India's misperceptions have dangerous implications

New Delhi’s delusion - Illustration: Shen Lan/GT

Over a month ago, Indian troops crossed into China at the Sikkim section of the border between the two countries, instigating a standoff with Chinese troops. This is arguably the biggest crisis facing the two countries since the 1962 border war, since there is still no sign of the Indian troops ending their trespass into Chinese territory.

The Sikkim section of the China-India boundary was delimited in 1890 with the Convention Between Great Britain and China Relating to Sikkim and Tibet, and the boundary demarcation is recognized by both China and India.

However, India claims that a road being legitimately constructed by Chinese troops in Chinese territory has "serious" security implications for India. It fears it will lead to the cutting of the so-called chicken's neck — the corridor, 20 kilometers wide, that links the Indian mainland to its northeastern states. As a result, New Delhi decided to make a"preemptive" move.

Knowing the Chinese border troops will refrain from "firing the first bullet", Indian soldiers have time and again employed such shady tricks in disputed areas. But this time, New Delhi has sent troops into China's Donglang area, which is not disputed, and which is nowhere near the trilateral junction that separates China, India and Bhutan.

India has harbored the belief that Beijing would compromise due to the upcoming ninth BRICS Summit in Xiamen, Fujian province. And because of this misperception, New Delhi has been emboldened to "dig in".

India's border provocation constitutes a diplomatic and military challenge to China, carries strategic implications for it.

With its troops trespassing in Chinese territory, New Delhi has taken a dangerous step by inciting confrontation. So far, China has exercised restraint, but its patience will not last forever.

China has repeatedly stated that it will defend its core interests, which include its territorial integrity. China does not have any strategic ambition to manipulate South Asian or Indochinese Peninsula affairs, but that does not mean it will allow its own territory to be encroached upon.

It seeks to handle border issues in line with international laws and documented evidence, but it does not fear a clash on its borders with a neighbor, if that is what is necessary to defend its territory. It has abundant resources to keep the risks controllable should a showdown occur. The 1962 border war between China and India is history. China can now force illegal intruders back across the border more easily than it could 55 years ago.

While continuing to be engaged in diplomatic efforts to persuade India to withdraw its troops from Chinese territory, China should be prepared for military action should that prove to be its only recourse.

As China has repeatedly emphasized, although the diplomatic channels are unimpeded, the withdrawal of the Indian border troops who have illegally crossed into China's territory is the prerequisite for any meaningful dialogue between the two sides.

Although the crisis is fundamentally an outcome of India's perception of its geopolitical role and worries about the rise of China, playing up the idea of an all-out geopolitical clash between the two countries is uncalled for.

After all, China and India are close neighbors and a healthy bilateral relationship meets the need of both for a favorable environment for development. The two countries should seek to reconcile their border issues and jointly strive to maintain regional stability.

Source: By Ang Gang, China Daily/Asia News Network

The author is a senior researcher at the Pangoal Institution, a think tank.

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The great technology transformation

AFTER a week in the Silicon Valley, California last month, I came to the conclusion that I am a dinosaur. The speed of change from technology has been so fast and so profound that we are lost in transition, translation and transformation.

The digital revolution is already upon us, but the baby boomer generation, to which I belong, is having difficulty understanding this because we still upload (read) on paper, whereas the millenials (those born between 1980 and 2000) upload information mostly on mobile phones, video and communicate through social media.

Demographics say a lot. At the turn of the 21st century, the baby boomers (born 1946-1964) were half the work force, but today in the United States, millenials and Gen X (born 1965-1979) are roughly one-third each. The baby boomers may own most of the retirement funds and wealth, but the new wealth is being created rapidly by the younger generations.

A simple set of statistics says it all. The Forbes top five US companies by revenue are Walmart, Exxon, Chevron, Berkshire Hathaway and Apple. Walmart employs over 2.1 million people, with revenue just under US$485bil, but profits of US$16bil with market capitalisation of US$265bil. Apple, with only 80,000 employees, had double Walmart profits of US$39bil and a market capitalisation of US$725bil, larger than Walmart and Exxon put together. Twitter, with only 3,638 employees or less than 0.2% of Walmart workforce, is valued at 9.2% of Walmart. Facebook, with only 9,200 employees but 1.44 billion users, is valued at 86% of Walmart.

In fact, if it wasn’t for the fact that Silicon Valley is booming in terms of wealth creation, California would be suffering from the economic effects of the worst drought in years. But at US$2.3 trillion, California is growing at 2.8% per annum, faster than US real gross domestic product growth of 2.2% in 2014. The Western Pacific states of Oregon and Washington are growing faster at 3.6% and 3% respectively, thanks to growing trade and services from the boom in technology.

Two things that stand out in the Digital Disruption – speed and scale. The speed and scale of the digital transformation is so fast and so wide and deep that we are all having problems valuing what it means – which is why we have a tech bubble in the making.

It is quite normal for us to accept that the Silicon Valley is the world leader in digital change, but what was eye-opening as I dug into the data is that the next waves are already happening in China and India. This has mind-boggling implications on a geo-political basis, especially for smaller economies, such as Malaysia, Hong Kong or Thailand.

What struck me from delving into the pattern of growth in the Internet Revolution is the speed and scale of change in China and India. Who would have expected even five years ago that four out of the top 15 global public Internet companies, ranked by market capitalisation would be Chinese (Alibaba, Tencent, Baidu and JD.com) with a combined value of US$542bil or 22.4% of the total market valuation of US$2.4 trillion of these 15 companies as of May, 2105.

Scale and speed

The reason for this valuation is scale and speed of the Chinese transformation, already overtaking the world leader, the United States. The rate of Internet penetration is over 80% for the United States, only 40+% in China and 20+% in India. But China already has more Internet users (618 million), double the US population and its growth in smartphones is double (21%) that of the United States (9%).

Although incomes in China and India are far lower than the United States, Chinese and Indian millenials (for that matter, millenials in all emerging markets) are beginning to spend more time on their smartphones than the advanced countries.

There are two implications from this broad trend, which the Chinese Internet platforms like Alibaba and Tencent are beginning to exploit.

The first is the ease and convenience of buying, selling and paying using the smartphone – an all service tool. Partly because of regulation, the US leaders such as eBay, Amazon and Facebook are still in their core areas of strength, but Alibaba and WeChat (part of Tencent) have developed eco-systems that are simultaneously social networks, chatrooms, trading and investing platforms combined.

