China to US: India a 'lesser power', not an equal

By Jyoti Malhotra

New Delhi -- India and China are in the middle of a spat resulting from a mix of bad timing and unusual Indian assertiveness over the Dalai Lama’s place in the religious pantheon here, as well as a new determination to pursue its economic interests in the South China seas.
The Sino-Indian boundary talks, scheduled between national security advisor Shiv Shanker Menon and his Chinese counterpart, Dai Bingguo, have been cancelled.
That was after Beijing demanded that Delhi scrap a Buddhist conference at which the Dalai Lama was expected to be a chief guest.
Chinese foreign ministry spokesman Hong Lei said China “opposed any country that provided a platform to the Dalai Lama and his activities”.
Hong reiterated the Chinese official stand on the Dalai Lama at his weekly Monday briefing, saying he “is not a purely religious figure but one engaged in separatist activities for a long time, under the pretext of religion…We oppose any country that provides a platform for his anti-China activities in any form.”
Indian diplomats said with China it was imperative to take the long view, which is that “anything India does with the Tibetan holy leader is the equivalent to taking a red rag to a bull,” and said it was the invitation to him at the Delhi conference that did the trick.


‘Not an equal’ 
The recent background to the spat is interesting.
According to a highly-placed US government source, who spoke on condition of anonymity, the Americans suggested to the Chinese in June that they embark upon a trilateral dialogue with India.
This first took place during the conversations between US assistant secretary of state for East Asia, Kurt Campbell, and Chinese vice-minister Cui Tiankai, during their inaugural US-China consultations on the Asia-Pacific region in Honolulu, Hawaii.
The Chinese were very clear and told the Americans, the US government source confirmed, that “there was no need for a lesser power, like India, to participate in a dialogue among equals, such as the US and China”. The US government source confirmed that the Americans were “quite taken aback by the quietly confident manner in which the Chinese turned down the US suggestion on India”.
The Americans, who have been encouraging Delhi to be much more enterprising in their foreign policy consultations with third countries, will hold the first ever trilateral between India, Japan and the US in mid-December in Washington DC.
Until last week, Delhi had seemed to take Chinese criticism in its stride.
Foreign secretary Ranjan Mathai, speaking at the ministry of defence think tank, the Institute for Defence Studies and Analyses, said India would be happy to participate in a trilateral dialogue with the US and China.
In fact, the US has been keen to undertake joint projects with India in Afghanistan, in Africa and in the Asia-Pacific.
While Delhi has shied away from engaging with the US in Afghanistan, it has happily reaped the benefit of a growing relationship with the US in east Asia and Australia.
India’s growing economy has also propelled it towards greater economic integration with Japan, South Korea, Singapore and Australia.
With the signature of several Free Trade Area agreements in this part of the world, the sense of India expanding its footprint in China’s neighbourhood is inescapable.


Indian thinking 
So, when India finally decided to take up Vietnam’s offer, pending since 1988, to explore and exploit two oil blocks in the South China seas off the coast from Vietnam, and Chinese premier Wen Jiabao raised the issue with Prime Minister Manmohan Singh at the East Asia summit in Bali last week, the PM insisted India’s interests were “purely commercial”.
When India offered to meet China halfway at the Buddhist conference, saying neither the PM nor the President would share the stage with the Dalai Lama, Beijing refused and wanted Delhi to stop the Dalai Lama from attending.
Instead, Delhi called off the meeting.
“The Indian elephant is usually very lazy, but once it takes a decision, it is very difficult for him to backtrack,” said Srikant Kondapalli, Chinese expert at Jawaharlal Nehru University’s School of International Studies. Indian diplomats sought to play down the latest disagreement with Beijing, saying both sides would return to “business as usual” very soon.
Kondapalli noted that in 1956, the Dalai Lama had come to Patna from Tibet to participate in the 2,500th anniversary of the Buddha’s birth, which then prime minister Jawaharlal Nehru had attended.
Fifty years later, Delhi could not possibly tell the Tibetan leader not to attend the Buddhist celebrations, especially when he now lived in India.
Asked if this spat would have an impact on the likely visit of Chinese vice-president and president-designate Xi Jinping in January, the diplomats noted that the dates for Xi’s visit had not been finalised.
The diplomatic sources implied it was time for China to come to terms with India’s rising power and status in the region, considering Delhi had also been adjusting to the reality of China being a rising power that was ready to take its place as the world’s most powerful nation.
They said India had watched China expand its presence in the Indian neighbourhood, especially in Pakistan, but had mostly kept quiet.
“But just because China was becoming more sensitive about India’s presence in East Asia does not mean India has to watch its step,” said a government official.
Kondapalli agreed that China was becoming more “isolated, as well as confident at the same time,” pointing to its holding of $1 trillion worth of US treasury bonds and its imminent shopping expeditions in the euro zone to snap up cheap assets.
On the other hand, as the US sold F-16 fighter planes to Indonesia, strengthened its trans-Pacific partnership with Australia, South Korea, Japan, Singapore and Malaysia, and announced military bases in Australia, the sense that China’s expanding might had to be balanced in some way by the rest of the region was becoming a greater concern, he said.

China embrace too strong for Naypyidaw

By Bertil Lintner

A truck carrying Chinese goods across the Myanmar-China border






Burmese jade sold in a Chinese market. 


JIEGAO, Yunnan province -- This tiny enclave south of the Shweli river belongs to China but is completely surrounded on land by Myanmar. Its unique position has given rise to a boomtown like no other in western Yunnan province, a bustling exit point for Chinese goods destined for Myanmar and beyond. Shops in Jiegao sell everything from electronic goods, household appliances, motorcycles, garments, medicines, fake DVDs and bizarre sex toys.
One shop displays two huge, 12-wheel trucks in a glassed showroom facing one of the town's broad new boulevards.
Jade and precious stones from Myanmar are on sale here as well.
The cross-border trade, however, weighs heavily in China's favor.
In 2009, the last year for which official statistics are available, Chinese exports to Myanmar amounted to US$2.3 billion while imports were a mere $646 million.
Some projections put the current export figure closer to $4 billion.
Jiegao's exports are not confined to Myanmar, with local markets in northeastern India and as far as Bangladesh flooded with cheap Chinese consumer goods.
Considering that only two decades ago Jiegao consisted of little more than a cluster of bamboo huts, this has been no mean achievement.
A new, wide bridge connecting the enclave with the rest of Yunnan north of the river was first built in 1992. At the same time, before high-rise buildings and shopping complexes were built, a giant monument was erected near the bridge, showing three figures pushing what looks like a circular object between them with their determined faces pointing south.

The Chinese monument in Yunnan
"Southeast Asia, here we come!" a local resident joked when this correspondent first visited Jiegao in late 1994.
Yet it hasn't been as easy to push that wheel south as the Chinese likely first expected.
For more than two decades now, Chinese companies have plundered northern Myanmar of its natural resources, including timber, which has led to massive deforestation especially in the country's northern Kachin State.
Rampant logging by Chinese companies in the area have led to floods, landslides and other natural disasters never before experienced in that part of the country.
According to a report by the international environmental watchdog Global Witness, this trade continues despite an official Chinese ban imposed in 2006 on the importation of timber from Myanmar.
"Half of China's timber imports from all countries are probably illegal," the investigative report stated.
Timber depots in western Yunnan and shops selling processed wood products are still widely available in China-Myanmar border areas.
"They're buying everything, small trees, big trees, even the roots," laments a local Myanmar resident on the border referring to still active Chinese importers.
Chinese ambitions for northern Myanmar have since grown.
On June 16, 2009, Myanmar's Beijing ambassador Thein Lwin and the president of China Power Investment Corporation Lu Qizhou signed a Memorandum of Agreement for the joint "Development, Operation and Transfer of the hydropower Projects in Maykha, Malikha and Upstream of Irrawaddy-Myitsone River Basin".
The biggest of these dams at Myitsone, or the confluence of the Maykha and Malikha rivers, which the local ethnic Kachins call N'Mai Hka and Mali Hka, was scheduled to cost $3.6 billion and flood more than 700 square kilometers of forestland.
Around 90% of the electricity generated by the massive dam was to be exported to China.
The Burmanization of the names of the two main rivers in Kachin State was not the only insult to the local population.
"Myitsone" is a new Burmese name which means "river junction", or the confluence of two rivers.
Previously, a Kachin village known as Tanghpre was located there but its inhabitants were forcibly evicted before the Chinese construction crews moved in.
It was renamed by the central Myanmar government and an entirely new settlement was built around a Buddhist pagoda in a predominantly Christian part of the country.
In April 2010, a series of bomb attacks were launched against the site.
No culprits were caught but local sources say disgruntled local Kachin residents were behind the attacks. The Myitsone dam controversy later grew from a local to national issue, fuelling nationalistic sentiments even among the majority Burman population.
This led to Myanmar President Thein Sein's stunning announcement on September 30 that the entire China-backed project would be suspended because it was against "the wishes of the people".
Ten days prior, Myanmar police had arrested a lone protester who had demonstrated against the dam outside the Chinese Cultural Office in the old capital Yangon.


