N. Korea nuclear test short of strategic deterrent, blame it on THAAD

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North Korea's official media announced today the country had successfully conducted a nuclear test, confirming international media reports that Pyongyang had carried out its fifth nuclear test. A 5.0-magnitude earthquake in North Korea was detected by overseas monitoring services. South Korea claims the explosion was equivalent to about 10,000 tons of TNT, the most powerful one North Korea has tested thus far.

Today’s test happened only eight months after the claimed hydrogen bomb test of January, the shortest time span between any two previous tests. Two weeks ago, North Korea conducted a submarine-launched ballistic missile test, and a few days ago it launched three missiles.

Pyongyang seems to be set to intimidate the US and South Korea, who are exerting more military pressure. It is also trying to force the international community to abandon their efforts to seek a nuclear-free Korean Peninsula. But the efforts only drew a backlash. It has created anger and embarrassment, but unlikely to scare the outside world. The other five countries of the Six-Party Talks, which are now in a deadlock, are unlikely to make concessions.

North Korea should bear in mind that nuclear weapons are only a strategic deterrent tool and cannot be resorted to. North Korea has scarce resources and its economy is limited, therefore, even if it has the ability to make nuclear bombs, the number of its nuclear arsenal would be small, so it could not reach the minimum threshold of a global nuclear power. Its nuclear capability would pale in comparison with the nuclear prowess of the US. The US believes if North Korea uses nuclear weapons first, it would lead to its destruction. North Korea is not capable of ensuring an effective strike-back after being hit by a nuclear weapon. Several factors combined, North Korea cannot build a nuclear deterrent in the traditional sense.

Look at how much Pyongyang has sacrificed to develop nuclear weapons. It has become the world’s most isolated country. It is suffering from extreme economic difficulties and sees no hope of getting out of trouble any time soon. No North Korean leader has visited China in the past few years. Its top leader diplomacy is almost zero. Owning nuclear weapons appears to have added a strategic tool for North Korea. But the severance of diplomatic channels means the “growth in national strength” cannot transform to influence.

Northeast Asia is in a mess. The THAAD issue has led to a stalemate between China and the US-South Korea alliance. North Korea is taking advantage of this, hastening its nuclear tests. Seoul believes the new North Korean tests make it more necessary for the US to deploy the THAAD missile system.

They are all wrong. What they are doing will only drag Northeast Asia into deeper chaos. The Korean Peninsula will become an even more dangerous powder keg.

Owning nuclear weapons won't ensure North Korea's political security. On the contrary, it is poison that is slowly suffocating the country. It is turning into a country possibly with one or two nuclear bombs but nothing else - no prosperity, no opening up, no confidence in national security. Pyongyang will have to always be on alert.

North Korea has not become any stronger because of its fifth nuclear test. The Korean Peninsula nuclear issue knot has merely tightened.

It's North Korea's national day on Friday. We understand how eager the country wants to boost morale and enhance national cohesion. But the nuclear weapon that’s more like a firework for the North Korean people may well become one that signals a new crisis. We sincerely hope North Korea is aware of the situation and open to advice. Global Times

Blame DPRK's fifth nuke test on THAAD

Democratic People's Republic of Korea said on Friday, its 68th National Day, that it "successfully" tested a nuclear warhead in the morning. This is the fifth nuclear test conducted by Pyongyang since 2006 and the second this year. The DPRK only on Wednesday rejected a UN Security Council statement condemning its latest missile tests and threatened to take "further significant measures".

China's Ministry of Foreign Affairs has issued a statement censuring Friday's nuclear test and urging the DPRK to meet its denuclearization commitments.

In the Republic of Korea, the presidential office reportedly held a National Security Council meeting on Friday afternoon after "a seismic event" of magnitude 5.3 was detected near the DPRK's northeastern nuclear test site.

The nuclear test carried out by the DPRK on Friday should not come as a big surprise given the planned deployment of the US' Terminal High Altitude Area Defense system in the ROK. In other words, the almost confirmed deployment of THAAD, an anti-missile defense system, has prompted Pyongyang to continue its ill-designed foreign policy.

Judging by its latest nuclear test, the DPRK still stands firm on its strategic misreading, believing that by developing nuclear weapons it will pressure the United States to respond to its concerns. That also explains why the DPRK has conducted missile tests this year even though THAAD might not necessarily pose a major threat to it.

Besides, a nuclear test on the 68th National Day of the DPRK also has a noteworthy political implication - that top leader Kim Jong-un will keep expanding the country's nuclear arsenal.

But it does not suggest the situation on the Korean Peninsula is out of control, because Pyongyang's nuclear efforts usually follow US and ROK military moves.

China is determined to divert this trajectory toward a peaceful direction. But admittedly, China's strategic choices in the face of a rising nuclear threat in the neighborhood are limited because of the geopolitical complexity and the denuclearization process may take five to 10 years to complete. So Beijing has been urging all parties concerned to make more concerted efforts to becalm the ensuing turbulence.

Washington and Seoul, in particular, should sincerely rethink their decision to install THAAD on the peninsula and review their other strategic mistakes that have prompted Pyongyang to make the wrong steps.

A vicious cycle is in the making between the US and the ROK on one side and the DPRK on the other, which can make peaceful reunification of the peninsula even more unlikely. In fact, if tensions continue to rise on the peninsula, the DPRK and the ROK will eventually be the worst victims.

