-thirds of the current grain consumption for the entire world. If it consumes oil at the same rate as the US today, the Chinese will be consuming 99 million barrels a day - and the whole world is currently producing 84 million barrels a day, and will probably not produce much more.

"If it consumes paper at the same rate we do, it will consume twice as much paper as the world is now producing. There go the world's forests. If the Chinese then have three cars for every four people - as the US does today - they would have a fleet of 1.1 billion cars, compared to the current world fleet of 800 million. They would have to pave over an area equivalent to the area they have planted with rice today, just to drive and park them."

Mr Brown, who has been tracking and documenting the world's major environmental trends for 30 years, went on: "The point of these conclusions is simply to demonstrate that the western economic model is not going to work for China. All they're doing is what we've already done, so you can't criticise them for that. But what you can say is, it's not going to work. And if it doesn't work for China, by 2031 it won't work for India, which by then will have an even larger population, nor for the other three billion people in the developing countries.

"And in some way it will not work for the industrialised countries either, because in the incredibly integrated global economy, we all depend on the same oil and the same grain.

"The bottom line of this analysis is that we're going to have to develop a new economic model. Instead of a fossil-fuel based, automobile-centred, throw-away economy we will have to have a renewable-energy based, diversified transport system, and comprehensive reuse and recycle economies. "If we want civilisation to survive, we will have to have that. Otherwise civilisation will collapse."
The Greenpeace report is one of the first major indictments of the catastrophic environmental effects the great Chinese industrial behemoth is starting to have on the rest of the world.

The ecological damage that China's breakneck industrialisation is having on the country itself has been widely recognised. In an interview earlier this year, China's deputy environment minister, Pan Yue, said five of the 10 most polluted cities worldwide are in China; acid rain is falling on one-third of the country; half of the water in its seven largest rivers is "completely useless"; a quarter of China's citizens lack access to clean drinking water; one-third of the urban population is breathing polluted air; and less than a fifth of the rubbish in cities is treated and processed in an environmentally sustainable way. But China's malign environmental "footprint" on other countries has been less widely reported.

John Sauven, forest campaigner for Greenpeace UK, said: "Western politicians, who think only in terms of gross domestic product, have seen China as some sort of economic wonderland. Tony Blair went to China with British businessmen in September and said how he wanted a slice of the cake. But the growth figures mask an environmental catastrophe. The Chinese are ripping the heart out of the world's irreplaceable rainforests to make cheap products like plywood for Western consumer markets."

The Greenpeace report details how, with incredible speed, China has become the world's largest plywood producer and exporter. Its export market has grown from less than one million cubic metres per annum in 1998 to nearly 11 million cubic metres in 2004.

China banned logging in large areas of its own natural forest in 1998 after catastrophic floods, themselves a direct result of deforestation, killed thousands of people. "This ban, coupled with massive growth in Chinese timber processing capacity and a liberalisation of trade barriers, led China to look overseas in its hunger for timber," says the Greenpeace report.

In one area of China investigated by the group, there were no fewer than 9,000 plywood mills taking in vast numbers of ancient hardwood trees from rainforests in countries such as Papua New Guinea, which are used merely to make plywood panels. Greenpeace contends that many of these trees, if not the majority, have been illegally logged.

The report, entitled Partners in Crime, does not blame only China - it accuses timber barons in rainforest countries of corruption in illegally supplying the wood, and builders' merchants and DIY outlets in Britain of culpable negligence in supplying plywood without establishing its origin. Chinese hardwood plywood imports to the UK have gone from 1 per cent of the total in 2001 to 30 per cent this year.

Greenpeace wants the EU, and failing that, Britain alone, to outlaw the import of timber which has not clearly been legally logged. At the moment there are no restrictions on illegally logged timber coming into Britain.

Rumsfeld To China: World Watching If It Charts Path To Open Society
http://www.terradaily.com/news/china-05zzzzzzzzzs.html

Beijing (AFP) Oct 18, 2005 - The world is watching to see whether China will chart a path toward a more open society, and wondering why it is concealing the pace of its military spending, US Defense Secretary Donald Rumsfeld said Tuesday.


