Rising world oil prices threaten to raise cost of consumer electronics
February 22, 2011 12:41 AMT
(PanARMENIAN.Net) – Rising world oil prices threaten to raise the cost of consumer electronics and slow development by forcing Asian manufacturers to spend more on transportation and raw materials, regional economists say.
Oil prices have been pushed up by unrest in the Middle East and the cost of crude for April delivery moved close to US$100 a barrel on Feb 21. This threatens to jack up transportation expenses, which account for roughly 20 percent of the cost of products made in East Asia, according to analysts.
The cost of raw materials such as plastics for computer casing or chemicals for mobile phone printed circuit boards will also go up if petrochemical factories end up paying more for crude supplies.
Oil refiners or naptha crackers would pass on about 80 percent of their higher costs to electronics firms who buy from them, said Wai Ho Leong, regional economist with Barclays Capital in Singapore.
“I assume the oil price hikes would be passed through to end users,” Tim Condon, chief economist with ING in Singapore. “Activity would slow because consumers wouldn’t be parting with their money. Demand would go down, you’d see unwanted inventory accumulating, and you’d see product cutbacks and employment effects.”
So far oil prices that have tested their highest since mid-2008 haven’t cramped Asia’s momentum in PCs seen during the Western year-end holidays and China’s Lunar New Year, analysts say.
But if the prices stay above $100 per barrel – and fresh violence in Libya could push them into that groove – for six to 12 months, manufacturers will be pinched.
“There is already some moderation kicking in,” said Joanna Tan, economist with Forecast Ltd in Singapore. “With the oil prices up, we could see more moderation. It really depends on how long it drags on.”
A dent in general world consumer confidence driven by higher oil prices could reduce demand for electronics, prompting manufacturers to pull back on capital expenditures for development of new technology, said Tony Phoo, economist with Standard Chartered in Taipei.
Oil prices that topped $140 per barrel in 2008 contributed to a slowdown in the growth of India’s PC market and compounded the woes of manufacturers elsewhere as the world economy struggled against fallout from the U.S. sub-prime mortgage crisis.
Electronics firms are not assuming business as usual this year but keeping a wary eye on the second quarter of 2011 for any signs that oil prices will stay high, IDG New Service reports.
USA’s 2011 National Military Strategy: We’ve got the power!
By Sergei Balmasov
February 10, 2011
The USA has unveiled the 2011 National Military Strategy for the first time in seven years. The strategy, as usual, serves for the preservation of the U.S. predominance in the world. The appearance of the document is based on recent major changes on the planet. The authors of the strategy pointed out a number of challenges for the United States in particular and for the Western civilization in general.
U.S. strategists claimed that the shortage of resources in the world may trigger territorial disputes, which poses a direct threat to American interests. They are also concerned about the fact that the national debt of the United States “poses a significant national security risk.”
All of that is aggravated with a whole list of unsolved problems, which have become even more serious during the recent years. First and foremost, “the world’s preeminent power” has not been able to defeat terrorism and extremism. The war in Afghanistan continues, and the fire of Afghan unrest is spreading into neighboring Pakistan. The strategists of the U.S. national security wrote that terrorists had nested on the Arabian Peninsula, in the countries of north-western Africa and in Somalia.
Nevertheless, the authors of the document said: “We will be prepared to find, capture, or kill violent extremists wherever they reside when they threaten interests and citizens of America and our allies.” Therefore, it is not ruled out that the world will soon witness the USA launching another military adventure in the above-mentioned territories.
Secondly, the USA is concerned about the rising powers, India and China, as well as other regional powerful countries. The Americans are especially worried about China and its defense preparations in the Taiwan Strait.
In this connection, the Pentagon is not going to reduce its attention to South Asia and the Far East. However, the USA does not exclude increasing its military presence in potentially dangerous directions. “With partner nation support, we will preserve forward presence and access to the commons, bases, ports, and airfields commensurate with safeguarding our economic and security interests worldwide,” the strategy runs. Here, it goes about such old allies as Japan and South Korea.