The peninsula policies adopted by the US and the ROK are not conducive to lasting peace, as they have exhausted the very few opportunities to replace the 1953 armistice with a peace treaty.

As US President Barack Obama will leave office in four months and his ROK counterpart Park Geun-hye faces a presidential election next year, there is hope their successors (if there is one in the ROK) would make a difference and forge a permanent peace and security mechanism with China.

The author is a researcher in Asia-Pacific strategy at the Chinese Academy of Social Sciences. The article is an excerpt from his interview with China Daily's Cui Shoufeng.

By Wang Junsheng (China Daily)

The author is a researcher in Asia-Pacific strategy at the Chinese Academy of Social Sciences. The article is an excerpt from his interview with China Daily's Cui Shoufeng.

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US media wanted 'special privileges'

President Barack Obama disembarked from Air Force One in Hangzhou, China, on Saturday. Photo: JONATHAN ERNST/REUTERS

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The United States' "obsession with special privileges" lies behind several US media organization's accusation that China treated US reporters rudely during the G20 Leaders Summit in Hangzhou, sources said.

The sources, who are close to the matter, responded on condition of anonymity to news reports and opinion pieces in some US newspapers that accused China of failing to meet the US media demands.

They faulted China first with not allowing some US reporters to be close to President Barack Obama as he got off Air Force One in Hangzhou on Saturday.

Obama said on Sunday, however, that his talks on Saturday with President Xi Jinping had been "extremely productive" and that he "wouldn't overcrank the significance" of arguments that took place at the airport upon his arrival.

The Wall Street Journal complained that on Saturday "the Chinese barred Mr Obama from including his traveling press contingent in his motorcade".

The New York Times said on Tuesday that "The White House press corps, which normally has access to the president's public events wherever he travels, has been sequestered in buses 200 yards from the site of the Group of 20, without access to food or toilets."

In response, a Chinese source told China Daily that the US, brushing aside common journalistic practice in multilateral meetings, insisted on having a bus carrying about 20 US reporters follow Obama's motorcade directly to summit hall where closed-door meetings were held.

Normally, however, host countries of major multilateral meetings have journalists gather as a pool in the news center and have them go through routine security checks before they are led to the meeting hall.

Another source at the scene told China Daily that "the bus was of course not allowed to join the motorcade, according to press rules, and we arranged for the reporters to go to the news center. But some of them chose to stay on the bus, while some went to the bathrooms or the press center at the summit."

The New York Times reported that when Xi and Obama took a leisurely stroll after dinner on Saturday, "Chinese security cut the number of US journalists allowed to witness it to three from the original six, then ultimately to a single reporter".

But a second Chinese source said China "had never promised to allow six reporters".

"Because the lakeside path was too narrow for that many reporters, we proposed one on one - one reporter from the US and the other from China. Later, the US agreed it was a good arrangement," the source said.

When asked about the meeting between Xi and Obama and the so-called incidents, Mark Toner, deputy US State Department spokesman said at a news briefing on Tuesday that the "small incidents that took place on the periphery" do not take away from "the strong cooperation that we've had with China on a number of fronts over the past several years of this administration".

A Chinese source said: "It is common to make some demands, but the demands should not cross the line. The US should not be an exception."

The sources added that no other country demanded the privileges that the US sought, and "China had every reason to provide convenient arrangements to foreign reporters" because it wished to successfully host the summit.

By Zhang Yunbi and Wu Jiao(China Daily)

Contact the writer at zhangyunbi@chinadaily.com.cn

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Philippine President calls Obama the "son of a bitch", reveals cracks in ties as he refuses to be lectured on human rights

US President Barack Obama and Philippine President Rodrigo Duterte expected to meet on the ASEAN Summit and related Summits in Laos in ...

Philippine President calls Obama the "son of a bitch", reveals cracks in ties as he refuses to be lectured on human rights

US President Barack Obama and Philippine President Rodrigo Duterte expected to meet on the ASEAN Summit and related Summits in Laos in early September 2016.

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Duterte: Who is Obama to ask me about human rights?

Philippine President Rodrigo Duterte called Barack Obama a "son of a w****"/"son of a bitch" on Monday as he vowed not to be lectured by the US leader on human rights when they meet in Laos.

The acid-tongued Duterte bristled at warnings he would face questioning by the US president over a crime war in the Philippines that has claimed more than 2,400 lives in just over two months.

"You must be respectful. Do not just throw away questions and statements. Son of a whore, I will curse you in that forum," Duterte told a news conference shortly before flying to Laos to attend the summit.

"We will be wallowing in the mud like pigs if you do that to me."

Duterte was due to hold a bilateral meeting with Obama on Tuesday afternoon on the sidelines of a summit of global leaders hosted by the Association of Southeast Asian Nations (ASEAN) in Vientiane, the Lao capital.

In response to Duterte's tirade, Obama said he had asked his staff to assess whether it would be productive for him to meet with Duterte.

Duterte was elected in May after a promise to wage an unprecedented war on illegal drugs that would see tens of thousands of suspects killed.

Official figures released Sunday show that, since Duterte took office on June 30, over 2,400 people have been killed in police anti-drug operations and by suspected vigilantes.

Duterte has angrily rejected criticism from the Catholic Church, human rights groups, legislators and the United Nations.

Duterte vowed Monday the bloodbath would continue as he pursued his goal of eradicating illegal drugs in the Philippines.