Analysis: Rumsfeld Arrives In Beijing
http://www.spacewar.com/news/china-05zzzzzzzzzr.html

http://www.wpherald.com/storyview.php?Stor...18-074738-2656r

Interview: The complexities of the US-China relationship
By Toshiyuki Hayakawa
Sekai Nippo
Published October 18, 2005


WASHINGTON -- As China grows in economic, political and military influence, it has a growing impact on neighboring Asian countries and Washington's policy toward the region. Sekai Nippo, a daily newspaper published in Tokyo, recently interviewed Peter Brookes, Senior Fellow of the Heritage Foundation and former Deputy Assistant Secretary of Defense for Asia and Pacific Affairs, on the US-China relationship.

Q: US-China summit was held in New York on September 13. What were the fruits of this?


A: Not much. I mean they hoped to have a meeting here in Washington, but then Hurricane Katrina came through, so they had a short meeting on the side of the summit in the world UN summit. But President Bush plans to visit China, so I think there will be additional, there will be more substantive meetings. I don't think they were able to really discuss much because it was a very short meeting. But I think in the future when President Bush goes to China and he will have much more substantive meetings.

Q: Was the Chinese military buildup included in the agenda?

A: Well, I don't know. I think the administration and many others are concerned about Chinese military buildup. Secretary Rumsfeld in Singapore asked a question why China is building up its military and reason is not quite clear. So I think our people are concerned about Chinese intentions and military buildup.

Q: I heard that China wanted the state visit here, but the White House refused the proposal. Is it true?

A: I don't know. I mean you have to ask the White House these questions. It had characteristics of a sub-state visit. A lot has to do with the schedule at the White House. But I understand Chinese did want a full state visit, but they did not quite get one. Chinese were pushing very much for a state visit. It wasn't quite a state visit. So I have to see what happens next time.

Q: How does Bush administration regard China now? A partner or a competitor?

A: I can not do speak for the Bush Administration. So you understand that this is my personal opinion. But there are a number of contentious, difficult issues in the US-China relationship today. I don't think there is one word to define the relationship other than the word "complex."

I think the relationship is very complex. I wouldn't say it's an enemy, a competitor, a friend, or an ally. But it's very complex relationship. We are trying to cooperate with one another on the issues such as North Korea. Other people have questioned about that. But then we had trade frictions with them. There are concerns about military buildup. There are also concerns about energy security. Some people are interested in China's economic policy. And human rights and proliferation are the areas where there is some friction in the relationship.

So I wouldn't say it's a competitor or I wouldn't say it's a friend or I wouldn't say it's an enemy. But I would say it's very complex relationship that we have with China right now.

Q: Secretary of Defense Rumsfeld criticized the Chinese military buildup in Singapore in June. Has the U.S. policy on China changed in the second term?

A: No, I don't think so. Four years ago the administration had the EP-3 incident, remember? There was that and there've been people who have been concerned about China. We are hoping for a constructive relationship with China. And I think there is still that hope. China is building military and exporting textiles. China is doing things US is concerned about. US maintains the same policy. It is China that is changing. So I think that a lot of things about the relationship depend on China, because they're a changing power. So I think there is more attention being paid to China, but we have these concerns toward China.

Q: What do you think about the present military balance of Taiwan Strait?

A: Well, as I said at my congressional testimony, I think the military balance has shifted and there are many people who are concerned about that. I think that Taiwanese are obviously concerned about it. I think also Japan must be concerned about it, because China is capable to take military action against Taiwan, and the conflict in the Taiwan Straight is in nobody's interest. It is not in the interest of Korea, not Japan, not Taiwan, not China, not US certainly, not even Russia. So I think it is raising eyebrows across Asia, as I said before and past. But I think China's military buildup is focused on Taiwan. I think it's also focused on US and Japan as well. It does not want to ever have to negotiate again for any purposes from position of military weakness. So China is going to be a rising military power besides being political, economical power.

Q: China is continuing to build up its military power. It gives high priority to the reinforcement of the navy and air force. What is the purpose?

A: China has always been a land power. It has had a large military with several million men. So it's always been a military land power, but it's never been an air power or sea power. And I think it realizes that even if it has 5 million men in its army, it still couldn't invade Taiwan with that army. It needs to project power offsh