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China steps up Afghan role as Western pullout nears

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By Sanjeev Miglani
KABUL – Sun Jun 3, 2012 3:38am EDT

(Reuters) – China and Afghanistan will sign an agreement in the coming days that strategically deepens their ties, Afghan officials say, the strongest signal yet that Beijing wants a role beyond economic partnership as Western forces prepare to leave the country.

China has kept a low political profile through much of the decade-long international effort to stabilize Afghanistan, choosing instead to pursue an economic agenda, including locking in future supply from Afghanistan’s untapped mineral resources.

As the U.S.-led coalition winds up military engagement and hands over security to local forces, Beijing, along with regional powers, is gradually stepping up involvement in an area that remains at risk from being overrun by Islamist insurgents.

Chinese President Hu Jintao and his Afghan counterpart Hamid Karzai will hold talks on the sidelines of the Shanghai Cooperation Organisation summit in Beijing this week, where they will seal a wide-ranging pact governing their ties, including security cooperation.

Afghanistan has signed a series of strategic partnership agreements including with the United States, India and Britain among others in recent months, described by one Afghan official as taking out “insurance cover” for the period after the end of 2014 when foreign troops leave.

“The president of Afghanistan will be meeting the president of China in Beijing and what will happen is the elevation of our existing, solid relationship to a new level, to a strategic level,” Janan Musazai, a spokesman for the Afghan foreign ministry, told Reuters.

“It would certainly cover a broad spectrum which includes cooperation in the security sector, a very significant involvement in the economic sector, and the cultural field.”

He declined to give details about security cooperation, but Andrew Small, an expert on China at the European Marshall Fund who has tracked its ties with South Asia, said the training of security forces was one possibility.

China has signaled it will not contribute to a multilateral fund to sustain the Afghan national security forces – estimated to cost $4.1 billion per year after 2014 – but it could directly train Afghan soldiers, Small said.

“They’re concerned that there is going to be a security vacuum and they’re concerned about how the neighbors will behave,” he said.

Beijing has been running a small program with Afghan law enforcement officials, focused on counter-narcotics and involving visits to China’s restive Xinjiang province, whose western tip touches the Afghan border.

Training of Afghan forces is expected to be modest, and nowhere near the scale of the Western effort to bring them up to speed, or even India’s role in which small groups of officers are trained at military institutions in India.

China wants to play a more active role, but it will weigh the sensitivities of neighboring nations in a troubled corner of the world, said Zhang Li, a professor of South Asian studies at Sichuan University who has been studying the future of Sino-Afghan ties.

“I don’t think that the U.S. withdrawal also means a Chinese withdrawal, but especially in security affairs in Afghanistan, China will remain low-key and cautious,” he said. “China wants to play more of a role there, but each option in doing that will be assessed carefully before any steps are taken.”

JOSTLING FOR INFLUENCE

Afghanistan’s immediate neighbors Iran and Pakistan, but also nearby India and Russia, have all jostled for influence in the country at the crossroads of Central and South Asia, and many expect the competition to heat up after 2014.

India has poured aid into Afghanistan and like China has invested in its mineral sector, committing billions of dollars to develop iron ore deposits, as well as build a steel plant and other infrastructure.

It worries about a Taliban resurgence and the threat to its own security from Pakistan-based militants operating from the region.

Pakistan, which is accused of having close ties with the Taliban, has repeatedly complained about India’s expanding role in Afghanistan, seeing Indian moves as a plot to encircle it.

“India-Pakistan proxy fighting is one of the main worries,” said Small.

In February, China hosted a trilateral dialogue involving officials from Pakistan and Afghanistan to discuss efforts to seek reconciliation with the Taliban.

It was first time Beijing involved itself directly and openly in efforts to stabilize Afghanistan.

Afghan foreign ministry spokesman Musazai said Kabul supported any effort to bring peace in the country. “China has close ties with Afghanistan. It also has very close ties with Pakistan and if it can help advance the vision of peace and stability in Afghanistan we welcome it.”

(Additional reporting by Chris Buckley in BEIJING; Editing by Daniel Magnowski)

China: Guidelines welcome foreign money

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Government officials and experts said the new guidelines are in keeping with proposals contained in China’s 12th Five-Year Plan (2011-2015), which seeks to lay the foundations for a more innovative and greener economy. [Photo / China Daily]
 Updated: 2011-12-30 09:03
By Ding Qingfen and Lan Lan (China Daily)

Ministry opens more industries to investment from overseas

BEIJING – China will encourage foreign companies to invest more in domestic industries to further make good on the country’s commitment to open its economy, according to guidelines released on Thursday.

In a new version of the Foreign Direct Investment Industry Guidelines (2011), the Chinese government is encouraging foreign investors to put money into advanced manufacturing, the service industry and certain business concerned with energy conservation, advanced technology, renewable sources of energy, new materials and advanced-equipment manufacturing.

Government officials and experts said the new guidelines are in keeping with proposals contained in China’s 12th Five-Year Plan (2011-2015), which seeks to lay the foundation for a more innovative and greener economy.

On Thursday, the Ministry of Commerce and the National Development and Reform Commission (NDRC) issued the guidelines, which will replace a previous version of the rules that was published in 2007. They are expected to come into force on January 30.

