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U.S. diplomatic offensive tightens strategic encirclement of China

November 13, 2010 Comments off

The following perspective is reprinted with permission from World Socialist Web Site.

U.S. diplomatic offensive tightens strategic encirclement of China
©  World Socialist Web Site
By John Chan
November 13, 2010

Washington’s aggressive diplomatic campaign in Asia over the past two weeks has amounted, in the words of U.S. Secretary of State Hillary Clinton, to “a full court press” against China, with the western Pacific and the Indian Ocean emerging as potential future theatres of war.

President Barack Obama’s visits to India, Indonesia, South Korea and Japan, and Clinton’s trips to Vietnam, Cambodia, Malaysia, Papua New Guinea, New Zealand and Australia, sought to either strengthen existing alliances or create new partnerships for a U.S.-led strategic encirclement of China.

Obama fervently courted India, China’s regional nuclear-armed rival. He urged New Delhi to become a “world power” and backed its bid to become a U.N. Security Council permanent member. Clinton twice reiterated that Washington could invoke the U.S.-Japan Security Treaty to militarily support Japan against China in the conflict over the Diaoyu/Senkaku islands in the East China Sea. Vietnam announced it was ready to hire out its strategic Cam Ranh Bay port in the South China Sea “to naval ships from all countries” – with Washington the most likely client. Canberra agreed to provide greater U.S. access to its military facilities, especially those in northern Australia.

The American offensive aims to prevent China from controlling the South China Sea, the Indian Ocean and key connecting waterways, such as the Strait of Malacca and the Sunda/Lombok straits of Indonesia. Since China depends on ships to transport one third of its oil consumption and 70 percent of its foreign trade, these sea lanes have become its “lifelines”. Some 60 percent of the ships passing through the Strait of Malacca every day are Chinese.

Since World War II, retaining the ability to cut off vital oil supply shipments to rival powers by controlling such “choke points” has been a key U.S. naval strategy. This task looms ever larger for Washington today, with the accelerating decline of American economic power and the rapid rise of China, particularly in the aftermath of the 2008 global financial crisis. Since the China-Association of South East Asian Nations (ASEAN) free-trade zone came into effect last January, Sino-ASEAN trade has increased by nearly 50 percent, whereas rising protectionism in the U.S. is stalling any free trade agreement with Asian states.

Far from accepting a diminishing role, the U.S. is determined to retain its dominant position in Asia through its residual military might. In an interview with The Australian newspaper on Monday, Clinton recalled that when Chinese officials first told Washington, earlier this year, that Beijing viewed the South China Sea as a core Chinese interest, “I immediately responded and said, ‘We don’t agree with that’.” What followed was Clinton’s aggressive announcement at the ASEAN meeting in July that Washington would intervene into disputes between China and ASEAN members, such as Vietnam and Philippines, over the Spratly and Paracel Islands in the South China Sea. China angrily responded by warning that “outsiders,” i.e., the U.S., should keep out of South China Sea affairs.

Clinton’s subsequent statement that the U.S. had a “national interest” in “freedom of navigation” in the South China Sea was even more provocative. More than 40,000 ships freely pass through the sea each year. The “freedom of navigation” that Washington demands is the freedom of American surveillance vessels and warships to sail the waters near the Chinese coast, and to collect intelligence on Chinese military operations, including the deployment of submarines, in the region. If China likewise were to send spy ships to international waters just off the coast of Hawaii or San Diego to monitor the U.S. naval bases there, the American media and political establishment would respond with outrage over what would, legitimately, be interpreted as acts of provocation.

By establishing or strengthening military ties with Vietnam, India, Australia and Indonesia, the U.S. is seeking to counter China’s “string of pearls” strategy. The aim of this strategy is to build port facilities in Burma, Bangladesh, Pakistan and Sri Lanka for the deployment of Chinese warships into the Indian Ocean in order to protect the shipping lanes that carry oil and raw materials from the Middle East and Africa to China.

Herein lies the importance of Indonesia, which was the second stop on Obama’s trip. The U.S. think tank Stratfor noted: “It [Indonesia] straddles the Strait of Malacca, a global shipping choke point, as well as the Sunda and Lombok straits, making it critical for sea-lanes between the Indian Ocean, the South China Sea and the Pacific, and Australia and China. These sea lanes supply China with critical raw materials; any power controlling this area accordingly has enormous leverage over Beijing.”

These considerations also apply to East Timor, Papua New Guinea and Solomon Islands, which sit astride other vital sea lanes. There is concern in Washington that over the past decade, China has established economic and even military ties with Pacific island states, and the Obama administration is determined to reassert U.S. “leadership” in the region.

Thus Clinton visited Papua New Guinea and discussed the Asia-Pacific region in her meetings with key officials in Australia and New Zealand.

The centrality of the South China Sea in Washington’s thinking was expressed by Robert Kaplan, who wrote recently in the Washington Post: “The geographical heart of America’s hard-power competition with China will be the South China Sea, through which passes a third of all commercial maritime traffic worldwide and half of the hydrocarbons destined for Japan, the Korean Peninsula and northeastern China. That sea grants Beijing access to the Indian Ocean via the Strait of Malacca, and thus to the entire arc of Islam, from East Africa to Southeast Asia.”

Kaplan is among those within U.S. ruling circles who have criticised the occupations of Afghanistan and Iraq for diverting the focus of the former Bush administration, and allowing China to expand its geopolitical influence throughout Asia. Kaplan’s basic ideas can be seen in the Obama administration’s “back in Asia” policy.

The anti-China coalition being assembled by the U.S. directly conflicts with China’s quest to build a blue-water navy to protect its sea lanes and oil supplies. A bestseller published in China last year, China Sea Power by Zhang Wenmu, summed up Beijing’s view of the present great-power struggle for global hegemony. Zhang wrote: “All players are focusing at one aim, the control of the Indian Ocean.”