When I lost my Blackberry, MacBook and camera recently in Latin America, I was staggered that using WeChat on iPhone, I could go on video and instant chat with friends across half the world for free. My only constraint was the battery on my iPhone and that I had not set up to get funds transfer in case of need.

The second implication is that traditional service providers are way behind in this technology. My credit card companies are still on outdated phone-banking, which meant that in order to report lost cards, I was frantically trying to Press one, Press two and Press self-destruct! These companies are at least two generations behind in customer service technology.

Internet Revolution

My conclusion from this survey of the Internet Revolution is that the disruption from technology on conventional businesses is yet incomplete. In the 1990s, the Internet changed the music, photography, book sales and video rental business. Today, we book airline and hotel travel on the web.

But with the arrival of the iPad and iPhone, healthcare, finance, investing, education and social communications are being combined into one gadget (the mobile phone) to do what we have to.

This disruption is happening very fast in China and India, because these late-comers have no pre-conceived legacy ideas on what cannot be done with technology.

If China is currently going through its tech bubble, watch out for the next tech bubble in India.

Those who think only in terms of risks think that bubbles are to be feared. I have come to realise that the animal spirits in us change the game through excesses. But those who learn from their mistakes will create the new.

Silicon Valley is not a place but a mindset – nothing ventured, nothing gained. That mindset is truly the New Digital Transformation.

Watch this space in Asia.

Andrew Sheng comments on global trends from an Asian angle

BRICS and SCO: Seizing the Eruasian moment

While the West is distracted by the Gulf region and Ukraine, moves are afoot in parts of Asia and Europe to empower emerging regions in the future

IF there is still any doubt that Russia and China are cultivating their global presence together, events in recent days come as a timely antidote.

The five emerging BRICS economies of Brazil, Russia, India, China and South Africa, spanning nearly as many continents, had their seventh summit in Ufa, south-western Russia on Thursday.

Any lingering uncertainty over Moscow-Beijing relations would also have been dispelled by the fact that the BRICS summit was held back-to-back with the 15th Shanghai Cooperation Organisation (SCO) summit on Friday.

The SCO is an association of six countries – Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan – and prime movers China and Russia, which also happen to be dominant. Its summit this time saw a growth in membership with the inclusion of India and Pakistan.

The BRICS countries have certain shared concerns and objectives, such as national development and international commerce that need not conform to the strictures of the Washington Consensus.

Strictures imposed by the Bretton Woods institutions, the World Bank and the International Monetary Fund (IMF), have bled already anaemic economies and destabilised countries in the developing world on the basis of ideological prescriptions.

At the same time, these Western-dominated financial institutions failed to give emerging economies, epitomised by China, their rightful voice according to their global economic importance. Thus a cash-rich China has had to evolve financial institutions of its own.

Such multilateral efforts are best done together with like-minded nations. So besides BRICS, SCO countries that span Eurasia – with a collective focus on Central Asia and now also South Asia – have come together to develop alternative funding agencies.

In addition to the Beijing Consensus of rapid growth that is politically conscious, defined and directed, there is now the “Shanghai Spirit” of mutual respect, trust, benefit and consultation with equality.

These values broadly mirror the Five Principles of Peaceful Coexistence adopted by China and India (Panchsheel Treaty) two generations ago.

But even as SCO membership sees steady growth, it is clear enough that its main drivers and those of BRICS are China and Russia. By dint of sheer size and capacity, particularly those of China, Beijing and Moscow have come to lead the rest.

The way Washington has managed to alienate China and Russia at the same time has helped develop their partnership. Following years of US criticism of both countries, the US navy chief lately branded Russia as the greatest threat while presidential hopeful Hillary Clinton accused China of hacking US sites.

Russia and China were thus prodded by the US to work more closely together. US foreign policy is often said to be defined by domestic interests, or perceived interests, and this is seldom more true than when a presidential election campaign approaches.

However, improving relations between China and Russia are not thanks solely to US posturing. Moscow and Beijing are not without common interests of their own.

On Thursday, Russian Foreign Minister Sergei Lavrov rallied member countries of both BRICS and the SCO to fight terrorism together. International terrorism today is a clear and present danger, a substantive threat and a common scourge requiring close cooperation particularly among neighbouring countries.

While BRICS’s terms of reference are more economic, the SCO’s are broader and more strategic. Within BRICS, member nations have formed a Business Council and formulated an Economic Partnership Strategy. Key sectors are manufacturing and infrastructure besides clean energy and agriculture.

But the star attraction at Ufa was the launch of the New Development Bank (NDB), also known as the BRICS bank, with an initial capital of US$100bil (RM378.2bil).

To be based in Shanghai with its first president in India’s K.V. Kamath, the NDB would be raising funds locally and internationally. It is set to issue its first loans next April. This is among four new financial institutions championed by China, the others being the Asian Infrastructure Investment Bank, the Silk Road Fund and the SCO’s Development Bank.

In the SCO context, member countries had made strides in the energy, telecommunications and transportation sectors. Now such gains needed to be affirmed while also developing opportunities in agriculture. Russia places a special priority on the Eurasian Economic Union (EAEU), which also covers Armenia, Belarus, Kazakhstan and Kyrgyzstan, with Russia dominant. China has prioritised its Silk Road Economic Belt initiatives linking Asia with Europe.

Working together, the EAEU and the Silk Road projects would be promoted jointly by the SCO. The proposed financial institutions, to which China would be contributing the most, would finance these and other related projects.

The fortunes of BRICS economies however have dipped in recent months. The Ufa summit did not deny the current challenges but chose to emphasise the positives.

Although numbering just five countries, the BRICS group had contributed half of the world’s economic growth over the past decade and produced 20% of total global output. No less than IMF findings show that until 2030 at least, BRICS growth would outperform developed and other emerging economies.

For Russia, the plans and initiatives have a more immediate tactical purpose – to alleviate economic pressures brought on by Western sanctions against its moves in Ukraine.

For China, the longer-term strategic purpose covers efforts to facilitate more trade, expedite internationalisation of the renminbi and generally build and solidify China’s global stature.

In investing massively in the new financial institutions however, Beijing will be competing against the IMF, the World Bank and the Asian Development Bank.

In doing so it will have to be more borrower-friendly, minus the strictures so synonymous with the Western-run rivals. The official word is that these new lending agencies are not going to challenge the Bretton Woods institutions, but the practical effect is nonetheless to offer borrowers more choice.

To substantiate the claim that the new institutions will neither rival nor replace the older ones, China is also calling for more open international accountability of the IMF and the World Bank. Somehow that may still not come as comforting news to Western power brokers.

