Cambodia Benefits From Internationalizing Border Clashes

The situation of clashes at the Thai-Cambodian border in Surin is still very worrying. Both sides rushed to build up troops and transport heavy weapons to build up bases for launching full attacks. The bases have been built along over 15-km-long borderline from Ta Khwai Temple to Ta Muean Thom Temple.
Cambodia has deployed troops from the Special Taskforce 91, which is under direct command of Major General Hun Manet, favorite son of Cambodian Prime Minister Hun Sen.
Main Reason
I believe Hun Manet wants to show and prove his fighting skill to the Cambodian people. This was the main reason that the Cambodian troops crossed the border to try to seize the Ta Khwai Temple three times but they were bombarded by troops from the Second Army Region, causing them to flee back.
It should be noted that when the Thai and Cambodian troops bombarding each other with artillery, Vietnamese Prime Minister Nguyen Tan Dung made two-day visit to Phnom Penh as a special guest of Hun Sen.
I believe Hun Sen and Vietnamese Prime Minister Nguyen Tan Dung, who is a great ally of Cambodia, definitely held a closed-door meeting to discuss the Thai-Cambodian border clashes.
What should be monitored is whether Hun Sen would seek military help from Vietnam if the fighting drags on. It should also be monitored how Vietnam, which is a member of Association of South East Asian Nations (ASEAN), will play its role regarding to this problem.
So far, what has become certain is that the Thai-Cambodian border clashes have been internationalized and sent to the United Nations very fast.
Maintaining Cease-Fire
UN Secretary General Ban Ki-moon issued a statement, demanding the two countries to stop using force to attack each other. The UN secretary general also called on the two countries to exercise restraint, so that they could hold negotiations to sustainedly solve the problem.
The UN secretary general also called on the two countries to come up with measures for effectively maintaining cease-fire, which should be verified immediately.
I see that the stand of the UN secretary general and ASEAN chairman, who called on the two countries to cease-fire and call for a measure for verifying ceasefire immediately, went along with the wish of Hun Sen.
Hun Sen wants third countries to get involved in the conflicts between Thailand and Cambodia.
This is a main problem that Prime Minister Yingluck Shinawatra must rush to solve.
As a result, Yingluck has made preparations to seek a talk with Hun Sen during an ASEAN Summit in Indonesia early May.
Negative Impacts
Yingluck raised a condition that such a talk must be a bilateral one without participation of any other country or organization.
The use of heavy weapons to bombard each other by the two countries has caused several negative impacts as following:
1. The longer the fight continues, the more casualties of troops of the two countries will happen. Although more Cambodian troops were killed than Thai troops, it was not an issue that we should rejoice.
2. The longer the clashes continue, the more budget will be spent.
3. Now that the situation in the bilateral ties has been under much tension, the hope has become diminished for two Thais, who have been detained by Cambodia on spying charges, to be released and sent back to Thailand.
4. More than 40,000 people in Surin and Buri Ram, including children and aged people, had to be evacuated and had to leave their homes and farmlands behind.
5. The border clashed prevented peoples living along the borderline from visiting each other like what they could do in the past.
6. The protracted fight will damage the border trades.
All in all, the border clashes had tremendous negative impacts.
Only a group of people do not care about the ongoing fighting.
They are Thai gamblers who continued to cross the border to gamble in casinos in Poipet.
As long as the casinos in Poipet are still open, the Thai gamblers will be willing to cross the border to fight against the casinos' owners.
And they will always return home empty-handed.

17th SAARC Summit

Founded in 1985, the South Asian Association for Regional Cooperation (SAARC) is an organization of eight South Asian nations, namely: Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan. The bilateral meetings tend to overshadow SAARC, much to the annoyance of the region’s smaller countries like the Maldives, the summit is largely India’s show. The Ministry of External Affairs’ spin doctors would like to project SAARC as a success beyond expectations. Some may even have the gumption of comparing it with ASEAN (Association of South East Asian Nations) grouping and the European Union (EU), claiming that what SAARC has achieved in its 26th year of its existence has been done at a faster pace in many sectors than what the other two economic biggies have been able to achieve.
The truth is that SAARC has so far been moderate in its accomplishments. But significantly it is now finally ready to take off and become a major economic grouping. Or, to put it even more dramatically, SAARC is an idea whose time has finally arrived. That is indicated by the fact that there are now nine countries that have been given ‘Observer” status at the current summit in Maldives outnumbering the number of member countries. These are the United States, Australia, China, the EU, Iran, Japan, South Korea, Mauritius, and Myanmar. That is a good sign as many of these countries had written off SAARC regarding it as a lost cause.
The fact is that India’s neighborhood is in a better shape than it has been for many years. Nepal appears back on track, restive Bangladesh has got its economy going, Sri Lanka has finally ended years of civil war and Pakistan, despite internal strife, wants to bring its economy back in shape. In all the eight SAARC countries, democracy has emerged though in Afghanistan, Nepal and Bhutan it may still be nascent.
Heads of states and delegates to the 17th SAARC met at the two-day summit in Addu City (the Maldives) on 10-11 November.
Focal Theme
The focal theme of the Maldives Summit was: "Building Bridges – both in terms of physical connectivity and figurative political dialogue." This eloquently summarizes the imperative of greater regional integration, and is an objective to which India is fully committed. One such initiative taken in 2010 was the launch of the South Asia Forum that has brought together eminent South Asians from different walks of life about the future cooperation in South Asia.
Chairman of 17th SAARC Summit was Maldivian President Mohamed Nasheed.
Joint Declaration
At the end of the summit, leaders adopted Addu Declaration, which reaffirms their commitment to peace, confidence building, liberty, human dignity, democracy, mutual respect, good governance and human rights. The declaration reviews their commitment to alleviate poverty and reduce income inequalities within the societies and reaffirms their resolve to improve quality of life and well-being of their people through people-centered sustainable development.
In the declaration, SAARC member states show their concerns about the continuing threat of terrorism in all its forms and manifestations, transnational organized crimes, especially illegal trafficking in narcotic drugs and psychotropic substances, trafficking in persons and small arms and increased incidents of maritime piracy in the region; and reiterating their resolve to fight all such menaces.
The declaration states that the countries are aware the environmental degradation and particular vulnerabilities of the region to the threat of climate change and recognize the need to further strengthen the institutional mechanisms of SAARC to bolster and enhance regional cooperation.
Foreign ministers from SAARC member countries have signed the agreements on Rapid Response to Natural Disasters, Multilateral Arrangement on Recognition of Confirmity Assessment, Implementation of Regional Standards and Seed Bank.
The Maldives Summit agreed to conclude the Regional Railways Agreement and convene the Expert Group Meeting on Motor Vehicles Agreement before the next Council of Ministers.
Highlights of Addu Declaration
Intensify efforts to fully and effectively implement the South Asian Free Trade Areas (SAFTA) agreement and work on reduction in Sensitive Lists as well as early resolution of non-tariff barriers and expediting the process of harmonizing standards and customs procedures.
* Direct SAARC Finance Ministers to chart a proposal that would allow for greater flow of financial capital and intra-regional long-term investment.
* Conclude the Regional Railways Agreement and convene the Expert Group Meeting on the Motor Vehicles Agreement before the next Session.
* Ensure completion of the preparatory work on the Indian Ocean Cargo and Passenger Ferry Service, including the Feasibility Study, by the end of 2011.
* Direct the conclusion of the Inter-governmental Framework Agreement for Energy Cooperation and the Study on the Regional Power Exchange Concept as also the work related to SAARC Market for Electricity.
Security and Other Issues
The leaders of the Maldives Summit agreed to establish a South Asian Postal Union.
On security issues, Nasheed said the SAARC leaders have reached an agreement on the Rapid Response to Natural Disasters and agreed to initiate work on combating maritime piracy in the region.
SAARC countries have agreed that they will spend an appropriate proportion of their national income on renewable energy technologies, subject to approval of national arrangements. They have agreed to convene an expert group meeting to discuss a regional mechanism to empowerment of women and promote gender equality in the region.
The SAARC leaders decided to promote communication between SAARC countries. SAARC secretary general has been instructed to ensure the final preparations for the Indian Ocean Cargo and Passenger Ferry Service are completed this year.
They agreed to direct the finance ministers to chart a proposal to allow more financial flows and investments.
India’s Point
Indian Prime Minister Manmohan Singh pledged to promote fair trade in the region. He spoke positively of the progress made in SAARC terming it as "impressive" and pointed out that many sectors including trade, transport, health and education have benefited from it.
He said: "Our summit is taking place at a time when the West is having an economic crisis. In the meantime developing countries like ours will be squeezed for capital and markets and we should look for innovative solutions within South Asian region."
The 18th SAARC Summit will be held in Nepal.