"More people will be killed, plenty will be killed until the last pusher is out of the streets. Until the (last) drug manufacturer is killed, we will continue and I will continue," he said.

Duterte insisted he would not take orders from the United States, a former colonial ruler of the Philippines, and did not care about how he was perceived.

"I don't give a shit about anybody observing my behaviour," he said.

Duterte also used vulgar language to accuse his domestic critics of wanting to please the United States.

"There are others who have the mental capacity of dogs who lap at the a** of the Americans," he said in reference to his critics.

Duterte is notorious for using offensive language.

During the election campaign Duterte described the US ambassador to Manila as a "son of a w****" and being homosexual.

This was in response to the ambassador's criticism of Duterte for making a joke about wanting to rape a "beautiful" Australian missionary who was killed in a Filipino jail.

IN QUOTES | Rodrigo Duterte, Philippines' president 

IN QUOTES | Rodrigo Duterte, Philippines' president

“A leader must be a terror to the few who are evil in order to protect the lives and well-being of the many who are good.”

“If I become president, I advise you people to put up several funeral parlour businesses. They will be packed. I’ll supply the dead bodies.”

“Pardon given to Rodrigo Duterte for the crime of multiple murder, signed Rodrigo Duterte.”

“You son of a whore Pope Francis. Why don’t you just go home?”

"Many are asking what my credentials are and what I can do for the Philippines. They are telling me that they heard I am a womaniser. That is true. That is very true.”

"I was angry because she was raped, that’s one thing. But she was so beautiful, the mayor should have been first, what a waste." - The Telegraph UK

Insult reveals cracks in US-Philippine ties

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"Son of a bitch." This is how Philippine President Rodrigo Duterte referred to US President Barack Obama on Monday. This has set a dilemma for Washington. When Obama was asked to respond to the remarks, he said the Philippine president was a "colorful" person, showing a generous response. However, the White House still expressed its anger through diplomatic means by canceling Obama's meeting with Duterte that had been scheduled during the ASEAN summit in Laos.

Although Duterte's spokesperson said he regretted his sharp words, they have spread all over the world. He meant it when he said the Philippines has long ceased to be a colony and that "I do not have any master except the Filipino people, nobody but nobody." The hostility between the US and the Philippines can hardly be settled easily.

During his election campaign, Duterte was dubbed the Philippines' Donald Trump. Still, his big mouth as president has shocked the world, especially the West. The Western media listed the figures he has referred to as "sons of bitches," which included Pope Francis and the US ambassador to the Philippines. Duterte cursed these people when they pointed their fingers at the domestic politics of Manila. After he assumed power, he dealt a heavy blow to drug dealers, while the West accused him of violating human rights.

But Duterte's actions have been welcomed in his country. Although his dirty words have tarnished his international image to some extent, he apparently attaches more importance to domestic support. He is clear which side matters more to him. The latest friction between Washington and Manila seems accidental, but conflicts between Western values and developing countries are common. Duterte, on behalf of developing countries, only showed that he had had enough.

Many people believe it is time for Manila to seek support from the US as the maritime disputes between Manila and Beijing highlighted the importance of the US-Philippines alliance to the latter. But why did Duterte slap Obama in the face? The reason is that the Philippines does not feel insecure even faced with China's "threat." Beijing and Manila do have territorial disputes. But despite US support and a favorable arbitration award to the Philippines, the Philippines gained no real benefits. The alliance with the US is not the only consideration for Manila. The Philippines has shifted the focus back to internal governance. The US needs the Philippines more as it sees this Southeast Asian country as a pawn to counter China.

Chinese netizens applauded Duterte's words about Obama. But the US-Philippine alliance will remain solid. China should not hold too many illusions. From a long-term perspective, it will not necessarily be easy to deal with the Philippines under his rule.

The human rights issue has brought enmity between the US and its two allies of Turkey and the Philippines. We can judge the role of human rights in US diplomacy. The dispute between China and the US over the issue is worth our observation. - Global Times

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G20 2016 concludes with multiple victories; China puts its stamp on global governance

Going green By Wang Xiaoying

Carbon commitment Illustration: Shen Lan/GT

https://youtu.be/gRUR_ouXAJI

• G20 SUMMIT CONCLUDES

• Dialogue 09/05/2016 G20 Summit concludes

  
   

   

   

  China’s multiple victories from G20 summit

  
  
  The Hangzhou G20 summit concluded Monday afternoon. China as host of the summit has garnered more global attention. China's careful organization has maximized the efficiency of the meeting, with abundant results achieved. While world opinion was reserved about the role of the G20 platform in the future, the Hangzhou summit has undoubtedly consolidated its status in global governance.
  
  From China's perspective, the summit is more successful. China's situation, its ideas and stance have all been shown to the world. It has opened the door to comprehensive communication between China and the outside world.
  
  Chinese President Xi Jinping met with his US and Russian counterparts respectively, which bears significance for global strategy. The summit also offered a chance for Sino-Japanese and Sino-South Korean ties, both of which are at a low ebb currently.
  
  China has gained a great deal of soft power through the meeting. As a rising power, China's unique system has been seen by Western media as its first identity. Some in the media were more interested in seeing China make mistakes as a host than expecting fruitful results of the summit. It turned out that the summit went smoothly and was a crowd-pleaser.
  
  The US Defense Intelligence Agency tweeted a New York Times article about the G20 and wrote, "Classy as always China" to its 83,000 followers. It later deleted the tweet and made an apology. The act only shamed the agency.
  