But after all the platitudes and hurrah in Ufa, there are now the realities to contend with.

Strategic analysts prefer to gauge the viability of regional institutions based on the common interests shared among member states. In this respect, the future of BRICS may seem less promising than the SCO’s. Precisely because of the broad spread of the BRICS countries, there is little they have in common besides an affinity with alternative modes of development.

Their economic growth has been significant, but achieved independently of other BRICS nations and – except for China – with little support from (integration with) other countries in their respective regions.

The obvious question arises as to how sustainable can BRICS as an entity be. The fortunes of international associations depend on more than goodwill and bravado.

The SCO by comparison holds more prospects for success. By comprising a contiguous region that includes Eurasia and a substantial chunk of the Asian land mass, cross-border concerns are shared and can be attended to jointly.

Furthermore, practical projects like the Silk Road Economic Belt and the EAEU require constant attention, commitment and contributions from the 60 countries and regions that are involved.

This may mean more obligations to begin with, but consistent maintenance will ensure better management and success.

By Bunn Nagara Behind the headlines

> Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.

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Big homegrown successes in India from Sillicon Valley's returning 'fail fast' engineers

Taking failure as a norm would be a major cultural shift in India, where high-achieving children are expected to take steady jobs at recognised job

India learns to 'fail fast' with startups

Families that expect children to have respectable jobs may be beginning to accept failure as the tech industry starts to come of age.

After ping pong tables, motivational posters and casual dress codes, India’s tech startups are following Silicon Valley’s lead and embracing the “fail fast” culture credited with fuelling creativity and success in the United States.

Taking failure as a norm is a major cultural shift in India, where high-achieving children are typically expected to take steady jobs at recognised firms. A failed venture hurts family status and even marriage prospects.

But that nascent acceptance, fuelled by returning engineers and billions of dollars in venture fund investment, is for many observers a sign that India’s US$150bil tech industry is coming of age, moving from a back-office powerhouse to a creative force.

“There is obviously increased acceptance,” said Raghunandan G, co-founder of TaxiForSure, which was sold to rival Ola this year. He is now investing in other early stage ventures.

“My co-founder Aprameya (Radhakrishna) used to have lines of prospective brides to meet ... the moment we started our own company, all those prospective alliances disappeared. No one wanted their daughters to marry a startup guy.”

Srikanth Chunduri returned to India after studying at Duke University in the US, and is now working on his second venture. “I think what’s encouraging is that acceptance of failure is increasing despite the very deep-rooted Asian culture where failure is a big no,” he said.

IT’S OK TO FAIL

The shift has come about, executives say, as engineers began returning from Silicon Valley to cash in on India’s own boom, as hundreds of millions of Indians go online.

“Investors too want to find the next Flipkart, and most of them come from Silicon Valley backgrounds, so they bring that culture,” said Stewart Noakes, co-founder of TechHub, a global community and workspace for tech entrepreneurs. “That’s changing the Indian norms. It’s becoming ok to fail and try again.”

Big names like Flipkart can also mean the prospect of a lucrative exit for investors, covering a multitude of failures. To be sure, the pace of change is slow in altering a culture that has produced top software engineers for decades, but – as yet – no Google, Apple or Twitter.

Cheap engineering talent keeps startups afloat far longer than in Silicon Valley, where companies last less than two years on average. And the freedom to fail remains restricted to a small portion of India’s corporate fabric, booming tech cities like Bengaluru or Gurgaon outside New Delhi.

There is also still no revolving door with big corporates, whom one senior Bengaluru headhunter described as beating down salaries of executives who dared to risk – but then came back.

ROLE MODELS

India learns to 'fail fast' as tech startup culture takes root

But big homegrown successes like e-tailers Flipkart and Snapdeal or mobile advertising firm InMobi, as well as the multi-billion dollar firms set up by former executives from the likes of Amazon.com, Microsoft and Google, have created role models, encouraging graduates to take risks.

“With success stories, people accept it as a legitimate exercise,” said Ryan Valles, former CEO of coupon site DealsandYou and a former executive at Accel Partners, now working on a new project.

Meanwhile, billions in investor funding have fed the sector. External cash – as opposed to more traditional bank loans tied to individuals, or family savings – makes a difference. Failing there can involve walking away Silicon Valley-style, not years of court proceedings in a country with no formal bankruptcy law.

There has also been, to date, no major collapse.

“What’s happening is healthy: people recognising that some things will fail, that it’s largely a failure-based industry, in the same way that movies, music or pharmaceuticals are,” said Shikhar Ghosh, senior lecturer at Harvard Business School.

An estimated 70-90% of start-ups fail.

But the biggest test may be the first bust after the boom.

“That will be the test: whether people come back into the market and how they treat the people who lost their money,” said Ghosh. – Reuters

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India’s Mars success boosts space research

India's Mangalyaan probe entered orbit around Mars Wednesday morning, which has been hailed by the public throughout the country. People across India, from the authorities to media outlets, feel proud of the fact that India has become the fourth power to put a satellite into orbit around Mars after the US, Russia and Europe. The Indian public fully expressed their elation at having surpassed China in Mars exploration. China's first Mars exploratory probe, Yinghuo-1, went missing one year after its launch in 2011. There is rhetoric on India's Internet that the success of Mangalyaan is pouring salt into China's wounds, which, however, is too serious and strong a characterization.

Apparently, China will not feel jealous of Mangalyaan entering Mars orbit. Chinese people understand that they boast much more advanced technological, economic and social development than India does.

Actually, Chinese people have myriad reasons to feel delighted at the success of the Mangalyaan probe alongside Indian people. If a country that is relatively backward in scientific research is able to send a probe to Mars, it is highly possible that Yinghuo-2 may succeed in the future.

No country can claim to be a leader in every arena. India has proved this point in its competition with China.

When poor nations participate in the space race, they are often sneered at by others and criticized domestically as well.

India sees itself as a major power that is supposed to do something "irrelevant with people's interests" in the eyes of populists. A small country can be composed of schools, hospitals, restaurants and washrooms, while a big one must possess much more advanced technology such as satellites and nuclear-powered submarines, as well as constantly seek technological breakthroughs.

India's space exploration endeavor, against its prevailing social conditions, should be reflected upon by Chinese people. China's space program and the relevance to its social development level were subjected to intensive Western public scrutiny, but the West takes China's competitiveness in space seriously now. India reminds us of the importance of taking the first step.

