Chinese leadership decides to shed caution



After he launched China on to a market-led course in 1978, Deng Xiaoping counselled caution in international relations. China should, he advised, keep a low profile while enriching itself and not alarm the countries whose markets for its exports would replace deficient domestic demand.
Hu Jintao, the president of China, and his leadership colleagues must have decided that the time has come to shed such caution. China not only adopts a higher global profile, but is increasingly ready to take positions that earn the world's disapproval, be it on the valuation of its currency or its support for regimes in Sudan, Iran and Burma. And now that more muscular approach by Beijing confronts the Obama administration's drive to reassert Washington's interest in Asia.
China not only adopts a higher global profile, but is increasingly ready to take positions that earn global disapproval.
This could provide a testing experience for both sides of the so-called G2, a concept that has never really taken off, if only because of the rocky path of Sino-US relations since President Barack Obama's visit to the People's Republic a year ago.
The flashpoints are evident. The assertion by Hillary Clinton, the US secretary of state, that freedom of navigation in the South China Sea runs straight up against China's claim to sovereignty over the waters to its south. Washington's growing closeness to India, including backing New Delhi's claim to a permanent seat on the UN security council, is not to Beijing's taste.
The US-Japan relationship remains a constant source of concern for China. The same goes for US-South Korean links. US arms sales to Taiwan rile Chinese leaders who insist that the island is part of the People's Republic.
During my recent three months in Beijing, I was struck repeatedly by the sharp tone adopted towards the US not only by ideologues and media propagandists, but by senior economists who insist that the failure of American economic policy is responsible for the world's ills.
The fact that the US Federal Reserve's new bout of quantitative easing (QE2) went down like a lead balloon at the Group of 20 (G20) leading and emerging economies summit in Seoul showed that China is not short of allies.
Before the G20 meeting, co-operation over global warming seemed at a dead end. China still values investments by companies such as Intel, yet promotion of domestic companies in its stimulus package and an increasingly tough regulatory climate for foreign firms complicate a business relationship that has flourished since the 1980s. As the mainland moves up the technological and value chain under its next five-year plan, trade tensions are set to rise.
China trade was once all about cheap exports. But if Chinese development goes to plan, import substitution for big-ticket items will become the order of the day. In a little-noticed development this month, China unveiled a prototype of a 150-seat airliner due to go into service by 2016, complicating Boeing's sales to the world's second-biggest market for commercial aircraft, not to mention the impact on Airbus.
Speaking at a European Central Bank conference in Frankfurt recently, Ben Bernanke, the US Federal Reserve chairman, hit back at Chinese criticism, noting that "currency undervaluation by surplus countries is inhibiting needed international adjustment and creating spillover effects that would not exist if exchange rates better reflected market fundamentals".
Mr Hu's visit to Washington in January will be the touchstone. In an interview with The Australian newspaper, Mrs Clinton said China's current policies in the region were designed to test other nations and insisted that Beijing should abide by international law. The problem is that the law is extremely vague on key points of conflict, notably the sovereignty of rocky islands that may sit on top of large energy reserves.
The US-China spat has greater resonance because of the way Washington backed Japan in the row over the detained Chinese trawler and the flurry over China's decision to halt exports of rare earth minerals to Japan. A survey by the Japanese newspaper Yomiuri Shimbun published this month found that 87 per cent of Japanese respondents considered China to be untrustworthy and 90 per cent thought relations between the two countries were bad.
A simultaneous poll by China's Oriental Outlook Weekly, run by the state news agency, found similar figures on views of Japan held by Chinese. On top of this Vietnam, with US approval, declared its port at Cam Ranh Bay open for foreign naval ships and, to Beijing's displeasure, hosted the US aircraft carrier George Washington.
If the relationship continues its downward spiral, Mr Hu's visit risks turning into a confrontation. Such a stand-off is dangerous for both countries - and the world. It could lead to damaging protectionism.
Depicting China as an enemy may be an attractive electoral gambit for an Obama administration that feels the need to display its muscles. Beijing will respond in kind.
High-level and dispassionate statesmanship is required, with each party giving some ground and trying to scale down the currency rhetoric while engaging in serious discussion on common approaches to environmental measures. Whether either party has the wherewithal remains in question. On their performances so far, one can only remain pessimistic.
Jonathan Fenby is the China director of the research service Trusted Sources and author of The Penguin History of Modern China
* Yale Center for Study of Globalization

Results

Final: Iran beat Spain 6-3.