  The way China hosts international conferences indeed differs from the West, but so what? The Hangzhou G20 meeting has further enhanced China's confidence.
  
  The world is diverse, and China does not need to feel shy about displaying its cultural characteristics or care about what the West thinks.
  
  Many countries are simply shouting out slogans, while China is dedicated to actions. Picturesque Hangzhou becomes more beautiful after hosting the G20. Despite some criticisms, its positive impact will long be enjoyed by Hangzhou residents and domestic travelers.
  
  China has encountered some controversies and challenges during its hosting of the G20 summit, but now they are all gone. This is a valuable process for China as it conveys the meaning of being a major power.
  
  As long as we are firm and dedicated, we will be confident that even if there are some errors, we can be at ease about it.
  
  During China's rise, we will keep changing our understanding of success and become more skilled in coping with the West. Development still tops the agenda. Rapid development is the biggest parameter for China to win respect and discourse power, and how the West sees us is one of the least important factors.
  
  We also got to know what world unity is. China should make contributions to unite the world. The Hangzhou G20 summit proves that China has such capabilities and doing so suits our interests. - Global Times
  

China puts its stamp on global governance at G20 Summit

Chinese President Xi Jinping presides over the opening ceremony of the Group of 20 (G20) summit in Hangzhou, capital of east China's Zhejiang Province, Sept 4, 2016. [Photo/Xinhua]

The ceremonies, handshakes, meetings and speeches, banquets and performances of this year's G20 Summit have now come to an end.

In fact, they ended on Monday after the leaders of the world's 20 major economies met in Hangzhou, East China's Zhejiang province, and a long list of agreements were signed. Check details of the final communiqué

But these were not the be-all and end-all of the 2016 G20, as it is likely to have a lasting legacy in international relations, with China leaving its stamp on the G20 as a mechanism to coordinate future actions by the world's leading economies.

China's contribution to the 2016 G20 has been significant in two ways.

First, China has demonstrated unswerving commitment to globalization, more specifically to defending free trade and cross-border investment and business cooperation, despite the fact that it can no longer easily increase its own exports by relying on low-cost labor, and that many processing operations formerly based in China have relocated elsewhere.

Amid growing calls for protectionism worldwide, pessimism about the future, and fear of sharing opportunities with foreigners, China understands that it must set an example by working with other countries to defend the existing global market system.

Just as President Xi Jinping told the delegates at the Business 20, a sideline session of the G20 Summit, on Saturday, rather than overturning the existing system, what China wants is to expand the global market system, to make it include more nations, more workers and more entrepreneurs.

China has also cautioned against attempts to seek self-protection, and politically defined small-circle games, since they tend to rewrite the rules for the global system and worsen the problems plaguing the world economy. On Sunday, Xi again called on the G20 members to continue to promote the liberalization and facilitation of trade and investment.

Second, China's contribution has also been significant in the way the G20's agenda has been aligned with the long-term goals and programs set out by the United Nations. China has contributed substantial content to affect this, including its efforts to nurture cooperation among the emerging market economies and inviting more leaders from developing nations to participate in the G20 process, as well as the proposal for a common e-commerce platform for small and medium-sized enterprises across the world.

To brave the rough waters of the world economy and start a new journey for future global growth, the G20 should not only help the world coordinate efforts to deal with emergencies, as was its original purpose following the onset of the global financial crisis, it should also focus on long-term governance. It should address both the symptoms and root causes of the world's economic problems with real actions, so as to spread opportunities where there are few or none.

In anti-globalization, anger and divisiveness hold sway. Globalization, on the other hand, requires people from different countries to exchange views, compare notes and learn from one another.

However, the G20 members can do more than just talk. They can generate more trade and cross-border investment deals, showcase more innovations, provide more services, and extend help to more poor people and under-developed nations. In the process, the G20 can become more important by finding "a direction and a course for the world economy with a strategic vision", as Xi has urged. In this way it can help realize people's common aspirations for sustainable, balanced and inclusive growth. - China Daily

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Gathering synergy for a new type of world economy

Beijing's prescriptions may sound too good to be executable at this point, but not if the G20 members, as Xi called for, "work with real action with no empty talk".


Remarks by H.E. Xi Jinping President of the People’s Republic of China At the Closing Ceremony of the G20 Hangzhou Summit
 
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Action, not words or empty talk, needed to cure global economy, China tells G20 summit

G20 Summit in Hangzhou

Leaders pose for pictures during the G20 Leaders Summit at the Hangzhou International Expo Center in Hangzhou, East China's Zhejiang province, on Sunday. WU ZHIYI/CHINA DAILY

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G20 Summit opens in Hangzhou, Xi delivers keynote speech

 http://english.cctv.com/2016/09/04/VIDEc5kKPpOOSbfGBwyHqtbP160904.shtml

Video: President Xi delivers speech at G20 banquet

Video: President Xi delivers speech at G20 banquetChinese President Xi Jinping urges world leaders to avoid "empty talk" and confront sluggish economic growth and rising protectionism as their summit opens in the scenic city of Hangzhou.http://english.cctv.com/2016/09/04/VIDEAYffDNcMahOalCr6FgGB160904.shtml

Action, not words, needed to lift economy - President tells world leaders China will strive to boost growth, aid development

President Xi Jinping urged the leaders of the world's biggest economies to deliver "real action" and "no empty talk" as they attempt to steer the global economy out of its sluggish state.

