Archive for the ‘stability’ Category

China Can’t Let Crisis End Reform, Central Bank Says; President Hu In U.S., Latin America

November 15, 2008

China can’t let the global credit crisis derail financial reforms that have benefited the public and helped the nation’s banks weather the turmoil, said Yi Gang, vice governor of the People’s Bank of China.

By Li Yanping, Bloomberg

“Although there have been doubts in the market on whether China’s financial reforms should continue after this crisis led to massive government bailouts and nationalization of financial institutions, China’s bank reforms can’t backtrack,” Yi said at a conference in Beijing today.

The worst financial crisis since the Great Depression has caused about $966 billion of writedowns and credit losses among financial institutions worldwide, according to data compiled by Bloomberg. The U.S. Treasury has initiated a $700 billion rescue plan to shore up distressed financial institutions.

“The U.S. and Europe may need to rethink financial innovations that exceed real economy needs and have pushed risks beyond control,” said Zhao Xijun, a finance professor at Renmin University in Beijing. “China’s financial services are under- developed by comparison, so we need to push ahead with reforms.”

Banks in China sold shares, accepted foreign strategic investors and enhanced risk management over the past three years to avoid repeating the bad-loans crisis earlier this decade, when the government spent $650 billion rescuing them. Limited buying of subprime debt has helped the banks avoid bigger losses.

`Unimaginable Shock’

“State-bank reform has been a success, benefiting people and greatly enhancing financial services,” Yi said. “China’s banks may have taken an unimaginable shock from this financial tsunami if they hadn’t completed shareholding reforms.”

Reforms based on market principles must continue to help shield banks from future risks during economic cycles, Yi said today. Banks will also be “tested” when the nation’s currency gradually become convertible and when interest rates are further liberalized, he added.

Read the rest:
http://www.bloomberg.com/apps/new
s?pid=20601208&sid=aLRVWbF2vObw

Chinese President Hu Jintao, seen here, begins a Latin America ... 
Chinese President Hu Jintao, seen here, begins a Latin America tour on Monday, taking in Costa Rica, Cuba and Peru, as China tightens economic ties and the region hopes for help in tougher times.

SAN JOSE (AFP) – Chinese President Hu Jintao begins a Latin America tour on Monday, taking in Costa Rica, Cuba and Peru, as China tightens economic ties and the region hopes for help in tougher times.

The Asian giant has increased diplomacy and investment in Latin America in recent years, with an eye on its natural resources and developing markets for manufactured goods and even arms.

Many in Latin America hope for an investment boost to help ride out the economic crisis.

Exports from the continent to China include soya and iron ore from Brazil, soya from Argentina, copper from Chile, tin from Bolivia, and oil from Venezuela.

The trade is still only a small percent of the continent’s total, but it is growing.

China’s state-run Xinhua news agency reported this month that exports to Latin America grew 52 percent in the first nine months of 2008 to 111.5 billion dollars.

Hu will visit San Jose and Havana between a G-20 meeting on the global crisis in Washington on November 15 and an Asian Pacific Economic Cooperation forum summit in Peru on November 22.

China and Cuba have remained all-weather friends for decades, their Marxist Socialist past a driving force in relations.

Read the rest:
http://news.yahoo.com/s/afp/20081115/wl_
afp/latamchinadiplomacy_081115063413

Reversal: $700 Billion Rescue Program NOT To Buy Troubled Assets

November 12, 2008

Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned.

Paulson said the administration will continue to use $250 billion of the program to purchase stock in banks as a way to bolster their balance sheets and encourage them to resume more normal lending.

By MARTIN CRUTSINGER, AP Economics Writer

 
Treasury Secretary Henry Paulson said Wednesday the $700 billion government rescue program will not be used to purchase troubled assets as originally planned. Photo: Associated Press

He announced a new goal for the program to support financial markets, which supply consumer credit in such areas as credit card debt, auto loans and student loans.

Read the rest:
http://news.yahoo.com/s/ap/20081112/ap_on_bi_ge/
financial_meltdown;_ylt=AlOjuzzp7Mg
_YNmhDJGmChes0NUE

China vows stable growth in face of global turmoil

October 12, 2008

BEIJING (Reuters) – China will maintain flexible and prudent macro-economic policies and seek to expand domestic demand in the face of a grim international economic environment, the country’s ruling Communist Party said on Sunday.

A meeting of the Party’s Central Committee warned that the global economy was slowing, threatening to dent Chinese growth, and said the country would be turning to home markets to cushion the fallout.