Compared with the 2007 version, the new guidelines encourage foreign companies to invest in a greater number of industries and reduce the number of industries that are off limits to such investment.

“The new version indicates China’s strong commitment to opening its market wider,” said Wang Zhile, director of the ministry’s research center for transnational cooperation. “It’s absolutely a positive signal.”

In the new guidelines, the Chinese government will encourage foreign enterprises to invest in new technology and equipment for the textile, chemicals and machinery-manufacturing industries.

The guidelines also call for the encouragement of investment into nine service industries. Among them are those concerned with charging electric vehicles and swapping their batteries, protecting intellectual property rights, cleaning up offshore oil pollution and vocational training.

China will also allow foreign companies to invest in medical institutes and various other industries that were previously off limits to them.

Dirk Moens, secretary general of the European Union Chamber of Commerce in China, said foreign investors are likely to take heed of the government’s investment guidelines.

This “will indeed facilitate decision-making for foreign investors thinking of coming to China”, Moens said.

Kong Linglong, director-general of the National Development and Reform Commission’s department of foreign capital and overseas investment, had similar thoughts.

“Looking at the changes in the new version, we can tell the way in which the Chinese government would like to transform its industrial structure,” Kong said.

“And another message is that China is now placing more value on the quality of foreign investments rather than their scale.”

The government will also prevent foreign companies from building or operating refineries that have the capacity to distill fewer than 200,000 barrels of crude oil a day. That is up from the previous limit of 160,000 barrels a day.

China, meanwhile, has removed industries from the list of those it encourages foreign companies to invest in. No longer part of that group are automakers, large coal-to-chemical operations and manufacturers of polycrystalline silicon.

“The restrictions generally apply to industries that have excessively large capacities and that pollute the environment,” said Zhang Xiaoji, senior researcher at State Council’s development research center.

“But they will probably be a source of their (foreign companies’) complaints about transparency in China’s market for foreign investment. To alleviate their concerns, China should try to provide detailed information about what will be restricted.”

China issued the first version of its guidelines governing foreign direct investment in 1995. They are now amended every four years.

China released a draft version of the new guidelines in early April, seeking the public’s suggestions and comments.

“We have made reasonable changes in response to foreign companies’ opinions,” Kong said. For instance, the draft version said foreign investors could take no more than a 50-percent stake in joint ventures that produce all of the chief components needed in new-energy vehicles, a proposal that led to heated discussions in the auto industry.

The final version changed the stipulation about “all chief components” to one that only concerns “fuel cell batteries”.

Giving a keynote speech in December at a celebration ceremony for the 10th anniversary of China’s entry into the World Trade Organization, President Hu Jintao said China will continuously open its economy to the world. He said that is especially true for industries concerned with advanced manufacturing, strategic emerging industries, services, agriculture and modern culture.

In April, China issued a directive that encouraged more investment in the high-tech, renewable energy and service industries, and for more attention to be paid to the country’s western and central regions. The directive marked a turning point in China’s policies concerning foreign direct investment.

China is now the second-largest destination for such investment in the world and the largest among developing economies. In 2010, the value of foreign direct investment into China hit a record high, increasing to $105.74 billion, a rise of 17.4 percent from the year before. In 2009, it decreased by 2.6 percent.

From January to November, the value of China’s foreign direct investment increased by 13.15 percent from the same period the year before, reaching $103.77 billion.

Source

China getting ready for war, alerts Navy

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Posted by Mohan Ramraj on December 9, 2011

Beijing, Dec 8 (TruthDive): Chinese President Hu Jintao has asked the Chinese navy to get ready for war as regional tensions over maritime disputes were on the increase in recent times. His call also came in the wake of a campaign portraying U.S as a Pacific power.

The Navy should “accelerate its transformation and modernization in a sturdy way, and make extended preparations for military combat in order to make greater contributions to safeguard national security,” he said.

In an address to the Central Military Commission, Hu said: “Our work must closely encircle the main theme of national defense and military building.”

His comments, which were posted in a statement on a government website, come as the United States and Beijing’s neighbors have expressed concerns over its naval ambitions, particularly in the South China Sea.

The whole of the fight is for the South China Sea, which accounts for one-third of the global sea-trade, also believed to have huge oil and gas reserves. Many countries accused China’s move to build tension over there.

The country’s official news agency quoted the President as saying China’s Navy should “make extended preparations for warfare.”

The U.S carefully responded acknowledging its right to develop its military and called for transparency.

“They have a right to develop military capabilities and to plan, just as we do,” said Pentagon spokesman George Little, but he added, “We have repeatedly called for transparency from the Chinese and that’s part of the relationship we’re continuing to build with the Chinese military.”

“Nobody’s looking for a scrap here,” insisted another spokesman, Admiral John Kirby. “Certainly we wouldn’t begrudge any other nation the opportunity, the right to develop naval forces to be ready.Our naval forces are ready and they’ll stay ready.”

State Department spokesman Mark Toner said: “We want to see stronger military-to-military ties with China and we want to see greater transparency. That helps answer questions we might have about Chinese intentions.”

It is very obvious that the Chinese Premier’s call came in the wake of several American top officials’ visit to Asian countries including President Barack Obama, Defense Secretary Leon Panetta and Secretary of State Hillary Clinton.

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