India-South Korea Civil Nuclear Cooperation Pact

India and South Korea signed a “historic” civil nuclear cooperation agreement on 25 July, paving the way for the possibility of Seoul exporting its atomic power plants. South Korea has now become the ninth country which had signed nuclear agreement with India after it got the waiver from the Nuclear Suppliers’ Group (NSG) in 2008. The other countries are the United States, France, Russia, Canada, Mongolia, Kazakhstan, Argentina and Namibia.
The agreement, signed after summit talks between President Pratibha Patil and her South Korean counterpart Lee Myung-bak, provides legal ground for South Korea’s participation in atomic power plant construction projects in India. It is like other civil nuclear agreements signed between India and other countries.
Historic Agreement
Lee termed the nuclear cooperation agreement as “historic” and will act as “a milestone, demonstrating that our two countries have now truly become strategic partners.”
During the talks, Lee called for support for South Korea's efforts to make inroads into India's atomic power plant market, the statement said.
India is currently building six nuclear power plants and plans to construct around 40 more by 2032, while South Korea seeks to become a major exporter of its home-built nuclear power plants.
The state-run Korea Electric Power Corporation (KEPCO) signed a memorandum of understanding in 2009 with the Nuclear Power Corporation of India Limited.
Peaceful Uses of Nuclear Energy
South Korea has now become the ninth country which had signed nuclear agreement with India after it got the waiver from the Nuclear Suppliers’ Group (NSG) in 2008. The other countries are the US, France, Russia, Canada, Mongolia, Kazakhstan, Argentina and Namibia. The two countries have just concluded and signed a bilateral agreement on cooperation in the peaceful uses of nuclear energy.

Both India and South Korea decided to start talks on civil nuclear cooperation during a meeting between Prime Minister Manmohan Singh and Lee on the sidelines of the ASEAN Summit in Hanoi in October 2010.

The nuclear agreement was signed by Dr Srikumar Banerjee, Secretary Department of Atomic Energy and Kim Sung Hwan, Foreign Minister of the Republic of Korea.

Earlier, Patil and her South Korean counterpart Lee held a 20-minute restrictive meeting followed by delegation-level talks for over an hour at the ‘Blue House’, official residence of the Korean President. Patil is on a week-long tour of Korea and Mongolia.

Opportunities Emerging From New Economic Avenues
In addition to the agreement on nuclear cooperation, the two sides also signed Memoranda of Understanding (MoUs) on media exchanges and another agreement on administrative arrangements to provide social security to people working in India and Korea.
Speaking at a banquet hosted by Lee in her honor, Patil said India would work with South Korea to enhance trade relations and tap investments opportunities emerging from new economic avenues.
She also called for greater people-to-people contacts between the two countries and cooperation in the UN.
Korean President Lee expressed hope that Patil’s visit will give a fillip to bilateral ties. “I firmly believe that Your Excellency’s visit will generate further momentum for the deepening of our cooperation,” he said.
Both presidents agreed to encourage greater people-to-people exchanges and stressed to start more direct flights between India and South Korea.
Forging Bilateral Ties
The pact provides legal ground for South Korea’s participation in atomic power plant construction projects in India
The two sides also signed MoUs on media exchanges and on administrative arrangements to provide social security to people working in India and Korea

Aphisit's Election Defeat Serves as Lesson for Thai Regional Leaders

The use of violence, social injustice, and suppression of freedom of expression may protect the politicians' power only for a short time frame. But this power will eventually be from society in which the people are increasingly participating in politics. This is what is manifested in the latest Thai elections, which should serve as a good lesson for political leaders in the neighboring countries and the world so as to make them govern in a way that increasingly serves the people's interests.
Impact of Red-Shirt Movement
Aphisit Vejjajiva took office as the Thailand's prime minister in 2008 with the support from the yellow-shirt group, military, and people at the powerful royal palace. His power was threatened many times because of the huge demonstrations by the red-shirt group close to Thaksin Shinawatra. Bloody crackdown was the choice of the military and government that was then led by Aphisit. The crackdown enabled him to be in power until now.
Although this allowed him to hold the prime ministerial position for two years, it did not make his position long lasting. Thai people have taught him about the importance of democracy; reminding him that they need a leader with more broadmindedness than him in terms of freedom and economic policies.
Disgraceful Political Record
The 3 July elections in Thailand have booted Aphisit out of his controversial prime ministerial position. The election results show that Pheu Thai Party has won 265 seats, which is more than enough to set up a government led by the first female prime minister, Yinglak, Thaksin's youngest sister, in the history of Thailand. Aphisit has conceded the defeat in the elections. He will leave his prime ministerial office with his disgraceful political record. Aphisit will remember that as a prime minister he has caused bloodshed in Thailand and endangered democracy.
People will remember him in a bad way rather than a good one. To be fair for him, he will at least not be remembered as a person who clings on to power as he was willing to have the elections on 3 July.
Responsibility and Transparency
Aphisit will not be able to meet the leaders of the Association of South East Asian Nations (ASEAN) members and other countries' leaders. But he has left behind a good lesson for leaders in both the region and the world. Leaders should remember that in democracy it requires to have a leader who takes utmost care of their people and pay attention to their freedom. Crackdown, suppression of freedom of expression, and oppression of all types are not a good way to govern a country or maintain their power for a long time. Instead, they should lead a country with responsibility and transparency by designing pro-poor policies, which is a good choice for leading the country with full support from the people. Any failure to do so will lead to political defeat.