Though Yinghuo-1 was outperformed by Mangalyaan, China's aerospace sector has made precious achievements in space, such as manned spaceflight and building space stations. Without these previous efforts, we will still be absent in some core fields.

Mangalyaan brings us more affirmation than a sense of competition. Among Net users from both countries, acrimonious remarks are heard against each other, creating an impression that China and India are mired in deep hostility.

But any real conflict of interest between the two is much less serious. Bilateral cooperation is entering the prime stage.

Source: Global Times Published: 2014-9-25

China wants strong defense; Never seek hegemony on 5 Principles of Peaceful Coexistence; Japan, Philippines using rule of law pretext

Xi Jinping stresses building strong frontier defense

Senior Chinese leaders Xi Jinping, Li Keqiang and Zhang Gaoli meet with representatives attending a national meeting on frontier and coast defense in Beijing, China, June 27, 2014. (Xinhua/Li Gang)

BEIJING, June 28 (Xinhua) -- Chinese President Xi Jinping called for efforts to build a strong and solid frontier defense network for both territorial land and water at a national meeting held here on Friday.

Xi said, upon mentioning frontier defense, one cannot help thinking China's modern history when the country was so weak and destitute that it was for everyone to bully.

Foreign aggressors broke China's land and sea defense for hundreds of times, plunging the Chinese nation into the abysm of calamity, Xi added, calling on the people not to forget the history of humiliation and to build a strong frontier.

Xi urged China's frontier defenders to meticulously monitor over and control the frontier and to mount actions to defend the country's maritime right, while implementing an overall national security outlook.

Furthermore, Xi called for efforts from both the military and civilian communities to strike a balance between frontier defense and economic development, staunchly safeguarding frontier security, stability and prosperity.

Premier Li Keqiang and Vice Premier Zhang Gaoli also attended the meeting. - Xindua

Xi pledges China will never seek hegemony

President re-affirms vow at meeting with leaders of Peaceful Coexistence doctrine's founding countries

Chinese President Xi Jinping on Saturday delivered a keynote speech at a commemoration marking the 60th anniversary of the Five Principles of Peaceful Coexistence at the Great Hall of the People in Beijing.[Photo/Xinhua]

Chinese President Xi Jinping (front row C), Myanmar President U Thein Sein (front row 4th L) and Indian Vice President Mohammad Hamid Ansari (front row 4th R) together with delegates from China, India and Myanmar attending a conference marking the 60th anniversary of the Five Principles of Peaceful Coexistence pose for a group picture during their meeting in Beijing, capital of China, June 28, 2013. [Photo/Xinhua]

China will never seek hegemony, no matter how strong it becomes, President Xi Jinping said on Saturday at a high-profile meeting to mark the 60th anniversary of the Five Principles of Peaceful Coexistence.

"China does not accept the logic that a strong country is bound to become hegemonic, and neither hegemony nor militarism is in the Chinese DNA," Xi said in a speech, as he played host to leaders from Myanmar and India to commemorate the anniversary.

Citing poems and old sayings from the three countries, Xi called for dialogue based on equality to resolve disputes and joint efforts to preserve regional peace.

He also announced the establishment of a friendship award and an outstanding scholarship related to the Five Principles of Peaceful Coexistence. 

Myanmar leader hails ties

Observers said Xi's remarks and the first meeting of leaders of all three of the peace code's founding countries since its inception sought to assure the world of China's peaceful development amid simmering tension in the East and South China seas.

It will take time for China, or any growing power, to be fully accepted by the world. But China will prove its intentions with its actions, based on the five principles, which can play a bigger role in the current international community, they added.

In 1954, the leaders of China, India and Myanmar initiated the Five Principles of Peaceful Coexistence. They are mutual respect for sovereignty and territorial integrity; mutual non-aggression; non-interference in each other's internal affairs; equality and mutual benefit; and peaceful coexistence.

The joint commemoration - especially the presence of Myanmar's President U Thein Sein and India's Vice-President Mohammad Hamid Ansari - shows those two countries' efforts to push forward the peace code and their relationship with China, said Zhang Jiuhuan, former director of the Department of Asian Affairs at the Foreign Ministry.

Having guided the rapid development of ties between China and Southeast Asia, the principles could also lead to the resolution of issues between China and some Southeast Asian countries in the South China Sea, said Zhang, who is also a former Chinese ambassador to Singapore and Thailand.

Wang Fan, vice-president of China Foreign Affairs University, said the five principles could be developed to become a mechanism to guarantee the spirit's future implementation.

East Asia - divided by an outdated alliance system - lacks a sound multilateral platform for cooperation. So the five principles under a mechanism could better restrict all concerned parties, he said.

Ansari also called for "a new paradigm for global action", "a framework in which opportunities and challenges for the betterment of our societies coexist".

The five principles "can act as a catalyst", he said in a speech at the meeting.

By Zhao Shengnan (China Daily)

Japan, Philippines using rule of law pretext

BEIJING, June 27 -- A spokesman for China's Foreign Ministry said on Friday said Japan and the Philippines have infringed on other countries' interests under the pretext of rule of law.

"Some countries are provoking and stirring up tensions on the one hand and vilifying other countries under the pretext of rule of law," Qin Gang said at a daily press briefing.

Qin's comments came after Philippine President Benigno Aquino and Japanese Prime Minister Shinzo Abe on Tuesday called for use of "the rule of law" to solve regional disputes, at a time when both countries are embroiled in separate rows with China.

Qin said China has always been committed to working with relevant countries and resolving the disputes on the basis of historical facts and international laws.

He also said China does not accept the international arbitration put forward by some countries, not because it is afraid to do so. The country is only "exercising the legitimate rights of signatories to the UN Convention on the Law of the Sea."

In early June, the Permanent Court of Arbitration asked China to submit evidence on its territorial claims in the South China Sea within six months for a procedural review of the suit filed by the Philippines.

China aims to properly resolve issues and protect regional peace and stability, which is also in line with the Declaration on the Conduct of Parties in the South China Sea , according to Qin.

"Some countries have infringed on the legitimate interests of other countries under the pretext of rule of law," he added, urging Japan and the Philippines to reflect on their acts in accordance with international laws and the norms guiding international relations.

(Xinhua)AFP

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Asians can and must think strategically, not to be dominated by the West

Can Asians think?

CAN Asian Think is a provocative book written in 1998 by the dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, Kishore Mahbubani, a prolific and brilliant thinker.

The book is a combative rebuttal of the idea that the dominant Western (read American) ideas are universalist, arguing that the Rest (of the World) has a lot to teach the West.