Diplomatic naivete 
The Chinese were stunned by the official decision.
If they had followed recent developments more carefully and had a better grasp of Myanmar history they wouldn't have been.
Casual conversations with local residents in the border areas reveal a deep distrust of China -- and anger at its designs for Myanmar.
But Chinese officials have displayed an astounding naivete in their analyses of the situation.
A typical example of that shallow understanding is a paper titled "Sino-Myanmar Relation and its Prospect" (sic) by Wang Junfu, vice president of the Chinese military's International Liaison Department of the General Political Department, publicly known as the China Association for International Friendly Contacts. (The department prepares political and economic information for China's top leaders.)
Written and presented in May 1995, just as the Chinese had penetrated Myanmar to the extent that they believed the situation was irreversible, Wang writes about a fictitious "joint struggle" of the "two peoples" against "imperialism and colonialism".
The writer lists numerous visits to Myanmar made by Chinese officials and states among much empty language that "two-thousand years" of history "proves that friendly cooperation is the melody of Sino-Myanmar ties".
What Wang conspicuously failed to mention was the vicious, anti-Chinese riots that rocked Yangon's Chinatown in 1967, which were followed by two decades of massive Chinese support for the insurgent Communist Party of Burma.
He also failed to note that the Chinese government at that time branded Myanmar's then strongman military leader Ne Win as a fascist and Red Guards surrounded the Myanmar embassy in Beijing shouting anti-Myanmar (then known as Burma) slogans day and night over loudspeakers.
In more recent years, Myanmar has seen a huge influx of immigrant workers, black market traders and gamblers from China.
According to Global Witness, 30% to 40% of the population of the northern Myanmar city of Mandalay is now Chinese.
As early as 1988, a local author, Nyi Pu Lay, wrote a short critical story titled The Python which highlighted the influx of Chinese to Mandalay, the old royal capital of Myanmar.
Nyi Pu Lay was subsequently arrested and released after spending several years in prison for his writings. Nyi Pu Lay is the youngest son of Mandalay's perhaps most famous literary couple, the late Ludu U Hla and Daw Ahma, lending local weight to his reputation and message.
Chinese economic penetration of Myanmar began in the early 1980s and was facilitated, but not caused, by Western isolation of the country after the military's brutal suppression of a nationwide pro-democracy uprising in 1988.
But it should have been clear to observers that it was an uneasy relationship from the beginning.
The recent turnaround, epitomized by the stoppage of the Myitsone dam, was not as assumed by many driven by the 2010 elections and the shift towards a nominally democratic government made up mainly of former military officers.
As one Myanmar observer put it, Myanmar's "new look" government was designed to give the regime a more friendly international face and provide a convenient opportunity to unveil policies that had been in store for several years -- policies which ironically have been promoted by staunchly nationalistic, hard-line army officers.
When asked if Myanmar army officers had simply changed their uniforms for civilian clothes, one local Yangon resident recently quipped: "No! They have put their suits on over their uniforms."
According to several sources, the first bilateral blow against China came in October 2004 when then prime minister and former intelligence chief Lt Gen Khin Nyunt was ousted, charged with corruption and given a stiff prison sentence which was later converted to house arrest.
Khin Nyunt was considered "China's man" in Myanmar and a well-placed source with access to inside information says that the Chinese could not at first believe he had been ousted.
Both sides managed to smooth things over and bilateral relations later appeared to return to normal after the internal purge.
The next big blow to bilateral ties came in August 2009 when the Myanmar Army moved into the Kokang area of northeastern Shan State.
Populated mainly by local ethnic Chinese, Kokang had received a considerable influx of residents from across the border.
Given the similarities between Kokang Chinese and Yunnanese Chinese, it was not difficult for the latter to obtain local Myanmar ID papers for a fee.
While many began to do business in the area, others moved to cities such as Mandalay as legal Myanmar citizens.
The Myanmar Army offensive into Kokang drove more than 30,000 people across the border into China. Chinese authorities allowed only Kokang-based Chinese nationals to cross into China and many ethnic Kokang-Chinese refugees were stopped at the border.
On the Myanmar side, government soldiers beat up Chinese nationals, stole their property and an unknown number of people were killed in the melee.
There were also reports of rape of Chinese women.
Chinese authorities were outraged by the violence against their citizens but then did nothing, probably hoping that the situation would once again return to normal.


Anti-China promotions 
The military operation in Kokang was masterminded by Lt Gen Min Aung Hlaing, then head of the Myanmar military's Bureau of Special Operations 2.
The commander on the ground who ordered his soldiers to beat up the Chinese was the head of the 33rd Light Infantry Division, Brig-Gen Aung Kyaw Zaw.
Both soldiers have since been promoted for their work.
Min Aung Hlaing has been elevated to joint chief of staff of the defense services -- the army, navy and air force -- replacing General Thura Shwe Mann, who is one of the top "civilians" in the new setup in Naypyidaw.
Aung Kyaw Zaw, meanwhile, has been promoted to a major general and commander of the Northeastern Command of the Myanmar Army based in Lashio.
In that new capacity, he is in charge of most of the border areas which are under the government's control, including the economically and strategically important trading post at Jiegao.
Myanmar's move towards a new China policy thus more clearly began in 2004, not after the 2010 election. An important internal document compiled by Lt Col Aung Kyaw Hla, a researcher at Myanmar's Defense Services Academy, seems to have set the stage for this policy shift.
His 346-page confidential thesis, entitled "A Study of Myanmar-US Relations", outlines specifically many of the policies now being implemented, including strategies for improving relations with the US and how to mitigate Myanmar's dependence on China.
Sources with access to inside information about Myanmar's military leadership assert that there is no "power struggle" inside the new government between alleged "hardliners" and "moderates" over democracy and human rights, as suggested by many Western pundits.
Many foreign news reports have presented Thein Sein as a reformist leader battling against entrenched forces linked to the previous ruling junta.
Rather, there is a consensus among the military top brass that Myanmar has become too dependent on China and that the country has deviated from its traditional, neutralist foreign policy -- a cornerstone for survival for a country squeezed between Asia's two giants, China and India, and with Western-allied Thailand on its eastern flank.
To be sure, these new "democratic" policies seem to be working well.
Myanmar has been able to leverage them to strengthen its position within the Association of Southeast Asian Nations (ASEAN), which recently agreed to allow it to chair the regional bloc in 2014.
The country is also reaching out to new power players in the region in a bid to diversify its trade and investment reliance on China.
In particular, Myanmar has recently cemented important ties with Indonesia, seen by many as ASEAN's new anchor.
In May, Indonesian President Susilo Bambang Yudhoyono held high-profile discussions with Thein Sein in Jakarta, while in June and July two Indonesian deputy ministers with economic portfolios, Mahendra Siregar and Edy Putra Irawady, visited Myanmar.
They pledged to increase trade and investments in Myanmar's energy, food production and infrastructure sectors.
More significantly, Gen Min Aung Hlaing, who was appointed commander-in-chief of Myanmar's military in March, took his first foreign trip in mid-November to Vietnam -- Beijing's traditional adversary -- rather than China.
Myanmar and Vietnam share similar fears of their powerful northern neighbor and so it is reasonable to assume that Min Aung Hlaing had much to discuss with his Vietnamese hosts.
Relations with the US are also improving.
On December 1, Secretary of State Hillary Clinton will visit Myanmar, the first such visit by a high-ranking US official in decades.
But, as cynics point out, while paying lip service to human rights and democracy, there is little doubt that the status of China-Myanmar relations will be high on Clinton's diplomatic agenda.
On a visit to Canberra in November, US President Barack Obama stated that "with my visit to the region, I am making it clear that the United States is stepping up its commitment to the entire Asia-Pacific region".
The United States is a Pacific power, Obama said, and "we are here to stay".
He added: "The notion that we fear China is mistaken. The notion that we are looking to exclude China is mistaken."
The last statement was as unconvincing as Thein Sein's claim that the Myitsone dam project was suspended because he was concerned about "the wishes of the people".
Myanmar and the US, two long-time adversaries, may now be on the same side in the emerging regional power struggle with China.
Yet the monumental wheel at Jiegao - China's gateway to Southeast and South Asia -- has certainly not stopped turning as Chinese trade and influence continue to grow in Myanmar and beyond.
But more friction and perhaps even hostility could color future relations between China and Myanmar, an antagonism that could help the military regime shake its pariah status and isolation from the US.

China's Threat: South China Sea Two-Step

Asean's weakness compels members to hedge their bets. But making the issue international might work. 
By CARLYLE A. THAYER

A Chinese fort on Mischief Reef, claimed by the Philippines.
The East Asia Summit in Bali last week saw a flurry of activity on the South China Sea.