First China-US Meeting on Asia-Pacific Region

China and the United States held their first round of consultations on Asia-Pacific in Hawaii on 25 June, which was hailed by both sides as positive and beneficial. The one-day closed-door consultations were co-chaired by Chinese Vice Foreign Minister Cui Tiankai and US Assistant Secretary of State Kurt Campbell.
Friendly, Candid and Constructive
Calling the consultations "friendly, candid and constructive," Cui said it was the outcome of the third round of the China-US Strategic and Economic Dialogue (S&ED) held in May to implement the consensus reached by Chinese President Hu Jintao and his US counterpart Barack Obama during Hu's visit to the United States in January.
The two sides praised the progress made in bilateral ties since President Hu's visit, stressing that they would continue to boost China-US cooperative partnership as envisioned by the two heads of state, Cui told reporters after the talks.
Region and Regional Issues
They also had in-depth exchange of views on the general situation of the Asia-Pacific, their respective policies on the region and regional issues of common concern, Cui said. The two sides agreed to use the consultation mechanism as a platform to keep close contacts and coordination on the regional situation and respective policies to advance bilateral cooperation in the Asia-Pacific and play an active role in safeguarding regional peace, stability and prosperity.
The two countries held "open and frank" discussions with his Chinese counterpart, with the goal of "attaining better understanding of each other's intentions, policies and actions toward the Asia-Pacific region. The United States reiterated that it welcomes a strong, prosperous and successful China to play a greater role in regional and world affairs.
China and the United States discussed issues related to the Asia-Pacific, as well as each other's objectives at a series of meetings, including the Association of South East Asian Nationa (ASEAN) regional forum, Asia Pacific Economic Cooperation (APEC) leaders meeting to be held in Hawaii, the Pacific Islands Forum and East Asian Summit. It was also agreed that the next round of China-US consultations on Asia-Pacific will be held "at a mutually convenient time."
Established during the third round of the S&ED on May 9-10 in Washington, the mechanism of China-US consultations on Asia-Pacific was an important step to materialize the achievements of President Hu's US tour in January as well as the consensus reached between the two countries at the latest round of the S&ED.

The creation of the mechanism would help usher in a pattern of positive interaction between China and the United States in the Asia-Pacific region so that the two countries could cooperate better to boost the region's stability and development.

Military Impact of South China Sea Dispute on ASEAN Countries

Some international strategist has said that if ever there is any large-scale war happened in this world again, then it is likely that such a war will happen in the South China Sea. But not many people believe it and said it is an exaggerated prediction.
In the past, the Southeast Asian region could still be considered as a peaceful region and the South China Sea is still considered as a calm and quiet piece of ocean.
Sovereignty of Islands and Maritime Boundaries
Although there are some small islands and some small reefs in the South China Sea whose territorial rights and maritime boundaries no country can clearly define, but countries, including China, Taiwan, Vietnam, the Philippines, Malaysia, Indonesia, and Brunei have all come forward to claim the 'sovereignty' of these islands and maritime boundaries and in wanting to protect such maritime territorial rights.
Nevertheless, in 2002, the countries involved in the sovereignty disputes of islands in the South China Sea have at least reached an agreement to say that no country should use military power as a solution to end the dispute of the territorial rights to these islands. These countries also said they would jointly develop the marine resources in the South China Sea.
New Challenge
Under the premise of 'peaceful development,' although all countries involved in the sovereignty disputes over the islands in the South China Sea are unwilling to give up their 'sovereignty' on these islands, but they also do not want to involve in some kind of conflict or confrontation with one another. As such, in the past years, countries involved in the South China Sea conflicts could still basically keep peace with one another.
But the situation in the South China Sea has since changed. Facing new challenge and new impact, the balance of peace achieved by these countries in the past might eventually lose the needed balance of peaceful coexistence.
In the first place, the world natural resources are getting less and less. As such, to each and every nation, natural resources have also become more and more precious to them. For countries to sustain and advance in economic development, they have to depend on new energy resources to sustain their economic growth. Since the South China Sea is rich in oil and gas resources, countries surrounding the South China Sea can no longer control or hide their desire in wanting to carry out their respective oil exploration projects in wanting to extract the rich oil and gas resources in South China Sea instead of waiting for the day when all can jointly develop the rich natural resources there as agreed upon earlier.
Second, in the past, the national strength and ability of countries surrounding the South China Sea were limited. These countries did not have the strength to handle their respective domestic affairs let alone extending their national power to the far away ocean.
However, today, China's rapid economic growth has driven its military expansion. In addition to adding warships, fighter jets, submarines, missiles, China has also added aircraft carrier to its list of military equipment making it a major sea power. Making effort to strengthen its military force, China's sense of fighting spirit has also been uplifted. The voice of China's domestic hawkish camp is on the rise as day goes by. To China's hawkish group, the South China Sea is but an inland sea belonging to China and as such the South China Sea must be under the control of China.
Earlier this year, when China launched a massive military exercise in the South China Sea, the countries in the Southeast Asian region have already shown their concern over such a massive military exercise carried out by China.
The Association of South East Asian Nations (ASEAN) countries have indeed felt the pressure of the expanded military power of China. In response, all ASEAN countries also began to increase their respective military budget, to purchase more military equipment and weapons. They begin to carry out military procurement race.
In the end, the original consensus to maintain peace and balance of power in the South China Sea region has entered a state of precarious balance with new friction emerging in the South China Sea water one after another.
Long-Embedded Confrontation
In May 2011, some patrol officers from China's patrol ship forcibly cut broken the cables of Vietnam's oil exploration ship. This incident has triggered serious argument between Vietnam and China and led the two sides entering a deadlock argument over such maritime conflict in the South China Sea. After the confronting incident between the vessels from the two countries, the Chinese and Vietnamese Governments have also begun to accuse the other side for provocation and for creating issue with each other. The incident has also set off protests from the civil society in both the countries.
Of note is that between China and Vietnam, these two countries have long-embedded confrontational and rival sentiment toward each other. For a long period in the past, Vietnam and China have considered each other as potential adversaries. As such, once these two countries come out with any kind of conflict and dispute, it can easily get out of control.
For this reason, the2002 consensus agreed upon by countries in the South China Sea region in not wanting to use military means to resolve the sovereignty dispute in the South China Sea might come out with possible variables.
Significant Military Influence
However, because of the military strength of ASEAN countries can never match that of China's military power, ASEAN countries understand that they cannot engage in direct military confrontation with China.
The present situation in the South China Sea is conducive to US intervention. After the United States withdrew its major military base in the Philippines, the United States has lost significant military influence in the Southeast Asian region. But today, due to the shift in global geopolitical environment, major powers have again reexamined the strategic importance of this part of the world. In this regard, Vietnam, the Philippines and Singapore are countries that have expressed their positive desire to welcome the reentering of US military power to the South China Sea.
In the coming days, the United States and China are bound to twist their military arms to compete with each other in the South China Sea. In the end, what smaller countries surrounding the South China Sea can do in addition to taking or choosing sides to move closer either toward China and the United States, is, to hope for the best.

Possibility of China-Vietnam War

In late 1970s, at the discretion of Deng Xiaoping, China decided to punish and wage a war of "self-defense and counter attack" against Vietnam. The close decades-long comradeship and brotherhood between the two countries were severed following the war.
The war that lasted for a decade had cast a gloom over the relations between China and Vietnam. The gloom has prevailed despite the steady development of the China-Vietnam ties. Tension has arisen recently between the two countries due to their divergent views and stands on the issue of the territorial dispute in the South China Sea. Moreover, some quarters with ulterior motives have tried to sow discord between them. We cannot help to worry that conflicts may erupt again between these two neighbors.
Safeguarding Territorial Integrity
A demonstration, something that is barely seen in Vietnam, was staged in the country's capital Hanoi recently. More than 300 took the streets to protest against Beijing on the issue of the South China Sea. In addition, the Vietnamese Ministry of Foreign Affairs proclaimed that the Vietnamese navy will take all necessary measures to safeguard the independence, autonomy, and territorial integrity of Vietnam. Not to be outdone, China responded through an editorial in the Huan Qiu Shi Bao [or Global Times], a paper under the government's mouthpiece The People's Daily: "It is impossible for China to practice limitless self-restraint. If Vietnam assumes that it can take China's tolerance for granted like the salt in the South China Sea, it is undoubtedly a strategic misjudgment... If Vietnam thinks it can take all necessary measures, feel free to try."
Such strong wording sounds similar with the statement of Deng Xiaoping before he announced the decision to "teach Vietnam a lesson". Commenting on Vietnam's "intrusion", Deng said then: "I am afraid all other methods are not effective, if we do not teach them a necessary lesson." His statement manifested China's determination to fight back even if it meant they had to go to war. And Deng had walked his talk then.
Declaration of Conduct of Parties
Beijing would strive to adhere to the "keeping low profile" policy advocated by Deng, which means it will continue to practice self-restraint and seek consensus through negotiation if any conflict arises, or to the least extent, it will seek to maintain the status quo. For instance, the signing of the Declaration of Conduct of Parties in the South China Sea with Association of South East Asian Nations (ASEAN) countries many years ago. Yet, at the same time, China will also ensure its territorial integrity and would not tolerate if any country tries to cross the line. No country should assume China is weak. Beijing could afford to deploy its troops to teach Vietnam a lesson even when the country was having a very hard time 32 years ago, let alone today, when the country is a lot stronger.
It is a test to the wisdom of leaders in Beijing and other relevant quarters as to how they could peacefully resolve the South China Sea dispute without a war. The only thing we are sure is, any provocative action such as sending vessels for oil and gas exploration will only pour oil on the flames and exacerbate this explosive issue of the South China Sea.