Thirdly, the nuclear proliferation issue remains unsolved as well. North Korea has proved the possession of nuclear weapons to the whole world. Iran is just about to do the same. “The prospect of multiple nuclear armed regimes in the Middle East with nascent security and command and control mechanisms amplifies the threat of conflict, and significantly increases the probability of miscalculation or the loss of control of a nuclear weapon to non-state actors,” the document says.
To solve the problem, Washington intends to support regional allies, like Iraq, to develop the missile defense system, which Russia vehemently objects to, and to take defense measures against those violating the nuclear non-proliferation regime. The USA must be prepared to eliminate sources of weapons of mass destruction, the document runs.
Fourthly, by 2025, Washington predicts serious destabilization in a number of developing states because of the ongoing demographic explosion. The population of those countries will grow by 1.2 billion people, which will lead to serious food and water problems. “Conversely, in Europe and parts of Asia, populations are projected to decline and age with long term impacts to the global share of their economic output. Population growth and urbanization in the Middle East, Africa, and South Central Asia will contribute to increased water scarcity and may present governance challenges,” the report says.
In other words, the American supremacy is facing many challenges on different continents. One shall pay attention to the following telling phrase: “In this multi-nodal world, the military’s contribution to American leadership must be about more than power – it must be about our approach to exercising power.”
Thus, the U.S. National Military Strategy must be flexible to take account of all serious changes in the world. That is why the USA must be prepared to dealing with modern-day challenges without allies’ help.
“Let us not forget, the Nation remains at war abroad to defend against and defeat threats to our homeland. Our foremost priority is the security of the American people, our territory, and our way of life.” “We will pursue deliberate acquisition process improvements and selective force modernization with the cost effective introduction of new equipment and technology,” the report says.
U.S. strategists point out the necessity to maintain high prestige of the U.S. Armed Forces. According to the document, the state must continue to pay increased attention to improving the well-being of its defenders. “Just as our Service members commit to the Nation when they volunteer to serve, we incur an equally binding pledge to return them to society as better citizens. We must safeguard Service members’ pay and benefits, provide family support, and care for our wounded warriors,” the report runs.
Needless to say that the Americans could not leave Russia out of their attention. On the one hand, the document declares the intention to develop military partnership, continue the reduction of arms and build security in Central Asia in cooperation with Russia. As for the Asian security, the Americans, most likely, are planning to get Russia involved in the Afghan war.
The new strategy also mentions more important things about Russia. For instance, the USA is going to continue its cooperation with Canada regarding the issues of regional security, such as the development of the Arctic region. It is an open secret that Russia claims its right on the Arctic shelf, which infuriates Canada in the first place.
Here is another, rather expressive statement: “NATO members act as a stabilizing force on its perimeter, which ranges from the Middle East and the Levant, Northern Africa, the Balkans, and the Caucasus.” One shall assume that the Americans will continue to interfere in Russia’s internal affairs.
The authors of the new National Military Strategy are certain that the USA will preserve its economic and defense power in the foreseeable future. The USA still places its stake on brutal military force, which, as the authors of the report say, will contribute to America’s security and prosperity in the 21st century.
The following analysis is reprinted with permission from Rick Rozoff.
U.S. Tightens Missile Shield Encirclement Of China And Russia
© Rick Rozoff
March 4, 2010
So far this year the United States has succeeded in inflaming tensions with China and indefinitely holding up a new strategic arms reduction treaty with Russia through its relentless pursuit of global interceptor missile deployments.
On January 29 the White House confirmed the completion of a nearly $6.5 billion weapons transfer to Taiwan which includes 200 advanced Patriot anti-ballistic missiles. Earlier in the same month it was reported that Washington is also to provide Taiwan with eight frigates which Taipei intends to equip with the Aegis Combat System that includes the capacity for ship-based Standard Missile-3 interceptors.
The Aegis sea-based component of the expanding U.S. interceptor missile system already includes Japan, South Korea and Australia, and with Taiwan added China would be justified in being apprehensive.