Play-off 3rd: UAE beat Russia 2-1 (in extra time).

Play-off 5th: Japan beat Egypt 7-2.

Play-off 7th: Italy beat Mexico 3-2.

What are the main cyber security threats?

Cyber crime - This includes fraud, impersonation, scams and deepfake technology, tactics that are increasingly targeting infrastructure and exploiting human vulnerabilities.
Cyber terrorism - Social media platforms are used to spread radical ideologies, misinformation and disinformation, often with the aim of disrupting critical infrastructure such as power grids.
Cyber warfare - Shaped by geopolitical tension, hostile actors seek to infiltrate and compromise national infrastructure, using one country’s systems as a springboard to launch attacks on others.

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The National's picks

4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young

Last five meetings

2013: South Korea 0-2 Brazil

2002: South Korea 2-3 Brazil

1999: South Korea 1-0 Brazil

1997: South Korea 1-2 Brazil

1995: South Korea 0-1 Brazil

Note: All friendlies

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Top 10 locations for inquiries from US house hunters, according to Rightmove

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UAE currency: the story behind the money in your pockets
MISSION: IMPOSSIBLE – FINAL RECKONING

Director: Christopher McQuarrie

Starring: Tom Cruise, Hayley Atwell, Simon Pegg

Rating: 4/5

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Name: Kumulus Water
 
Started: 2021
 
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Director: Louis Theroux

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Rating: 5/5

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Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea

Rating: 2.5/5

European arms

Known EU weapons transfers to Ukraine since the war began: Germany 1,000 anti-tank weapons and 500 Stinger surface-to-air missiles. Luxembourg 100 NLAW anti-tank weapons, jeeps and 15 military tents as well as air transport capacity. Belgium 2,000 machine guns, 3,800 tons of fuel. Netherlands 200 Stinger missiles. Poland 100 mortars, 8 drones, Javelin anti-tank weapons, Grot assault rifles, munitions. Slovakia 12,000 pieces of artillery ammunition, 10 million litres of fuel, 2.4 million litres of aviation fuel and 2 Bozena de-mining systems. Estonia Javelin anti-tank weapons.  Latvia Stinger surface to air missiles. Czech Republic machine guns, assault rifles, other light weapons and ammunition worth $8.57 million.

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How has net migration to UK changed?

The figure was broadly flat immediately before the Covid-19 pandemic, standing at 216,000 in the year to June 2018 and 224,000 in the year to June 2019.

It then dropped to an estimated 111,000 in the year to June 2020 when restrictions introduced during the pandemic limited travel and movement.

The total rose to 254,000 in the year to June 2021, followed by steep jumps to 634,000 in the year to June 2022 and 906,000 in the year to June 2023.

The latest available figure of 728,000 for the 12 months to June 2024 suggests levels are starting to decrease.

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UK's plans to cut net migration

Under the UK government’s proposals, migrants will have to spend 10 years in the UK before being able to apply for citizenship.

Skilled worker visas will require a university degree, and there will be tighter restrictions on recruitment for jobs with skills shortages.

But what are described as "high-contributing" individuals such as doctors and nurses could be fast-tracked through the system.

Language requirements will be increased for all immigration routes to ensure a higher level of English.

Rules will also be laid out for adult dependants, meaning they will have to demonstrate a basic understanding of the language.

The plans also call for stricter tests for colleges and universities offering places to foreign students and a reduction in the time graduates can remain in the UK after their studies from two years to 18 months.

Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal 

Rating: 2/5

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”