Geopolitics with Chinese Characteristics

ajtr

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Geopolitics with Chinese Characteristics


The emergence of a new power has often profoundly shifted the geopolitical landscape and caused considerable discomfort among the established order. China's current economic and political resurgence is doing that, but apart from the inevitable uncertainty and tension associated with any shift in global power, much of the angst in China's case stems from its failure to engage in behavior concomitant with its increased global responsibilities -- or even to acknowledge an obligation to do so.

China's rise may be unique, for it has ascended rapidly onto the global stage by virtue of its total economic might even as it retains characteristics of a developing country by GDP per capita. China seems to want it both ways -- it plays geopolitical power games as a force to be reckoned with among equals, yet declines to shoulder the burdens of a great power, or even demands to be afforded the benefits due to an underdeveloped charity case. In this regard, China's leadership often appears schizophrenic, nursing a profound grievance against "colonialists" and "aggressors" as it expands its direct political and economic influence across the globe. China's rulers show bravado when on the world stage, but seem deeply paranoid that their rule at home could all fall apart at any time.

While China's public pronouncements may at times appear mercurial, they are more likely part of a well-conceived strategy. On one hand, China seeks to leverage benefits consistent with being a developing country, plays upon the west's historical guilt over colonialism, and exploits the west's continued belief that economic development will inexorably lead to pluralism. On the other hand, it does not hesitate to attempt to parlay its growing power into influence whenever and wherever it can. This Janus-like strategy gives China leeway and flexibility in crafting its international political and economic policy.

At home, the Chinese Communist Party (CCP) has established Socialism with Chinese characteristics, or, less euphemistically, state capitalism. State capitalism typically involves state powers using markets to create wealth, while ensuring political survival of the ruling class. As a government that now presides over the third (soon to be second) largest economy in the world -- and one that depends intimately on flows of international goods and capital -- the CCP no longer simply practices state capitalism at home: it applies it globally.

Although the west has long played mercantilist games, it has gradually migrated toward the belief that liberalization of international markets is mutually beneficial for all countries. But China continues to see international economics as a zero-sum game. It finds its developing status a convenient cloak and justification for the application of global state capitalism. It engages in beggar-thy-neighbor policies it deems advantageous, and distorts the world's markets according to the dictates of its political demands, while dismissing criticism of such behavior as unfair to a developing country. Similarly, on political issues, China portrays naked self interest as the reasonable demands of a developing country, and displays this behavior in nearly every arena in which it interacts with the world, from foreign aid and investment to multilateral institutions to international relations.

The undervaluation of the yuan is worth reviewing as a representative case, and points to further distortions of international markets by China's state capitalism. The Peterson Institute for International Economics estimates that the yuan is undervalued by between 20 and 40 percent, amounting to a massive export subsidy. However, the yuan's undervaluation may be the tip of the iceberg. As importantly, Chinese banks receive a hidden subsidy: a wide spread between the rates paid on household deposits and the rates banks charge for loans. Bankers, who are in effect state employees -- given that the banking system is largely government run -- funnel the artificially cheap money to state-owned enterprises (SOEs). Since households have no investment alternative to domestic banks, they in effect provide a huge subsidy to Chinese industry.

The CCP's state capitalism mandates growth and employment through exports and investment at all costs in order to ensure its political supremacy. One price of this systemic export subsidy is the distortion of the domestic economy in favor of export-dependent growth. Another, of course, is the distortion of the global economy resulting from China's $1.4 trillion in estimated exports this year, combined with foreign exchange reserves which will approach $3 trillion this year. Yet China refuses to acknowledge there is a serious problem. Premier Wen Jiabao recently praised the yuan's stability as "an important contribution" to global recovery, and added, "I don't think the yuan is undervalued." Wen then played his rhetorical trump card, alleging that developed countries were seeking to force unfair currency changes "just for the purposes of increasing their own exports." Wen provides insight into China's strategy when it faces legitimate international criticism by first denying that its state capitalism distorts markets (and therefore, that it is playing by different rules of the game than the west), and second, by obfuscating the issue, depicting it as one of developed countries picking on developing countries.

Even as China increases its economic presence through investment and greater influence in multilateral institutions, it continues to reap benefits intended to accrue to the world's truly needy nations. By all rights, China should be a donor nation in multilateral development banks, not a recipient of aid. That China is the Asian Development Bank's largest recipient of Bank funds really is scandalous, and comes at the cost of countries like Bangladesh and Nepal, the poorest of the poor, which truly need the resources. As of 2007, China was ranked in the top 15 of development aid recipients worldwide. But in late April of 2010, China increased its number of voting shares in the World Bank to become the third largest stakeholder, behind the U.S. and Japan. The U.S. and Japan do not receive development assistance from organizations like the World Bank -- at what point does China's absolute strength count for more than its per capita development? And why should donor countries like the U.S. and Japan allow this double standard to occur?

China continues to expand its own program of foreign aid, dubbed official development assistance (ODA), which is closely linked to its outward foreign direct investment (OFDI). Because of the scale of its ODA and OFDI, the two combine as an effective instrument of state policy. This is really no different than how foreign assistance and FDI are deployed by a plethora of other countries - such as Japan - but China's tendency is to 'bulldoze' its way into developing countries, providing cash and assistance in order to secure natural resources. China has closely dovetailed ODA with its OFDI, offering infrastructure projects, soft loans, debt relief, and grants as a package deal to resource rich countries. This projection of Chinese state power, and the frequent result (such as a tendency not to hire locals to complete construction projects and a failure to transfer knowledge from China to the recipient nation) has had negative consequences for recipient nations.

China's OFDI is relatively small, but growing at one of the fastest rates in the world. In 2008, OFDI stock amounted to just 3.5% of GDP. Since officially launching its "go global" program in 2001, China has pushed its OFDI growth rate to 116% annually from 2000-2006, compared to the average global growth rate of 6% over the same period. SOEs dominate OFDI, and more than half operate in the natural resources sector. In 2006, the top three OFDI investors were China Petrochemical Corporation (Sinopec), China National Petroleum Corporation (CNPC), and China National Offshore Oil Corporation (CNOOC). Strategic service sector investments to support export and import activity, such as shipping and insurance, account for the largest portion of OFDI to date. The lion's share of Chinese OFDI represents a strategic investment; acquiring firms and footholds in strategic markets and guaranteeing access to commodities necessary to fuel the country's export-oriented economy being the overriding objectives.

Politically, China is an irredentist power that arguably has done more to advance global nuclear proliferation than any other state save Pakistan, while routinely doing business with some of the world's worst governments. Apart from the issues of Taiwan and the Spratly Islands, China lays claim to much of India's state of Arunachal Pradesh, and caused major jitters in 2009 with incursions into the territory combined with strident rhetoric. It has blocked Asian Development Bank projects approved for India over the issue. It helped Pakistan develop its nuclear arsenal and ballistic missile technology. Currently, the largest recipients of Chinese military aid are India's neighbors, including Burma, Pakistan, Nepal, Bangladesh, and Sri Lanka in addition to Pakistan; India fears that China is engaged in a concerted campaign to undermine and contain it. In addition, China is rapidly developing its "string of pearls" strategy in the Indian Ocean, investing significant resources to develop deep water ports in the Bay of Bengal, the Arabian Sea, Pakistan, Sri Lanka, and the Seychelles. These appear to be a basis for the projection of a powerful naval presence into what India considers its backyard.

Meanwhile, China blocks action against or actively supports a rogue's gallery of nations, among them Iran, North Korea, Sudan, and Zimbabwe. It claims it has no influence over their actions, based on its policy of non-interference, but China's support clearly requires a quid pro quo, be it natural resource wealth, business ties, or a geopolitically strategic use. China has avoided sanctions from the international community, partly due to the image it has cultivated of itself as a non-interfering developing country. While the west has also projected its power and dealt with equally noxious states, domestic political constraints make such "deals with the devil" increasingly difficult to sell to an electorate attuned to human rights, ethics, and governance.

As long as the CCP continues to govern, China will not change. It will continue to comport itself according to its zero sum vision of the world. At best, the west can hope the CCP's interests converge toward those of the larger globalized world. For the moment, even as China speaks of a peaceful rise within the existing international structure, its behavior, which at times may only be described as ruthless, belies the west's faith in its words. Indeed, the west appears to be running out of patience at China's uncompromising approach to the promotion of its own self interest. President Obama has attempted to engage China on a variety of global issues, and for the most part found that his proffered hand was met with a clenched fist. The U.S. may soon discard the illusion that China is gradually transitioning to become a responsible global power and may begin to react to China in a manner consistent with what it really is: an emerging global superpower that will stop at nothing to promote its own interests.

Stephen Goldsmith is an analyst with the International Country Risk Guide. Daniel Wagner is Managing Director of Country Risk Solutions, a Connecticut-based political and economic risk consultancy.
 

ajtr

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US mum over China's links to Iran

By Peter J Brown

China and the United States have been down a rocky road together over the past two decades with respect to China's missile technology transfers to Iran. Today, China's ongoing contributions to the buildup of Iran's missile forces warrant closer scrutiny.

The opening by Iran of a new missile production plant in March will enable Iran to further quickly expand its supply of Nasr anti-ship missiles. Although no Chinese officials attended the opening ceremony, there are Chinese footprints all around this facility. [1]

In addition, Iran is preparing to launch several satellites. As in the case of North Korea, each of these Iranian satellite launches will generate its own shockwave in the West, and will spark further



debate about the inability of the US and its allies to deal effectively with Iran and its significant technological advances.

In early 2008, Stephanie Lieggi, a research associate at the California-based James Martin Center for Non-proliferation Studies, wrote a white paper entitled "China's Trade with Iran under Western Scrutiny as Beijing Considers Next Move".

She wrote in the report, "Many recent assessments of China's export control system have pointed to positive movement in controlling sensitive dual-use items and a recognition by Chinese authorities of the need to control the transfer of such items to countries like Iran." [2]

At the time Lieggi's paper emerged, the next phase of an already planned expansion of Iran's anti-ship missile production capabilities was already in motion. This new missile plant suggests strongly that perhaps the "positive movement" which Lieggi spoke of earlier has now ceased, but Lieggi disagrees and labels China's efforts to control its companies' activities in Iran as "mixed".