U.S. President Barack Obama raised the territorial dispute, but Chinese Premier Wen Jiabao snapped back, arguing the summit wasn't the place to discuss the issue, which should be solved bilaterally by the states concerned. 

Finally, chairman of the Association of South East Asian Nations (Asean) and Indonesian President Susilo Bambang Yudhoyono noted, after 16 of the 18 leaders had raised maritime security in their remarks, that consensus had been reached to indeed discuss the issue. 

While this was a hopeful sign, doubts remain whether Asean has the cohesion to negotiate a satisfactory bilateral resolution to the dispute with Beijing. 

Internationalizing the issue to the extent possible might be the best bet to pressure China to tone down its position of "indisputable sovereignty" over 80% of the South China Sea. 

This year China has aggressively asserted its sovereignty claims in the area by challenging oil exploration vessels operating in waters claimed by the Philippines and Vietnam. 

In the former case, an exploration vessel was forced to leave Reed Bank by a Chinese ship. 

As for Vietnam, Chinese ships reportedly cut the cables of two vessels towing seismic monitoring equipment. China and Asean members are now about to begin negotiating a Code of Conduct to reduce tensions. 

But Asean has failed to adopt a common policy on the issue, essentially conceding to China that maritime security issues involve only the six claimants—China, Taiwan, Vietnam, the Philippines, Malaysia and Brunei—and not the six other non-claimant members of Asean. 

This is a deeply flawed strategy. 

Maritime security in Southeast Asia affects both claimants and non-claimants as international law applies equally everywhere. 

Reaching a Code of Conduct in the South China Sea frees China to act assertively in Southeast Asian waters stretching from the eastern Indian Ocean through to the Gulf of Thailand. 

Given Asean's capitulation, it is unsurprising that the Philippines and Vietnam are, as a start, hedging their bets. 

Both seek support from major regional powers, including the United States. 

However, both are also trying to maintain good relations with Beijing. 

Both Asean countries are courting the U.S. and arming for potential conflict, taking measures to beef up their military forces for South China Sea contingencies. 

The Philippines revised its defense doctrine to include territorial defense and increased defense funding for the modernization of its armed forces. 

Philippine Foreign Secretary Albert del Rosario earlier this year went to Washington, making the case that the 1951 treaty between the two countries obligated the superpower to come to Manila's defense. 

As for Vietnam, it announced several years ago that it would procure six Kilo-class conventional submarines from Russia. 

This year Vietnam received the second delivery of a Russian Gepard-class guided missile frigate, its second battery of Bastion land-based anti-ship cruise missiles and additional Sukhoi Su-30 jet fighters. 

Vietnam even held widely publicized live-fire naval exercises to signal its resolve after the cable cutting incidents. 

Then there's the advanced defense ties with the U.S. 

Hanoi and Washington signed their first defense cooperation agreement this year, and two U.S. military sealift ships have undertaken minor repairs in Cam Ranh Bay. 

But this doesn't mean Vietnam is abandoning its military relationship with China. 

Security analysts who think the U.S. will return to its former base at Cam Ranh Bay are too hasty. 

In fact, Vietnam has successfully used a better relationship with the U.S. to enhance its bargaining position with China. 

This year it conducted joint naval patrols with the Chinese navy in the Gulf of Tonkin and Vietnamese naval ships made their second port visit to China. 

The joint statement issued on Vietnam Communist Party Secretary General Nguyen Phu Trong's visit to China included a lengthy paragraph spelling out future defense cooperation. 

Manila and Hanoi have sought to engage China diplomatically to lower tensions. 

Philippines President Benigno Aquino visited Beijing in September before Secretary General Trong visited in October. 

But this policy isn't just playing off the U.S. against China. 

Both countries are trying to internationalize the issue. 

The Philippines took the lead this year by raising the matter with the United Nations and by lobbying fellow Asean members to support an initiative to clarify which areas of the South China Sea are in dispute and which are not. 

Mr. Aquino and Vietnam's Prime Minister, Nguyen Tan Dung, have also made separate visits to Tokyo, where they elicited Japanese support. 

Vietnam cleverly dispatched President Truong Tan Sang to India while its party leader was in Beijing. Vietnam and India announced a major oil deal, which China promptly protested. 

The outreach to the U.S. is then part of the international strategy. 

Last year it was Vietnam, then Asean chair, which lobbied the U.S. and other regional countries to raise South China Sea issues. 

Eleven foreign ministers joined U.S. Secretary of State Hillary Clinton in raising concerns in July. 

This is not a matter of opposing China, but rather of peace and prosperity that affects all in Asia. 

In Bali, Mr. Obama restated the U.S. position Mrs. Clinton articulated last year—the U.S. takes no sides but supports a peaceful, collaborative diplomatic process based on international law and the United Nations Convention on Law of the Sea in particular. 

He also restated U.S. interests as including freedom of navigation and unimpeded international commerce. China might gnash its teeth, but Mr. Obama is hitting the right notes.

This problem is global and might just force many countries in Asia to take sides. 

Beijing, which cares for saving face in the international stage, could soften. 

That could be the opportunity for Asean to press China for a settlement. 

A collaborative solution is possible, if Asean is up to the challenge.

Huntsman's comment spurs debate in China

Following Republican presidential candidate Jon Huntsman's comment about what will 'take China down,' Chinese commentators debate what he meant. 
By Peter Ford

Former Utah governor Jon Huntsman at the Republican foreign policy debate. 
Beijing -- One advantage Jon Huntsman has going for him in his bid for the Republican presidential nomination is the fact that he understands China better than any of his rivals.
He was ambassador here for a couple of years, so he ought to.
Mr. Huntsman also knows that anything anyone in his position says in America about China will be instantly published here, so he won’t have been too surprised to hear that his comments the other day at the Republican candidates’ foreign policy debate have sparked a bit of a debate in China too.
Asked about his China policy, Huntsman said something interesting, that “we should be reaching out to our allies and constituencies within China. They’re called the young people. They’re called the internet generation… and they are bringing about change the likes of which is going to take China down.”
Whether he is right or wrong about this generation, some commentators here have taken his talk of “taking China down” badly.
In China, Washington is widely believed to have stirred up the democratic “color revolutions” in former Soviet satellites such as Ukraine and Georgia, and Huntsman’s comment is being seen in this context. “Making use of the internet to promote US values and then trigger political unrest can make the authorities lose control,” argued Chen Bing, a news commentator on the popular Shenzhen satellite TV channel. “Huntsman’s is not a new idea.”
There is also a widespread feeling that the United States’ goal is to keep China down, and Huntsman’s remark has fed that fear.
“No matter whether we are a dictatorship or a democracy, the US just wants to take down China’s manufacturing industry,” claimed one blogger joining an online discussion of Huntsman's comment.
Others took the former ambassador’s point, and supported him.
“Isn’t it a good thing to take down China’s autocracy?” asked one.
But Chinese observers are familiar enough with the American political process not to take anything they hear during a presidential campaign too seriously.
“When Huntsman was ambassador he was comparatively friendly to China,” pointed out Mr. Chen.
Now he is a candidate “he has to criticize China and talk about containing China if he wants to win.”

China's Pacific Push Spurs U.S. Spending on Anti-Sub Warfare

Bloomberg

China's naval expansion in the Pacific Ocean is poised to accelerate U.S. investment in anti- submarine warfare equipment, according to Ultra Electronics Holdings Plc, the world's biggest supplier of sonar detectors.
The Pentagon and its allies will focus spending on devices able to spot subs even in the noisiest shipping lanes as China's naval build-up heightens tensions with neighboring nations and underscores the need to secure commercial shipping flows, Ultra Chief Executive Officer Rakesh Sharma said in an interview. “Even with global defense cuts the sonar business is expanding,” Sharma said.
“Mineral supplies and commodities, for example, are all transported by sea, so it's becoming imperative to protect trade routes. Australia, Singapore, Malaysia and the Philippines, as well as the U.S., will all start investing in anti-submarine warfare as the threat from China grows.”
President Barack Obama said last week he'd station 2,500 marines in north Australia to boost security in vital sea lanes as the U.S. moves to blunt the naval influence of China, which is staging exercises in the western Pacific this month and plans to add 30 subs through 2020 out of 86 likely to be built for the region's fleets, according to defense researcher IHS Jane's.


Hidden Threat 
Ultra's latest technology employs multiple “sonobuoys” which are dropped from a ship or plane and return data from different angles and frequencies to determine whether an object is a submarine, a rock or a whale, Sharma said.
Earlier versions couldn't differentiate between organic and inorganic materials.
Greenford, England-based Ultra is developing sonars geared to Asia-Pacific operations at a unit in Indiana, the CEO said.
Emitting more powerful acoustic pulses, they can spot submarine signatures in the most sound-polluted waters, including the Malacca Strait -- the main channel between the Pacific and Indian oceans -- and the South China Sea, where oil rights have led to standoffs between China, Vietnam and the Philippines.
Other gear is able to detect variations in temperature and salinity that can help hide even nearby vessels, Sharma said.
“Water is a very good insulator and when a submarine is sitting on the seabed not moving for days it's very difficult to identify,” he said.
“You could have a sub sitting 5 kilometers off your ship and never hear it, or one 20 kilometers away that you can easily detect. It isn't related to the distance the sub is from you, but the way the sound is travelling.” U.S. concern about Chinese capabilities began to increase in 2006, when a diesel-powered Song-class attack submarine surfaced undetected within torpedo range of a naval battle group led by the aircraft carrier USS Kitty Hawk, Sharma said.