US Stirs More Storms To South China Sea Conflicts

Since March 2011, both Vietnam and the Philippines have engaged in several rounds of arguments with China over the sovereignty disputes of islands in the South China Sea. These conflicts have led to a sudden increase of tension in the South China Sea. More recently, Vietnam has even come out with official protest against China, making claim that China has dispatched its warships to interfere with a Vietnamese ship's oil exploration work in the South China Sea, cutting and damaging the ship's undersea oil probing cable.
However, the Philippines also accused China for invading the Philippines' territorial waters as many as seven times within this year. Moreover, the Manila Government also claimed that since its protest against China's invasion of its territorial waters could not be resolved, it has now decided to appeal the case to the United Nations. Yet China's response to the Philippines was that China's vessels were sailing along its own territorial waters. China claimed it did not violate any other country's territorial rights at all.
Dispute Over Sovereignty Rights
By virtue, any dispute over the sovereignty rights of islands in the South China Sea is but the dispute between 'two families' namely ASEAN (Association of South East Asian Nations) and China. In the past, when there were disputes over issues pertaining to conflicts in some of the islands in the South China Sea, the members of these two families would sit down and negotiate a way out to settle the dispute.

However, ever since US Secretary of State Hillary Clinton came out with remarks saying that 'the United States has the obligation to ensure free and secure maritime shipping route along the South China Sea' and presented a high profile of US intention in wanting to involve in the South China Sea affairs when she attended the ASEAN Regional Forum held in Vietnam in July 2010, the United States has indeed stirred more storms to the South China Sea. The sky above the South China Sea has suddenly changed color, and the atmosphere in the South China Sea has also become increasingly tense among countries surrounding the Sea.
Expansion of China's Military Power
On 4 June, when US Secretary of Defense Robert Gates was in Singapore attending the Tenth Asian Security Conference, Gates reiterated the US position in the South China Sea. He said the United States will maintain 'strong' military power in this region to guard its allies and to protect the Southeast Asian region's waterways and the region's maritime security. Indirectly, Gates also hinted that the expansion of China's military power has threatened Asian countries. Yet of note is that China's Defense Minister General Liang Guanglie was also among the representative attending the same Asian Security Conference held in Singapore.
From these recent incidents, it is not difficult for us to see that the US involvement in the South China Sea affairs has already disrupted the 'warm relationship' that ASEAN has all along maintained with China. It is also not difficult for us understand that of late, China's high-profiled execution of power in the protection of its maritime interest in the South China Sea is but a design for China to resist the power competition coming from the United States. Of course, the Chinese authority also knows that the reason why Vietnam and the Philippines will loudly accuse China for violating their respective maritime territorial rights is because they have received encouragement from the United States indirectly. As such, at this stage of time, the sovereignty dispute in the South China Sea is no long an issue between the 'two families' namely ASEAN and China. The South China Sea issue has been internationalized. We trust that if some major happening or conflicts ever happens in the South China Sea in the coming days, the United States will definitely want to get involved in it.
Issues and Problems
Issues and problems pertaining to the South China Sea are indeed very complex because these complex issues have involved many countries. Besides China, many other countries have also claimed their rights over certain portion of the group of islands in the South China Sea. These countries have included Vietnam, the Philippines, Brunei, Malaysia and Taiwan. If the conflict in the South China Sea cannot be resolved in an amiable manner, it can lead to military conflicts in any minute.
In this regard, what our Malaysian Prime Minister Najib Razak recently said at the 10th Asian Security Conference held in Singapore should be viewed as a hint for the direction that ASEAN countries should go in order to resolve the conflicts in the South China Sea. Najib said: 'As long as we treat China positively and constructively, China will also make the same response to us. China is a country well known for returning kindness to other countries when it has received kindness from others.'

Unreasonable Behavior by China in South China Sea

The events of the past few days in the East Sea (South China Sea) are neither strange nor difficult to understand. They are a trick to take advantage of the new self-drawn border defined by the so-called 'cow tongue line' to take 80 percent of the 3,500,000 square kilometers of the territorial waters that Vietnam calls the East Sea.
Self-Drawn and Unrecognized Map
Based on their self-drawn and unrecognized map, they developed a strategy and act as if those sea borders had been accepted long ago, in some French-Manchurian treaty or the San Francisco Conference of 1951.
In the role of self-acclaimed master, every year they think up the 'fishing ban,' and hold military exercises in the sea areas they claim for themselves in spite of the fact that other countries, including Philippines, Malaysia, Brunei, Indonesia, Singapore and Vietnam, have been in this sea area for a very long time.
In response to the disputes, ASEAN (Association of South East Asian Nations) countries have shaken hands and come up with a joint declaration of conduct to show humanity, civilization, and friendliness while waiting for an acceptable solution agreed by the parties that have lived with overlapping continental shelves for generations.
Declaration of Conduct
ASEAN countries involved in the East Sea have behaved in a civilized manner, according to the 'Declaration of Conduct.' For example in 2009, Malaysia and Vietnam signed the joint submission of the continental shelves, which means that it was possible to discuss reasonably and to share like human beings. However, China strongly objected to Malaysia and Vietnam at that time and saw it as collusion.
Aware that outsiders were interfering and using the rule of 'might makes right,' ASEAN countries formally invited China to join the signing of the civilized and humane 'Declaration of Conduct' in 2002.
Through this declaration, ASEAN and China committed to resolve all territorial and jurisdictional disputes by peaceful means, without resorting to violence or the threat of violence, and committed to refrain from actions which may complicate the situation or exacerbate the disputes and have an impact on peace and stability.
They went ahead and signed, but in reality they act as if they had never signed the declaration. One day they impose a fishing ban, the next day a fisheries patrol, then maritime surveillance, then military exercises. They use their superior numbers and behave as if the entire vast territorial water is their own pond so they can freely conduct fisheries patrols and surveillance.
Continuous Probes
At the end of April last year, when three of Chinese fishery patrol ships inspected a Malaysian vessel, Malaysia sent a fighter jet to the scene. In March this year, when two Chinese patrol boats played the 'surveillance' game with a Philippine ship, the Philippines dispatched two armed OV-10 Propeller Aircraft, although they are a poor and weak country. After that incident the Philippine government submitted a complaint to the United Nations. Since then, Malaysia and the Philippines have gained some peace in this vast sea area.
These continuous 'probes' are aimed at gauging the reactions of each country. On his recent visit to the Philippines, the Chinese defense minister was questioned about the Chinese surveillance ships and the MIG-29 trespassing into Philippine territory. The Chinese minister denied it. 'It's not our plane. We suggest that you investigate its origin,' he said. He meant that it was a Malaysian Air Force plane.
The Chinese defense minister still has a sour taste about the Malaysian air force MIG-29 that buzzed a Chinese fishery patrol boat at 10:30 am on 29 April last year. Malaysia and the Philippines have woken up to the principle of going with the flow while waiting for the 'Declaration of Conduct' (DOC) to become a binding 'Code of Conduct' (COC) for the countries involved.