"Chinese export controls have come a long way in the last 10 years, but the major problem with regards to trade with Iran is that China's leadership does not have the political will to stop some deals, especially if there are powerful companies like China Precision Machinery Import and Export Corporation [CPMIEC] involved and if the technologies aren't necessarily on China's control lists ... There is a notable difference with enforcement of export controls when the company involved is not a powerful state-owned enterprise."
China's control lists cover ballistic missile technology, but there is still debate about how far cruise missile technology should be controlled.

According to Jane's Information Group, CPMIEC is state-owned and oversees the production for export of a variety of anti-ship missiles including the HY-1, YJ-1/ C-80, HY-3/C-301 and YJ-2/C-802 medium-range anti-ship missiles, to name just four. [3]

Last year, the New York County District Attorney's Office uncovered a multinational funds transfer apparatus overseen by the Iranians and revealed that a long-running supplier of banned missile components and weapons to Iran. It listed a Chinese company known as LIMMT Economic and Trade Company Ltd, along with various front companies, as providing Iran with many critical materials in great quantity. Iran was close to obtaining sophisticated equipment and tons of additional material for its nuclear and missile programs when investigators put an end to this network. [4]

Keep in mind that we are talking about an enforcement action that took place in 2009, not 1999.

The US Treasury Department was active in this investigation as well.

"Today we are acting under our [United Nations] Security Council and other international obligations to prevent these entities from abusing the financial system to pursue centrifuge and missile technology for Iran," said US Under Secretary for Terrorism and Financial Intelligence Stuart Levey.

A Chinese individual, Li Fangwei (also known as Karl Lee), the commercial manager of LIMMT, "created front companies to access the global financial system. In doing so, LIMMT had to juggle multiple aliases and confronted operational difficulties and customer confusion.

"LIMMT instructed its customer, 'you are kindly required NOT to inform our following previous identifying information to US bank or US Treasury Department ... What you should do is let them know that SINO METALLURGY & MINERALS INDUSTRY CO, LTD is a company who is NOT related to LIMMT company and any other Company on the Specially Designated National (SDN) list of US Department of the Treasury's Office of Foreign Assets Control (OFAC)'", according to the US Treasury Department. [5]

Besides LIMMT and its eight front companies, Khorasan Metallurgy Industries (KMI), Kaveh Cutting Tools Company, the Amin Industrial Complex, Yazd Metallurgy Industries and Shahid Sayyade Shirazi Industries were among the Iranian companies targeted.

Another Iranian company, Niru Battery Manufacturing Company, was found to "be owned or controlled by, or acting or purporting to act for, or on behalf of, directly or indirectly, the Iranian Ministry of Defense and Armed Forces Logistics (MODAFL)".

KMI is a subsidiary of Iran's Ammunition Industries Group which is owned by Iran's Defense Industries Organization (DIO), and has ties to Iran's ballistic missile sector. Niru Battery provides power units for Iranian missile systems.

DIO and Iran's Aerospace Industries Organization which oversees missile-related research and development as well as many ballistic missile entities - perhaps even the new anti-ship missile plant - in Iran are controlled by MODAFL.

Lee, in effect, was just the tip of the iceberg.

Besides this case in the US last year, nuclear-related items are often being brokered by Chinese companies for delivery to Iran via Taiwan in order to avoid the licensing requirements in the Chinese system. The case of Yi-Lan Chen, a Taiwanese businessman arrested in Guam earlier this year, may fit this pattern.

"This is somewhat telling," said Lieggi. "China's nuclear-related controls are more solid than their missile-related controls. And in these cases it appears that China's enforcement efforts were relatively successful, at least in deterring domestic companies from trying to export out of China illegally."

In mid-May, US Deputy Secretary of State James Steinberg gave a speech at the Washington, DC-based Brookings Institution entitled "US-China Cooperation on Global Issues". Steinberg said nothing at all about the new missile plant in Iran or China's contribution to the steady buildup of Iran's missile forces. [6]

"The cat is out of the bag so nothing is being said about the US dropping the ball in general when it comes to China's conventional arms exports to Iran today especially dual-use exports," said John Pike, director of GlobalSecurity.org, a private firm in Virginia which addresses emerging security challenges.

Lieggi was not surprised that the plant was not mentioned "in such a public forum - if for no other reason, there really has not been firm reporting on it". "The issue is important to the US administration [which is] continuing to push the issue of missile-related transfers with Beijing; just not in place of discussing nuclear issues," said Lieggi.

Some say the silence in Washington, DC has been deafening lately.

"President [Barack] Obama's April nuclear summit, ostensibly designed to highlight the threat of nuclear terrorism, failed to produce any mention of China's critical role in creating the necessity for such a summit," said Rick Fisher, senior fellow at



the International Assessment and Strategy Center in Washington, DC.

Does the US seek to avoid irritating China at all costs especially at a time when the imposition of additional sanctions on Iran is so close at hand?

Lieggi disagreed and offered as evidence the lack of more movement by the US on China's application to join the Missile technology Control Regime (MTCR), and on issues regarding high technology trade to China, "which the US administration is still not budging on". It is this ongoing Chinese-Iranian cooperation in the realm of anti-ship and cruise missile development "and the legal ambiguities involved that keep the US from agreeing to allow China to be admitted to the MTCR".

"These are issues that the Chinese continue to raise at bilateral meetings and continue to be a thorn in China's side," said Lieggi. "Some within the Obama administration recognize that China is not a monolithic creature and that some players within the Chinese system can be worked with cooperatively, like on the issue of Iran's nuclear program, even if you do not like the activities of other factions within the same system."

The US has bargained with China before over missile-related transactions and done so with limited success.

"The US pressured the Chinese to stop missile sales to Iran during the [Ronald] Reagan administration, and part of the understanding reached at the time involved Chinese access to the international commercial space launch services market," said Gregory Kulacki, senior analyst and China Project Manager for the Global Security Program at the Massachusetts-based Union of Concerned Scientists. "President George W Bush and the [US president Bill] Clinton administration justified continuing cooperation with China on commercial space launch services, despite the Tiananmen sanctions, on these grounds."

The new missile plant in Iran does not represent the start of a new phase in the Chinese-Iranian joint arms development process, according to Uzi Rubin, chief executive officer of Rubincon Ltd, an Israeli missile defense consultancy.

"Iranian missile production is not undergoing any significant changes in 2010," said Rubin. "The rate of production has been and is still quite high. It stands to reason that the production is dependent on some parts and materials from Chinese sources, but this is not new."

Rubin does not detect any sign that China's missile-related contributions to Iran's missile programs are increasing.

"There is no indication that the Chinese contribution to Iran's missile program is escalating. Nor do any specific trends in Iran's current program seem to bear any relationship to China. It is simply that China is already light years away from where Iran is. The influence seems to come from North Korea and perhaps from Russian entities rather than China," said Rubin.

Iran continues to improve its Noor anti-ship missile as well. This is now described as an upgraded and air-launched version of China's C-802 missile, but with longer-range, over-the-horizon capabilities.
"The Iranians are very clever in exploiting existing designs for uses beyond original specifications. If they found a way to launch the C-802 from an aircraft, I would not be surprised, The Chinese are not necessarily involved in that," said Rubin. "There may have been some Chinese assistance in turning the old Chinese rocket-propelled Styx [Silkworm] into Iran's jet-propelled Raad [a long-range anti-ship missile that Iran deployed along its coast five years ago]. The small jet engine in the Raad could well be Chinese."

According to Pike, when US pressure on China in the past successfully prevented direct transfers to Iran of certain missiles, Iran simply obtained them via Pakistan, and "not directly from China".

In addition to China and Pakistan, countries like Russia, Ukraine and North Korea have played a role in Iran's missile program over the years. According to Dr Geoffrey Forden, senior research associate at the Massachusetts Institute of Technology's Program on Science, Technology and Society, Iran's Safir ballistic missile/satellite launch vehicle (SLV) which was used to launch Omid - Iran's first satellite - shares certain design elements with the North Korean U'nha-2 ballistic missile/SLV, for example.

"The Simorgh SLV - which Iran developed after the Safir - still appears different than the U'nha-2," said Forden. "On the other hand, the Safir's second stage is the same as the U'nha-2's third stage. I don't know if the U'nha-2's first stage is the same as China's DF-3 [missile's] first stage. I suspect not."

According to German space and missile expert Norbert Brugge, the Simorgh uses North Korean Nodong engines whereas the Unha-2 uses Chinese YF-2 engines from the DF-3 missile. [7]

"Judging from the pieces of missile technology that have been seen in the Safir, it appears that they come from Russia as opposed to China," Forden told Asia Times Online in March 2009.
Rubin disagreed at the time with Forden's statement that Russia was the source of the Safir technology.

"It could as well come from China or Ukraine," said Rubin, who added that a seizure in Bahrain of tungsten bars being shipped from China to Iran was firm evidence that, "Chinese entities are still engaged in the proliferation of ballistic missile technology in the Middle East and probably elsewhere, but there is no evidence or hint that the shipment represented official Chinese government policy." [8]

This quick primer is not just an attempt to encapsulate the ongoing debate about how all these missile builders and their components fit together, but it is an indicator of how Iran has reached out to others besides China to achieve its objectives on the launch pad. Yet China's role is central to the intricate problem confronting the US and its allies today.

"Iran, North Korea and Pakistan remain for China valuable nuclear and missile proxies for tying down the Americans, Indians, Japanese and others," said Fisher. "There is one common link: China's nuclear and missile technologies that have been spread directly or indirectly."