Taiwan Tension 
China's navy will due to stage maneuvers at an unspecified time this month, the official Xinhua News Agency said today, citing the country's defense ministry.
The exercise is an “annual event” and not aimed at any particular state, it said.
China already has 60 submarines, including eight that are nuclear powered, according to the International Institute for Strategic Studies in London, and has been conducting sea trials with its first carrier, a reconditioned former-Soviet vessel.
China's military upgrades have reduced the likelihood of a “peaceful resolution” to tensions with Taiwan, according to a draft of a report from the congressionally mandated U.S.-China Economic and Security Review Commission released last month.
The U.S. is a guarantor of Taiwan's security, and has defense treaties with the Philippines and Thailand.


‘Sea of Fire' 
Japan and South Korea are also among nations looking at anti-submarine systems, said Simon Wezeman, a researcher for the Stockholm International Peace Research Institute's Arms Transfers Program, while Asia-Pacific nations will procure about 100 maritime-patrol planes and 100 marine helicopters this decade, most of them sonar-equipped, according to IHS Jane's.
North Korea today threatened South Korean with a “sea of fire” should even one bullet be aimed its territory after the South held a drill in the Yellow Sea yesterday, the anniversary of a deadly artillery exchange.
The 2010 barrage followed the sinking of a warship that an international investigation concluded was hit by a North Korean torpedo.
The Koreas remain technically at war after the 1950-53 war ended in a cease-fire.


Destroyers 
Malaysia and Vietnam also have submarines on order, and Indonesia is in talks with Korea's Daewoo Shipbuilding to buy three 1,400-ton vessels costing 1.2 trillion won ($1.1 billion).
Ultra is already supplying sonar systems for Australian air-warfare and anti-submarine destroyers being upgraded by Lockheed Martin Corp. and for Boeing Co. P8 Poseidon planes, slated for service entry with the U.S. Navy in 2013 and equipped with torpedoes, depth-charges and anti-ship missiles.
The U.K. company generated 68 million pounds ($107 million) of revenue from its sonar division in the first half, equal to 20 percent of the total, making the business the company's second-biggest after defense communication and computer systems.
Other units supply equipment for warplanes and airliners, with 50 percent of revenue coming from North America.
Ultra shares rose as much as 1.7 percent today and were trading 1.1 percent higher at 1,420 pence as of 10:24 a.m. in London, putting the stock on course to snap eight days of declines.
American Lewis Nixon invented a sonar-like listening device in 1906, with the first patent for underwater echo-ranging filed in Britain in 1912, a month after the Titanic struck an iceberg that had been detected visually less than 40 seconds previously.
The name -- standing for sound navigation and ranging -- was coined during World War II.

Iceland rejects Chinese bid for resort land

By ANNA ANDERSEN
REYKJAVIK, Iceland — A Chinese entrepreneur's bid to create a vast nature retreat in Iceland was turned down by the north Atlantic island nation's government Friday, amid concern the deal would have handed a major chunk of territory to a foreign investor.
Iceland's interior ministry said it had rejected an application by the Zyongkun Group, a company controlled by Huang Nubo, a 55-year-old former Chinese government official, in part because no foreign buyer had ever bought so much land in the country.
Huang, one of China's wealthiest entrepreneurs, had sought to buy 30,639 hectares (120 square miles) of land on the north shore of Iceland in a deal which would have been worth about 1 billion Icelandic kronur ($8.8 million).
He had hoped the site in Iceland's northeast — which would have represented about 0.3 percent of the island's land mass — would attract about 10,000 guests a year and create scores of new jobs.
Iceland's Prime Minister, Johanna Sigurdardottir, had previously said she would welcome Huang's investment, particularly as the nation recovers from the collapse of its banking industry in 2008.
Since its financial meltdown, Iceland's economy has begun to recover — with the International Monetary Fund predicting economic growth of 2.5 percent in 2012, far better than its struggling European neighbors.
However, the interior ministry confirmed it had ruled it could not lift the country's strict restrictions on the purchase of land by foreigners to allow the deal to go ahead.
"The ministry believes that it's not possible to look past how much land the company wanted to purchase," it said in a statement.
"There is no precedent for land on this scale being sold to foreigners."
Referring to Iceland's law on land sales, the ministry said "it was considered necessary to limit foreigner's rights to property in Iceland to protect Iceland's independence" and to ensure that Icelandic people — rather than foreign investors — are able to benefit from the country's resources.
Some critics of the proposed deal had raised concerns that allowing Huang to purchase the land could give China a strategic toehold in the Arctic Circle, where nations are scrambling to claim natural resources and melting ice caps are expected to eventually open up new, faster global shipping lanes.
Huang previously rejected those claims, and insisted that he planned the Icelandic site to be among a chain of nature resorts in China, the United States and Scandinavia.
Halldor Johannsson, Huang's representative in Iceland, said he was surprised by the government's rebuff and claimed Icelandic law did not include limits on the size of a parcel of land an investor could purchase.

China Bends to U.S. Complaint on Solar Panels but Plans Retaliation

By KEITH BRADSHER
HONG KONG — Chinese solar panel manufacturers are preparing to shift steps in their production processes to South Korea, Taiwan and the United States in response to the filing of a trade case against them in Washington, and are working on a way to retaliate against U.S. exports to China, Chinese solar industry executives and officials said Monday.
Preparations to redesign supply chains and retaliate come after the U.S. Department of Commerce opened an anti-dumping and anti-subsidy case against Chinese solar panel manufacturers on Nov. 9, at the request of SolarWorld Industries America and six other U.S. solar companies.
The Commerce Department said it was considering anti-dumping tariffs of 50 percent to 250 percent on Chinese solar panels, plus a request by SolarWorld for anti-subsidy tariffs of more than 100 percent.
After hastily hiring trade lawyers, Chinese solar panel manufacturers are increasingly gloomy about their chances of winning the case, said Ocean Yuan, the president of Grape Solar, a big importer of solar panels based in Eugene, Oregon.
Many trade lawyers in Washington have reached the same conclusion because the Commerce Department handles anti-dumping complaints against China under special rules that heavily favor U.S. manufacturers. China accepted the rules as part of its joining the World Trade Organization in 2001.
Mr. Yuan said that Grape Solar was already in negotiations with several Chinese manufacturers, whom he declined to identify, to do final assembly of solar modules in Oregon as the last step in new supply chains that would start in China then run through South Korea and Taiwan to avoid the likely tariffs.
The Chinese solar panel industry is also seeking legal advice on filing its own anti-dumping and anti-subsidy trade case against the United States with China’s Commerce Ministry, Chinese solar industry executives in Beijing said Monday.
The most likely target would be U.S. exports of polysilicon, the main material used to manufacture conventional solar panels, said Wang Shijiang, a manager at the China Photovoltaic Industry Alliance based in Beijing.
The manufacture of polysilicon requires enormous amounts of electricity — so much electricity that it typically takes the first year of operation of the panel to generate as much power as was required to make the polysilicon in it.
The United States is one of the world’s largest producers of polysilicon, in states like Tennessee and Washington, because it has access to a lot of inexpensive hydroelectric power.
China’s own polysilicon industry is controversial because it relies heavily on electricity generated by coal-fired power plants, and because weak environmental controls at Chinese polysilicon factories have resulted in toxic spills that have fouled streams and rivers.
Polysilicon production guzzles electricity because it requires superheating large volumes of material in electric arc furnaces, including the melting of quartzite rock at 2,000 degrees Celsius (3,630 Fahrenheit) at the start of the process.
The United States exported $873 million worth of polysilicon to China last year while importing only $4 million worth of the material, according to GTM Research, a renewable energy consulting firm based in Boston.
At the simplest level, there are four main steps in making a solar panel, also known as a solar module.
Using molten polysilicon to grow crystals or cast blocks of polycrystalline silicon is the first step.
The second step is cutting and polishing the material into thin, smooth wafers.
The third step involves chemically treating the wafer and adding electrical contacts to turn it into a solar cell. The last step involves connecting 60 or 72 solar cells together, covering them with glass, enclosing them in an aluminum frame and adding an electrical junction box.
Mr. Yuan said that Chinese manufacturers wanted to keep wafer production in China, but were making plans to ship wafers to Taiwan or South Korea for conversion into solar cells.
Turning wafers into cells is the costliest, most high-tech and most highly automated step in producing solar panels, representing about a third of the total cost.
An executive at a Chinese solar manufacturer said his company had already begun making elaborate preparations to move solar cell production out of China for panels destined for the U.S. market.
Chinese manufacturers have studied moving solar cell factories directly to the United States but have largely rejected it in favor of other countries because it takes so long to comply with the many American regulations for opening new factories that use a lot of chemicals, said the executive, who spoke on condition that neither he nor his employer be identified.
Frank Haugwitz, a solar industry consultant based in Beijing, said Taiwan had a very large solar cell manufacturing sector with capacity equal to more than five times the U.S. market, and a significant chunk of that capacity was not being used.
But Taiwan has very little capacity to turn solar cells into solar modules; the finished modules are heavy and expensive to ship because of the weight of the glass and aluminum frames.
China exports finished modules because its low wages offset the extra shipping costs.
But wages in Taiwan are considerably higher than those in China.
Solar cells fabricated in Taiwan or South Korea from Chinese wafers will be shipped to the United States for final assembly, Mr. Yuan of Grape Solar said.
Final assembly involves a lot of labor in bolting components together, for which regulatory approvals tend to be simpler than for solar cell manufacturing.
The final assembly typically accounts for a little less than a fifth of the total cost of making a solar panel.
The U.S. trade case was filed against solar panels for which either of the final two steps — turning the wafer into a cell or assembling cells into a panel — was done in China.
So if Chinese manufacturers shipped solar cells from Taiwan or South Korea back to China for final assembly into modules at their existing factories, these products would also be hit by any steep tariffs that the United States might impose.
Ben Santarris, a spokesman for SolarWorld Industries America, a subsidiary of SolarWorld of Germany, said that there was only one small Chinese-owned factory in the United States doing final assembly of modules.
“Chinese manufacturers would have to build significant production capacity here for final assembly” to reduce appreciably their exposure to any tariffs, he said.
The single Chinese module assembly site, located near Phoenix, Arizona, and owned by Suntech Power, has a capacity equal to about 3 percent of the American market, according to GTM Research.
Companies based in China manufactured 41 percent of the panels installed in the United States in the third quarter of this year.
Mr. Santarris also said that solar cells manufactured in Taiwan or South Korea and imported by the United States would not be immune to trade cases — despite close U.S. trade relations with both countries — if they were discovered to have broken trade rules, as in benefiting from government subsidies.
The U.S. Commerce Department will rule by mid-March on the anti-dumping complaint and by late May on the anti-subsidy complaint, and each ruling is likely to be retroactive for at least 90 days, and possibly retroactive to the department’s opening of the case on Nov. 9.
Under the terms of China’s accession to the World Trade Organization in 2001, other countries are allowed to treat it as a nonmarket economy in anti-dumping cases until 2016.
This allows other countries to use special rules so that Chinese manufacturers almost always lose. SolarWorld calculated in its petition for the anti-dumping and anti-subsidy case that American imports of Chinese solar panels rose 220 percent in February through August of this year compared with the preceding six months.
The period of February through August was the most recent available when the company filed its case in October.