Innocent People Become Victims of Thai-Cambodian Conflict

The Thai-Cambodian conflict over the disputed territory around the Preah Vihear Temple has evolved from border clashes to an issue on the international stage. Representatives of the two countries first met in Paris under the United Nations Educational, Scientific and Cultural Organization's (UNESCO) mediation before defending their stand in the International Court of Justice in The Hague in the Netherlands.
The two meetings between Thai and Cambodian representatives in Paris have failed. Thailand has asked Cambodia to postpone submitting its management plan for the Preah Vihear Temple until the border demarcation is completed. Cambodia, however, has insisted on having the UNESCO's World Heritage Committee consider the plan during its meeting in Paris from June 19 to 29.
Promoting Unity
Thailand can claim a certain degree of success in the UNESCO meeting as the UNESCO director has agreed to its proposed postponement of the deliberation of the Preah Vihear management plan out of concern that it could worsen the conflict between the two countries. The UNESCO chief has also observed that the World Heritage Committee should serve to promote unity rather than be a tool for conflict.
At the World Court, Cambodia has sought a legal interpretation on the court's 1962 ruling that the Preah Vihear Temple is in Cambodia's territory without specifying to which country its vicinity belongs, the contentious point that has become the cause of conflict between Thailand and Cambodia. Phnom Penh has asked the court to give its verdict on this point and issue an injunction requiring Thailand to immediately and unconditionally withdraw its troops from the vicinity of the temple.
Thailand has argued that the World Court has no jurisdiction over the Preah Vihear conflict as there is a joint Thai-Cambodian border commission to mediate the issue besides overseeing the border demarcation. The point here is whether the World Court tribunal will agree with Thailand or Cambodia or will order withdrawal of Thai troops from the Preah Vihear Temple's vicinity.
Bilateral Talks
The Thai Government has insisted on not allowing the Thai-Cambodian conflict to become an international issue but rather having it settled via bilateral talks. Anyhow, the dispute has been brought before the UNSC, the World Heritage Committee and UNESCO, the Association of Southeast Asian Nations (ASEAN) and then the World Court once again after it ruled on the case 50 years ago.
While the Preah Vihear conflict is likely to drag on, prime concern should go to Thai villagers living along the border in several northeastern provinces. They are living in fear of a possible war after having had to dodge flying bullets and bombs and being unable to make their living. They have become 'refugees' on their own land, displaced by the war that academics said was not caused by them but by some people in the capital for their own political gain.

Thailand-Cambodia Conflicts

Reports of Japan's earthquakes and Tsunami as well as the southern flooding that have dominated media coverage may have made Thais temporarily forget the Thailand and Cambodia conflicts. The border conflicts between the two countries however continue to make headlines. Last week, the Thai-Cambodian Joint Boundary Commission (JBC) meeting ended without any progress or solutions to end the border dispute.

The first JBC meeting since the military clashes on the Thai-Cambodian border in February was held in a lackluster atmosphere. It was a 'purely bilateral' negotiation as required by Thailand. Indonesia, in its capacity as current chairman of the Association of Southeast Asian Nations (ASEAN), only played a facilitator's role, providing the meeting venue and facilities for both countries. The meeting did not discuss any contentious issues that could bring about tensions.

Permanent Cease-Fire

This JBC meeting was held with much efforts from Indonesia as current ASEAN chairman after it has been assigned by the United Nations Security Council (UNSC) to get Thailand and Cambodia to enter a negotiation to establish a permanent cease-fire and to have Indonesian observers be stationed to monitor a cease-fire at the time that Thailand lacks unity and is marred by political infighting.

The Thai Government must face Cambodia which has unity over the border dispute while it is still struggling in conflicts with the People's Alliance for Democracy (PAD). Even the Foreign Ministry and the Defence Ministry have shown differing views and stance. The military, which is tasked with responsibilities in the General Border Committee (GBC), insists it will not attend the GBC meeting if it is held in the third country and not in Thailand or Cambodia.

The fact that Parliament has not approved the previous JBC minutes makes it difficult for the government to enter negotiations with Cambodia and this also shows the lack of solidarity between the government and Parliament. The lack of unity has also led to the government's failure to help two Thais detained in Cambodia. One side believes the country should respect the Cambodian court decision and should either appeal or seek Royal pardon, and on the other, rejects the court ruling and threatened to bring the case to the world court.

Resolving Ongoing Dispute

The case of the two Thais should serve as a lesson for every party to realize that to solve the Cambodian dispute Thailand must have unity and walk the same path. Thais could trip over each other by walking a different path. The government should organize meetings to listen to opinions from different groups and find the common ground that is the country's stance and not that of any particular group.

The Thailand and Cambodian conflict is no longer just a conflict between the two countries because the UNSC and ASEAN have now become involved in certain way. We must empathize with Indonesia because not only that it is current ASEAN chairman but also a great friend of our country. We must show the world community that we respect the UN resolution.

ASEAN's Role in Democratization of Myanmar

In an atmosphere filled with fear and unrest, military-controlled Myanmar finally completed its purported 'multiparty democratic elections' after more than two decades. Although almost the entire world has been criticizing the elections as unfair, the Myanmar military government is expected to proclaim to the entire world that Myanmar had accomplished its democratic elections with a high voter turnout.

Myanmar is a member of the Association of South East Asian Nations (ASEAN). However, it is sad to point out that as a regional organization, ASEAN could only play an onlooker role in Myanmar's elections. Prior to the elections, ASEAN had proposed to send its observers to oversee the electoral process. Yet, the Myanmar military government, which obviously knew nothing about basic courtesy, flatly rejected the good intention of ASEAN with the reason that Myanmar had adequate experience about elections. In addition, the military government claimed that it would allow each of the embassies and UN agencies in Myanmar to send up to five representatives to observe the voting process at the polling stations. But at the end of the day, these representatives were blocked from visiting to the polling stations for security reason.

Treaty of Amity and Cooperation
ASEAN approved the membership of Myanmar in 1997. The decision was made out of the concern that in the face of the plight of being isolated by the Western countries, Myanmar might turn more and more to China. Furthermore, the Burmese military government had also announced earlier that it was ready to accept ASEAN's Treaty of Amity and Cooperation, demonstrating its wish to be on good terms with its neighboring countries.

After Myanmar officially became a member of ASEAN, the organization has consistently called on the country to conform to the rules and regulations of ASEAN and preserve the reputation of the organization. However, the Myanmar military government continues to go its own way and simply disregard the calls from ASEAN. For example, ASEAN has repeatedly urged the military regime to give proper treatment to the democratic icon of Myanmar, Aung San Suu Kyi, and hoped that the military regime would release her. But until today, Suu Kyi is still placed under house arrest. This is because the military regime has assumed that ASEAN needs Myanmar, which is abundant in natural resources, more than Myanmar needs ASEAN.

Fair Elections
For the elections this time, as usual, ASEAN released a statement to express its hope that the elections would be conducted in a fair and transparent manner. But what else can ASEAN do in addition to expressing its hope? Elections are part of the internal affairs of a country. At present, there is an unwritten rule among the 10-member states of ASEAN, namely the member states are not allowed to interfere into the internal affairs of other countries. Therefore, as long as ASEAN persists to 'abide by' this 'sacred' rule, it can do nothing even though it knows well that the elections were unfair.