On February 28 the U.S. House and Senate foreign affairs committees permitted the “sale to Taiwan of missiles, helicopters and ships valued at about $6.4 billion” despite weeks of protests from China. “The U.S. Defense Department wants to sell Taiwan the most advanced Patriot anti-missile system… The system, valued at $2.8 billion, would add to Taiwan’s network of 22 missile sites around the country…”
Chinese Foreign Ministry Spokesman Qin Gang recently stated “The responsibility for the current difficulties in China-U.S. relations [belongs] completely to the U.S. side” for failing to recognize and respect China’s “core interests.”
If the proposed placement of U.S. missile shield components in Poland, the Czech Republic, Japan, Australia, South Korea, Alaska and elsewhere were explained by alleged missile threats emanating from Iran and North Korea, the transfer of U.S. Patriot Advanced Capability-3 (PAC-3) missiles to Taiwan – and, as was revealed in January, 35 miles from Russian territory in Poland – represents the crossing of a new threshold. The Patriots in Taiwan and Poland and the land- and sea-based missiles that will follow them are intended not against putative “rogue states” but against two major nuclear powers, China and Russia.
The PAC-3, “one of the most comprehensive upgrade programs ever undertaken on an American weapon system,” is in theory a strictly defensive anti-ballistic missile system, targeting cruise and tactical ballistic missiles. However, it has seven times the range of its PAC-2 predecessor and with plans for a yet further major upgrade, the Missile Segment Enhancement, its operational capability will be doubled again. With a future range of some 300 kilometers, the PAC-3 would be able to intercept and destroy missiles over Chinese and Russian territory.
The English-language government newspaper China Daily published an article on February 22 called “China circled by chain of U.S. anti-missile systems,” which observed that “Quite a few military experts have noted that Washington’s latest proposed weapon deal with Taiwan is the key part of a U.S. strategic encirclement of China in the East Asian region, and that the missiles could soon have a footprint that extends from Japan to the Republic of Korea and Taiwan.”
The article cites a Chinese air force colonel and military strategist as contending that “China is in a crescent-shaped ring of encirclement. The ring begins in Japan, stretches through nations in the South China Sea to India, and ends in Afghanistan. Washington’s deployment of anti-missile systems around China’s periphery forms a crescent-shaped encirclement.”
Regular Pentagon military exercises in Mongolia, the Philippines, South Korea, Thailand and Cambodia as well as solidification of military ties with the nations of the Indian subcontinent – Pakistan, India and Bangladesh – are further cause for concern in Beijing.
The China Daily feature also quoted an expert in military affairs at the Institute of Political Science and Law as saying “The U.S. anti-missile system in China’s neighborhood is a replica of its [the U.S.’s] strategy in Eastern Europe against Russia. The Obama administration began to plan for such a system around China after its project in Eastern Europe got suspended.”
In fact the current U.S. administration has by no means abandoned plans to surround Russia as well as China with a ring of interceptor missile installations and naval deployments.
Last month’s revelations that Washington is going to station land-based interceptors in Bulgaria and Romania were followed by a report that in addition to the Patriot missile batteries that will be set up in eastern Poland next month “The U.S. is still looking to build missile silos in northern Poland” and, even more alarming, “The U.S. is also interested in building longer-range missile silos near the Poland-Kaliningrad border. These would be capable of shooting down missiles from as far as 5,500 kilometers away…”
The distance between the capitals of Poland and Iran is less than 4,000 kilometers, so American missiles with a range of 5,500 kilometers are designed for other purposes. They could take in a broad stretch of Russia.
The above-cited Chinese feature noted in addition that “the ring encircling China can also be expanded at any time in other directions… Washington is hoping to sell India and other Southeast Asian countries the Patriot Advanced Capability (PAC)-3 missile defense system.”
The U.S. has had Patriot interceptor missiles deployed in Japan, South Korea and in Taiwan even before the planned delivery of 200 more to the third state.
“Analysts say that China is closely monitoring U.S.-India missile defense cooperation since any integration of India into the U.S. global missile defense system would profoundly affect China’s security.”