China's fury building over Obama's new Asia policy

By Barbara Demick

President Obama listens as Chinese Premier Wen Jiabao speaks during their meeting on the sidelines of the Assn. of Southeast Asian Nations and East Asia summits.
BEIJING -- Chinese scholars and commentators lashed out with barely repressed anger at President Obama's trip to Asia, complaining that his efforts to shore up U.S. influence in Asia were by implication aimed at containing China.
"The United States has alienated 1 billion Chinese. It's not smart public diplomacy," Shen Dingli, a professor of American studies at Shanghai's Fudan University, said Monday.
The English-language China Daily in its lead editorial on Monday accused the United States of "scaremongering" over the perceived threat of China's rise and a signed Op-Ed article on Sunday declared, "East Asia not U.S. playground."
"The aim of America's strategic move east is in fact to pin down and contain China and counterbalance China's development," echoed Jiefang Daily, a Chinese-language version of the official Xinhua news agency, in a commentary on Sunday.
Chinese reaction during Obama's trip to Australia and Indonesia had been relatively muted, but it seems that hard-line anger is mounting with time to parse over events of the nine-day trip, which ended Sunday.
In Australia, Obama announced plans to locate 2,500 Marines in Darwin by 2016 -- troops that Beijing fears could be used for the defense of Taiwan.
He also outlined a new trade alliance called the Trans-Pacific Partnership that would most likely exclude China because of strict environmental and labor standards.
At a summit of East Asian countries in Bali, Obama also pressed a reluctant Premier Wen Jiabao into discussing China’s territorial claims to the South China Sea, despite Beijing's past insistence that disputes be handled with each country individually and not in an international setting.
The Philippines, Vietnam, Malaysia and Brunei have all complained about China's territorial claims.
In the deluge of editorials published in the past few days, Chinese newspapers mocked the weak U.S. economy and accused Obama of anti-China posturing to bolster his presidential campaign.
At the same time, editorials went out of their way to insist that Beijing actually was not angry.
"China takes U.S. return with aplomb," was the headline of an editorial Monday in the Global Times, a hard-line newspaper with close ties to the Chinese Communist Party. 
Despite the headline, the clenched-teeth editorial went on to say that "the United States doesn’t have the strength to encircle China now. What can it provide to the Asia-Pacific countries?"
If anything, the rhetoric was harsher in the English-language than the Chinese-language press.
"It's obvious that they don't want the regular Chinese people to know what’s happening, but they want the foreigners to know they’re angry," said Ni Lexiong, an international affairs professor at the Shanghai University of Political Science and Law.

Tibetans in China seek fiery way out of despair

By Sui-Lee Wee

Tibetan Buddhist nuns from the Ganden Jangchup Choeling nunnery walk along a mountain road near the town of Daofu, Sichuan province November 13, 2011.
DAOFU, China -- The Ganden Jangchup Choeling Nunnery stands hidden from view on an isolated mountain-top in southwestern China, accessible only by a twisting, rocky road.
It was here, in a mud-brick hut, that Palden Choetso lived.
The 35-year-old Tibetan Buddhist nun burned herself to death on a public street an hour's drive away earlier this month, the latest in a string of self-immolations to protest against Chinese religious controls over Tibet. Palden was a quiet woman who had been with the nunnery in the Ganzi prefecture in Sichuan province for more than a decade, her friends said.
A bright nun who studied Tibetan Buddhism, she was well-versed in reciting spiritual texts and was an ardent follower of the exiled Tibetan leader, the Dalai Lama.
No one suspected, however, that Palden would sacrifice herself, writhing in flames on a dusty road lined with shops in downtown Daofu, or Tawu in Tibetan.
"I want the Dalai Lama to return to China, I want freedom for Tibet!" she is said to have shouted as fire engulfed her body.
"She had drunk several jin of gasoline," a senior religious figure at the nunnery told Reuters, referring to a traditional weight of measure that is about half a kilogram.
"We got a call that she had set herself on fire, and a few of us went down to try to save her. But it was too late."
In China, eleven Tibetan monks and nuns -- some former clergy -- have resorted to the extreme protest since March this year.
At least six have been fatal.
The similarities are striking: All called for the return of the 76-year-old Dalai Lama, who fled to exile in India in 1959, and for freedom for Tibet.
China's Foreign Ministry has branded the self-immolators "terrorists" and has said the Dalai Lama, whom it condemns as a supporter of violent separatism, should take the blame for the "immoral" burnings.
Human rights activists and Tibet experts say, however, the string of self-immolations stems from desperation at Chinese religious controls and being left with few opportunities and little protection for their culture, without the Dalai Lama to provide hope.
"In her heart, she's always wanted the Dalai Lama to return to China," said the senior religious figure at Palden's nunnery, some 425 km (265 miles) from Lhasa, capital of the Tibet Autonomous Region.
The Dalai Lama, revered by Tibetans, has not condemned or condoned the burnings but said the desperate conditions Tibetans face under Beijing's rigid controls in what amounted to "cultural genocide" have led to the spate of self-immolations.