As this traffic in missile technology expands - more rapidly than the US might be willing to admit - and while it may no longer emanate from China exclusively, it nevertheless results in the injection of sophisticated tactical strike weapons overtly into theaters where US forces must then adapt and adjust their everyday movements and actions accordingly based on the constant threat posed by the presence of these new weapons.
 

badguy2000

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the dominance of western values in the world will be subverted and face the chanllenge from Chinese values,when China as a old and lively civiliazation is reemerging .

many concepts and values accepted by people here naturally will be questioned, after CHinese economy success is proven and accepted by the world,such as "democracy=good" and "autocracy=bad"

Instead, many west guys will have to pay more attention to what happen in CHina and what CHinese are using and interested in.

for example, west guys might have to study anqitue chinese culture such as confucians ,just as many chinese are studing antque greece culture.
many west guys will get fury that Chinglish will be gradually accepted widely and even replace english as lingua franca some day....
 
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Phenom

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Do you really think "Democracy=Good and autocracy=Bad" is a wrong belief.
btw Democracy is not a western system, it was present in the east as well. The west just perfected an already existing system.
 

badguy2000

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Do you really think "Democracy=Good and autocracy=Bad" is a wrong belief.
btw Democracy is not a western system, it was present in the east as well. The west just perfected an already existing system.
well,one thing can be sured ,that is , China's success is reforging people''s impression on "autocracy" gradually.

If west countries can not prevent the fat cats of Wall street act recklessly,then people's impression on "democracy" will be reforged too.
 

ajtr

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The Hans are pushing the envelope. As per this map, if the Hans have not been able to subvert the Demography of Inner Mongolia, East turkestan, or tibet in the halycon days of mao when they were a closed society, fat chance they can do it now.
 

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The Great Power 'Great Game' between India and China: 'The Logic of Geography'


Abstract:
The simultaneous rise of China and now India is a fundamental factor for understanding the twenty-first century. In rising as Great Powers, a relative term, they are coming up against each other across Asia and its surrounding waters. Traditional geopolitical models, Mackinder, Spykman and Mahan point to their spatial politics around Central Asia, South Asia, Pacific Asia and the Indian Ocean. Actual spatial settings are combined with perceived spatial outlooks. These powerful neighbouring states seek to continue rising, and constrain the other where necessary through mutual encirclement and alliances/proxies. This type of 'Great Game' is evident in the military-security, diplomatic and economic areas. Globalisation has not replaced regionalism, nor has geoeconomics replaced geopolitics. The stakes are high as is their need for securing access to energy resources for their economics-led rise to Great Power status. Some cooperation is evident, in line with IR liberalism-functionalism. However, geopolitical IR realism and security dilemma perceptions still shape much of their actions.
 

badguy2000

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The Hans are pushing the envelope. As per this map, if the Hans have not been able to subvert the Demography of Inner Mongolia, East turkestan, or tibet in the halycon days of mao when they were a closed society, fat chance they can do it now.
what a outdated map!
 

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As per this map, if the Hans have not been able to subvert the Demography of Inner Mongolia, East turkestan, or tibet in the halycon days of mao when they were a closed society, fat chance they can do it now.
pls brush up your knowledge about 'demography' in China.

Inner Mongolia - for example after hundreds of year and change of scope, has been Han-dominant. Inner Mongolia was expanded after founding of PRC to include many Han/Manchu/Olunchun areas to make it inclusive of 'all' Mongol nomads scattering in that region. As for so-called Turkestan it has never been an 'official' name of Xinjiang. It was used by separatists for their 'cause'. unlike what foreigners imagine, it's never a Uigur dominant area. Don't forget Uzbek, Khazak, Mongol (once rulers of Xinjiang) and Han, Manchu, Xibe. Probably most of time, people heard of Uigur, then got that impression.

How about India, in the long course of history?? A strong ethnic group (Hindi??) assimilated others and expanded, conquered... Or Aryan conquest, or Muslim Sultanese from the north (Central Asia)? The Assam, Sikkim... That's why Indians are so diversified with castes

China was just one that mirrors most of 'Empires' in the world.
 
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badguy2000

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pls brush up your knowledge about 'demography' in China.

Inner Mongolia - for example after hundreds of year and change of scope, has been Han-dominant. Inner Mongolia was expanded after founding of PRC to include many Han/Manchu/Olunchun areas to make it inclusive of Mongols scattering in that region. As for so-called Turkestan it has never been an 'official'name of Xinjiang. It was used by those separatists for their 'cause'. unlike what foreigners imagine, it's never a Uigur dominant area. Don't forget Uzbek, Khazak, Mongol (once rulers of Xinjiang) and Han, Manchu, Xibe. Probably most of time, people heard of Uigur affairs, then got the impression
Inner mongolia has been a transitional belt between Hans and nomads in Mongolian plateau for thousands of years. Han settled down in Inner Mongolia before Sakyamuni was born.

Han settled down in Xinjiang before Jesus was born.
 

amoy

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Inner mongolia has been a transitional belt between Hans and nomads in Mongolian plateau for thousands of years. Han settled down in Inner Mongolia before Sakyamuni was born.

Han settled down in Xinjiang before Jesus was born.
Somehow disagree with u. Han is an evolving concept. never has it been static. Just think about Xian-Bei, Jin, and Liao (Qidan) and Hun (Xiong Nu) who were merging into Hans. So your 'thousands of years' are for different origins of moder-day Hans.
 

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India-China: Dangerous Hysteria


By B. Raman

A dangerous hysteria has taken hold of India-China relations since the anti-Beijing uprising in Lhasa in March last year. This hysteria is not due to any actions or rhetoric by the two Governments, which have been conducting themselves in a balanced and restrained manner. They have been trying to preserve and expand the gains in bilateral relations since the famous visit of Rajiv Gandhi to China in 1988. They have been sincerely trying to adhere to the bilateral agreement on maintaining peace and tranquility till a final solution is reached to the border dispute between the two countries. This hysteria has been the creation of some sections of the non-governmental strategic communities in the two countries.

2. There are issues on which the two Governments have reasons to be concerned and unhappy with each other. India has reasons to be concerned over past Chinese contacts with the Naga and Mizo insurgents in the North-East and with their present contacts, as suspected, with the United Liberation Front of Assam (ULFA). Similarly, China has reasons to be concerned over the activities of the set-up of His Holiness the Dalai Lama and the Tibetan Youth Congress (TYC) from the Indian territory and over the reported presence in the Indian territory of the National Endowment for Democracy (NED) of the US which they blame for part of their troubles in Xinjiang and Tibet. The two Governments have refrained from publicly articulating these concerns and have taken care to see that these concerns do not come in the way of the further development of the bilateral relations.

3. Even in respect of the bilateral dispute over the border, one has to take note of the fact that there has been no attempt by either Government to change the status quo by setting up an illegal territorial presence in any sector of the border. In respect of the Ladakh sector, India feels that the status quo favours the Chinese because of the Chinese occupation of large parts of our territory in this sector after the People's Republic of China came into existence in 1949. The Chinese have consolidated the status quo, which favours them, by constructing roads, setting up border posts and creating border habitations in areas which used to be unpopulated. India, while not accepting the status quo de jure, has not tried to disturb it de facto.

4. In the Eastern sector (Arunachal Pradesh), the status quo, which we inherited from the British, favours us. The Chinese disturbed it briefly during the Sino-Indian war of 1962 by occupying large parts of it by taking advantage of our weak military and administrative presence in that area, but they unilaterally restored the status quo by withdrawing from the area occupied by them. If they had not withdrawn unilaterally, our Army was not in a position to eject them and we would have been confronted in the Eastern sector with a situation similar to the one in the Western sector---that is, with a new post-1949 status quo set up by the Chinese which we are not in a position to change. The Chinese have been trying to change the status quo in the Eastern sector in their favour not through military means, but by claiming a large part of this territory and insisting on our conceding their demand over some (Tawang) if not all of this territory as part of a border settlement.

5. Unfortunately, we find ourselves in an unequal position with the Chinese. This is because while the Chinese have consolidated the status quo in the Western sector and made sure that India will not be able to change it militarily, we have similarly not consolidated the status quo in the Eastern sector and made sure that the Chinese will not be able to change this militarily. Our long-neglect of the North-East and our failure to consolidate the status quo in Arunachal Pradesh have placed China in a strategically advantageous position in the Eastern sector. Only in the last two or three years have we realised the importance of consolidating the status quo in the Eastern sector by strengthening our military and administrative presence in the area through the construction of roads and inducting fresh military units to protect this area from any adventurist Chinese action.

6. While the Chinese have not sought to change the status quo in the Arunachal Pradesh sector militarily, they have created for themselves a capability for doing so eventually if the border talks fail. They have done this by developing road and rail communications in Tibet and by strengthening military deployments in Tibet. We have only recently realised the importance of giving ourselves a capability in the Arunachal Pradesh sector to thwart any Chinese attempt to change the status quo militarily if the bilateral border talks fail to break the deadlock.

7. The Chinese long-term strategy with regard to India has many facets. The trans-border developments are only one---but the most important--- component of their strategy. There are other components---namely, strengthening their relationship with Pakistan in order to confront India with the danger of a two-front war should it try to change militarily the status quo either in respect of China or in respect of Pakistan with regard to Jammu & Kashmir; giving Pakistan a nuclear and missile capability for threatening India; weakening the Indian influence in the rest of South Asia and strengthening their presence and influence in Bangladesh, Sri Lanka and Nepal; creating a presence for their Navy in the Indian Ocean region and opposing India's attempts to emerge as an Asian power on par with China.

8. Till recently, we had no well thought-out long-term strategy with regard to China----neither in the border region, nor in South Asia nor in the Indian Ocean region. Only recently the initial rudiments of such a strategy have been appearing. Our attempts to strengthen our strategic relationship with the US and Japan is one such building-block of this comprehensive strategy. Our proactive Indian Ocean policy is another building block. But we find ourselves handicapped in further developing such a comprehensive strategy because we have let our influence be weakened in Bangladesh, Sri Lanka and Nepal.