Re-reading it after more than 16 years, the questions raised by Mahbubani are as relevant as ever. Personally, I found the title rather condescending – of course Asians can think! The real issue is whether Asians can think strategically in their own interest, or whether they think that the dominant Western philosophy and values are so comfortable and relevant that they simply accept that the West is best.

The intellectual tide is going full circle. Since 1998, we have experienced two full-scale crises – the Asian financial crisis of 1998-1999 in which some Western polemicists gloated over Asian hubris, and the Great Recession of 2007-2009, when even Western intellectuals questioned whether unfettered capitalism was a dead end.

As one Asian leader said, when our teacher stumbles, what does the student do? This strategic question has not been completely answered, or at least the answers are different for different Asian countries.

Now that the West has begun to recover, we are going through a reversal of fortunes. Emerging economies are going to bear the brunt of global adjustment. At least three Asian economies are counted among the Fragile Five (India, Indonesia, Turkey, Brazil and South Africa), and there is considerable worry that China may be going through a hard landing.

President Obama’s trip to Asia was a belated personal confirmation of his “Pivot to East Asia” policy, first articulated in 2012 by then Secretary of State and Presidential wannabe Hillary Clinton. As the United States began to withdraw from Iraq and Afghanistan, and its discovery of shale oil making it less dependent on the Middle East, the Pivot strategy involved strengthening bilateral ties with allies in East Asia, and working relationships with emerging powers, such as China. The immediate unintended consequence of the Pivot policy was the eruption of the Ukraine crisis, whereby Russia took advantage of European weakness and diversion of US attention to effectively bring Crimea back to the Russian sphere of influence.

All of a sudden, the Cold War, defined as the struggle between Big Powers, re-emerged into the global risk equation.

Russian soldiers march at the Red Square in Moscow during a Victory Day parade. Thousands of Russian troops marched in Red Square to mark 69 years since victory in World War II in a show of military might amid tensions in Ukraine following Moscow’s annexation of Crimea. -AFP

The word “pivot” originally arose from a paper “The Geographical Pivot of History”, delivered exactly 110 years ago by Sir Halford Mackinder (1861-1947), then director of the London School of Economics. In his second book in 1919, Mackinder, considered the father of geopolitics and geostrategy theory, enscapsulated his theory of the Heartland in a dictum: “Who rules East Europe commands the Heartland; Who rules the Heartland commands the World Island; Who rules the World Island commands the World.”

The Heartland is of course Central Asia, previously part of the Soviet Union, and the World-Island is the largest landmass of Euroasia, from Atlantic Europe to the East Asian Pacific coast, which commands 50% of the world’s resources. Many of today’s areas of geopolitical risk are at the frontiers of the Heartland – Ukraine, Syria, Afghanistan, Iraq, Iran and the South China Sea.

Mackinder’s innovation was to examine national strategy on a global scale, recognising that the British empire must use geography and strategic policy to its advantage against competing great powers.

Former British colonies understood very well the British strategy of “divide and rule”, playing off one faction against the other, so that Britain could rule a subcontinent like India without expending too much resources. But Britain did not hesitate to apply gunboats or cannon to maintain the strategic balance. Similarly, Britain played off one European power against another, until weakened by two world wars, her former colony, the United States emerged as the global superpower.

Seen from the long lens of history, we are in the second Anglo-Saxon empire, with America being the new Rome. Just as the Roman empire shifted its capital from Rome to Constantinople (now Istanbul) in the 20th century, power shifted westward from London to Washington DC.

In the 20th century, two island economies, Britain and Japan, played leading roles in intervening in the continents of Europe and Asia through maritime power, but by the 21st century, air and technological power through size and scale changed the game in favour of the United States. The United States is a continental economy defended by two oceans, the Pacific Ocean and the Atlantic, without a military rival within the Americas.

In contrast, Asia has been historically riven by war and territorial disputes.

In his new book, the Revenge of Geography, geostrategist Robert Kaplan argued how politics and warfare were determined throughout history largely by geography.

Even though the arrival of air travel and Internet suggest that the world may become borderless, the reality is that the world is becoming more and more crowded.

When the First World War broke out in 1914, the global population was only 1.7 billion, with a death count of 16 million. By the Second World War, the death count reached as high as 85 million, when world population was only 2.3 billion.

The next World War will be fought over water and energy resources, because there are limits to natural resources even as the global population exceeds 7 billion, going towards 9 billion by 2030.

For the world to avoid global conflict will require great skills and mutual understanding, because the geopolitical risks of political miscalculation and accidents are extremely high in an age of rising tensions due to inequality, chauvinism, religious and ethnic polarisation. As an old African saying goes, when elephants fight, the grass gets trampled. In the next big fight between the nuclear powers, there will be no winners.

Now that is something that not just Asians must seriously think about.

 - Contributed by Tan Sri Andrew Sheng

Tan Sri Andrew Sheng is Distinguished Fellow of the Fung Global Institute. The views expressed are entirely the writer's own.

India’s financial crisis a drag on region

After many years of galloping growth rates, India is grinding to a halt, and countries in the region may soon feel the impact.

To ease pressure on the rupee, the government said it had set up a panel to look at paying for imported items in rupees rather than foreign exchange under bilateral currency swap agreements. Photo: Reuters

INDIA is in the news and for all the wrong reasons. With the rupee collapsing, the current account deficit exploding and corporate debt set to melt down (trimming its contribution to Forbes billionaires’ list), China’s strategic challenger looks set to drag the rest of Asia-Pacific into a prolonged economic crisis.

After many years of galloping GDP growth rates, India is grinding to a halt. Growth in 2012 was 6.3% – this year it will be lucky if it can get above 3%.

For a proud nation with a US$4.684 trillion (RM15.4 trillion) economy, its own nuclear bomb and a navy equipped with both aircraft carriers and submarines, this is a massive loss of face and, indeed, opportunity.

India may well go down in the annals of contemporary economic history as being the trigger of the 2013 financial crisis – much as the South Koreans and Thais were the forerunners of the 1998 meltdown.

So what went wrong in India? Wasn’t the subcontinent’s giant supposed to be a great developmental success story and what are the lessons for us in Malaysia?

According to a pair of extremely high-profile economists, Jean Dreze and Nobel Prize winner Amartya Sen, whose book An Uncertain Glory: India and its Contradictions was launched earlier this year, India allowed its public sector, especially healthcare and education, to wither. This failure of governance and execution compounded deeply-rooted iniquities at the heart of its complex – a caste-driven society.