In his opening speech at the start of the two-day G20 Summit on Sunday, he said the G20 had drawn up action plans in multiple fields, including sustainable development, green finance, energy efficiency and anti-corruption, "and we should implement each of them seriously".

The Hangzhou summit has come at a time when the world economy is plagued by problems, short and long term, such as poor growth momentum, changing demographics, rising trade protectionism and low investment, Xi said.

But he insisted that G20 members will "face the problems squarely" and collaborate in developing solutions.

World leaders vowed at the meeting to find workable solutions to restore strong growth and achieve more-inclusive development that reduces inequality. They also agreed that more focus should be placed on structural reforms, innovation and high-technology, as traditional growth engines have weakened.

German Chancellor Angela Merkel said leaders had agreed that they must work together to boost global economic growth, and she welcomed China's focus on structural reform.

She added that digital ministers from the world's biggest economies will meet for the first time next year and that the group planned to set up a task force for innovation, Reuters reported.

Xi said in his speech that while the world needs to better coordinate monetary and fiscal policies and carry out structural reforms, priority should be given to achieving balanced growth. He said the G20 will help less-developed countries, including those in Africa, with industrialization as well as green energy and finance to bridge the gaps in global development.

The G20 has been criticized in the past for failing to take concrete measures to coordinate world economies. While urging members to take substantial action, Xi said the group "should continue to build our mechanisms to ensure our cooperation continues and deepens".

"The G20 is becoming more systematic and is changing from a short-term arrangement to handle crises to a long-term dialogue and action mechanism," according to Chen Wenling, chief economist at the China Center for International Economic Exchanges. "To make it more effective, the G20 should establish a secretariat."

Wang Wen, acting director of Renmin University of China's Chongyang Institute for Financial Studies, added: "The G20 used to be driven by crises, and now it's driven by ideas. China has provided a global consensus at the Hangzhou summit that will drive global joint action."

World economic growth－still made in China

By Stephen S. Roach (China Daily)

Despite all the hand-wringing over China's slower economic growth, the Chinese economy remains the single largest contributor to world GDP growth. For a global economy limping along at stall speed－and most likely unable to withstand a significant shock without toppling into renewed recession－that contribution is all the more important.

A few numbers bear this out. If Chinese GDP growth reaches 6.7 percent in 2016－in line with the government's official target and only slightly above the International Monetary Fund's latest prediction of 6.6 percent－China would account for 1.2 percentage points of world GDP growth. With the IMF currently expecting only 3.1 percent global growth this year, China would contribute nearly 39 percent of the total.

That share dwarfs the contribution of other major economies. For example, while the United States is widely praised for a solid recovery, its GDP is expected to grow by just 2.2 percent in 2016－enough to contribute just 0.3 percentage points to overall world GDP growth, or only about one-fourth of the contribution made by China.

The European economy is expected to add a mere 0.2 percentage points to world growth, and Japan not even 0.1 percentage points. China's contribution to global growth is, in fact, 50 percent larger than the combined contribution of 0.8 percentage points likely to be made by all of the advanced economies.

Moreover, no developing economy comes close to China's contribution to global growth. India's GDP is expected to grow by 7.4 percent this year, or 0.8 percentage points faster than China. But the Chinese economy accounts for fully 18 percent of world output (measured on the basis of purchasing power parity)－more than double India's 7.6 percent share. That means India's contribution to global GDP growth is likely to be just 0.6 percentage points this year－only half the boost of 1.2 percentage points expected from China.

More broadly, China is expected to account for fully 73 percent of the total growth of the BRICS grouping of large developing economies. The gains in India of 7.4 percent and South Africa 0.1 percent are offset by ongoing recessions in Russia, minus 1.2 percent and Brazil, minus 3.3 percent. Excluding China, BRICS GDP growth is expected to be 3.2 percent in 2016.

So, no matter how you slice it, China remains the world's major growth engine. Yes, the Chinese economy has slowed significantly from the 10 percent average annual growth recorded during the 1980-2011 period. But even after transitioning to the slower growth of what the Chinese leadership has dubbed the new normal, global economic growth remains heavily dependent on China.

There are three key implications of a persistent China-centric global growth dynamic.

First, and most obvious, continued deceleration of Chinese growth would have a much greater impact on an otherwise weak global economy than would be the case if the world were growing at something closer to its longer-term trend of 3.6 percent. Excluding China, world GDP growth would be about 1.9 percent in 2016－below the 2.5 percent threshold commonly associated with global recessions.

The second implication, related to the first, is that the widely feared economic "hard landing" for China would have a devastating global impact. Every decline in Chinese GDP growth of one percentage point knocks close to 0.2 percentage points directly off world GDP; including the spillover effects of foreign trade, the total global growth impact would be around 0.3 percentage points.

Defining a Chinese hard landing as a halving of the current 6.7 percent growth rate, the combined direct and indirect effects of such an outcome would consequently knock about one percentage point off overall global growth. In such a scenario, there is no way the world could avoid another full-blown recession.

Finally (and more likely in my view), there are the global impacts of a successful rebalancing of the Chinese economy. The world stands to benefit greatly if the components of China's GDP continue to shift from manufacturing-led exports and investment to services and household consumption.

Under those circumstances, Chinese domestic demand has the potential to become an increasingly important source of export-led growth for China's major trading partners－provided, of course, that other countries are granted free and open access to rapidly expanding Chinese markets. A successful Chinese rebalancing scenario has the potential to jump-start global demand with a new and important source of aggregate demand－a powerful antidote to an otherwise sluggish world. That possibility should not be ignored, as political pressures bear down on the global trade debate.