9. The post-March 2008 hysteria in the bilateral relations has not been the creation of the two Governments. It has been the outcome of a new activism with regard to each other in the non-governmental strategic communities of the two countries. Sections of the Indian strategic community saw in the Lhasa uprising an opportunity to change the status quo in Tibet by playing the Tibet card against China through helping the Tibetans in securing their legitimate rights from the Han Chinese. By changing the status quo in Tibet----not militarily which is out of question, but politically by backing the Tibetan people's efforts to change the status quo themselves--- India might be able to change the status quo in the Western sector and preserve the status quo in the Eastern sector. So these analysts believed and started advocating vigorously a policy of playing the Tibet card against China.

10. The activism in the Chinese non-governmental strategic community is partly the result of what they see as the Indian activism on Tibet and partly the result of the Indian activism in Arunachal Pradesh for consolidating the status quo. They want their Government to be more assertive in playing the Arunachal Pradesh card and to take advantage of the difficulties faced by India in the North-East to counter any attempt by India to play the Tibet card. This hysteria has resulted in a campaign of mutual demonisation and mutual sabre-rattling. This sabre-rattling is only at the non-Governmental level. The two Governments have maintained a distance from this hysteria without trying to discourage it.

11. The danger of such hysteria is that it could acquire an uncontrollable momentum and take the two countries towards a precipice from where they may not be able to withdraw. Any confrontation as a result of this hysteria would damage the interests of both the countries. This hysteria has to be defused in time by the top leaderships of the two countries interacting with each other more frequently and more directly than now and taking initiatives to remove wrong perceptions about each other. It is unwise for Indian analysts to talk of the Tibetan card. The international community has recognised Tibet as a part of China. While it will be sympathetic to any Tibetan attempts to free themselves of Chinese control, it will not support any Indian initiative or move in this regard. By frequently talking of the Tibetan card, we will only be adding to the suspicions and concerns in the Chinese mind.

12. It is equally unwise for Chinese analysts to talk of the Arunachal Pradesh (southern Tibet as they call it) or the North-East card. The international community looks upon these areas as a part of India and will not support any Chinese move to change the status quo. Much of this hysteria will die down automatically if the two countries reach a border settlement. The only border settlement, which will be equally advantageous, is for India to accord de jure recognition to the status quo in the Western sector in return for China recognising the status quo in the Eastern sector. The present difficulties in the Eastern sector are apparently due to the fact that China wants a face-saving formula by India handing over at least Tawang to it. India cannot do this because Tawang is a populated area. Its inhabitants are Indian citizens. No India political leader will be able to sell to the people and the parliament any concession, which would involve any population transfer.

13. So, what are the options? Either go on holding one meeting after another without any forward movement or think of some idea which could break the present deadlock. One idea could be to explore the possibility of a 'status quo plus' solution under which China will recognise the status quo in Arunachal Pradesh in return for India accommodating some of the Chinese interests in Tawang.

14. Once the border dispute is solved to our mutual satisfaction, the danger of a military confrontation between the two countries across the Himalayas will lessen considerably. But the competition between the two countries for influence in the region and outside will remain in the near and medium-term future, but this competition need not lead to a military confrontation.

(The writer is Additional Secretary (retd), Cabinet Secretariat, Govt. of India, New Delhi, and, presently, Director, Institute For Topical Studies, Chennai. He is also associated with the Chennai Centre For China Studies. E-mail: [email protected])
 

ajtr

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CHINA'S STRATEGIC INTRUSIONS IN INDIA'S NEIGHBOURHOOD

B.RAMAN

"The Chinese long-term strategy with regard to India has many facets. The trans-border developments are only one---but the most important--- component of their strategy. There are other components---namely, strengthening their relationship with Pakistan in order to confront India with the danger of a two-front war should it try to change militarily the status quo either in respect of China or in respect of Pakistan with regard to Jammu & Kashmir; giving Pakistan a nuclear and missile capability for threatening India; weakening the Indian influence in the rest of South Asia and strengthening their presence and influence in Bangladesh, Sri Lanka and Nepal; creating a presence for their Navy in the Indian Ocean region and opposing India's attempts to emerge as an Asian power on par with China.

Till recently, we had no well thought-out long-term strategy with regard to China----neither in the border region, nor in South Asia nor in the Indian Ocean region. Only recently the initial rudiments of such a strategy have been appearing. Our attempts to strengthen our strategic relationship with the US and Japan is one such building-block of this comprehensive strategy. Our proactive Indian Ocean policy is another building block. But we find ourselves handicapped in further developing such a comprehensive strategy because we have let our influence be weakened in Bangladesh, Sri Lanka and Nepal. "

---From my article of September 8,2009, titled "India-China: Dangerous Hysteria" available at http://www.southasiaanalysis.org/papers34/paper3398.html

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Despite all the abusive mails and comments that I have been getting and to which I am used over my article deploring the hysteria that is being created by some of our strategic analysts and the media over the trans-border developments, I am not unduly concerned over the reports of continuing Chinese troop intrusions into Indian territory. These intrusions were initially confined to the Eastern sector and now are being reported from other sectors too.

2. When a border is not demarcated on the ground and when there is no common understanding between the two sides as to what constitutes the line of actual control due to the Chinese reluctance to exchange with us maps indicating their understanding of the LAC, such intrusions are bound to take place from both sides. Such intrusions used to be a recurring feature across the India-Myanmar border before the two countries demarcated the border except in the trijunction areas to the north and the south. Such intrusions were also a normal feature across the Sino-Myanmar border in the Northern Shan State and the Kachin State before the Sino-Myanmar border was demarcated in the 1970s except in the northern trijunction where the borders of India, China and Myanmar meet, which remains undetermined and undemarcated till today.

3.What I would be worried about is any illegal occupation by the Chinese of territory claimed by them either in the Arunachal Pradesh or in the Ladakh sector. The 1962 war occurred not because the Government of India ignored reports of intrusions, which are instances of trespass, but because it ignored and played down intelligence reports of illegal occupation of Indian territory by the Chinese in sectors such as Aksai Chin in Ladakh and their incorporating them into Chinese territory. It is our failure and reluctance to counter such outrageous instances of illegal occupation of Indian territory which inexorably led to 1962.

4.The Chinese used to have the habit of illegally occupying territory claimed by them if they had an opportunity of doing so, They did it in Indian territory before 1962. They did it in Myanmar in the late 1960s.They did it with regard to the Philippines when they quietly occupied in 1995 the South China sea island of Mischief Reef, which the Philippines claimed as its territory. After the furore caused by their illegal occupation of the Mischief Reef, I am not aware of any further instance of illegal occupation of foreign territory by the Chinese. If there is, I would be happy to stand corrected.

5. I have stated this many times before and I state this again that the Chinese would continue to stall the border talks with India by even not exchanging maps on the LAC till the Dalai Lama dies. They are not satisfied that that they have pacified Tibet once and for all. The Lhasa uprising of March 2008 has created fresh doubts in their mind about the prospects for continued political stability in Tibet. They are determined to impose on the Tibetans a successor to His Holiness, when he dies, chosen by the Communist Party of China. They do fear that there will be opposition to their nominee from the Tibetans and that this could lead to disturbances in Tibet, in which the Tibetan Youth Congress (TYC) will play an important part. They want to keep a pressure point which they can use against India in order to make it control the TYC. A continuing dispute with India over Arunachal Pradesh will, in their calculation, help them in dealing with any-post Dalai Lama instability. It has been my assessment that the border talks will show some movement for the better or for the worse only after the death of His Holiness and not before.

6. The question for our policy-makers is whether we facilitate the Chinese game of stalling till His Holiness dies or whether we insist on a settlement here and now and if so, what are the options that could be explored. It was in that context that I suggested that we explore the possibility of a status quo plus solution under which in return for the Chinese accepting the status quo in Arunachal Pradesh, we could consider accommodating some of their interests in Tawang, about which they seem to be doing a song and dance. I was amazed by a flood of mails accusing me of suggesting that we hand over Tawang to the Chinese. Where have I said so?

7. What are the Chinese interests in Tawang? Nobody knows for certain. I have asked many retired military officers whether Tawang would have any military significance for the Chinese. They said no. The Chinese themselves have cited what they consider as the historic and religious links of Tawang with Tibet. They even claim that there are records to show that the residents of Tawang paid their taxes to the set-up of the Dalai Lama in Lhasa and not to the British Government in New Delhi. They have not made a similar claim regarding the rest of Arunachal Pradesh. They have also pointed out that one of the previous Dalai Lamas was born in Tawang. The Singapore Foreign Minister, who had recently visited Lhasa, has been quoted as saying that the Chinese are worried that after the death of His Holiness, his followers might proclaim a child of Tawang as the incarnation of His Holiness. If that is so, they should try to get hold of Tawang before His Holiness dies instead of waiting till his death.

8. I have been suggesting to many think tanks in India that instead of getting hysterical over Tawang, we must do a detailed research, analysis and assessment of the Chinese obsession with Tawang. Nobody has done so till now.

9. In a commentary on the observations of the Singapore Foreign Minister contributed to the South Asia Analysis Group (http://www.southasiaanalysis.org), Brig.Subash Kapila, a fine military intelligence officer with whom I had the pleasure and privilege of being associated, has raised a very important question: the Chinese did not show the same obsession with Tawang in the past as they seem to be doing now. He has pointed out that the Chinese even withdrew from Tawang in 1962 after having occupied it. If Tawang was that important to them, they should not have withdrawn from there. Why did they do so?

10. The answer is simple. Long after they withdrew from Tawang, sections of the US media carried reports, based on interviews with the Tibetan Khampas, that the Khampa revolt in the 1950s against the Chinese occupation of Tibet was orchestrated by the USA's Central Intelligence Agency (CIA) and India's Intelligence Bureau then headed by the legendary B.N.Mullick. One does not know whether these claims or allegations were correct, but the Chinese presumed that they were. The fact that after the failure of the Khampa revolt, His Holiness and his entourage made a dash for Tawang has added to the strength of the Chinese presumption. The Chinese fear that if there is a joint attempt by the Indian and US intelligence to destabilise Tibet after His Holiness, that attempt could be directed from Tawang. .