And with a general election slated for next year, there’s little doubt that a floundering Congress-led administration under Manmohan Singh will once again fail to tackle one of the world’s most inefficient and corrupt bureaucracies.

So, with the precipice fast approaching, it would be wise for Malaysian readers to acknowledge that India will not suddenly rebound and we will all be tainted by association. Moreover when the fear sweeps the markets, the contagion often ends up being far worse than anything crafted by Hollywood’s merchants of doom.

To be fair, India’s track record has been stellar if you’re middle-class and above.

Opportunities have abounded, despite the odd infrastructural glitch such as the July 2012 power blackout across Northern India (at the height of the summer heat).

However, for those at the bottom of the social scale, life has been less enthralling.

Take, for instance, the Indian government’s meagre spending on healthcare – only 1.2% of GDP alongside China’s 2.7% and Latin America’s 3.8%. Converted into absolute expenditure (at PPP terms), India has been spending US$39 (RM125) per capita whilst China has spent US$203 (RM655) per capita.

To put things into perspective, Malaysia spends 4.8% of its GDP on healthcare or about US$400 (RM1,292) per capita. Indonesia spends 2.7% of its GDP and US$100 (RM323) per capita.

Understandably, India has reaped a bitter harvest from this shocking under-investment, achieving Quality of Life indices that pale in comparison even with neighbouring Bangla-desh. This is despite Bangladesh having a GDP per capita of US$747 (RM2,413) compared to India’s US$3,557 (RM11,490).

But it’s the weaker sections of society that have been the most imperilled: women, tribal people and the lower castes. Indeed, female empowerment in Muslim Bangladesh far surpasses anything in India.

However, the story isn’t uniformly bad. India is a vast nation and there are differences in the various indices between the country’s North and West (sub-Saharan African bad) and its South (generally good). So, if one is to subscribe to the Sen/Dreze formulation, India’s failure is primarily a failure of governance with more public money being spent on notoriously corrupt fertilizer subsidies rather than healthcare and education.

We cannot underestimate the cost of this neglect to invest in its people: not only due to higher crime and squalor, but also in terms of lost opportunities via better human capital.

As a result of this terrible under-investment in their own people, India’s “demographic boom” may well be worthless as its burgeoning youth population of some 430 million won’t be adequately educated, employed and/or fed.

Of course, the two men’s thesis hasn’t been uniformly accepted. Free-market thinkers like Columbia University’s Jagdish Bhagwati have taken issue with their prescriptions, seeing rather the need for less state intervention and greater private sector participation. The ensuing debate between the two prominent thinkers has been sharp and acrimonious, reflecting the underlying sense of unease.

Ultimately, the correct policy path for India probably lies midway between the two positions, but for now, we can be sure that little will be done to improve the lot of India’s hundreds of millions of poor.

Dreze and Sen have also criticised India’s free market and much-lauded democracy, arguing that neither has helped address its fundamental inequalities.

Look across the Himalayas to China, however, whose authoritarian system has brought it great wealth, but also the same inequalities and social dislocations and things don’t seem that rosy either.

Where should developing economies go then? Perhaps this is the great paradox of modern capitalism: that nothing countries do will ever be right in the long run and that periodic market scares, if not an outright collapse are only to be expected!

Only then will governments be forced to reassess and change their policies. So as emerging markets ready themselves for the impending squalls, we in Malaysia should also be sharpening our policy “tools” and readying ourselves to address the many failings in our policy “tool-box”.

Contributed by KARIM RASLAN
> The views expressed are entirely the writer’s own.

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Information innovator

Information technology (IT) is all about innovation. Vish Iyer can’t agree more.

Mobility, social media and big data are all hot-button topics. Cloud computing frees up people from the desk, so an IT system can be managed even on the road. “For a bank, it could be payment via Internet banking or mobile phone,” says the high-flying corporate executive, dapper in a light purple shirt.

Vish Iyer: 'There is no advantage in having 20 or 30 years of experience unless you are ...very merit-driven and work-driven'.



“For an insurance company, it could mean enabling an agent to get quotations and conduct transactions on his or her mobile.” For an airline, pilots no longer carry huge bags with heavy operating manuals. “We put that on an iPad,” he adds.

Few would believe the president for Asia Pacific at Tata Consultancy Services (TCS) has neither training in IT nor a background in engineering. He learns by doing.

Born and raised in Kolkata around the time when India’s first computer arrived, Iyer graduated from St Xavier’s College, one of the city’s best-known educational institutions with a major in taxation and economics.

Now the head of the largest service provider in the Asia-Pacific region based in Singapore, he manages 10,000 employees in 13 countries including Australia, Japan, China and South Korea.

The 45-year-old Indian company, whose clients include Microsoft and ING Group, is the provider of IT services and business solutions, with a turnover exceeding $12 billion and market capitalization of $45 billion on the Bombay Stock Exchange.

It is part of the Tata group, India’s largest conglomerate in seven sectors including communications, engineering and energy, with a revenue of more than $100 billion in the fiscal year 2011-12.

As a certified accountant, Iyer moved on from the financial field to other areas including human resources, marketing, strategy, mergers and acquisition. “I have been a chief financial officer many times,” he tells China Daily Asia Weekly at the TCS Hong Kong office.

But that didn’t stop him from venturing into new fields after three and a half decades. Midway through his career, he moved into a new-born industry in India.

His rationale is: “What matters is how you put your basic training to use and how you quickly learn from the surroundings. You can do anything as long as you have a will to do it, and you are determined to work hard enough.”

He spent a decade at IBM, where he was director of corporate development. IT has since become his longest stint.

He has witnessed the birth of the industry along with the ups and downs. “The IT industry is very fascinating. Every two to three years are completely different. In that sense, everybody got to continuously learn,” he says.

In the IT world, experience doesn’t necessarily give you an edge over the younger generation. Two-thirds of the company’s workforce has about three years of experience and the average age of a TCS employee is just 28.

“There is no advantage (in) having 20 or 30 years of experience unless you are … very merit-driven and work-driven,” Iyer says.

“This is the industry across the world (where) everything looks the same. There is no different standard in the US or Japan. Once you are inside IT, it is the same. It talks the same language and (has the same) quality level.”

The capability to locate young talent matters for the industry. To Iyer, the Chinese mainland not only has a staggering domestic market but also vast trained manpower resources.