"ALL HEROES" 
Burning oneself in public is not a new form of protest in China.
The self-immolations are perhaps an uncomfortable reminder to the Communist Party of previous public protests such as those by five people in Beijing's Tiananmen Square in 2001.
China said then the self-immolators belonged to Falun Gong, a banned spiritual group.
But this year's self-immolations are notable for their frequency -- and the power with which they symbolize the pent-up frustration felt by many Tibetans in China.
Just days before she burned herself, Palden told her fellow nuns that she felt "so sorry for those who self-immolated themselves," Free Tibet, an advocacy group, told Reuters.
Nicholas Bequelin, a researcher on China for Human Rights Watch, said that his interviews and reports among the monastic communities suggest that tensions are worse now than in March 2008, when deadly riots against the Chinese presence spread across Tibetan regions ahead of the Beijing Olympics.
"So far, the escalation and the rise in tensions is unprecedented," he said.
"One of the main concerns of the government is they don't exactly know how to respond to this."
"Normally they rely on fear and intimidation," Bequelin said.
"But how do you intimidate people who are ready to set themselves on fire?"
Most of the people who Reuters spoke to in three Tibetan towns in Ganzi prefecture approved of the grisly act.
"I think they are all heroes," said a woman shopkeeper selling Tibetan religious artwork in the heavily Tibetan town of Danba, giving the "thumbs up" as she spoke.
"The central government says our policies on the Tibetans are good. But all they do is suppress the Tibetan people."
"There will be more. This is just the beginning," she said.
"There's no other way out."
A monk at the Jingang Temple in Kangding town concurred: "Many Tibetans support it, and I support it too. They gave up their lives for the Tibetan race."
In Daofu, a town of about 55,000 people and the site of a previous self-immolation by a monk from the Nyitso monastery in mid-August, Tibetan clergy appeared conflicted about the act.
"No, absolutely not," said the senior religious figure from Palden's nunnery, when asked whether he supported self-immolation.
"I can't support it because we're talking about people's lives. It's going against the principles of Buddhism." The Karmapa Lama, ranked third in the hierarchy of Tibetan Buddhism after the Dalai Lama and Panchen Lama, appealed last week for Tibetans not to set themselves on fire, saying he hoped they would find more constructive ways to advance their cause.
Robbie Barnett, a Tibet expert at Columbia University in New York, said there has been no precedent for self-immolation as a political protest in Tibet, but added it would be "quite misleading to think that Buddhists disapprove of this".
"They disapprove of it from the point of view of the individual, but they admire the sacrifice that the person is making for what's seen as a greater ideal, for the greater good," Barnett said.
The self-immolations have been concentrated in Ganzi and the neighboring Aba prefecture.
Most residents are Tibetan herders and farmers, many of whom have long resented Chinese rule.
"This was not far from the areas where the first big battles began against the Chinese in the mid-1950s," Barnett said.
"These are people who are not easily pushed around, especially now when their religious institutions are being interfered with in a way that is not seen by them as justifiable."
All the monks who were interviewed by Reuters spoke of decades of "patriotic re-education" campaigns, during which they are forced to pledge allegiance to the Communist Party and occasionally denounce the Dalai Lama.
In Daofu, where monks have been jailed for "splittist" activities, they say they live in fear of the police and are wary of arrest.
All of them asked that their names not be used.
The complaints are familiar: China has ruled Tibet with an iron fist since its troops marched in 1950.
Experts say, however, that Beijing has compounded the problem by intensifying its security presence in monasteries in recent years.
Monks and nuns are deeply respected figures in Tibetan society and have also often led resistance to Chinese Communist rule.
Chinese security forces detained about 300 Tibetan monks from Aba's Kirti monastery for a month in May amid a crackdown sparked by a monk's self-immolation in March.
Although there were no police roadblocks and no sign of a heavy security presence in Ganzi on a recent weekend, six buses of troops and paramilitary forces were seen leaving Daofu.
Police told Reuters journalists to "leave immediately" and tailed them out of the town for about 200 km.


RETURN OF THE DALAI LAMA? 
China, which has poured billions into Tibet, rejects accusations that it oppresses Tibetans, saying its rule has ended serfdom and brought huge economic benefits to what was a poor, feudal society.
"Life was much harder before the Communists came," said Zhaxi Zhongka, a villager from Jiaju village in Danba, which has benefited from tourism money.
She brushed off questions about Tibetan independence and the Dalai Lama.
But many Tibetans remain resentful of Chinese rule.
They have placed their hopes in the Dalai Lama, who stresses a non-violent movement for Tibetan autonomy but not outright independence.
Khedroob Thondup, the Dalai Lama's nephew, said in a telephone interview the situation is unlikely to improve unless Chinese officials meet with his uncle.
China has held on-off talks with the Dalai Lama's envoys for several years, without any sign of progress. Talks between the two sides last occurred in February 2010.
The thorny issue of the aging Dalai Lama's religious succession may also feed into tensions.
Tibetans fear China will use the issue to split the movement, with one new Lama named by exiles and one by China after his death.
"We cannot change anything without His Holiness, the Dalai Lama's return to Tibet," Palden was quoted as telling her friends in the nunnery, days before she burned herself.
Woeser, a Tibetan writer based in Beijing, said Tibetans in Ganzi have been sentenced to jail for merely shouting slogans.
"Under these circumstances, you can only choose self-immolation to express your intentions," she said.

Obama and Asian Leaders Confront China’s Premier

By JACKIE CALMES

President Obama met with Premier Wen Jiabao of China, right, on Saturday in Indonesia on the sidelines of an Asian forum.
ABOARD AIR FORCE ONE — President Obama and nearly all the leaders at an Asian summit directly confronted China on Saturday for its expansive claims to the resource-rich South China Sea, putting the Chinese premier on the defensive in the long-festering dispute, according to Obama administration officials. Premier Wen Jiabao was by turns “grouchy” and constructive as he responded to the concerns aired by almost all of the leaders attending the East Asia Summit, said one of the administration officials, who spoke to reporters aboard Air Force One as Mr. Obama returned from an eight-day diplomatic swing around the Pacific Rim.

The meeting, at the end of the summit, capped a week during which Mr. Obama moved quickly, and on several fronts, to restore the influence of the United States in the Asia-Pacific region after years of preoccupation in Iraq and Afghanistan. 

He announced that 2,500 Marines would be stationed in Australia; opened the door to restored ties with Myanmar, a Chinese ally; and gained support for a regional free-trade bloc that so far omits Beijing. 

The announcements appeared to startle Chinese leaders, who issued a series of warnings that claimed the United States was seeking to destabilize the region. 

Despite the rapid-fire diplomatic challenges, Mr. Obama did make time to speak with Mr. Wen on Saturday morning after the Chinese leader asked if they could meet. 

And Thomas E. Donilon, the national security adviser, described the meeting as “a good engagement.” 

A report in Xinhua, the official Chinese government news service, backed up the administration’s suggestion that Mr. Wen had been put in an uncomfortable position by the focus on the South China Sea, especially because the country has long insisted that the issue should not be discussed in multinational forums. 

At an Asian regional meeting last year in Hanoi, at which Secretary of State Hillary Rodham Clinton bluntly warned China to curb its aggressiveness in its territorial claims, the Chinese foreign minister walked out enraged, according to officials who were there. 

On Saturday, Mr. Wen acknowledged that he did not want to discuss the issue at the summit, but added that it would be “impolite” not to answer the concerns of his country’s neighbors, according to Xinhua. 

He then defended China’s stance on the sea, according to the news service and an Obama administration official who briefed reporters on the condition of anonymity. 

The fact that Mr. Wen spoke at all, however, represented a tactical defeat in a struggle that has become a focal point in the larger tug-of-war with the United States over influence in the region. 

The United States, with an eye toward strengthening ties with China’s smaller neighbors, has backed their preference for multinational talks, rather than one-on-one negotiations in which China would have the advantage. 

The administration official’s account of the nearly two-hour session suggested a more dramatic exchange than is typical of such gatherings. 

Of the 18 nations represented at the East Asia Summit, only the leaders of Cambodia and Myanmar did not raise the issue of maritime security as the presidents and prime ministers took turns speaking, the administration official said. 

Unlike an initial session of the summit, where the leaders met in a large ballroom with retinues of aides on issues of trade, education and multilateral responses to natural disasters, the session Saturday included only the 18 leaders and one adviser each in a smaller room — suggesting a relative intimacy that likely facilitated more candor. 

The official said that Mr. Obama, who was the first American president to attend the East Asia Summit, “did not lobby” the other leaders to speak up. 

The first to speak up, the administration official said, were the leaders of Singapore, the Philippines and Vietnam — among whom tensions with China run highest — followed by representatives of Malaysia, Thailand, Australia, India, Russia and Indonesia, the summit host. 

The leaders reiterated their insistence on a “multilateral resolution of the conflicting territorial claims,” the official said. 

Only after other leaders had spoken did Mr. Obama express his agreement with them, the official said. 

Mr. Obama argued that, “while we are not a claimant in the South China Sea dispute, and while we do not take sides, we have a powerful stake in maritime security in general, and in the resolution of the South China Sea issue specifically — as a resident Pacific power, as a maritime nation, as a trading nation and as a guarantor of security in the Asia Pacific region.” 

Then Mr. Wen replied. 

The administration official described his response as “positive in the sense that he was not on a tirade, and he did not use many of the more assertive formulas that we frequently hear from the Chinese, particularly in public.” 

Instead, the official said, Mr. Wen simply countered that the East Asia Summit was not the place to discuss the issue, and asserted “that China goes to great pains to ensure that the shipping lanes are safe and free.” 

“I would describe the overall discussion as constructive,” and not acrimonious, the official added. 

“The leaders were not equivocating; they were not speaking ambiguously.” 