In this photo released by China's Xinhua News Agency, all nine ...
In this photo released by China’s Xinhua News Agency, all nine members of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee, including President Hu Jintao, center, and Premier Wen Jiabao, fourth left, attend the third Plenary Session of the 17th CPC Central Committee on Sunday, Oct. 12, 2008 in Beijing. China’s ruling Communist Party said Sunday it aims to double the income of the country’s farmers in two decades amid efforts to boost domestic demand to counter the effects of the faltering global economy. The move is part of an agricultural reform and development plan approved by the party’s Central Committee at the end of a four-day meeting, the official Xinhua News Agency said. From left are, Zhou Yongkang, Li Keqiang, Li Changchun, Wen, Hu, Wu Bangguo, Jia Qinglin, Xi Jinping and He Guoqiang.(AP Photo/Xinhua, Li Xueren)

“There are also some pronounced contradictions and problems in domestic economic activity. We must enhance our sense of peril and actively respond to challenges,” according to a communique issued after the meeting by the official Xinhua news agency.

At the same time, it said the party’s top leaders had stressed that the overall state of the Chinese economy was good.

Growth had remained quite fast, and the financial sector was operating in a stable, healthy way.

“The fundamental conditions of our country’s economic development have not changed,” the communique said.

Thanks to capital controls and an underdeveloped, inward-looking banking system, China has been largely sheltered from the global credit crisis.

But economists and policy makers are braced for second-round effects as slowing exports hit manufacturers and cause loans on the books of the nation’s banks to turn sour.

“The most important thing is to handle our country’s own affairs well,” the communique said.

It said the government would “maintain economic stability, financial stability, and stability of the capital markets … continuing to encourage economic and social development that is both healthy and rapid.”

Read the rest:
http://news.yahoo.com/s/nm/20081012/
bs_nm/us_china_economy_3

America’s Naval Supremacy Slipping

March 18, 2008

During a recent trip to China with Adm. Timothy Keating, American reporters asked General Chen Bingde, chief of staff of the People’s Liberation Army, “Should the United States have anything to fear from China’s military buildup?”

The general responded: “That’s impossible. Isn’t it? There’s such a big gap between our military and the American military. If you say you are afraid, it means you don’t have enough courage.”
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Courage or not, China’s rapid and massive military buildup (particularly in terms of its expanding submarine force and progressive aircraft-carrier R&D program) has analysts concerned. And the U.S. Navy — the first line of defense against any Chinese expansionism in the Pacific — continues to struggle with the combined effects of Clinton-era downsizing, a post –9/11 upsurge in America’s sealift and global defense requirements, and exponentially rising costs of recapitalization and modernization of the Navy’s surface and submarine fleet, aircraft, and related weapons systems. 
A warplane takes off from the USS John C. Stennis aircraft carrier ... 
F/A-18 takes off from the U.S. Navy
Aircraft Carrier USS John C. Stennis.
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Currently, America maintains a 280-ship Navy (including 112 ships currently underway) responsible for a wide range of seagoing operations, as well as air and land missions, conventional and unconventional. 
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The fleet is small — a dwarf fleet compared to the nearly 600-ship Navy under President Ronald Reagan — but its responsibilities aren’t.
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Among them are defense of the U.S. homeland and American territories and interests abroad.
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Keeping the sea lanes open and safe from terrorism, piracy, and weapons smuggling. Maintaining air superiority above the Navy’s areas of operation. Maintaining sea-basing and amphibious landing and landing-support capabilities (this includes the Marine Corps, which technically and traditionally falls under the Department of the Navy). Maintaining light, fast forces capable of operating in rivers and along the coastal shallows (littorals). Maintaining a strategic nuclear capability (through its ballistic missile submarine force). Maintaining superior information and intelligence collection and counterintelligence capabilities. And maintaining its ability to engage in direct action — like the recent cruise-missile strike against Al Qaeda targets in Somalia — and providing support for special operations worldwide. 