While the entire world is condemning the elections held by the military regime, eventually ASEAN will still release a statement to welcome the accomplishment of the elections and express its hope that this will be the first step of the democratization of Myanmar.

Malaysia Can Develop Muslim Market in China

International Trade and Industry Minister Datuk Seri Mustapa said that Malaysia's halal [not forbidden]Muslim products were well positioned in the huge Muslim market in China. He said Muslim products produced by Malaysia were widely accepted and welcomed by the Muslims in China. He added that if Malaysia and China could enhance bi-lateral cooperation in the various Halal product fields, Malaysia's Halal products should stand a good change to open up the huge and massive Muslim product market in China.

Datuk Seri Mustapa said this in conjunction with the 20th Anniversary of the Malaysian-China Chamber of Commerce (MCCC) when he accepted a video interview with the MCCC Economic Bureau Director Kong Ling Loong.

Business and Investment Opportunities
In this interview, the International Trade and Industry Minister Datuk Seri Mustapa said the Malaysian Government was prepared to host a number of business and investment forum to promote bilateral business and investment opportunities between Chinese and Malaysian businesses to boost business interaction. He also hoped Malaysian private sector could play an active role to attract more Chinese businesses to invest in Malaysia.

'Malaysia looks forward to more Chinese buyers to participate in the 2010 International Trade Exhibition (INTRADE 2010) held in Kuala Lumpur from 9 to 11 November this year.'

Minister Datuk Seri Mustapa said: 'Malaysia and China must build a more far-reaching relationship and cooperation in various fields, including agriculture, infrastructure development, transportation and logistics management, tourism and investment, as well as the rapid development in biotechnology and environmental services in recent years.'

Bilateral Economic and Trade Relations With China
When asked about how Malaysia and China could strengthen trade and economic ties, Minister Mustapa said that as early as in 1974, Malaysia and China had already established diplomatic relations. He said that following Prime Minister Datuk Seri Najib's visit to China in June 2009 and the visit of Chinese President Hu Jintao to Malaysia on11 November during the same year, the bilateral relationship between the two countries have already reached a new height.
'In 1988, Malaysia has also signed trade agreement with China to strengthen bilateral economic and trade relations.'

'Under this trade agreement, in 1988 Malaysia and China formed the Joint Economic and Commercial Council (JETC). Since then, JETC has served as the platform for both governments and commercial organizations from both countries to carry out interaction and. It has also become a platform to resolve trade and investment problems and issues. The JETC has held eight meetings since then.
Minister Mustapa said he hoped Malaysia could hold more similar meetings with China.

Malaysia Issued Over 20,000 Country of Origin Certificates To China For Chinese Enterprises To Enjoy Tax Exception Benefit
In conjunction with the launch of the ASEAN-China Free Trade Area in 2010, Malaysia has issued 23, 434 country of origin certificates (Form Es) with a total worth of US$2.8 billion dollars to China in 2009.

Minister Mustapa said that in addition to bilateral trade and economic ties, Malaysia also enhanced its tie with China within the region through the ASEAN-China Free Trade Agreement (ACFTA). Under this agreement, as long as the importing countries could produce the country of origin certificates of their products at the customs office, their good imported to that country within ASEAN or China would get tax relief or total tax exemption.

'The ASEAN-China Free Trade Area has become effective as of 1 January 2010. Ninety percent of the internal products circulated within the region, including electronic and electrical products, have already enjoyed zero tariffs.'

China Becomes Malaysia's Largest Trading Partner
International Trade and Industry Minister Datuk Seri Mustapa said the trade impact of China to the region was increasingly important as days went by.

'China has always been Malaysia's major trading partners. In 2009, for the first time, China has become Malaysia's largest trading partner with a total trade volume amounted to 127.9 billion ringgit.'

'In 2009, when China's Ministry of Commerce released its trade report, Malaysia was China's fifth largest trading partner in the world after Japan, Korea, Hong Kong Special Administrative Region and Taiwan.

'As for Malaysia's trade volume with China among Association of South East Asian (ASEAN) countries, Malaysia is indeed the most important trading partner for China within the ASEAN region. It is clear that the bi-lateral trade relationship between Malaysia and China is interdependent of each other. Such a trade partnership can be expected to improve in the coming years.'

China's Rapid Development To Benefit Malaysia
'China's rapid development is not so much of a challenge to Malaysia but rather an opportunity for Malaysia.' Mustapa said the Chinese Government has set its own economic transformation goals. China's development in various fields has given Malaysian businesses ample trade opportunities.

'Furthermore, Malaysia is also moving towards it own 'New Economic Model' reform. Both countries have a lot of opportunities to cooperate. Malaysia can also learn from China.'

'From regional perspective, the establishment of ASEAN-China Free Trade Area has reflected the obvious intimate relationship between China and ASEAN. ASEAN's total trade with China reached $192 billion dollars in 2008. From 2003 to 2008, the ASEAN-China bilateral trade volume grew on an average of 26.41 percent annually.'

In conclusion, International Trade and Industry Minister Mustapa said that China would need to position itself in ASEAN when the East Asian Community was formed. China would also need to taking up the leadership responsibility to cooperate with partners with similar trade ideology such as Malaysia to maintain peace and harmony in the East Asian Community.

Crisis in Thailand Could Jeopardize Regional Stability

The latest political crisis in Thailand in these few days has plunged into a worse state since its eruption in April. The figure of casualties has reached 35 in the past four days of clashes and is expected to increase if the military is given the green light to attack the fortress of the pro-former Prime Minister Thaksin Shinawatra Red Shirts.

Abhisit Vejjajiva administration should give due attention and immediately resolve the bloodshed conflict. If the conflict prolongs, there will be a huge potential or tendency towards a more severe conflict.

Current Turbulent Situation
In fact, some predict that a civil war may erupt in Thailand if the crisis is not resolved immediately. We have seen traces toward that direction when the government spokeperson Panitan Watanayagorn said the authorities would continue to attack the Red Shirts' fortress because the military wanted to crush the 'armed terrorists' among the Red Shirts. Like the conflict took place about 1,000 km away, which involved the Malays in the provinces of southern Thailand since 2004, it is said that some 'third party' has taken advantage of the current turbulent situation in Bangkok as well.

If this happens, Thailand is certainly on the verge of a civil war as predicted by security and strategic experts lately. Therefore, Abhisit should utilize all the strengths and wisdom to immediately restore the situation and bring Bangkok back to order and economic activities as it used to be. If Abhisit fails to restore the situation, it will expose his administration to new opposition from the business community who have been badly affected for almost two months already.

Political Stability and Economic Strength
Bangkok is the center of administration, tourism and trade, as well as the main entrance and exit for Thailand to connect with the outside world. Thailand is also one of the main cities in Association of South East Asian Nations (ASEAN). The domestic conflict may also undermine the performance and image of the organization of Southeast Asian countries in the eyes of the international community. ASEAN has a bigger goal to create a developed and prosperous community, and in turn become an active economic player on the global stage.

All these will be influenced by political stability and economic strength of every member states. Assuming a civil war erupts in Thailand, it will increase the burden to the current government which has not managed to bring the conflict in the southern region of the country to an end yet. When this happens, it is worried that foreign countries or superpowers which have their interest in this region may have concrete reasons to interfere into the country. If this happens, Southeast Asia, a region declared as independent and neutral, may eventually be forced to accept interference of foreign powers which purportedly want to restore political stability and peace in this region.