All in all, despite all the focus on the US, Europe, or Japan, China continues to hold the trump card in today's weakened global economy. While a Chinese hard landing would be disastrous, a successful rebalancing would be an unqualified boon. That could well make the prognosis for China the decisive factor in the global economic outlook.

While the latest monthly indicators show China's economy stabilizing at around the 6.7 percent growth rate recorded in the first half of 2016, there can be no mistaking the headwinds looming in the second half of the year. In particular, the possibility of a further downshift in private-sector fixed-asset investment could exacerbate the ongoing pressures associated with deleveraging, persistently weak external demand, and a faltering property cycle.

But, unlike the major economies of the advanced world, where policy space is severely constrained, the Chinese authorities have ample scope for accommodative moves that could shore up economic activity. And, unlike the major economies of the developed world, which constantly struggle with a trade-off between short-term cyclical pressures and longer-term structural reforms, China is perfectly capable of addressing both sets of challenges simultaneously.

To the extent that the Chinese leadership is able to maintain such a multi-dimensional policy and reform focus, a weak and still vulnerable global economy can only benefit. The world needs a successful China more than ever.

The author is a faculty member at Yale University and a former chairman of Morgan Stanley Asia, and author of Unbalanced: The Codependency of America and China. Project Syndicate

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G20 summit recognizes China's success, a historic starting point for the world, expert said

All in a day’s work: Chinese President Xi Jinping attending the opening ceremony of the B20 Summit ahead of the G20 Summit in Hangzhou. ...

G20 summit recognizes China's success, a historic starting point for the world, expert said

All in a day’s work: Chinese President Xi Jinping attending the opening ceremony of the B20 Summit ahead of the G20 Summit in Hangzhou. — Reuters

MOSCOW: The fact that the G20 summit will be held in Hangzhou, China, reflects the global recognition of and respect for China’s giant economic success, a leading Russian economic expert has said.

“The international community admits that China has become a major economic power, which largely determines the economic development of the whole world,” Vyacheslav Kholodkov, head of the International Economic Organisa­tions Department at the Russian Institute for Strategic Studies, told Xinhua.

As the second-largest economy of the world, China has a strong impact over global economic processes, the economist said, adding that the performance of China’s stock markets and its import of energy resources exert a powerful influence on world markets.

Kholodkov also expressed the belief that the Western media today have exaggerated and distorted the existing problems with the Chinese economy.

“China’s economic success is like a thorn on the side of many Western politicians and journalists, because it shows that there are other more successful models besides the Western liberal economic model,” the expert noted.

In his opinion, the current problems plaguing China were those of structural adjustments and shifts in economic development pattern.

If previously China’s development had been driven mainly by exports, it is now shifting from an export-oriented development model to focusing on domestic demand, Kholodkov said.

Kholodkov saw “nothing dramatic” in such a development, as other countries that experienced similar problems have survived such transitional periods.

China’s GDP grew by 6.9% last year, a rate to be envied by many countries, according to Kholod­kov.

China presents an example for many developing countries, including Russia, which are closely watching China’s experiences and following some of its trends in their political practices, he concluded. — China Daily/Asia News Network

Summit can be historic starting point for the world

President Xi Jinping and US President Barack Obama meet at the West Lake State Guest House in Hangzhou, Zhejiang province, on Saturday. Wu Zhiyi / China Daily

The Austria-born American management philosopher Peter Drucker once attributed the absence of right-wing fanaticism in North America to the self-organizational ability of society, represented, first of all, by the thousands of well-managed business enterprises.

That point should be appreciated today, when, eight years after the 2008 global financial crisis, all major economic powers still cannot guarantee a sustainable recovery for the world.

The annual meeting of the G20 bears witness to the shared will and joint efforts of the leading developed and developing economies in the world. All countries have so far remained steadfast in their agreement to hold a defensive line for the globalist agenda. There has not been a full-scale trade war and competitive currency depreciations－at least not yet.

The global financial crisis has cast a very long shadow, with growing income inequality in many places and corporations holding onto their capital instead of investing, and judging from the rising protectionism, along with some ideologically-charged rhetoric, from various political forces, there are some who seem willing to set back or spoil the globalization process.

A genuine "mass flourishing" of businesses is needed to help the world both stay on the course of globalization and avoid the malaise that caused the last crisis.

That is why the G20 created, alongside its annual summit, a business leaders' meeting, called the Business 20. That is also why the G20 needs not just a business leaders' meeting, but also a distilled vision of common concerns and necessary actions, which is what President Xi Jinping delivered in his keynote speech at the B20 Summit on Saturday.

Drucker proposed that long-range planning does not deal with future decisions, but with the future of present decisions. In his speech Xi urged all parties to prescribe remedies to the world's economic problems and explore new sources of growth and expand the space for development.

The foreign guests can see for themselves through Hangzhou, the host city of the G20 and B20 summits, how China has become a leader of growth, as the city is home to many new businesses and new management models.

As Xi said it is an unprecedented achievement for a country with such a large population to realize modernization. The more businesses are created, the more they spread from developed to under-developed areas. In the process, obsolete industries are phased out and new ones emerge, jobs are created, and cities such as Hangzhou become vibrant.