On February 24 Russian Lieutenant General Yevgeny Buzhinsky was paraphrased by one of his nation’s main news agencies as stating “China could strengthen its nuclear capability in response to U.S. global missile defense plans.”
Indicative of what reaction U.S. missile shield deployments in China’s neighborhood could provoke, he said: “At present, China has a very limited nuclear potential, but my recent contacts with Chinese military representatives indicate that if the United States deploys a global missile defense system, in particular in the Far East, China will build up its offensive capability.”
In response to U.S. insistence on supplying Taiwan with hundreds of Patriot missiles, Blackhawk helicopters and Harpoon missiles, on February 23 the Pentagon announced that China had delivered on its pledge to postpone military contacts with Washington by canceling scheduled exchanges, including “a visit by Adm. Robert F. Willard, commander of U.S. Pacific Command, and visits to the U.S. by China’s chief of the general staff, Chen Bingde, and a Chinese regional commander.”
A Russian commentary on March 2 placed the developments in stark perspective. “The differences between the USA and China have gone so far that some time ago Beijing announced that all contacts with Washington in this field would be stopped… The visit to China by Pentagon Chief Robert Gates, which was set for the first half of this year, is also put into question. Besides, bilateral consultations on strategic security were also delayed on Beijing’s initiative.”
Another analysis from the same country added a historical dimension to the burgeoning crisis in U.S.-China relations.
“This winter has been a cold one for China-U.S. relations. So many serious disagreements between the two countries have not surfaced simultaneously for decades… In the past China and the U.S. avoided taking harsh measures against each other serially, but evidently things have changed beyond recognition over the past several months.”
As mentioned above, the U.S. is implementing plans to replicate the interceptor encirclement of Russia in regards to China. China’s sense of alarm and its government’s response, then, can be expected to parallel those of Russia.
In late February Polish President Lech Kaczynski ratified a Status of Forces Agreement for American troops to be based at the Patriot missile battery near Russia’s Kaliningrad district.
All American and NATO claims to the contrary, “Poland’s former Defense Minister Radoslaw Sikorski and the Polish president himself earlier admitted that they are not concerned about threats from Iran, but they are interested in establishing an ‘American umbrella’ above Poland, thus trying to show that they see Russia as an aggressor and a threat to Poland.”
“According to the agreement, about 100 American soldiers will service up to eight U.S. Patriot missile launchers” in an installation that “will be equipped with elements allowing it to be integrated with the Polish defense system.”
Early last month General Nikolai Makarov, chief of Russia’s General Staff, warned that American interceptor missile plans jeopardize his nation’s national security and have sabotaged the finalization of a successor to the Strategic Arms Reduction Treaty (START), which has been in limbo since December 5.
Makarov said of the U.S. project, “We view it very negatively, because it could weaken our missile forces.”
Echoing his fears over the fate of START talks, on February 19 Russian Deputy Foreign Minister Sergei Ryabkov said that Washington’s missile project “in the most immediate sense” is negatively influencing negotiations on a replacement to a Strategic Arms Reduction Treaty.
Five days later Konstantin Kosachev, head of the State Duma committee for international relations, said “If the connection between the strategic arms reduction treaty and missile defense is not exhaustively fixed by the sides in preparing the treaty… this would automatically create obstacles for subsequent ratification of the document in the State Duma and create additional difficulties for further advance[s] in cutting strategic offensive weapons.”
The provocative decisions by the U.S. on missile deployments in Poland, Romania and Bulgaria since the expiration of the START last December lead to no other conclusion than the White House and the Pentagon intend the indefinite postponement if not the aborting of any comprehensive agreement to limit and reduce nuclear arms.
Russia’s permanent representative to NATO, Dmitry Rogozin, has recently voiced the concern that the U.S. still plans to base anti-ballistic missile facilities in Poland and the Czech Republic in spite of statements by President Barack Obama and Secretary of Defense Robert Gates last September 17 that previous plans for both countries are being replaced by “stronger, smarter, and swifter” deployments.
The U.S. has not substituted the missile encirclement of Russia with that of China. It is conducting both simultaneously.