Beijing will not allow Washington to undermine the gains it has made in Asia. Just days after Clinton told Cambodia not to become “too dependent” on a single country – i.e., China – the Chinese government gave Cambodia $1.6 billion for infrastructure projects and announced a $590 million loan for the development of mobile phone services. Less than a day after Obama arrived in Jakarta, a Chinese delegation came with $6.6 billion in infrastructure projects. In the words of the New York Times, Beijing “laid down a not-so-subtle challenge to Mr. Obama: Show your Indonesian hosts the money”.

Driven by the deepening global economic crisis, the escalating rivalry between the U.S. and China is yet another sign that the world capitalist system is hurtling towards a major catastrophe. Unless the international working class intervenes to overthrow the profit system and the outmoded system of rival nation-states, these great-power tensions must inevitably lead to a new world war.

[End.]

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Categories: AUSTRALIA, CHN, IND, INDO, JAP, MALAYSIA, NZ, PAK, SRI, UN, USA, VIET, WORLD

Malaysia’s Kelantan State issues its own gold and silver currency

August 16, 2010 Comments off

Inteltrends.
August 16, 2010

Kelantan State in Malaysia has started issuing gold dinars and silver dirhams as an “official currency” alongside the Malaysian ringgit. The new currency is deemed compliant with Islamic shariah law.

According to an article in The Malaysian Insider, “the state would strive to expand the use of gold dinar and silver dirham in all transactions, including paying civil servants’ remuneration.”

Kelantan State has set a high financial standard by issuing these coins for daily commerce and trade, rather than as collectibles. So far, 1,000 traders have agreed to recognize the new currency in their transactions, including Bank Islam Malaysia.

“There is no reason why transactions in syariah [shariah] currency cannot be practised in the state as it was widely used thousands of years before the fall of the Ottoman Empire,” The Malaysian Insider quotes Kelantan Menteri Besar Inc. (PMBK) chairman Nik Abdul Aziz. The new currency is being managed by PMBK subsidiary Kelantan Golden Trade (KGT). Other Malaysian states are being encouraged to use it.

The following announcement is currently posted on KGT’s website:

KELANTAN LAUNCHES DINAR & DIRHAM ON 12TH AUGUST 2010

This is the first time in the last 100 years, since the fall of the Ottoman Caliphate, when a Muslim government introduces Shariah Currency. Indeed there has been four generations of Muslims who have not seen Gold Dinar and Silver Dirham; four generations of Muslims who have been divided into little national reservations and sentenced to permanent robbery first by local, then by international Masters of Riba [interest]; four generations of Muslims who haven’t known what is their Deen. The introduction of Gold Dinar and Silver Dirham in the state of Kelantan is not a new idea or experiment, it is the return to the medium of exchange that has been known for 1400 years throughout Dar al-Islam as Money of Shariah taking its legislation from Allah’s Revelation and Rasul’s Sunnah.

[End. Embedded text links added by Inteltrends.]

As if in response to being threatened from abroad by the issuance of the new gold and silver based currency, a scathing commentary appeared in today’s Arab News — an English language newspaper from Jeddah, Saudi Arabia. The commentary, by Mushtak Parker titled ““Islamic gold dinar move sparks debate about legitimacy of dollar”, reads in part:

The Islamic gold dinar move has … resulted in an unintended debate in some of the most unexpected circles about the legitimacy of the U.S. dollar as the international currency. This is a legitimate and pertinent debate which has attracted the likes of Nobel laureates to the bleary-eyed barefoot economists to some of the delusional Islamist economists.

There is a case for the replacement of the U.S. dollar as the new international currency. But whether it will be a going back to the Gold standard pre-Bretton Woods must remain a moot point. The Chinese, the world’s largest capital owners today, have long argued for this. But for the moment they are a hostage to their massive holdings of U.S. Treasury bonds which together with the Japanese holdings effectively underwrite the obscene U.S. budget deficit, which in reality is not fully payable.

The commentary continues:

As for the Kelantan government move, no sooner had the Kelantan Chief Minister Nik Abdul Aziz Nik Mat announced the launch of the currency, his Economic and Finance Minister Husam Musa was forced to issue a humiliating retraction that the gold dinar is not a currency but an alternative to barter trade in the state.

Regardless of whether you call the new gold dinars and silver dirhams “currency” or “barter” the fact that a Malaysian state took the initiative to issue “shariah compliant” precious metal coinage — presumably without consulting the Saudis for an opinion beforehand on how this would affect Islamic finance in general — must surely have ruffled some feathers in Riyadh. It’s no secret that the Saudis have a significant financial stake in U.S. Treasury bonds along with the Chinese. (What did P.T. Barnum say was “born every minute”?)

The new dinars weigh 1.06 grams and contain gold of 91.7% purity. (I’m not sure about the specs for the silver dirhams.)

According to the Asian Tribune in an editorial dated 14 August 2010:

The coins came into circulation Thursday and can be purchased at various locations in Kelantan. Their worth is currently about $180 per dinar and $4 per dirham.

The gold dinar and silver dirham coins would provide an alternative to Malaysia’s currency, the Ringgit, the state official said. The northeastern Kelantan state is governed by the Pan-Malaysian Islamic Party, a conservative opposition group that promotes religious policies in its rule.

Kelantan authorities also say the use of such coins is encouraged in the Quran. The gold dinar was the official currency of Muslim societies for centuries.

Whereas the value of each coin is contained within the coin itself, the new currency should gain rapid acceptance not only in Malaysia but throughout the region.

Inteltrends.

[End.]

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Categories: MALAYSIA