What was interesting, the official said, was not what Mr. Wen said, but what he did not. 

For instance, he did not repeat the notion that the disputes should be resolved bilaterally. 

But a report in Xinhua said the prime minister “reaffirmed” China’s position, perhaps indicating that his omission did not mean any real change in thinking. 

Despite the prickly response by Chinese leaders throughout the week, the backlash has been relatively muted, at least compared to the past when such moves would have generated more critical statements and sometimes blistering commentaries in the state-run media. 

Bonnie Glaser, a senior fellow in China studies at the Washington-based Center for Strategic and International Studies, attributed the Chinese response to possible confusion over Mr. Obama’s intentions as he approaches a difficult presidential election. 

“They’re probably not too sure how much of it to attribute to the political campaign, and how much to attribute to a shift in U.S. strategy,” Ms. Glaser said.

Obama scores diplomatic victory over China

AAP
US President Barack Obama has succeeded in hauling a maritime dispute into an Asian summit despite China's objections, in a diplomatic victory at the end of his Pacific tour. 
The "robust" discussion on the South China Sea territorial row, at the East Asia Summit on the Indonesian resort island of Bali, took place on Saturday after a week of increasingly sharp exchanges between the two world powers.
Washington's new diplomatic campaign to assert itself as a Pacific power has alarmed China which sees the initiatives, including stationing US Marines in northern Australia, as intruding into its sphere of influence. China's Premier Wen Jiabao has warned against interference by "external forces" in the maritime wrangle, over a strategic and resource-rich area where several regional nations have overlapping claims.
But shortly after hastily arranged talks between Obama and Wen on the summit sidelines, the group leaders held a "very robust conversation on maritime security and the South China Sea", according to a US administration official.
Obama was "encouraged" by the talks and the tone was "constructive", the official said on condition of anonymity, referring to a famous Wild West gunfight by saying it was "not a shootout at the OK Corral". There was no "tirade" from Wen, he said, adding: "Even though maybe he started off maybe a little grouchy, by and large he was very measured."
Chinese state media indicated that Wen reluctantly agreed to the issue being raised at the 18-nation summit. "I don't want to discuss this issue at the summit, however, leaders of some countries mentioned China on the issue. It's impolite not to make a return for what one receives," he said, according to the official Xinhua news agency.
"The South China Sea is an important transportation passageway for China, regional countries and even the world. The Chinese government has made a positive contribution to safeguard the navigation security in the South China Sea," he added.
China, which claims the South China Sea in full, had insisted on discussing the dispute individually with its smaller neighbours but the US has now succeeded in making it a topic for debate at an international forum. The region is a conduit for more than one-third of the world's seaborne trade and half its traffic in oil and gas, and major petroleum deposits are believed to lie below the seabed.
China claims all of it while four South-East Asian countries declare ownership of parts of it, with Vietnam and the Philippines accusing Chinese forces of increasing aggression there.
"The US position here is a principled position -- the United States is a Pacific power, it is a trading power, it is a maritime power," US National Security Adviser Tom Donilon said in Bali.
"The United States has an interest in the freedom of navigation, the free flow of commerce, a peaceful resolution of disputes (but) we don't have a claim, we don't take sides in the claims."
Donilon said Obama discussed concerns about what Washington sees as the artificially low value of the yuan and trade disputes that he raised with China's President Hu Jintao in Hawaii last week.
Wen told Obama China would increase the flexibility of the yuan while stressing that reforms had already had an effect, Chinese state media reported.
"We are closely watching the changes to the yuan's exchange rate... and will encourage the yuan's flexibility in both directions," CCTV quoted Wen as saying.
Wen and Obama met on the same day that a commentary by China's official Xinhua news agency dripped with contempt for his attempt to show that the United States considers itself a Pacific power.
As well as the deployment of 2500 US Marines to northern Australia, Obama has also irked Beijing with his support for expanding negotiations on a pan-Pacific trade deal in which China is not included.
"If the United States sticks to its Cold War mentality and continues to engage with Asian nations in a self-assertive way, it is doomed to incur repulsion in the region," the Xinhua commentary said.
"It is also called upon to guard against sparking disputes and encroaching on others' interests," it added, in an apparent reference to the row over the South China Sea.
China is also likely to be concerned by a dramatic US foray into Burma, its resource-rich ally and southern neighbour.
On Friday Obama said he would send Hillary Clinton there next month, the first visit by a US secretary of state for 50 years, as Aung San Suu Kyi's National League for Democracy said it would take part in upcoming by-elections.
Washington is looking to encourage tentative reforms by the new nominally civilian regime in a country which for decades was ruled by a military junta, and developed close ties to Beijing while the West imposed sanctions on it.

Old U.S. Foe Proves Useful in Asia

By JAMES HOOKWAY

Vietnam has become an important ally as the U.S. seeks to counteract China in Asia. Protesters shout anti-China slogans in Hanoi in August.
CAM RANH BAY, Vietnam—America is back in Vietnam with a message for the rest of Asia: If you want to have a productive relationship with China, you'd better have a good one with Washington, too.
As President Barack Obama attends a key trade forum in Indonesia this weekend, the U.S. is moving beyond its decadelong focus on the Middle East to concentrate again on the powerhouse economies of East Asia at a time when the biggest success story of them all—China's rise to become the world's second-largest economy—is transforming the entire Asia-Pacific region.
Once America's fierce war-time adversary, Vietnam is now emerging as one of Washington's most important new allies in providing a diplomatic and commercial counterpoint to China's growing clout, and Washington's warming relationship with Hanoi perhaps best illustrates America's full-court press in the region across a broad spectrum of fronts.
In a notable reversal from the war years, a U.S. Navy vessel called in at Vietnam's Cam Ranh Bay naval base in August for the first time in more than three decades.
The USNS Richard E. Byrd spent seven days undergoing repairs at the shipyards there, which have been occupied by French, American, Soviet and, finally, Vietnamese forces over the course of 60 years.
The visit added to strengthening ties between the two countries' navies, after the U.S. and Vietnam also held joint noncombat-training exercises in July.
Cam Ranh Bay was one of the U.S.'s largest military bases during the Vietnam war, and the scheduled repair stop came close on the heels of American statements that the busy shipping lanes of the South China Sea should be left free—a clear warning to China's claims to sovereignty over the entire region, and a move which infuriated Beijing and its increasingly assertive naval forces.
Military strategists describe the site as hugely attractive—a deep-water bay offering protection from the frequent typhoons that batter the region and which also provides a strategic base on the South China Sea. Vietnam's leaders are refurbishing the tightly-guarded facility in a bid to encourage other countries' vessels to regularly stop by for repairs or military exercises, effectively internationalizing shipping lanes nearby and counterbalancing China's reach in the region.
It's also a useful way for the U.S. to forge stronger ties.
One of Washington's top diplomats, Assistant Secretary of State Kurt Campbell, argues that a stronger American presence could help secure the economic growth of all countries in region, including China, by ensuring stability and preventing small regional spats from escalating into more disruptive conflicts.
"I would argue that in many respects the last 30 or 40 or 50 years in which we've seen remarkable progress economically and politically in many ways have been underwritten by the full presence of the United States, and we will seek to continue that effort and to diversify it," he said in Bangkok last month.
The U.S. is also tapping into growing environmental concerns in the region—much of it prompted by China's massive need for resources.
In the rice-farming delta of the Mekong River, for instance, Americans are fanning out to help Vietnam cope with the potential environmental impact of China's dam-building projects further upstream.
Among them are geologists from the U.S. Geographical Survey who are helping map and counteract some of the damage caused by China's thirst for hydroelectric power.
The dams prevent nutrient-rich silt flowing down the delta, reducing land levels in the Mekong delta and allowing salt water to flow up the Mekong as far as 60 miles inland, destroying valuable farmland. 
"Once you start mucking about with a river, it can cause all sorts of problems," says Richard Cronin, a Vietnam War veteran and an expert on the environmental challenges facing the Mekong river system who now heads the Southeast Asia program at the Washington-based Stimson Center.
Indeed, China's dam program is triggering a growing environmentalist movement here that's often colored by strong anti-Chinese sentiments.
In Myanmar, too, anti-Chinese environmentalists recently pressured the military-backed government to suspend construction on a massive new hydroelectric complex that would have flooded a large chunk of the country in order to feed China's growing appetite for power.
"The U.S. won't admit as much, but they are partly tapping into this anti-Chinese feeling," says Ian Storey, a regional security expert at the Institute of Southeast Asian Studies in Singapore.
Vietnam is also one of the players in the U.S.'s plans for a new free-trade group known as the Trans-Pacific Partnership, which also includes countries such as Chile, Malaysia and New Zealand.
The U.S. already is a major investor in Vietnam, spearheaded by Intel Corp.'s $1 billion investment in a chip plant in Saigon.
Officials in Washington privately say they hope the trade plan will overtake China's proposals to create an Asia-only trade bloc and help dilute Beijing's commercial and military influence in a region it increasingly considers its own backyard.
So far, the trade proposal seems to be working. Japan, Mexico and Canada have said they want to join, too.
Even China's President Hu Jintao acknowledged that Washington's proposal on a cross-Pacific pact could be one path to a broader trade deal—something some U.S. officials already privately welcome as a way of keeping China engaged even as America retreads its path back into Asia.