The same process can also prove true elsewhere in the world. - (China Daily)/ANN

China plays a key role in setting G20 agenda

The G20 summit meets against the backdrop of two interrelated global issues.First,since the international financial crisis global growth has been slow. Second, asa result social and geopolitical crises have persisted. China’s proposals for the G20 summit – an innovative, invigorated, interconnected and inclusive economy –simultaneously and in an integrated way address both issues.

China’s four proposals are inseparably connected:

Innovation, in technology and in management, logistics, skills and ideas, is indispensable for sustained economic development.

But innovation purely in ideas is insufficient to lead to sustained economic development. Advances in ICT technology, for example, had to be embodied in investment in internet and computer technologyto produce productivity gains. Therefore, the global economy must be invigorated through increased investment, new trade liberalisation agreements, new financial institutions such as the Asian Infrastructure Investment Bank (AIIB) and modifications in global economic governance. This requires drawing on numerous resources in global economy and finance.

Development is most powerful if internationally integrated. Since Adam Smith founded modern economics it has been known that the most powerful force developing productivity is division of labour, which in a globalised economy necessarily includes international division of labour.Retreats into protectionism deeply damage the world economy. But advancing international division of labour requires not only legal trade and investment agreements but development of internationally integrated infrastructure making such trade possible and supporting international investment. Such integration highlights the importance of China’s ‘One Belt, One Road’initiative,while China supports economic integration in Africa, Latin America, Europe and elsewhere.

Development must be inclusive both between and within countries.Failure of sections of the world’s population to benefit from economic development is dangerous politically. Impoverishment of sections of the population and social disintegration has led to terrorist organisations gaining support, andin some cases open warfare, in parts of Africa and the Middle East. Within advanced economies failure of parts of the population to gain from economic growth strengthens protectionist and xenophobic forces which threaten global economic integration and therefore global prosperity.

Success in developing innovative, invigorated, interconnected and inclusive economic growth will therefore lessen geopolitical and social tensions.

China is in an unequalled position to give leadership on this G20 agenda not only theoretically but due to China’s practical achievements in dealing both with the international financial crisis and over the longer term.From 2007, the last year before the financial crisis, to 2015 China accounted for 46% of world growth measured at current exchange rates – compared to 22% for the second placed US.China was the world economy’s most powerful engine to face the international financial crisis, benefitting both advanced and developing economies.

World Bank data shows 83% of the world’s population still lives in developing countries. Economic development therefore remains the most pressing issue facing humanity. China, the world’s largest developing economy, increased its per capita GDP, the fundamental index of economic development, from 2007 to 2015 by 86% - the fastest of any G20 country.

China playsa key G20 agenda setting role because, in addition to these shorter term anti-crisis trends, China’s historical economic and social achievements are unprecedented.From 1978 onwards China experienced the most rapid economic growth in a major economy in human history. China lifted 728 million people from World Bank defined poverty, 83% of the reduction of those living in poverty in the world. This is greatest contribution of any country to human well-being.

But despite these achievements China’s stress on integrated inclusive growth means China has no conception it can successfully develop alone. Instead China advocates strengthening the G20’s role. G20 economies account for 85% of world GDP, including the largest advanced and developing economies. The G20 is therefore provides an unequalled forum to coordinate measures to deal with the world’s most pressing economic issues.

China’s proposals for an innovative, invigorated, interconnected and inclusive economy are therefore crucial not only for this year’s Hangzhou summit but a step towards the G20s strategic development.

By John Ross (People's Daily Online)

John Ross is Senior Fellow at Chongyang Institute for Financial Studies, Renmin University of China.

G20 can unlock global economic potential

The 2016 G20 Hangzhou summit will kick off on Sunday and a related meeting, the Business 20, will be held this weekend. As China is the chair of this year's G20, expectations are running high though some still try to interpret the event through an ideological lens. But the fact that the global governance capability will be mobilized to its maximal extent at this year's summit may be a common consensus.

China sees G20 as a top item on its agenda and has strived to create favorable conditions for the summit. Some say too much attention has been put on G20. However, the positive significance of a successful G20 overweighs the negative effect. From the perspective of urban development, the summit has promoted Hangzhou's growth and image.

China is a unique member of G20. It is the world's second-largest economy and the largest developing country. It has excelled in some areas but the overall economic and social development is not as advanced as in some other countries. China's high speed development together with its experience, from both successes and mistakes, make us easier to find common ground with both developed nations and emerging markets.

China is sincere about promoting global governance and creating a win-win situation in resolving world economic issues. China's rise, to some extent, is the result of globalization. Chinese believe strengthening international cooperation is a global trend and are devoted to the win-win principle. We believe the G20 playing a greater role will benefit China and the world.

Compared to the time of the first G20 summit in 2008, the global economic issues have become more complicated and morale has taken a further beating. Eight years after the financial crisis, the developed nations have yet to walk out of the shadows and the emerging markets are facing increasingly grave challenges. G20 needs a passionate summit and the enthusiasm of the Chinese society will help make it happen.

There is still great potential in the global economy and the key is to redistribute resources more reasonably so that less developed regions can drive growth that benefits all sides. The same issue has also been haunting China. The country has been restructuring and developing through the process of reform. The exploration belongs as much to China as to the world.