As it is doing so, the Pentagon announced on February 12 that “A U.S. high-powered airborne laser weapon shot down a ballistic missile in the first successful test of a futuristic directed energy weapon, the U.S. Missile Defense Agency said…”
A Reuters report of the test launched from a base in California over the Pacific Ocean, one which has been touted as finally realizing the Ronald Reagan administration’s plans for the Strategic Defense Initiative, popularly known as Star Wars, described its purpose: “The airborne laser weapon is aimed at… providing the U.S. military with the ability to engage all classes of ballistic missiles at the speed of light while they are in the boost phase of flight.”
One of the weapon’s manufacturers, the Boeing Company, issued a press release for the occasion which said in part: “This experiment marks the first time a laser weapon has engaged and destroyed an in-flight ballistic missile, and the first time that any system has accomplished it in the missile’s boost phase of flight… The laser is the most powerful ever installed on an aircraft…”
Northrop Grumman, another partner in the project (Lockheed Martin being the third), added: “While ballistic missiles like the one ALTB [Airborne Laser Testbed] destroyed move at speeds of about 4,000 miles [6,500 km] per hour, they are no match for a superheated, high-energy laser beam racing towards it at 670 million mph [one billion kph].”
The Pentagon’s Missile Defense Agency was no less enthusiastic about the results, stating “The revolutionary use of directed energy is very attractive for missile defence, with the potential to attack multiple targets at the speed of light, at a range of hundreds of kilometres…”
The airborne laser weapon is mounted on a modified Boeing 747 commercial airliner. Its potential range is global.
Ten days later it was reported by the U.S. Army that the High Energy Laser Systems Test Facility at the White Sands Missile Range in New Mexico will receive a new laser weapon and “The Army may soon blast missiles out of the sky with a laser beam.” The weapon contains “100-kilowatt lasers that can rapidly heat a target, causing catastrophic events such as warhead explosions or airframe failures.”
Pentagon officials said it has “successfully worked in the laboratory and on the battlefield and now they want to begin shooting down missiles with it.”
Airborne laser anti-missile weapons will join the full spectrum of land, sea, air and space interceptor missile components to envelope the world with a system to neutralize other nations’ deterrence capacities and prepare the way for conventional and nuclear first strikes.
1) Bloomberg News, March 1, 2010
2) Bloomberg News, March 2, 2010
4) China Daily, February 22, 2010
5) Warsaw Business Journal, March 2, 2010
6) China Daily, February 22, 2010
7) Russian Information Agency Novosti, February 24, 2010
8) Stars and Stripes, February 25, 2010
9) Voice of Russia, March 2, 2010
10) Roman Tomberg, Collapse of the G-2 Myth, or Stalemate in China-U.S. Relations, Strategic Culture Foundation, March 2, 2010
11) Russia Today, February 27, 2010
12) Polish Radio, February 28, 2010
13) Associated Press, February 9, 2010
14) Associated Press, February 19, 2010
15) Russian Information Agency Novosti, February 24, 2010
16) Voice of Russia, February 23, 2010
17) Reuters, February 12, 2010
19) Defense News, February 12, 2010
20) Associated Press, February 13, 2010
21) The Guardian, February 12, 2010
22) MyStateline.com, February 22, 2010
The following article cites China Daily as the originator.
China circled by chain of U.S. anti-missile systems
© China Daily
By Qin Jize and Li Xiaokun
February 22, 2010
… Quite a few military experts have noted that Washington’s latest proposed weapon deal with Taiwan is the key part of a U.S. strategic encirclement of China in the East Asian region, and that the missiles could soon have a footprint that extends from Japan to the Republic of Korea and Taiwan.
Air force colonel Dai Xu, a renowned military strategist, wrote in an article released this month that “China is in a crescent-shaped ring of encirclement. The ring begins in Japan, stretches through nations in the South China Sea to India, and ends in Afghanistan. Washington’s deployment of anti-missile systems around China’s periphery forms a crescent-shaped encirclement”…
Read more. Full-text article appears at the following links.