Wednesday, August 5, 2009
Saturday, August 1, 2009
“I’d love to do politics in Britain,” he says after a pause to taste a delicious cauldron of shellfish, tentacles and soggy bread. “But the important thing is to understand our culture and society in order to know how you do that. Being an elected member of parliament might not be the best way – it could be, it probably is, but – well – the question is whether you can actually play a useful role in changing policy in any way.”
It’s hard to know where Rory Stewart really belongs. He says he likes working with communities, but it’s difficult to imagine him enjoying the lifestyle of a British constituency politician. He wants to “change things for the better in a way that is enduring and worthwhile and not just superficially impressive ... or because it looks good on your cv”. In another age, he would have been a statesman, an explorer, a philosopher – but today?
Friday, July 31, 2009
Wednesday, July 22, 2009
As part of its continued efforts to reduce exposure to the U.S. Dollar, China will use portions of its $2.132 trillion - yes, trillion - forex reserve chest to purchase tangible and corporate assets abroad. The announcement comes less than one week after China appointed Yi Gang as the new head of the State Administration of Foreign Exchange (SAFE).
Ostensibly energy and natural resources firms will be first on the acquisition list. Prepare for an uptick in xenophobia and anti-Chinese sentiment on Capitol Hill as China's state-owned companies take advantage of depressed asset prices to buy up U.S. companies and business units of multinationals with sensitive technologies.
One wonders which banks stand to gain from the underwriting and due diligence requirements coming in the months and years ahead, and whether outside consultants are advising SAFE on its investment strategy.
It will be interesting to see if/how this impacts Chinese demand for U.S. Treasuries. Without the Chinese government's continued purchases of U.S. debt, the costs of the Obama Administration's ambitious policy agenda will escalate further. On top of the declining support for his policies, an inability to acquire debt financing would leave his initiatives stillborn.
Tuesday, July 14, 2009
With China's three decades of uninterrupted economic growth, the country is seeking to expand its influence throughout South Asia - from the Indian Ocean to the Persian (Arabian) Gulf. As the FT notes, often this influence takes the form of infrastructure projects - such as deep water ports, arms deals, energy investments, and diplomatic support.
The so-called "string of pearls" of Chinese influence appear to leaders in New Delhi as elements in a strategy of encirclement. No wonder the Indians are eager to begin sea trials of their first nuclear-powered, ballistic missile capable, submarine later this month.
This portending conflict is a subject that Robert Kaplan expanded upon in the March/April 2009 issue of Foreign Affairs, in an essay titled "Center Stage for the 21st Century: Power Plays in the Indian Ocean."
While it is tempting to believe that the forces of history will inevitably lead to major war between these two powers, it is worth pausing and remembering that history isn't linear. The recent unrest in Xinjiang Province points to the tenuous hold the Chinese Communist Party has over domestic stability. An increase in unrest of any kind within China likely would compel the government to focus on its domestic situation, and forego the uncertain benefits of foreign intrigue. Of course, leaders in Beijing might redirect domestic anger and unrest, by channeling the population's latent nationalism toward a foreign enemy.
Regardless, as David Lampton points out in his excellent book The Three Faces of Chinese Power: with 14 land neighbors, China faces a delicate balance between overt demonstrations of power and influence, and maintaining a peaceful regional environment conducive to its own continued economic growth. If China manifests its power obtrusively, it may find its neighbors bandwagoning against it.
For those interested in geopolitics, competition over resources, the great swath of land stretching from the Near East through South and Central Asia to China, as well as those who believe the world's future lies more with the G-20 than with the G-8, this story is one to watch.
Saturday, July 4, 2009
The essay is available here.
This is a must read.