Command of Foreign Power
The concern about 'third party' taking advantage of the situation in Bangkok is well-founded, especially if the group is linked with the label of 'Islamic extremists' or Al-Qa'ida. This will instantly beckon certain foreign power to 'help' eradicate the group and this will become the starting point when Southeast Asia will no longer be a peace, independent and neutral region.

It will instead become a region that is forced to follow the command of foreign power forever.

Malaysian Prime Minister's US Visit

Malaysian Prime Minister Datuk Seri Najib Tun Razak's visit to the United States this time, the second time after he took over the prime ministership, is expected to bring huge meaning to the relations between Malaysia and the United States, as well as the United States with the Islamic world.

Objective of Present Tour
It is understood that President Barack Obama will ask advice from Kuala Lumpur in an endeavor to mend the relations of the United States with Islamic countries in line with the open attitude toward the Islamic world, which he expressed during his visit to Al-Azhar University, Egypt recently.

Datuk Seri Dr Jamaludin Jarjis, Malaysian Ambassador to the United States, hinted the matter to the Malaysian media persons who were here to cover Najib's official visit to the United States starting 11 April until 16 April. The first time he visited United States in the capacity of a prime minister was in November 2009.

The prime minister arrived here at noon on 11 April. He will participate at the Nuclear Security Summit here from 12 to 13 April on Obama's invitation.

He explained: "The change is drastic...the way the United States sees Malaysia as a developed Islamic country and an example for other Islamic countries. Of course, the government will consider to 'study' the relations with the United States."

Bilateral Discussion
Jamaludin said that a development like this was evident when Malaysia -- a nonnuclear country -- was invited to attend the summit. A total of 44 world leaders were invited to attend the summit.

In fact, he explained, Najib was the only leader from Association of South East Asian Nations (ASEAN) and one of the two leaders from Asia to have a bilateral meeting with Obama.
Najib-Obama meeting will be held right before the commencement of the Nuclear Security Summit. China is the second country from Asia, which is to have a bilateral discussion with the United States.

Jamaludin explained: "Obama's invitation to the prime minister to attend the summit is an honor to Malaysia because we are not a nuclear country. And it is seen as a leap in terms of Malaysia-US bilateral ties, and also the relations between the United States and Islamic countries in general."

Obama will only have bilateral discussion with nine of the leaders attending the summit. The summit, among others, aims to focus on the matter of nuclear security in addition to ensuring that nuclear technology will not fall into the hands of terrorists.

In addition to Obama, during the luncheon on 12 April, the prime minister will also meet with US Vice President Joe Biden, Deputy Secretary of State James Steinberg, and Howard Berman, chairman of the US House Foreign Affairs Committee.

Handling Threat and Security
In the context of handling threat and security, the prime minister will deliver his policy speech revolving around Malaysia's experience and achievement in handling the threat of communist at the Center for Strategic and International Studies (CSIS) here on 14 April.

Tun Hanif Omar, former inspector general of police, and General (retired) Tan Sri Muhammad Hashim Ali, former Armed Forces chief, are also invited by the CSIS to the event.

Jamaludin also said that the prime minister would take the opportunity to explain the framework of the New Economic Model, which was launched at the end of last month when meeting investors and businessmen here and in New York, as a step to attract investment, particularly from the United States.

Meeting With Other Personalities
Among personalities he will meet include World Bank President Robert Zoellick and the chief executive officers of Coca-Cola, Intel, Motorola, and Conoco Phillips.

As a step to enhance Malaysian tourism and culture, accompanied by his wife, Datin Seri Rosmah Mansor, the prime minister will launch the Festival of 1Malaysia Faces, a program organized by the Ministry of Information, Communication and Culture.

He said: "Our tourism sector does not have much promotion in the US and this is the best opportunity to promote Malaysia."

Hong Kong Maintains Close Economic Ties With US

Hong Kong Financial Secretary John Tsang Chun-wah said that since 1983 Hong Kong began to establish currency exchange system pegged with the US currency. Although such currency peg has gone through ups and downs in the past 27 years, Hong Kong has maintained good economic relationship with the United States. He said Hong Kong has no intention to change the present currency exchange system to follow China's monetary policy.'

Tsang said this in response to a question if it would be possible for Hong and China to implement the same monetary system. He said that Hong Kong's per capita income was more than $30,000. He added that in term of economic development, Hong Kong and the United States have maintained very close relationship. As such Hong Kong has no intention to change its monetary exchange rate pegging system with the United States.

Tsang Chun-wah said that although China's Renmibi (RMB) was an important currency, it was not an easily convertible currency. This was an area Hong Kong was currently trying to assist China.

Some places in Association of South East Asian Nations (ASEAN) countries also allow the use of RMB as trading currency. It is hoped that Hong Kong can become such a platform and base for RMB to rise and continue to grow strong.

Establishing Two Financial Centers
Hong Kong Financial Secretary John Tsang Chun-wah opined that since China has a population of 1.3 billion people, having Hong Kong and Shanghai as its two financial centers were not many. China can have two financial centers.

On primary and secondary industries, China has already grown very strong. China is now working on third tier of industries. This should be the economic growth engine to push China's economy further ahead.

Learning From Malaysia on Islamic Finance Development
Tsang said that Malaysia's experience in Islamic financial sector and in Islamic investment as well as in public education for it were very successful. As such, one of the main reasons he visited Malaysia was to learn from Malaysia in these areas. He said that at this moment, for Hong Kong to develop the Islamic financial sector, the most important thing is to enhance public education and promotion about it and to allow more market participants to understand that the Islamic financial sector was not only for Muslims to participate only. It was a financial field that all interested investors could join and participate.

When Tsang Chun-wah accepted a joint interview with the Malaysian media, he said that Hong Kong's Muslim population was not much. But Hong Kong has a robust financial structure. Hong Kong could become a regional platform, in particularly a platform for China to participate in Islamic finance and service.

In addition, Tsang also said that the purpose of his visit to Malaysia was also to see if the bi-lateral cooperation between Hong Kong and Malaysia could further be advanced in certain direction or to develop cooperation model. He said while he hoped his visit could promote bi-lateral economic relationship between Hong and China, he also wanted to learn from Malaysia's success economic stories.

He said that when he met and talked to Prime Minister Datuk Seri Najib earlier, he gained many constructive views. He believed this would help to make the bilateral economic growth and cooperation between Hong Kong and Malaysia to move forward.

Country's NKRA Measure
Hong Kong Financial Secretary Tsang Chun-wah said that in order for Hong Kong to maintain healthy economic development, Hong Kong has identified six priority areas in order to diversify Hong Kong's economic base and create employment opportunities. He said Hong Kong's priority measures and Malaysian Government's measures to identify National Key Result Areas (NKRA) were quite similar in essence.

He said that the six priority areas identified by the Hong Kong Government included education services, pharmaceutical services, laboratory certification, innovation and technology, environmental industries as well as cultural and creative industries.

When Tsang Chun-wah presented his keynote address at a public forum themed as "New Economic Order in Post Global Financial Crisis Era, he said: "The top priority area concept carried out by Hong Kong holds many common grounds as Malaysia's National Key Result Area policy. Through such comparison, I can see many opportunities for cooperation between Hong Kong and Malaysia. Such cooperation opportunities can help us to achieve our common goal. We should try to create these opportunities. "

ASEAN-China Free Trade Area

Ever since the formation of ASEAN-China Free Trade Area at the beginning of this year, the business enterprises in some ASEAN countries have come out with opposing voices. In response, China's Minister of Commerce Chen Deming gave an encouraging boost to formation of the ASEAN-China Free Trade Area by highlighting the fact that after the formation of ASEAN-China Free Trade Area, the trade advantages of this Agreement bought to China and ASEAN have increased drastically.