11. I am not a military expert. But I have spent nearly three decades in the intelligence profession. From whatever little I know of the craft of intelligence, I could say that if there is one place on the Indo-Tibetan border from where a covert action to destabilise Tibet can be mounted with some success that is Tawang. I am, therefore, not surprised that the Indian presence in Tawang gives them the creeps. When I suggested a status quo plus formula what I had in mind was an Indian guarantee that New Delhi would not allow Tawang to be used to destabilise Tibet after the death of His Holiness in return for a Chinese acceptance of the status quo in Arunachal Pradesh, including Tawang. I do not know whether this will work with the Chinese, but it is worth trying.

12. I am not unduly worried over the continuing reports of Chinese troop intrusions. We are fortunate in having a competent, professional army, which is capable of taking care of them. There is no need for a hysteria over the intrusions. I am more worried about the diplomatic,economic and strategic intrusions which the Chinese are quietly making in our neighbourhood and the inability of our diplomacy to counter them. What are those strategic Chinese intrusions around us in our neighbourhood?


- The winning of the contract for the second stage of the Hambantota port development project in Sri Lanka.
- The winning of the contract for the Colombo-Kalutara road in Sri Lanka.
- The winning of the contract for the improvement of the Kyaukpu port on the Arakan coast of Myanmar.
- The winning of the permission from the military junta of Myanmar for the construction of two pipelines---one for gas and the other for oil--- from Kyaukpu to Yunnan.These pipelines will carry not only gas and oil produced locally but also brought by Chinese tankers from West Asia and Africa. We claim to have great influence over the junta in Myanmar.It has reportedly agreed to sell to China gas found by a consortium of which an Indian public sector company was a member. After millions of rupees of Indian investment, gas is struck and the Myanmar junta sells that gas to the Chinese. We watch it sucking our thumbs.
- The reported furtive negotiations with the Government of Bangladesh for a pipeline to carry gas from Bangladesh to Yunnan via the Arakan area of Myanmar.
- The proposal for a railway line from Gwadar on the Mekran coast of Pakistan to Xinjiang for which a feasibility study was ordered by the Pakistan Government two weeks ago.
- Talks with the Pakistani and the Iranian authorities for a gas pipeline to take Iranian gas to Xinjiang.

13. What contracts of strategic significance India has won in our neighbourhood? Zilch.

14. What progress India has made in strengthening its strategic presence in its neighbourhood? Zilch.

15. How effective Indian strategic and economic diplomacy has been in our neighbourhood? Zilch.

16. It is time to be worried and howling over the way China has made strategic inroads in our neighbourhood and over the failure of our diplomacy to counter it.

17. Our Army can take care of China. Can our diplomats take care of China? ( 14-9-09)
 

ajtr

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Tawang seems a lame excuse. The Dalai Lama can be reincarnated anywhere, apparently precedence was also in Mongolia. And to add to the twist he could be a "she". Here is the ref :

Sunday, February 17, 2008
THE DALAI LAMA AS A NUN

Claude Arpi meets the spiritual head of Tibetan Buddhism
A COUPLE of months ago when the 14th Dalai Lama declared that he
could very well be reincarnated in the form of a woman, it became a
scoop for the media all over the world. I recently had the occasion to
ask him to elaborate on that point for which he explained: "In Tibet,
the tradition of having reincarnated teachers is almost 700 years old.
Among them, we had one institution of a female reincarnation. In case
a female Dalai Lama is more useful to Tibet in future, then why don't
we have a woman as 'reincarnation'? If a Tibetan lady Dalai Lama
comes, every male will become her followers," he said, laughing. "I
feel that education alone cannot solve all our contemporary problems.
More emphasis should be given on 'compassion'. Women are basically
more sensitive and compassionate.
But men are not. They are more aggressive. Therefore, a 'female rule'
will be more suitable for today's setup," he added.
Already in the course of another interview five years ago, my 13-
yearold daughter, who accompanied me, found it was not 'normal' that
'the Dalai Lama always returns as a man.' She even asked him: "So
far you have always been reincarnated as a boy. Is there any reason
for that?"
The Tibetan leader became thoughtful and took time to ponder: "The
reason is that in a male dominated society, it was more effective for
serving the Buddhadharma."
The Tibetans consider the Dalai Lama to be the reincarnation of
Avalokiteshvara, the Bodhisattva of Compassion and Saint-Patron of
Tibet.
His 'job', as the present Dalai Lama would say, is to protect the Land
and the People of Tibet and make sure that the Buddhist tradition
flourishes in the Land of Snows.
The current series of declarations on his succession have been
triggered by the announcement of new "Measures on the Management
of the Reincarnation of Living Buddhas in Tibetan Buddhism" by the
Chinese government on July
13. China watchers knew that Beijing had been preparing for his
succession; the Dalai Lama was obviously targeted by the
proclamation. If he could read some of the 14 articles of the
'measures', poor Karl Marx would be uncomfortable in his grave.
They describe in great detail how "reincarnating living Buddhas should
carry out application and approval procedures." The Party threatened:
"No group or individual may without authorisation carry out any
activities related to searching for or recognising reincarnating living
Buddha soul children."
One wonders how suddenly the Communist Party, who always treats
religion as "poison", has suddenly become expert in the century-old
tradition of "reincarnation." The Marxist ways are often unfathomable!
The Nobel Peace Prize laureate was quick to state that the Tibetan
tradition is not as rigid and simple as the CCP would like it to be.
In 2003, he had explained to us: "It seems that the 5th Dalai Lama
(during the 17th century) had different plans.
He was thinking of changing the system of succession of the Dalai
Lamas from a reincarnation lineage (at the death of a Dalai Lama, his
reincarnation is discovered in a new born child), to a father-son
lineage."
"It seems that the 5th Dalai Lama had made such plans; it explains
why the 6th Dalai Lama deliberately gave up monk vows to see if the
plan could go smoothly. I think that the 5th Dalai Lama preferred the
father-son system of succession. At least, the succession could have
been less chaotic," he added.
It is necessary to give here a historical background of the "rule by
incarnation." As mentioned by the Dalai Lama, it has not always been
prevalent on the Roof of the World; it was only established during the
reign of Ngawang Lobsang Gyatso, the Fifth Dalai Lama, (1617-1682).
During the 13-14th century, the hierarchs of Sakya monastery ruled
over the Land of Snows. Their succession was set up by way of
'transmission' from father to son or uncle to nephew. Further, some
historians (one of them is Michael Aris, the late husband of the
Burmese leader Aug San Suu Kyi) believed that at the beginning of the
17th century, two Dalai Lamas were alive at the same time (the 6th
and the 7th).
There was no fixed place on where a Dalai Lama should be reborn. The
Fourth, Yonten Gyatso was born in Mongolia while the Sixth,
Tsangyang Gyatso, took birth in India (in Tawang district of today's
Arunachal Pradesh).
The Dalai Lama is also perfectly aware of the weakness of the Tibetan
system of "rule by incarnation." During the interregnum between the
death of a Dalai Lama and the attainment of majority by the newly
reincarnated child, there is a political vacuum lasting between fifteen
to twenty years.
The 19th century saw a succession of five Dalai Lamas. The Chinese,
through their Ambans (or Ambassadors) in Lhasa, made full use of this
weakness. Many surmise that the premature deaths of the Ninth up to
the Twelfth Dalai Lamas were not a mere coincidence and the Chinese
Ambans certainly took great advantage of their "timely departure." I T
is clear that the problem is not only a spiritual issue, but also a
political one and this explains the meddling of the Chinese Communists
in what seems at first sight to be a religious affair. The regency has
been the weak link in the governance of the Tibetan State during the
past one and half century. The Dalai Lama gave a crash course on
Tibetan history to my daughter: "Regency is a disruption. Many
unfortunate things happened during regencies. After the death of 13th
Dalai Lama, I had two regents. Of course, both of them were my
teachers, my gurus and I respected them and had full faith in them,
but their behaviour was not always up to the mark, sometimes even
harmful to Tibet's interests." That is why he explained: "If in certain
circumstances, a female form is more useful, then certainly a female
form will come." He continued his fascinating exposition: "One of the
highest reincarnations in Tibet was Samding Dorjee Phagmo. She
reincarnates always as a female."
He had another anecdote: "Day before yesterday, I received a history
book of Kham province. It is published in Tibet. It is the story of a
Lama called Demmo Lama who had many reincarnations. One of these
reincarnations was a very beautiful woman. She lived 113 years. Until
she was about 100 years old, she retained the beauty of a woman of
20-30 years old. So, you see a very high Lama can reincarnate in a
female form."
In November, when he first mentioned the possibility of naming a new
Dalai Lama while he was still alive, the Chinese Foreign Ministry
spokesman had immediately reacted, "It would blatantly violate
religious rituals and historical conventions of Tibetan Buddhism." But
the Tibetan tradition is undoubtedly less rigid than the rules
propounded by Marx.
The point remains that it is a timely debate and whether the Dalai
Lama returns as a man or woman will not change the political
situation; the present struggle for "genuine autonomy" needs
continuity and naming a successor could go a long way in solving the
'regency gap'.
If it is not militarily important, why should China be worried about? Only possibility that remains then is deception. The main point of focus is not Tawang at all. But PRC is building it up to distract from real buildups elsewhere - probably Aksai Chin, and or NA.
 

Rage

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Somehow disagree with u. Han is an evolving concept. never has it been static. Just think about Xian-Bei, Jin, and Liao (Qidan) and Hun (Xiong Nu) who were merging into Hans. So your 'thousands of years' are for different origins of moder-day Hans.
'Han is an evolving concept', yeh? 'Hindi' or 'Hindostani' is an evolving concept also. At some point in time, it meant all the lands east of the Indus and south of the Himalayas, all the way up to Burma in the east and the island of Ceylon down south. Does that mean we start claiming lil' ol' Myanmar, Bhutan and Nepal as well? Because we sure as hell are an evolving concept.

