Northern Iraq’s budding Chinatown

As foreign investment increases in Iraqi Kurdistan, cultural boundaries are being broken.

1. Ling, from Anhui province in eastern China, has been managing the shop there for about six months after responding to a newspaper advertisement by a Chinese firm.
2. The Chinese market is in the newly opened Kawa Mall in Sulaimaniyah, Iraqi Kurdistan’s second city. Chinese people, outlets and a restaurant dominate the top two floors, which are reserved for firms from the world’s second biggest economy, of the Kurdish-owned shopping centre.
3. The majority of the approximately 500 Chinese in Sulaimaniyah, which has a municipal population of about 750,000, work in the mall. Chinese flags, lucky cats and paper lanterns make for an incongruous sight as locals in the widely pleated trousers, flayed suit jackets and turbans of Iraqi Kurdistan pass by.
4. Foreign investment is increasing in Iraqi Kurdistan. More than half of the 1,170 foreign firms investing there are Turkish, working in areas such as construction. Multinational firms are monitoring development of the area’s 43.7 billion barrels of proven oil and 25.5 billion barrels of potential reserves.
5. Funds from abroad are also making their way into retail in an attempt to exploit the consumer potential of the 4.7 million strong local population, of which more than half are under the age of 20.
6. International investment surpassed $14bn from mid-2006 to September 2010, unconfirmed official sources have said.
7. The Kurdistan Regional Government (KRG) is hoping the estimated 250,000 to 300,000 foreigners it has so far attracted to the region will help to enervate some of those deficiencies.

Asia Pacific Issues

1. The National Defence Programme Guideline has been approved by the cabinet and will shape Japan’s defence policy for the next 10 years
2. Japan is changing its defence policy in response to the shifting balance of power in Asia.
3. The guidelines say Japan is concerned by China’s growing military spending, modernisation of its armed forces, and increased naval assertiveness in the East China and South China seas.
4. Relations between Japan and China deteriorated sharply in September, after collisions between a Chinese trawler and Japanese patrol boats near a chain of disputed islands in the East China Sea.

Armed forces                   Japan                    China
Submarines                            18                          9
Destroyers                             41                         27
Fighters                                  310                  1,320
Battle tanks                            876                 9,840
Active personnel          237,000        2,255,000
Source: IHS Jane’s

1. The review paper added that it was necessary to reduce the burden on communities hosting US bases, including Okinawa.

Source: http://www.bbc.co.uk/news/world-asia-pacific-12015362

China to Lose Ally Against US Trade Hawks

The US business community can no longer resist political pressure for Washington to take a tougher stand against China on trade issues, according to a senior figure from the US Chamber of Commerce.

Myron Brilliant, senior vice-president for international affairs, who has previously helped to protect Beijing from hawkish trade policies, told the Financial Times: “I don’t think the Chinese government can count on the American business community to be able to push back and block action [on Capitol Hill].”

Speaking on the eve of a trip to Beijing, where he will meet senior Chinese officials, Mr Brilliant added: “Certainly the chamber remains a bridge in support of the relationship but it is a difficult time to keep the wolves at bay. China shouldn’t take the American business community for granted.”

Mr Brilliant said corporate America’s attitude had changed in response to a range of “industrial policies” pursued by Beijing, including the undervaluation of the renminbi, which made it harder for US companies to do business and compete with China. He also cited the tough economic times in the US – particularly the near 10 per cent jobless rate – as making it more difficult to argue against tough action on China.

The political heat in the US surrounding China’s currency policy increased last week when a group of Democrats and Republicans in the House of Representatives urged the Treasury to describe China as a “currency manipulator” in its report due in April. This move could be followed by sanctions. In addition, lawmakers from both parties in the Senate last week proposed legislation designed to force China to allow the renminbi to appreciate.

Mr Brilliant said it was too early for the chamber to take a position on the recently unveiled Senate proposal. However, he did say the chamber understood the “frustration” of lawmakers. “We concur that this is a growing problem,” he said, while adding: “I don’t believe in an eye-for-an-eye. I don’t believe that protectionism should be met with protectionism.”

In the 1990s, Mr Brilliant helped lead the chamber’s lobbying efforts in favour of China’s accession to the World Trade Organisation, persuading thousands of companies to push for its inclusion in the global trading system. “I don’t think I could pull that coalition together now. Part of it is that China is not playing by the same rules”

Meanwhile, China vowed again on Sunday to resist pressure for a renminbi revaluation and threatened to retaliate if the US imposed trade sanctions.

Speaking as Beijing sent a senior official to Washington to ease trade frictions, Chen Deming, commerce minister, said China would “not turn a blind eye” if it was labelled a manipulator by the US Treasury. Mr Chen said if the US falsely called China a manipulator for domestic political reasons, and sanctions followed: “We will not do nothing. We will also respond if this means litigation under the global legal framework.”

He added adjusting the value of the renminbi would not solve global trade imbalances, predicting that China could see its trade balance turn to deficit in March.

Copyright The Financial Times Limited 2010.

By James Politi in Washington and Patti Waldmeir in Shanghai

The Financial Times

Published: March 21 2010 19:28 | Last updated: March 21 2010 19:28