TCS is among the first Indian companies to enter the Chinese mainland as the first wholly-owned foreign enterprise. The IT consultancy commenced its operations in Shanghai in 2002, then established a development center in Hangzhou in Zhejiang province in October of the same year. Its banking products are used by Bank of China in more than 40 provinces.

Iyer sees the potential to substantially increase China’s TCS workforce from its current number of 3,000 people, as the company’s sales growth in China outpaces that in the Americas. TCS now has relations with 20 colleges in China.

“Our business is all about people,” he says. “At the end of the day, we need to find out where are these talents available for serving our customers. China is very important from that point of view — as a pool of talent. It’s equally important for the size of the economy, too.”

“We are very bullish about China,” he said in a previous interview. “Its full potential has not yet been harnessed … We’re looking to leverage its position as an innovation center and a hub for the Northeast Asia region.”

TCS has started to provide a ground-breaking cloud-based service that enables smaller banks and credit unions to establish their own Internet, mobile and ATM facilities by paying a monthly fee. “A village bank need not have an IT department, but the same technology that empowers a (central bank) is now available to small and medium enterprises.”

The TCS pioneer project has found a home in the world’s second largest economy. iCity or the Intelligent City, utilizes smart technologies and collective intelligence to improve a city’s livability and sustainability.

These cities will be built on cloud infrastructure that makes them easy to run. Every citizen will own a personalized information page for health records and blood pressure measurements and even get health alerts and doctors’ advice.

Imagine buildings that glean energy from the sun and rain, reducing energy consumption, and embedded software in cars and traffic poles that automatically monitor local traffic. At the same time, healthcare and consumer services are dispensed to citizens at home, saving time, cost and valuable resources.

An iCity project in southern China’s port city of Guangzhou is slated for a soft launch later this year. More blueprints are on majors’ drawing boards in first- and second-tier Chinese cities, including Tianjin, Ningbo and Chengdu.

“The Indian IT industry over the last 20 years has done exceedingly well,” Iyer says. “Works of best quality are from this industry. There (has been) a lot of proud achievements — so it’s an exciting place to be in.”

But when asked about the most exciting moment in his life, the president’s answer has surprisingly nothing to do with his career. “The day when my daughter was born, and when I was holding her in my hands,” he says, with a gentle smile.

“Lots of people talk about work-life balance. I think each person has to find that balance himself … Family influence is a strong support for the profession I pursue, so there are no conflicts or contradiction.”

Looking back, Iyer has been with his two children — his 23-year-old daughter and 18-year-old son — through every important step of their life. “I (accompany) them through every exam, drop them off and pick them up after classes, and consult their teachers for college admissions. As long as you enjoy it, you’ll find time for doing it,” he adds.

Technology has been the savior for this family man with a hectic business schedule with long hours of frequent travel.

“I am on the road 50 or 60 percent of the time. Each month, I am outside my hometown for 20 days,” he says. “My children have grown up with me spending a lot of time at work. But this is a world of Facebook, email and Skype. That’s what we do now,” he says.

What makes his day? Iyer answers professionally without a second of hesitation: “To satisfy a customer in a meeting.”

Then comes the personal bit: “Followed by a relaxing dinner with my wife.”

By jennifer@chinadailyhk.com 

Vish Iyer
President of Tata Consultancy Services (TCS), Asia Pacific

Career Milestones:
2010: Becomes president of TCS Asia Pacific
2008: Serves as CFO of global business operations at TCS
2006: Takes up post as head of corporate strategy at TCS
1996: Becomes director of corporate development at IBM Global Services
1991: Joins Tata Elxsi as executive vice-president

QUICK TAKES:
Hobbies:
Playing golf. The question is not how well you play but whether you enjoy the time. Whatever I do, I enjoy. It’s a great opportunity to meet people.
Business philosophy:
I always believe in ... simple communication with the customer and the employee. There is no point promising things that you cannot deliver. Whatever you promise, you deliver. Whatever you don’t deliver, you don’t promise.
If you were to do one thing differently in life?
I can’t think of one thing. I do things that I enjoy doing.
How to kill time on the road:
I spend a lot of time watching movies on the plane. My favorite stars are Jackie Chan and Amitabh Bachchan, who hosted India’s version of the game show Who Wants to Be a Millionaire?

Born: December 8 in a Year of the Snake

Engage maids directly instead of costly maid agencies in Malaysia

WHEN put in perspective, if a spouse in a Malaysian household resigns from her job as a substitute for a maid, with a conservative average monthly income of RM3,000, that is RM36,000 less on the household table.

Take into account 300,000 Indonesian maids that used to work here and you have a scenario, where families in this country will be forgoing RM11bil in potential household revenue.

It seems obvious that middlemen are trying to blatantly profit from the urgent need for maids.

On one side of the coin, you have Malaysian maid agencies who used to charge up to RM8,000 for securing a maid and when the Government announced a moratorium on fees chargeable, the Indonesia side immediately claimed the fee was too low (See article below).

Invariably, both the employer and the maid are the victims. In any employment sector, it is very unusual for a potential employee to pay a fee to be employed.

The argument for deductions put forth by maid agencies, that the deduction is for loans given to maids and for training, does not make sense.

Perhaps a holistic solution would be to allow Indonesian agents to open offices in Malaysia and work directly with Malaysian employers.

Create a maid training facility, where maids can arrive and be trained within a short period of 10 working days.

Such a facility can be co-sponsored by the Malaysian Govern­ment. All it should entail is 10 to 20 low- to medium-cost flats that can house 200 to 300 maids, with a common area that allows for training.

Concurrently, increase the maid’s salary to RM800 per month in lieu of any advance payment and no increase in the agent’s fee.

There should be no need for any advance payment with full payment to be made upon final selection, when the employer takes the maid home. Peg the agent’s fee at RM1,500, with reimbursements for other costs, from levy to travel, that must be substantiated with proper receipts.

This is similar to what is charged in Singapore.

The training programme should not cost more than RM1,500. Which means the total cost can be pegged between RM4,500 and RM5,000 at most.

Get agreement with the Indonesian government on the process for direct engagement with maids.

Maids should only be required to go through an orientation programme similar to Singapore’s SIP (Settling-In-Programme) for foreign domestic workers.

Maids should not be allowed to work for more than eight hours a day. If required to work overtime, they should be entitled to a minimum hourly rate of RM8 to RM10 per hour.

Create a toll-free number manned by agencies that will monitor the welfare of maids, to ensure their overall well-being at all times.

Souce: B. J. FERNANDEZ  Shah Alam, The Star views

Maid agencies: Fees are too low?