Allies Now

U.S.-Vietnam ties have warmed.

1975: The U.S. leaves as North Vietnamese troops take control of the whole country.

1994: The U.S. lifts a trade embargo with Vietnam.

1995: Vietnam and the U.S. restore full diplomatic relations.

2000: President Bill Clinton visits Vietnam.

2001: U.S. and Vietnam normalize trade relations.

2002: Russia hands back Cam Ranh Bay naval base to the Vietnamese.

2003: The first U.S. warship visits Vietnam since the end of the war.

2010: Vietnamese Prime Minister Nguyen Tan Dung offers the U.S. and other foreign navies use of the facilities at Cam Ranh Bay.

Philippines Urges Action on China's Maritime Moves

By ERIC BELLMAN
NUSA DUA, INDONESIA—The Philippines called for a faster, bolder response to China's increasingly aggressive territorial claims in the resource-rich South China Sea.
While growing fears about China's claims were repeatedly raised by the U.S. and other countries during a series of Asian summits over the weekend, the Philippines, one of the most concerned countries, says that nothing has been resolved and that it needs more concrete steps to feel secure.
Manila has recently been the most vocal critic of China's stance in the crucial waterways, which are believed to contain significant reserves of energy and other resources.
It cannot fight Asia's dominant power alone, so it needs more backup from the U.S., as well as its partners in the 10-member Association of Southeast Asian Nations, said Albert del Rosario, secretary of the Philippines Department of Foreign Affairs.
"We feel that we are the puny kid in the schoolyard," he told The Wall Street Journal after Philippine President Benigno Aquino met with U.S. President Barack Obama, in connection with the Asean and East Asia summits held on Indonesia's resort island of Bali through Friday.
The Philippines thinks that Asean-sponsored discussions on the issue are moving too slowly.
It has unveiled its own proposals on how to proceed faster, but they were largely ignored during the summits.
If the Philippines doesn't get better backing from other Southeast Asian countries, Mr. del Rosario said, it will be have to try to defend its claims in international courts that rule on the United Nations Convention on the Law of the Sea.
"That's the avenue we think we will have to pursue if we are not able to convince Asean to take up the cudgel for moving forward the validation of respected claims," he said.
The Philippines, China, Vietnam and other Asian countries have overlapping claims in the sea.
The Philippines has clashed with China in the past in an area known internationally as the Reed Bank and has taken to calling the body of water the West Philippines Sea.
In an incident in March, a Chinese patrol boat threatened a Filipino oil exploration ship in the area, Mr. del Rosario said.
The Philippines has responded by calling on the U.S. and Asean for support, as well as unveiling plans to upgrade its military.
China says it wants peace in the region but is sticking by its claims.
At the last major Asean meetings, in July, China agreed to participate in multilateral talks on the issue.
But the many claimant states have yet to exchange proposals on peaceful confidence-building operations in the South China Sea, and the discussions are far from even asking claimants to outline their claims, as well as any historical and geographical proof they are based on.
The Philippines has recently unveiled its own plans for the disputed territories.
It has called for what it is describing as a Zone of Peace, Freedom, Friendship and Cooperation that would have countries clearly define their claims in the sea and then cooperate in and share the areas where they have no overlapping claims, leaving a reckoning on the disputed areas till later.
President Aquino failed to drum up much support for the proposal during the Asean and East Asia summit meetings.
"What is happening now is that the president is trying to get Asean behind its position, but there are some countries that don't want to go as far as antagonizing China," said Ramon Casiple, executive director of the Institute for Political and Electoral Reform in Manila.
Another Asean member that has been an outspoken critic of China's actions in the South China Sea has been Vietnam.
The Vietnamese have long been wary of China's long-term policy goals in the South China Sea and have been working hard to build up relations with the U.S. in recent years.
While Vietnam was one of the countries complaining loudest about China earlier this year, some Vietnamese diplomats see the Philippines' recent campaign as an opportunity to sit back a little, analysts say.
Despite their wariness of China, Vietnam trades a lot with China, and there are many high-level interactions between the two, particularly between the chiefs of their respective Communist parties.
The Philippines is getting impatient, Mr. del Rosario said.
It needs unfettered ability to explore the waters surrounding its islands for natural resources like oil and gas. "China can afford to wait 100 years," he said.
"But we need what we are trying to explore for in the South China Sea for our economic development sooner rather than later."

Formations in China Desert Are Still a Mystery

By J. DAVID GOODMAN

Google MapsMysterious shapes seen on Google Maps in the Gobi Desert in China have raised questions online. The arrows above indicate the locations of three such shapes within about 20 miles.

In the areas of the Internet that buzz with delight at strange formations writ large on the landscape, a mystery appeared to be solved this week: giant shapes seen on Google Maps in China are simply geometric targets for satellite calibration.

Or are they?

The shapes, which include thick white lines drawn in sharp angles and structures arranged in concentric circles around airplanes, attracted attention earlier this month after they were first highlighted by the online magazine, Viewzone. That post includes a photo of one such formation, partially built, from 2003 and what appears to be a village nearby.

It was later picked up by Gizmodo, the technology blog, which posted several other images found by readers. The blog observed that the forms, some up to a mile long, “seem to be designed to be seen from orbit.”

Google MapsOne large shape seen in the Chinese desert. (Far right in the image at top.)

The massive forms in the Gobi Desert in western China appear to be several years old and previously attracted the attention of at least one blogger, who in March 2009 wrote: “There’s something screwy going on in western China.”

As far back as 2004, they seem to have drawn more than just casual interest, as Wired magazine’s Danger Room blog recently reported in a post after the formations came to light again this week. The post draws on data gathered by enabling a feature of Google Earth that shows the date and size of the satellite images stitched together to create a seamless image by the service. The fact that many images of the remote location were taken over time, beginning in 2004, suggests a costly interest on the part of an individual or organization.

As former CIA analyst Allen Thomson notes, turning on the DigitalGlobe coverage layer in Google Earth shows all the various times the imaging satellite has been asked to inspect that part of the desert. [Here’s a screenshot.] “Starting in 2004, somebody has ordered many, many satellite pictures of it,” Thomson tells Danger Room. “Can’t have been cheap.”

Google MapsRaised structures surround planes in concentric circles.

On Twitter-like social media sites in China, users shared links to articles in the Western press (China’s official media have not yet weighed in) and pet theories about what in the world they could be.

“If you like crop circles, Area 51 or UFOs in the United States, then you will love this,” one user of the popular Chinese microblog Sina Weibo wrote.

“In fact, as early as 2008, China’s major media reported on the shooting range in the northwestern desert state,” another stated, without elaborating, in a comment along with a reposted CNN video.

Amid the theories both in and out of China, the mystery seemed to find a mundane explanation on Thursday.

A site called Life’s Little Mysteries said the forms were “almost definitely used to calibrate China’s spy satellites,” citing comments in an interview with a research technician at the Mars Space Flight Facility at Arizona State University.

The satellite calibration theory was advanced by a blogger in 2008 to explain crop circles, which have also been the subject of fevered online speculation.

Google MapsMore formations in the China desert (these are the middle forms in the image at top). The shapes drew comparisons to well-known curiosities including crop circles and Area 51, a government site at the center of many extraterrestrial conspiracy theories.

But The Lede found that after consulting with independent and United States government satellite experts, the calibration theory may be incorrect.

“With calibration, you’re looking for precise measurement,” said Dwayne Day, a military space historian, in a telephone interview. “You have boxes that get smaller by a calculated amount. You don’t just throw stuff all over the place and then take a picture of it.”

He said that when calibration targets have been used by the United States and Russia, they are much smaller. “There’s no reason why you would build anything that big for a satellite calibration target,” he said.

Decades-old markings that are more likely candidates for satellite targets can still be seen on Google Maps in Arizona. A video of one of these markings, which resemble cross hairs, was posted by an amateur historian who said they were likely part of recently declassified American spy satellite programs from the 1960s and early 1970s. But that site too may have nothing to do with space or satellites, analysts said; they could be related to military aviation.

After an email inquiry by The Lede, the Union of Concerned Scientists, an industry watchdog and critic, said the China formations appeared to be conventional aerial and missile bombing targets. In the past, China has built large structures for bombing practice.

In short, the China sites remain a mystery — but not necessarily one with an out-of-this-world explanation.

“The thing that would make it really sexy is if there were fences around it — and I don’t see any,” Mr. Day, the historian, said, adding that a lack of security indicated a lack of strategic importance. “We don’t know what the heck it is, but there are probably two guys in China who could tell you what it is and you’d be bored silly.”