Han, as it stands today, is a static idea. It refers to those people that are the descendants of the 'Han' dynasty, excluding those it called its 'protectorates', and specifically to those that populated the Han river basin from Wuhuan in the North, now Hebei, Liaoning, and Shanxi, to Ailao in the South (now Yunnan) and to Qiang in the West- the easternmost tip of the Tibetan plateau. That, at least, is how the world understands it. We can all, everyone of us, choose to define ourselves as we like- to our convenience. The problem is we then become acquainted with irridentism. And rile the stakes of everyone around us.
 

ajtr

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The Geography of Chinese Power


By ROBERT D. KAPLAN
Published: April 19, 2010
China's blessed geography is so obvious a point that it tends to get overlooked in discussions of the country's economic dynamism and national assertiveness.

Yet it is essential: It means that China will stand at the hub of geopolitics even if the country's path toward global power is not necessarily linear.

Today China's ambitions are as aggressive as those of the United States a century ago, but for completely different reasons. China does not take a missionary approach to world affairs, seeking to spread an ideology or a system of government. Instead, its actions are propelled by its need to secure energy, metals and strategic minerals in order to support the rising living standards of its immense population.

Within the Chinese state, Xinjiang and Tibet are the two principal areas whose inhabitants have resisted China's pull. In order to secure Xinjiang — and the oil, natural gas, copper, and iron ore in its soil — Beijing has for decades been populating it with Han Chinese from the country's heartland.

The mountainous Tibetan Plateau is rich in copper and iron ore and accounts for much of China's territory. This is why Beijing views with horror the prospect of Tibetan autonomy and why it is frantically building roads and railroads across the area.

China's northern border wraps around Mongolia, a giant territory that looks like it was once bitten out of China's back. Mongolia has one of the world's lowest population densities and is now being threatened demographically by an urban Chinese civilization next door.

Having once conquered Outer Mongolia to gain access to more cultivable land, Beijing is poised to conquer Mongolia again, albeit indirectly, through the acquisition of its natural resources.

North of Mongolia and of China's three northeastern provinces lies Russia's Far East region, a numbing vastness twice the size of Europe with a meager and shrinking population and large reserves of natural gas, oil, timber, diamonds and gold.

As with Mongolia, the fear is not that the Chinese army will one day invade or formally annex the Russian Far East. It is that Beijing's demographic and corporate control over the region is steadily increasing.

China's influence is also spreading southeast. In fact, it is with the relatively weak states of Southeast Asia that the emergence of a Greater China is meeting the least resistance.

There are relatively few geographic impediments separating China from Vietnam, Laos, Thailand and Myanmar, and China continues to develop profitable relationships with its southern neighbors. It uses Asean (the Association of Southeast Asian Nations) as a market for selling high-value Chinese manufactured goods while buying from it low-value agricultural produce.

Central Asia, Mongolia, the Russian Far East and Southeast Asia are natural zones of Chinese influence. But they are also zones whose political borders are not likely to change. The situation on the Korean Peninsula is different. No one really expects China to annex any part of the Korean Peninsula, of course, But although it supports Kim Jong-il's Stalinist regime, it has plans for the peninsula beyond his reign.

Beijing would like to eventually dispatch there the thousands of North Korean defectors who now are in China so that they could build a favorable political base for Beijing's gradual economic takeover of the region.

China is as blessed by its seaboard as by its continental interior, but it faces a far more hostile environment at sea than it does on land.

The Chinese Navy sees little but trouble in what it calls the "first island chain": the Korean Peninsula, the Kuril Islands, Japan (including the Ryukyu Islands), Taiwan, the Philippines, Indonesia and Australia.

China's answer to feeling so boxed in has been aggressive at times — for example when, in March 2009, a handful of Chinese Navy ships harassed the U.S. surveillance ship Impeccable while it was openly conducting operations in the South China Sea.

Beijing is also preparing to envelop Taiwan not just militarily but economically and socially. How this comes about will be pivotal for the future of great-power politics in the region. If the United States simply abandons Taiwan to Beijing, then Japan, South Korea, the Philippines, Australia and other U.S. allies in the Pacific will begin to doubt the strength of Washington's commitments. That could encourage those states to move closer to China and thus allow the emergence of a Greater China of truly hemispheric proportions.

So can the United States work to preserve stability in Asia, protect its allies there, and limit the emergence of a Greater China while avoiding a conflict with Beijing?

Strengthening the U.S. air and sea presence in Oceania would be a compromise approach between resisting a Greater China at all cost and assenting to a future in which the Chinese Navy policed the first island chain. This approach would ensure that China paid a steep price for any military aggression against Taiwan.

Still, the very fact of China's rising economic and military power will exacerbate U.S.-Chinese tensions in the years ahead. To paraphrase the political scientist John Mearsheimer, the United States, the hegemon of the Western Hemisphere, will try to prevent China from becoming the hegemon of much of the Eastern Hemisphere. This could be the signal drama of the age.
 

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Why India Must Swing


"[The] very fact of China's rising economic and military power," Robert Kaplan concludes in an essay in the latest issue of Foreign Affairs, "will exacerbate US-Chinese tensions in the years ahead. To paraphrase the political scientist John Mearsheimer, the United States, the hegemon of the Western Hemisphere, will try to prevent China from becoming the hegemon of much of the Eastern Hemisphere. This could be the signal drama of the age."

Duh!

If Kaplan had written this any later, he would be like the earnest police inspector who arrives in the penultimate scene of a Hindi movie, with handcuffs for the bad guy and a cliche for the hero.

Part due to the wishfulness of the rhetoric surrounding Barack Obama's campaign and part due to the economic crisis it sunk into, it became fashionable in the United States to ignore geopolitical realities, and instead engage in a fresh bout of fantasising about China. Influenced by intellectuals such as Zbigniew Brzezinski it became fashionable to believe in the existence of a tidy bipolar world where the United States and China, the G-2, would sit together and shape the twenty-first century. Tidy and familiar as this world may be to Cold War-era strategists, it does not even begin to mirror reality: it took, for instance, no less than a Group of 20 countries to co-ordinate economic policies to combat the global recession.

While the United States is caught in its Brzezinskian bipolar disorder, China continues to do what it has been doing for the better part of the last two decades-systematically preparing itself for an adversarial relationship with the United States. After the 1990 Gulf War, the Chinese leadership became acutely aware of how far behind the People's Liberation Army (PLA) actually was. In his book on China's military modernisation, David Shambaugh, a professor at George Washington University, documents how, since Norman Schwarzkopf stormed the Iraqi desert, the PLA has methodically focused its doctrines, capabilities and strategies with its eye on the United States.

Instead of blindly emulating its rival, Beijing has sought to gain asymmetric advantage: for instance, if the US Navy has a formidable surface fleet, the PLA Navy (PLAN) went in for the submarines that neutralise it. If the United States has the capacity to project power globally, China has nurtured proxies like Pakistan and North Korea to tie it down both indirectly and inexpensively. If the United States outguns it in traditional areas of warfare, China has sought to gain an advantage in cyberspace and outer space. The waters of the Indian Ocean therefore, are merely one of the several theatres where China and the United States will challenge each other.

To be sure, the United States military establishment is aware, concerned and preparing for a confrontational relationship with China. However, even at the best of times Washington-like New Delhi-finds numerous domestic vectors pulling in different directions to be able to fashion a focused strategy. Worse, at this moment, the Obama administration is not only confused by the dissonance between its beliefs and reality. It is also constrained by a weak economy, fiscal pressures and a mountain of debt that it owes to its geopolitical rival.

What does this mean for India?

First, despite irreconcilable differences in the way India and China view international relations, the high Himalayas prevented large-scale military conflict between the two civilisations for nearly two millennia. While the Himalayas are no longer the physical barriers they used to be, the presence of nuclear weapons in both countries makes war unattractive and unrewarding. The India-China contest has, instead, shifted to other domains: in and around the Indian Ocean, in cyberspace, and for access to resources and markets.

Second, given the relationship with China, it is in India's interests for the United States to remain the predominant power in the world. Yet, despite ongoing attempts, it is uncertain if the two countries can achieve collaborative "win-win" solutions to common challenges. The United States, after all, continues to be the principal benefactor of a state that has long conducted a proxy war against India. Sure, there is an increasing convergence of long-term interests but the political processes in both the United States and India often produce contradictory outcomes. Don't be too surprised if US troops withdraw from Afghanistan in 2011, leaving Kabul to the Taliban under appropriate obfuscations. Don't be surprised too if New Delhi purchases multi-role fighter aircraft from Sweden, ignoring the strategic aspect of the deal. In New Delhi as in Washington, it is not strategic sense, but political sense that counts.

If strategic sense were to prevail in Washington, the United States would do everything to woo India into a tight alliance. There was a period during the much-maligned George W Bush administration that it appeared that the United States had chosen just such a course. No longer-given its bipolar fantasies, the Obama administration has substantially abandoned the project.

The implication for India is that despite an alignment of interests, it must not always side with the United States. It must swing.

To paraphrase Henry Kissinger, India's options toward the United States and China must always be greater than their options toward each other. It serves "our purposes best if we maintained closer relations with each side than they did with each other." Isn't this-by design or by default-what we're already doing? Not really. That's because until New Delhi demonstrates that it can deliver pain for one and pleasure for the other, it won't be seen as swinging. It will be mistaken for sleep-walking.

Consider two contemporary issues. Despite India's effort to support his Af-Pak strategy, President Obama has remained insensitive to India's interests, going so far as to issue a directive "that concluded that India must make resolving its tensions with Pakistan a priority for progress to be made on US goals in the region." What has India done to show that its support cannot be taken for granted?

Earlier this month, Environment Minister Jairam Ramesh remarked that "we bailed the Chinese out of many a difficult situations (sic). Chinese know India was absolutely essential for the fact that China did not get isolated at Copenhagen." Well, in that case, he swung too early. It would have been better to bail the Chinese out after they had been sufficiently isolated.

The reason why India is unable to get the swinging right is perhaps because our political leaders and much of the strategic establishment are wedded to their pet dogmas. Prime Minister Manmohan Singh, for instance, is committed to improving relations with the United States. And it was Mr Ramesh, after all, who popularised-if not coined-that ghastly word, "Chindia". Now turn on your television or open the op-ed page of a newspaper, and you'll spot their opposite numbers, forever opposed to the United States or China or both.