USS Greeneville off the coast of Honolulu, Hawaii.
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The Navy’s enemies and potential enemies include everyone from global terrorists like Al Qaeda to previous Cold War adversaries China and Russia.
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And not only is the Navy fleet small, it is rapidly aging, and gradually losing the depth and flexibility needed to accomplish all of its current missions and strategic requirements.
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The Navy currently maintains 11 aircraft carriers. The USS Enterprise is slated to retire in 2012, but the under-construction USS Gerald R. Ford could be delivered by 2015.The fleet is also comprised of an array of cruisers, destroyers, frigates, attack and ballistic missile submarines, amphibious assault and sealift-capable ships, support vessels of all kinds, and a variety of special warfare craft.
USS Wasp LHD-1.jpg
USS Wasp
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Sounds formidable, and in 2008 it is. But the Navy is not even close to where it needs to be if it hopes to match, deter, or outfight the emerging sea powers that will continue to grow over the next 10, 20, or 30 years.
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“Even though we obviously have a strong eye toward what’s going on in Iraq and Afghanistan for our ground forces, we still must have a balanced force that can deal with a range of threats,” says Peter Brookes, former Deputy Assistant Secretary of Defense for Asian and Pacific Affairs. “China is going to be a major conventional threat in the coming years. So we need the capability of projecting naval power across the Pacific to maintain peace and stability in that region.”
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According to Brookes, the Navy needs to focus on — among other things — regaining much of its anti-submarine warfare capability (undersea, surface, and airborne) that has been neglected since the end of the Cold War.
USS Kitty Hawk CV-63.jpg
USS Kitty Hawk.  This aircraft carrier calls Japan “homeport.”  She was ordered to the vicinity of Taiwan on or about 18 March 2008 to provide security for the Taiwanese elections.  Photo from the U.S. Navy.
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Hoping to remedy its overall shortfall, the Navy has proposed a 313-ship fleet – an increase of 33 surface ships and submarines — able to be deployed according to Navy officials by 2019.
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Among the Navy’s new additions would be the Littoral Combat Ship — a small, swift-moving surface vessel capable of operating in both blue water and the coastal shallows — a nuclear-powered guided-missile destroyer, a next-generation guided-missile cruiser, a new class of attack submarine, a new carrier with an electromagnetic aircraft launching system (replacing the steam-driven catapult system), and ultimately a new fleet of jets like the F-35 Lightning II (the carrier variant of the Joint Strike Fighter).
USS Zumwalt (DDG-1000).jpg
USS Zumwalt (DDG 1000)
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All of the newly developed ships and airplanes would have multi-roles, and would be able to go head-to-head with a wide range of conventional and unconventional threats. Problem is, developing new ships and weapons systems take time, are often technically problematic in the developmental stages, and increasingly hyper-expensive. Additionally, new ships and systems are being designed, developed, and built at the same time the Navy is having to spend money on manpower and costly, aging ships, aircraft, and weapons systems just to stay afloat and fighting.

single modified tactical Standard Missile-3 (SM-3) launches from the U.S. Navy AEGIS cruiser USS Lake Erie
This photo provided by the U.S. Navy shows an SM-3 missile being launched from the USS Lake Erie warship on Wednesday, Feb. 21, 2008. The Pentagon says the missile successfully intercepted a wayward U.S. spy satellite orbiting the earth at 17,000 miles per hour, about 133 nautical miles over the Pacific ocean. (AP Photo/US Navy)
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Of the proposed  $515 billion U.S. Defense budget for Fiscal Year 2009, the Navy is asking for $149.3 billion — 29 percent of the budget — which includes the Marine Corps’ piece of the pie (As its current recap/mod needs are similar to the Army’s, we will address Corps issues in our forthcoming piece on ground forces.), and that requested figure will almost certainly, and necessarily, increase over subsequent years.
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Nevertheless, experts contend we are kidding ourselves if we believe the Navy will crack the 300 mark under the current plan.

This picture released by the US Navy shows Fire Controlman 2nd ...
Our sailors make our Navy the most capable in the world. This picture released by the US Navy shows Fire Controlman 2nd Class John Whitby operating the radar system control during a ballistic missile defense drill on February 16 aboard the USS Lake Erie. The US warship is moving into position to try to shoot down a defunct US spy satellite as early as Wednesday before it tumbles into the Earth’s atmosphere, Pentagon officials said.
(AFP/US Navy-HO/Michael Hight)
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“This is the dirty secret inside the Beltway,” says Mackenzie Eaglen, a senior policy analyst with the Heritage Foundation. “If you crunch the actual shipbuilding numbers — year-to-year for the next 10 to 20 years — a 313-ship Navy is a pipe dream.”
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According to Eaglen, the budget requests for shipbuilding submitted to Congress between FY 03 and FY 07, averaged just over $9.5 billion per year. “What’s needed is at least $15 billion per year,” she says. “What’s worse is that I see Defense spending dropping.”
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Cynthia Brown, president of the American Shipbuilding Association, believes money slated for new ship construction needs to be at least $22 billion per year.
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“Of the proposed $149.3 billion, only $12 billion is slated for new ship construction in FY 09,” says Brown. “Since 2001, the Defense Department has increased its spending by 80.8 percent, excluding war supplementals, but shipbuilding has only increased 12.2 percent.”
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Costs of recapitalizing and modernizing our Navy will continue to rise, as will the conventional and unconventional threats our sailors must be trained and equipped to fight. And considering the make-up of Congress — and who may be moving into the White House in 2009 — the nation’s primary power-projection force may find it near impossible to avoid becoming, as Eaglen says, “a mere shadow of its former self.”