By YVONNE LIM  The Star

PETALING JAYA: Maid agencies are adamant that the RM4,511 fee imposed by the Government for Indonesian maids is too low, as the actual cost to recruit a maid is double the amount.

Many described the fee, which was agreed to in the Memorandum of Understanding (MoU) between Jakarta and Kuala Lumpur last year, as “impossible to meet” and said that they have been running at a loss while trying to comply with it.

An agency owner, who declined to be named, said that despite demand, his agency had stopped recruiting Indonesian maids as he would spend up to RM10,000.

He said the fees charged by Indonesian maid suppliers started at RM5,500 including training, medical check-up, transport and recruitment fees, as well as duit susu, which is a contribution paid to the families of the maids.

“If we are being charged RM5,500 per maid, how can you expect agencies to comply with a fee of RM4,511, especially now that the cost has gone up for everything, including air travel?” he asked.

He urged the Government to review the amount and consult both Indonesian and Malaysian agency representatives so that a more realistic fee could be set.

Malaysian employers had previously called for Papa to justify the increase in Indonesian maid fees by agencies by up to RM12,000 and asked for a breakdown of costs.

Some had also urged the association to pressure its members to comply with the agreed fee, saying that the high demand for maids would compensate for it.

A spokesman for another agency said her company was now charging RM9,800 per Indonesian maid.

“We have already lowered the fee, but we cannot do much as our Indonesian partners are charging close to RM6,000 per maid,” she said.

Association of Foreign Maid Agencies (Papa) president Jeffrey Foo said that prior to the morato-rium on maids from Indonesia, employers had no qualms about paying up to RM9,000 for domestic helpers.

“We voiced our disagreement on the RM4,511 fee when the Govern-ment consulted us as it is simply too low, and were shocked when they settled on that price in the MoU anyway,” he said.

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'China-threat theory' dismissed

 PHOTO: REUTERS/FILE 

COLOMBO: Chinese Defence Minister Liang Guanglie says Beijing's increasingly close ties with South Asia are aimed at ensuring regional "security and stability" and are not intended to harm any "third party".

Liang, the first Chinese defence minister to visit Sri Lanka, did not name India -- where he heads to Sunday -- but officials in New Delhi have expressed concerns about Beijing's influence in Sri Lanka, Bangladesh, Maldives, Nepal and Pakistan.

India fears it might be part of a Chinese policy to throw a "string of pearls" -- a circle of influence -- around regional rival India.

But in a speech released by Sri Lanka's military on Saturday, Liang said that China had only peaceful intentions in South Asia, while stressing that the Indian Ocean was an important supply route for his fast-developing country.

Beijing is seeking "harmonious co-existence and mutually beneficial and win-win cooperation" with countries in the region, he told a Sri Lankan army staff college on Thursday, according to a copy of the speech.

In New Delhi, the minister will be a guest of the defence ministry, an Indian government spokesman said, without giving details of what will be discussed.

India is warily eyeing growing Chinese clout in what New Delhi regards as its traditional sphere of influence.

Liang dismissed the "China-threat theory".

"Some people in the international community suspect that China would take the road of expansion with force and have been actively spreading the 'China-threat theory'," he said.

"The People's Liberation Army (China's armed forces) efforts in conducting friendly exchanges and cooperation with its counterparts in South Asian are intended for maintaining regional security and stability and not targeted at any third party," he added.

Liang said his trip to Colombo was aimed at further strengthening close ties with Sri Lanka, including military cooperation.

China is a key supplier of weapons to the Sri Lankan military, which in 2009 crushed the Tamil Tiger rebels and declared an end to 37 years of ethnic conflict that claimed up to 100,000 lives on the island, according to UN estimates.   – AFP

Respond calmly to 'China threat theory'

China has won acclaims for its significant economic and social achievements since the reform and opening-up, but at the same time it has been seen as a threat by many countries.

Conflict of interest, an underlying cause of "China threat theory"

The "China threat theory" is caused by the country's rapid growth in economic and military strength, and is bound to accompany the country's rise as a great power.

In the eyes of certain Western powers, China's rise poses a challenge to the traditional Western-led international order and geopolitical landscape. According to the history of capitalism's rise, the rise of all great powers was accompanied by the use of force and wars. For example, the rise of the United Kingdom, the United States, Germany, and Japan all followed the same old path of wealth accumulation, military buildup, and military expansion. Western international relations theories formed on this basis, be it the Western power shift theory or hegemony transfer theory, believe that China's rise will cause a shift of power among countries and break the existing international order, which will cause global instability and even wars.

Therefore, the real reason for Western countries to propagate the "China threat theory" is that they are afraid that China will challenge the existing international status when it becomes strong. The western countries hope to restrict the rise of China by means of the "China threat theory."

"China threat theory" has dual effect of containment and stimulation

In order to curb and interfere with China's development, the Western countries hype the new round of "China threat theory." However, the result is counterproductive. The "China threat theory" exaggerated by the Western countries for decades produced a dual effect of containment and stimulation.

On one hand, the "China threat theory" damaged the image of China and deterred the development pace of China. It deteriorated the surrounding environment of China to some extent and made China must face a more complex international environment and withstand more external pressure.

On the other hand, as an imposed power, the "China threat theory" strengthened China's sense of crisis and stimulated the rise and development of China. According to the "challenge-response" theory of British historian Arnold J. Toynbee, the organism will instinctively produce a series of effective responses in the face of challenges and ultimately promote its development.

Take a calm and initiative attitude in response to "China threat theory"

The "China threat theory" has become a preferred tool in the domestic politics of some countries, and has become a power discourse in the international community. Whenever some countries suffer from relevant domestic political issues, they often take the "China threat theory" as shields. For example, in the currently heated U.S. presidential election, the "China threat theory" is the stock in trade of the Obama administration. Facing the "China threat theory," we have to be calm and initiative, but also take the following effective methods.

Firstly, have a calm state of mind compatible with other dominant countries. Secondly, continue to promote and intensify international cooperation. Thirdly, actively build a favorable national image. Fourthly, unswervingly follow the road of peaceful development.

Therefore, the fundamental way to offset the negative effects of "China threat theory" is to vigorously develop China's national strength. Besides, we should concentrate on our own business so as to ride out the current critical period of development. By then, the "China threat theory" as a special historical symbol in China's development process will naturally fade.

Read the Chinese version at http://zqb.cyol.com/html/2012-04/06/nw.D110000zgqnb_20120406_1-09.htm

By Shi Qingren (China Youth Daily)