Macroeconomics may not be the most popular stories. Some Western media tend to politicize the summit or sprinkle their coverage with gossip. The summit only takes two days and the topics proposed by China revolve around the economy. As the global economy is once again at a crossroad, we hope the media can make the call heard for an "Innovative, Invigorated, Interconnected and Inclusive" world economy. Global Times

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Singaporeans on buying sprees for Penang prewar houses; Residents see red

Little Singapore expanding: At least 26 prewar houses at Lorong Bertam in George Town are the latest to be snapped up by a Singapore company

Singapore sweep continues

Republic’s real estate hunters snapping up houses outside Penang’s heritage enclave.

GEORGE TOWN: Singaporean real estate hunters with a taste for prewar properties in Penang are still on buying sprees, says an NGO.

They are snapping up houses that are located just outside the state’s heritage enclave as these properties are not accorded heritage protection by Unesco, according to George Town Heritage Action.

The biggest buyer appears to be World Class Land (WCL), which is building the tallest residential skyscraper in the planet’s southern hemisphere.

Called Australia 108 because of its 108 storeys, the Melbourne development is expected to be completed in 2019.

WCL has since December 2013 reportedly snapped up 236 prewar houses in Penang, totalling more than 250,000sq ft – the equivalent of 26 football fields.

Recently, it applied to build a 46-storey condominium tower in Gurdwara Road, just 200m from Komtar after buying 37 prewar properties in that area.

Its latest block buy appears to be 26 prewar houses on Penang Road and Bertam Lane, also across from Komtar.

The properties were owned by six descendants of Tunku Kudin (1835- 1909), the great grand uncle of the late first prime minister, Tunku Abdul Rahman Putra Al-Haj, for nearly 100 years.

The offer from WCL was about RM980 per sq ft, totalling RM21mil.

Tengku Abdullah Tengku Mahadi, 61, who collected the monthly rent from the tenants on behalf of his 92-year-old father, said the deal was sealed in Thailand through one of the six heirs who spoke for all of them.

“All the heirs are in their late 80s and 90s. It will cost too much to develop the land ourselves.

“We didn’t really feel like selling. We know the new owner will change the whole place but we are all old and don’t want to stand in the way of development,” he told The Star.

He said the heirs only earned about RM50 per month from each unit when the Rent Control Act was in force.

After it was repealed in 1997, they raised the rent to about RM600 and it had stayed the same since.

WCL lawyers have sent eviction notices to the 60-odd tenants who have until end November to move out.

A subsidiary of Aspial Corporation Ltd, WCL has completed many projects in the island republic and Australia.

Aspial chief executive officer Koh Wee Seng is listed by Forbes this year as the 43rd richest man in Singapore.

George Town Heritage Action has been vociferously against the state government’s apparent lack of control over the alleged WCL buying sprees.

“This company’s business model is to buy the properties, evict the tenants, renovate or rebuild, and then drastically increase rentals,” said its co-founder Mark Lay.

At a press conference yesterday, he showed a list of 236 properties purportedly bought by WCL through several subsidiaries.

Totalling more than 250,000 sq ft, these include rows of old houses along 19 roads, including Dato Keramat, Macalister, Transfer and much of the Seven Streets precinct (known locally as Chit Tiau Lor) near Komtar.

Lay warned that if the state government allowed “one company to accumulate more than 230 prewar houses, it will kill diversity and people’s moral rights to the city”.

“Our concern is also socio-cultural. Any company can damage the fabric of George Town when they have a monopoly,” he added.

In June, The Star reported that Singaporean companies typically raise rentals by 400% to 500% after sprucing up the old houses.

In response, Penang Town and Country Planning Committee chairman Jagdeep Singh Deo had said that the state cannot interfere with free enterprise.

By Arnold Loh The Star/ANN

Penang residents see red over Singaporeans snapping up properties

GEORGE TOWN: Public anger in the state is on the rise as Singaporeans continue to buy up pre-war houses here by the blocks.

NGOs and netizens are reacting negatively following The Star Online’s Facebook posting of the news yesterday.

Many are calling for stricter measures to limit foreign buying, but Penang Citizens Chant Group legal adviser Yan Lee warned that it would be useless as foreigners could sidestep such restrictions by simply forming Malaysian shell companies with local directors who are proxies or trustees.

“The corporate veil will shield them from these simple stop-gap measures. Instead, these measures end up keeping out individual foreigners who earnestly want to own property here because they just want to live in Penang.

“The Penang government is more concerned about collecting development charges. The more it allows development, the more money it collects,” he lamented.

Yan Lee was commenting on cooling measures here since 2012 that prevent foreigners from buying landed property of less than RM2mil on the island and RM1mil on the mainland.

For stratified property, the cap is not less than RM1mil both on the island and the mainland.

There is also a state approval fee of 3% over the purchase price.

State Town and Country Planning Committee chairman Jagdeep Singh Deo said in a statement yesterday that statistics had shown that these measures had reduced foreign buying of Penang property by about 50% since 2013.

George Town Heritage Action held a press conference on Thursday to reveal that Singapore developer World Class Land (WCL) had acquired 236 pre-war houses in and around the heritage zone totalling about 250,000sq ft, equal to 26 football fields.

According to the annual report of WCL’s parent company, Aspial Corporation Ltd, the properties are held by six Malaysian companies – WCL (George Town) Holdings, WCL (Magazine), WCL (Macallum), WCL (Noordin), WCL (Bertam R) and WCL (Bertam L).

In the Companies Commission of Malaysia’s online portal, there are also company records of WCL (Malaysia) and WCL (Penang).

By Arnold Loh The Star/ANN

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