Pentagon: China’s military secrecy poses risk

March 3, 2008
WASHINGTON (AP) — In a report on China’s military strategy and power, the Pentagon asserted Monday that Beijing’s reluctance to share details about its military buildup poses a risk to stability in Asia.

The report said the international community has limited knowledge of the motivations, decision-making and capabilities of China’s military modernization. This includes a lack of clarity about China’s defense spending, which Washington contends China understates by the equivalent of tens of billions of dollars.

“The lack of transparency in China’s military and security affairs poses risks to stability by increasing the potential for misunderstanding and miscalculation,” the report said. “This situation will naturally and understandably lead to hedging against the unknown.”

Read the rest:
http://www.usatoday.com/news/washington/2008-03-03-pentagon-china_N.htm?csp=34

New Weight in Army Manual on Stabilization

February 8, 2008

The new doctrine elevates the mission of stabilizing war-torn nations to the same importance as the defeat of adversaries on the battlefield.

By Michael R. Gordon
The New York Times
February 8, 2008

WASHINGTON — The Army has drafted a new operations manual that elevates the mission of stabilizing war-torn nations, making it equal in importance to defeating adversaries on the battlefield.
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Military officials described the new document, the first new edition of the Army’s comprehensive doctrine since 2001, as a major development that draws on the hard-learned lessons of Iraq and Afghanistan, where initial military successes gave way to long, grueling struggles to establish control.

Read the rest:
http://www.nytimes.com/2008/02/08/washington/
08strategy.html?hp

Iraq not using oil cash to rebuild

January 30, 2008

By Sharon Behn
The Washington Times
January 30, 2008

Increased Iraqi oil revenues stemming from high prices and improved security are piling up in the Federal Reserve Bank of New York rather than being spent on needed reconstruction projects, a Washington Times study of Iraq’s spending and revenue figures has shown.
U.S. officials and outside analysts blame the collapse of the country’s political and physical infrastructure for Baghdad’s failure to spend the money on projects considered vital to restoring stability in the country.
Out of $10 billion budgeted for capital projects in 2007, only 4.4 percent had been spent…

Read the rest:
 http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080130/FOREIGN/458073763/1001

Putin Attacks U.S. Even As “Time” Makes Him “Man of the Year”

December 20, 2007
By Dmitry Solovyov

MOSCOW (Reuters) – Russian President Vladimir Putin accused the United States of trying to undermine Russia to further its global dominance and said Washington had ignored Moscow‘s attempts to build a friendship.

In an interview with Time magazine, which named the Russian president its “Person of the Year” for 2007 on Wednesday, Putin said Washington had adopted its strategy of belittling Russia to try to influence the country’s domestic and foreign policy.
This image, supplied by Time magazine, shows Russian President ... 

“I believe … this is a single-minded attempt to create a certain image of Russia which allows (Washington) to influence our internal and external policy,” Putin said in the interview posted on the Kremlin‘s official site www.kremlin.ru.

Read the rest:
http://news.yahoo.com/s/nm/20071219/pl_nm/russia_putin_west_dc_1
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NEW YORK (AP) – Russian President Vladimir Putin was named Time magazine‘s “Person of the Year” on Wednesday for imposing stability that restored Russia as a world power.

The magazine recognized Putin’s “extraordinary feat of leadership in taking a country that was in chaos and bringing it stability,” said Richard Stengel, Time’s managing editor.

The magazine noted that “Person of the Year” is not an honor or endorsement but a recognition of leadership that shapes the world.

“He’s the new czar of Russia and he’s dangerous in the sense that he doesn’t care about civil liberties, he doesn’t care about free speech,” Stengel said.

Read the rest:
http://news.yahoo.com/s/ap/20071219/ap_on_re_us/time_person_of_year_14