Everyone, it seems, is locked in their favourite positions. Are you?

Nitin Pai is founder & fellow for geopolitics at the Takshashila Institution and editor of Pragati - The Indian National Interest Review, a publication on strategic affairs, public policy and governance. He blogs at The Acorn and is active on Twitter too.
 

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" Chinese Civilization Vis-a-Vis Eastern And Western Philosophies "

B y L i a n g S h u m i n g
Introduction
Beginning around 1917, Chinese intellectuals began to engage each other in serious discussion and debate on
culture, history, philosophy, and related subjects — all with an eye to the bigger problem of China's weakness and
the possible solutions to that problem. This period of intellectual debate, labeled the May Fourth Movement, lasted
to around 1921.
Liang Shuming (1893-1988) was a scholar, philosopher, professor, and author living in Beijing. He was an active
participant in the debates on culture during the May Fourth period. In the following passage, he discusses Western,
Indian, and Chinese cultures.
Document Excerpts with Questions (Longer selection follows this section)
From Sources of Chinese Tradition: From 1600 Through the Twentieth Century, compiled by Wm. Theodore de Bary and Richard
Lufrano, 2nd ed., vol. 2 (New York: Columbia University Press, 2000), 380-381. © 2000 Columbia University Press. Reproduced
with the permission of the publisher. All rights reserved.
"Chinese Civilization vis"‘à"‘vis Eastern and Western Philosophies"
By Liang Shuming
There are three ways in human life: (1) to go forward; (2) to modify and to achieve
harmony, synthesis, and the mean in the self and; (3) to go backward. "¦ The fundamental spirit
of Chinese culture is the harmony and moderation of ideas and desires, whereas that of Indian
civilization is to go backward in ideas and desires [and that of the West is to go forward].

Let us compare Western culture with Chinese culture. First, there is the conquest of
nature on the material side of Western culture — this China has none of. Second, there is the
scientific method on the intellectual side of Western culture — this also China has none of. And
third, there is democracy on the social side of Western culture — this, too, China has none of. "¦
This shows negatively that the way of Chinese culture is not that of the West "¦

"¦ The problems discussed in the ancient West and ancient India have in fact not existed
in China. While the problems of the West and India are not really identical, they are the same
insofar as the search for the reality of the universe is concerned. "¦ Have you heard of Chinese
philosophers debating monism, dualism, or pluralism, or idealism and materialism? The
Chinese do not need to discuss such static problems of tranquil reality. "¦

What attitude should we Chinese hold now? What should we select from the three cultures?
We may say:
1. We must reject the Indian attitude absolutely and completely.
2. We must accept Western culture as a whole [including conquest of nature, science, and
democracy] but make some fundamental changes. That is to say, we must change the
Western attitude somewhat [from intellection to intuition].
3. We must renew our Chinese attitude and bring it to the fore, but do so critically.
Questions:
1. What stereotypes is Liang Shuming using in his comparative analysis of
Chinese, Indian, and Western civilizations? How do these stereotypes
compare to those that you would expect from your point of view?
2. Compare Liang's attitude toward Western and Chinese civilizations with
other May Fourth intellectuals, such as Hu Shi and Liang Qichao. Do they
differ in their interpretations and assessments of the value of Western and
Chinese civilizations?
3. What might account for Liang's negative assessment and rejection of Indian
civilization?
Longer Selection
From Sources of Chinese Tradition: From 1600 Through the Twentieth Century, compiled by Wm. Theodore de Bary and Richard
Lufrano, 2nd ed., vol. 2 (New York: Columbia University Press, 2000), 380-381. © 2000 Columbia University Press. Reproduced
with the permission of the publisher. All rights reserved.
"Chinese Civilization vis"‘à"‘vis Eastern and Western Philosophies"
By Liang Shuming
There are three ways in human life: (1) to go forward; (2) to modify and to achieve
harmony, synthesis, and the mean in the self; and (3) to go backward. "¦ The fundamental spirit
of Chinese culture is the harmony and moderation of ideas and desires, whereas that of Indian
civilization is to go backward in ideas and desires [and that of the West is to go forward].
Generally speaking, Westerners have been too strong and too vigorous in their minds
and intellect. Because of this they have suffered spiritually. This is an undeniable fact since the
nineteenth century.
Let us compare Western culture with Chinese culture. First, there is the conquest of
nature on the material side of Western culture — this China has none of. Second, there is the
scientific method on the intellectual side of Western culture — this also China has none of. And
third, there is democracy on the social side of Western culture — this, too, China has none of. "¦
This shows negatively that the way of Chinese culture is not that of the West but is the second
way [mentioned above — namely, achieving the mean]. "¦ As to Indian culture "¦ religion
alone has flourished, subordinating to it philosophy, literature, science, and art. The three
aspects of life [material, intellectual, and social] have become an abnormal spiritual
development, and spiritual life itself has been an almost purely religious development. This is
really most extraordinary. Indian culture has traveled its own way, different from that of the
West. Needless to say, it is not the same as that of Chinese culture.
In this respect Chinese culture is different from that of India, because of the weakness of
religion, as we have already said. For this reason, there is not much to be said about Chinese
religions. The most important thing in Chinese culture is its metaphysics, which is applicable
everywhere. "¦ Chinese metaphysics is different from that of the West and India. It is different
in its problems. "¦ The problems discussed in the ancient West and ancient India have in fact
not existed in China. While the problems of the West and India are not really identical, still they
are the same insofar as the search for the reality of the universe is concerned. Where they are the
same is exactly where they are decidedly different from China. Have you heard of Chinese
philosophers debating monism, dualism, or pluralism, or idealism and materialism? The
Chinese do not discuss such static problems of tranquil reality. The metaphysics handed down
from the greatest antiquity in China, which constituted the fundamental concept of all learning
— great and small, high and low — is that completely devoted to the discussion of change that
is entirely nontranquil in reality.
The first point of the Confucian philosophy of life arising out of this type of Chinese
metaphysics is that life is right and good. Basically, this metaphysics speaks in terms of "the life
of the universe." Hence it is said that "change means reproduction and reproduction."1
Confucius said many things to glorify life, like "The great characteristic of Heaven and earth is
to give life,"2 and "Does Heaven speak? All the four seasons pursue their course and all things
are continually being produced." "¦3 Human life is the reality of a great current. It naturally
tends toward the most suitable and the most satisfactory. It responds to things as they come.
This is change. It spontaneously arrives at centrality, harmony, and synthesis. Hence its
response is always right. This is the reason why the Confucian school said, "What Heaven has
conferred is what we call human nature. To fulfill the law of human nature is what we call the
Way."4 As long as one fulfills his nature, it will be all right. This is why it is said that it can be
understood and put into practice even by men and women of the simplest intelligence. This
knowledge and ability are what Mencius called the knowledge possessed by man without
deliberation and the ability possessed by him without having been acquired by learning.5
What attitude should we Chinese hold now? What should we select from the three cultures?
We may say:
1. We must reject the Indian attitude absolutely and completely.
2. We must accept Western culture as a whole [including conquest of nature, science, and
democracy] but make some fundamental changes. That is to say, we must change the
Western attitude somewhat [from intellection to intuition].
3. We must renew our Chinese attitude and bring it to the fore, but do so critically.
 

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What indian values the author of the above paper is speaking of ....is it buddhism????
 

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The Opium Files

Post Japanese

The Takao Club


Following the surrender of Japan in 1945, the island of Taiwan was given over to China or, more precisely, its putative government, the Nationalists or Kuomintang. The Kuomintang would subsequently become stranded on the island which they ruled for more than 50 years.
The rise to power of China's Nationalist movement was closely linked with Shanghai's eminence as an international drug capital. During the chaotic 1920s, warlord struggles for power and money accelerated the disruption and impoverishment of the country. Among the groups trying to reestablish a centralized state was the Kuomintang (KMT) or Nationalist party, whose objectives were at first more progressive than those of most of the warlord competition. In 1924 the KMT under Sun Yat-sen allied itself with the fledgling Chinese Communist party in order to strengthen itself politically and promote badly needed reforms.


Sun Yat-sen in 1911

However, as Chiang Kai-shek gained power within the party after Sun's death in 1925, he began to break with the Communists and move toward an alliance with more conservative groups. During the Northern Expedition of 1926-1928 Chiang's KMT armies defeated warlord rivals thereby gaining support from the many people who demanded both an end to the chaos of warlordism and social reforms.


Chiang Kai-shek in 1920s

Yet the way in which Chiang took control compromised most of the KMT's progressive ideals. Struggles with warlords often ended in coalition and support in the countryside was sought from the old ruling class, the gentry, so that the need for social reform was ignored. Although Chiang never attained power over the entire country, the Nationalists did become established in China's major coastal cities, which remained their primary base of support until the Japanese invasion of 1937.
Foremost among these coastal cities was Shanghai, which had been an important Chinese center for the opium traffic since the 1840s, when Britain's victory in the Opium War opened the port to foreign trade and the establishment of foreign-controlled areas or concessions.


Shanghai in the 1920s

Chiang's control of Shanghai was made possible with the aid of two main groups: the wealthy and the criminal. Wealthy merchants and foreign capitalists supported the KMT with the understanding that there would be no reforms that threatened their interests. The Shanghai criminal organizations were dominated by two secret society groups called the Green Gang and the Red Gang. During the nineteenth century the Red and Green Gangs had drawn their membership from people involved in transporting grain and smuggling salt along the Grand Canal, China's primary north-south inland waterway. However, after 1911 these groups had shifted their activities to the cities of central China, and in particular to Shanghai, China largest and most industrialized city.

A young leader of the Green Gang, Tu Yueh-sheng, was to become one of Shanghai's most influential citizens. Tu, narcotics overlord and anti-Japanese patriot, began his career in Shanghai's French Settlement, a noted center of illicit activities where criminals were permitted to operate freely. In exchange for tax profits on vice, the French turned the administration of the settlement over to the gangs. Tu became the protege of a man known as Pockmarked Huang, who was the chief of detectives in the French concession and a major Green Gang leader.

Tu Yueh-sheng
(1881-1951)
Prior to 1918 Shanghai's opium traffic had been based in the British concession, under the control of Swatow Chinese. However, after a 1918 crackdown on opium by the British authorities, the opium traffic was taken over by the Green Gang operating from the French concession. During the 1920s Tu Yueh-sheng unified the competing gangster organizations involved in the drug traffic and extended his influence from the French Settlement out to the more prosperous International Settlement. In the early 1920s Tu, known as the Opium King, was behind the production of 'anti-opium' pills, a supposed 'cure' for opium addiction that contained heroin, which sold by the million, so that one time the Shanghai syndicate was importing 10 tons of heroin annually from the West.


The leaders of the Green Gang in 1920s
(Tu Yueh-sheng on right)
Tu became one of the "Big Three" among the Shanghai gangsters. This unholy triumvirate controlled the city's underworld in early 1927, when Chiang's Northern Expedition forces were approaching. In late February 1927 labor unions allied with the KMT had moved against warlord control and foreign economic domination and begun a general strike, planning to welcome Chiang's armies to a liberated Shanghai. For his part, Chiang Kai-shek was actively courting the support of wealthy conservative and foreign businessmen; a strong united labour movement was a major impediment. Consequently, in late February, Chiang's forces delayed their advance toward the city, hoping that reprisals by the British-run International Settlement police and the Chinese garrison commander would break the strike and destroy its leadership.




12 April 1927 Shanghai purge

Tu and the Green Gang solved the problem for Chiang Kai-shek. On April 12, 1927, the gangsters initiated a vicious crackdown on the local Communist party organizers and labour activists. During the subsequent 'reign of terror', the city's Communist party and labour movement was destroyed. This pact with the Kuomintang strengthened the Green Gang's grip on official power, so that Tu was given a seemingly free hand to operate throughout Nationalist China.
Following the Geneva Convention ban in 1928 on the marketing of heroin, the Shanghai traffickers set up their own refineries. They were so successful that in 1934 the Shanghai municipal council received a report that heroin was being more widely used than opium, and by then Shanghai had become a major exporter to the United States.
Tu's dominance of Shanghai had allowed the Kuomintang to destroy the communists in that city, but it had also forged an alliance between the Kuomintang and the drugs trade. The Ministry of Finance became dependent on the flow of funds from drug trafficking and yet it was never enough.

In May 1935, while pursuing Communist troops in Yunnan, Chiang Kai-shek saw the opportunity to harvest the much-needed opium revenues from that province for the national treasury. By the end of the summer, the positioning of Kuomintang forces in Yunnan had brought the province into alignment with the Nationalists. The generalissimo followed similar tactics elsewhere to entrench Kuomintang authority and gain greater control over the opium business in the southwest and the Yangtze basin.

By mid-July 1935, Chiang had turned most of the opium enterprises over to his ally, Tu Yueh-sheng. The Kuomintang jurisdiction in 1935 did not lead to opium suppression but brought instead stricter regulation of cultivation and sale, with the government monopoly providing revenue for Chiang from the city workers and poor farmers who "would rather go without food than without opium."

The Kuomintang's opium was sent down to Shanghai, where Tu supervised a comprehensive narcotics distribution network, whilst controlling all aspects of life from underworld operations to local government and municipal finances. As head of the Chung Wai Bank and chairman of the board of directors of the Commercial Bank of China, he easily financed his illicit dealings. Tu Yueh-sheng was now by far the most powerful man in China, and the Government itself had to count with his power. And in July 1935, Tu became a key member of the new Opium Suppression Commission, a tool that enabled him to ruthlessly suppress all independent operators under government sanction.


Chung Wai Bank
Avenue Edouard VII, Shanghai


Japanese troops enter Shanghai in 1937

When the Japanese invaded Shanghai in 1937, Tu Yueh-sheng pulled out and subsequently settled down in Chungking, where he became known as a great philanthropist and headed several relief societies.
In January 1942 the time was ripe for Tu Yueh-sheng to again go into action in his particular line of business. Smuggling between occupied and Free China had become so lucrative a business that the Chungking government decided to step in and control it. It was arranged for Tu Yueh-sheng to manage this trade with the enemy through the firing lines, and five banks were ordered to finance Tu's new organization to the tune of 150 million Chinese national dollars.

Tu Yueh-sheng's cartel had crumbled when the underworld fled Shanghai. After World War II, as the Chinese revolution gathered momentum in the late 1940s, Shanghai's gangsters realized it was only a matter of time until the Communist forces would occupy the city. As most of the city's gangsters had participated in the 1927 massacre of Communist supporters, almost the entire underworld migrated en masse to Hong Kong from 1947 to 1950. This massive influx of thousands of China's toughest criminals was too much for Hong Kong police to handle, and organized crime flourished on an unprecedented scale. The Green Gang syndicate was a national organization, and its Hong Kong branch served as a welcoming committee. However, local gang leaders turned the situation to their advantage, and in the case of the Green Gang usurped the authority of their Shanghai bosses.

Following World War II, the Green Gang fell under the control of a Nationalist army lieutenant general, Kot Siu-wong. Kot had set up a new alliance, the Hong Fat Shan, in Guangzhou in the late 1940s as an anti-communist action group. The Hong Fat Shan subsequently became known as the "14K Society". 14K members moved first to Hong Kong, Taiwan and Macao after the communist takeover of the mainland in 1949, and then dispersed further to Thailand, San Francisco, Vancouver, Manchester and Perth Australia.

The "one-armed master chemist and his seven Green Gang disciples" escaped in 1949 from Shanghai to Hong Kong, where they trained the colony's chemists in the arts of heroin refining. This enabled Hong Kong to become a pivotal centre for the heroin trade in 1950s. The 14K was able to link the Kuomintang-controlled highlands of the Golden Triangle to the distribution channels of the USA and Europe.

Tu Yueh-sheng also retreated to Hong Kong in 1949, where he died, aged 70, in 1951.



Tu Yueh-sheng



Chen Yi

Following the Japanese surrender of Formosa (Taiwan) to the control of the Kuomintang in 1945, Chiang Kai-shek sent Chen Yi to act as his governor. The new governor proved not to be the saviour that the Formosans were expecting as he set about a carpetbagging campaign of influence-peddling and pillage that would flavour Taiwan politics to the present day. One item of interest was the fate of the (Japanese) Narcotics Monopoly stocks. Although the Japanese government had not published narcotics figures since 1935, we can use these to guess the stockpiles remaining.
It is a matter of record that at the end of 1934 the Taiwan Monopoly Bureau carried over a stockpile of 67,000 kgs of raw opium and 19,000 kgs of prepared opium. At the end of 1935 it carried over a stockpile of 424,500 kgs of coca leaves, 6,060 kgs of crude morphine, and 1,250 kgs of crude cocaine. Ten years later Chen Yi announced that the Japanese had surrendered only 4,374 kgs of opium and "a small quantity" of cocaine. These narcotics stocks, he said, had been promptly divided into three parts; some had been released to the local Bureau of Health, some had been sent to Nanking for use in the Army medical services, and the balance had been destroyed. Henceforth, he said, the manufacture of cocaine and coca derivatives would be given up. His agents had also assumed control of the coca plantations in Taichung and near Taitung.


The Kuomintang, after their defeat by the Communists in 1949, fled in two directions. One group, led by Chiang Kai-shek, escaped south from Shanghai and via Hong Kong to settle in Formosa (Taiwan); the other group, led by General Lee, escaped through Yunnan to settle in northern Thailand and Burma.
The intention was to retake China from Mao and the Communists in a two-pronged attack. This never took place, but the remnants of the army in Thailand developed the heroin trade. They were useful to the Thai government, and to the West, who were pleased to have a fiercely anti-communist and well-armed group patrolling the northern borders. They turned a blind eye to the heroin trade, which consequently expanded.



Kuomintang base in Burma in 1950s

With CIA support, the Kuomintang remained in Burma until 1961, when a Burmese army offensive drove them into Laos and Thailand. By this time, however, the Kuomintang had expanded Shan State opium production by almost 1,000 percent-from less than 40 tons after World War 11 to an estimated three hundred to four hundred tons by 1962.


Shan heroin refinery in Thailand

From bases in northern Thailand the Kuomintang continued to send huge mule caravans into the Shan States to bring out the opium harvest. Until 1971, over twenty years after the CIA first began supporting Kuomintang troops in the Golden Triangle region, these Kuomintang caravans controlled almost a third of the world's total illicit opium supply and a growing share of Southeast Asia's thriving heroin business.
The Hong Kong-based '14K' triad, with its strong links to the old Shanghai Green Gang and Nationalist officers, was able to link the Kuomintang-controlled highlands of the Golden Triangle to the distribution channels of the USA and Europe.
Whether the Kuomintang in Taiwan had any connection with this trade remains an open question. However, it can be assumed that Taipei had little incentive to risk the American aid that flowed in after the Korean War, and the American supply contracts that flooded in during the Vietnam War, launching Taiwan on its 'economic miracle'.

In the early 1990s, Taiwan came to notice as a transit point for Asian drug trafficking organizations moving heroin to the Western Hemisphere. The largest heroin seizure on record is the nearly half-ton of heroin that U.S. authorities discovered in Hayward, California in 1991. The drugs, which originated in China, had transited Taiwan en route to the United States.

On 10 May 1993, Taiwanese policemen raided a fishing vessel entering Tungkang Harbour, 10 kilometers south of Kaohsiung, where they seized 336 kilograms of pure heroin smuggled from the Chinese mainland, with an estimated retail price of NT$10 billion (US$337 million). This was the largest single heroin seizure in Taiwan's history, and resulted in Taiwan being added to the Majors List in 1995.

Taiwan's role as transit point for drugs destined for the United States, however, has changed radically in the past few years. More stringent law enforcement procedures, together with improved customs inspection and surveillance methods, have all but cut off serious flows of heroin from Taiwan to the United States. At the same time, the opening of major container ports in southern China has diminished Taiwan's importance for the drug trade.
 

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