ASEAN Export to China
Addressing a press conference, held after the CPPCC (Chinese People's Political Consultative Conference) and the NPC (National People's Congress) joint sessions, China's Commerce Minister Chen Deming pointed out the fact that since the formation of ASEAN-China Free Trade Area, for the month of January alone, China's export to ASEAN has increased by 52.8 percent and ASEAN's export to China during the same month of January has increased by 117.3 percent.

He said that in fact the growth of ASEAN's export to China was much faster than China's export to ASEAN nations. China's Commerce Minister Chen Deming stressed that these statistics have proven that the ASEAN-China Free Trade Area was a win-win arrangement type of trade framework.

Annual Trade Growth Rate
In retrospect, Minister Chen Deming said China and ASEAN took ten years to negotiate and seal the ASEAN-China Free Trade Area. It was China's first negotiation for a free trade area with other countries. He said that until today, the ASEAN-China Free Trade Area is still the largest free trade area China works with developing nations. The free trade area covers a total population of close to 1.9 billion people.

Before the seal of the ASEAN-China Free Trade Area agreement, China and ASEAN have already promoted the "early harvest" bi-lateral cooperation framework between the two parties to achieve an annual trade growth rate of 18.2 percent per year. Minister Chen Deming pointed out that from such trade development; it was suffice to illustrate the strong complementary nature of the two major markets' industrial properties and trade opportunities.

Nevertheless, Minister Chen Deming also admitted that at this initial period of the formation of ASEAN-China Free Trade Area, some weaker enterprises in ASEAN countries, especially the small and medium size enterprises might be affected by the agreement. However, with the bi-lateral industrial properties within the Free Trade Area of ASEAN and China begin to boost up and with the competitiveness between the two sectors continue to expand, the benefits of ASEAN-China Free Trade Area would clearly reflect regional economic prosperity and stability.

Beyond Framework Pact
Minister Chen said that at the same time, China would, as a newly emerging developing country with vase land area and large population, also play the facilitator's role and pay close attention and look into the need of the weaker enterprises in the ASEAN countries. Minister Chen said that beyond the framework of the ASEAN-China Free Trade Area, China would also consider provide assistance and support to the weaker small and medium size enterprises in some concerned ASEAN member nations. For example, China could make arrangement for China's industries along the coastal provinces of China that have same or similar industries as in ASEAN countries to go to some of the ASEAN nations to carry out cooperation partnership and investment there. The purpose is to help improve the work process ability and level of the weaker industries in some of the ASEAN member nations.

Minister Chen Deming also disclosed that China was also prepared to help ASEAN nations to improve their basic infrastructure, the level of goods circulation and to help in the promotion and enhancement of ASEAN member nations' competitiveness in international market and trade.

Implementation of Zero Tariff Policy
After years of preparation, the ASEAN-China Free Trade Area was finally formed on 1 January 2010. However soon after its formation, the business enterprises in Indonesia, Thailand and other countries have come out with protest noises. Indonesia's business community is concerned that the low-cost imports from China will result in unfair competition with its local industries.

The Indonesian Government has sent an official letter to the ASEAN Secretariat and requested postponement of the implementation of zero tariff policy for quite a lot of its products for one more year. Indonesia wants the effectiveness of the ASEAN-China Free Trade Area Agreement to take effect only on 1 January 2011 in order to give its local businesses and enterprises to have more time to adjust to the zero tariff policy between China and ASEAN member nations.

Malaysia, China Expand Bilateral Trade Ties

Chinese Ambassador to Malaysia Liu Jian said that the Malaysia-China relations in recent years have indeed entered a best period in the diplomatic history of both nations. He added that after the mutual visits by the two national leaders to each other's country, the bilateral ties between Malaysia and China have turned even better.

Therefore, both nations should take such opportunity to follow through and create more favorable conditions for both nations to push the bilateral exchange and cooperation in the economic, cultural and other fields to a new high.In accepting Nanyang Siang Pau's exclusive interview, Ambassador Liu Jian said that in this New Year, the Chinese Embassy in Malaysia would focus on coming out with programs to advance the friendly bilateral ties between the two countries.

The first item on Ambassador Liu's to-do list is in the expansion of trade and related investment between the two nations. The Chinese envoy said that in 2009, the Malaysia-China bi-lateral trade volume has reach $50 billion (about M$ 170.1 billion ringgit). This bilateral trade volume accounted for China's one-fourths trade volume with ASEAN (Association of South East Asian Nations). It was a heavy percentage.

Economic and Trade Supplement
Ambassador Liu said that on economic and trade, Malaysia and China could supplement each other's need. Both nations could promote the diversification of trade and deepen economic and trade exchanges. He disclosed that at this juncture, when more and more Chinese enterprises were keen to "explore the outside world", the Chinese authorities would continue to encourage large Chinese enterprises to invest in Malaysia. He said that at present stage, many Chinese provincial and municipal leaders have already begun to promote work in this area. At the same time, China also welcomed Malaysian companies to continue their investment in China. When Prime Minister Datuk Seri Najib made his first official visit to China in his capacity as the Prime Minister in June 2009, both countries have agreed on three agreements and one memorandum of understanding. Ambassador Liu Jian was one of the backstage contributors toward cementing these agreements between the two countries.
The first important agreement signed between Malaysia and China as witnessed by Malaysian Prime Minister Najib and Chinese Prime Minister Wen Jiabao was the "Malaysia-China Joint Action Plan on Strategic Cooperation." The second agreement was the "Abolition of Visa Agreement" which covers regulations on the travel of holders of diplomatic and official or service passports. These personnel will no longer be required to get visas for travel to China or Malaysia. The third document signed between the two countries was the "Marine Science and Technology Cooperation Agreement." The memorandum of understanding signed was the" Malaysia-China Postal Cooperation MoU (Memorandum of Understanding)."

Strong Business Opponent
Chinese Ambassador to Malaysia Liu Jian opined that Malaysian businesses should not hold the concern that once the ASEAN-China Free Trade Zone was fully implemented, Malaysia's domestic enterprises could not face the strong competitors coming from China and that it the process the Malaysian enterprises would be "swallowed" by the Chinese enterprises. He added that all nations should look at the bigger picture and the overall situation of the Free Trade Area Agreement and avoid "losing the big issues just because we focus on smaller ones."
The Chinese envoy said that it was based on common interest that China and ASEAN countries worked to achieve this ASEAN-China Free Trade Area. He said China and ASEAN countries have spent ten years to prepare for the free trade area. He added that the reduction of tariffs between China and ASEAN would be done year by year gradually.
Therefore, the implementation of the ASEAN-China Free Trade Area would not bring much economic and trade impact to all countries concerned. Ambassador Liu said, "The full implementation of the ASEAN-China Free Trade Area will be carried out in two stages. The first stage of implementation is between China and the few founding members of ASEAN. By 2015, the full ASEAN-China Free Trade Area will then be expanded to cover all the newer ASEAN nations." This was what Ambassador Liu Jian said when he accepted the interview with Nanyang Siang Pau.
When asked to comment on the dilemma faced by the Malaysian SMEs (Small and Medium Size Enterprises) as the direct result of the implementation of China-ASEAN Free Trade Area agreement in Malaysia, Ambassador Liu Jian said that if what the Malaysian enterprises produced were similar to the products of what the Chinese enterprises came out, it was quite normal for Malaysian enterprises to have such concern and fear. However, he added that we should all look at the overall situation and should not allow the smaller issues to block out the bigger issues as well as the bi-lateral trade benefits in the long run.
Setting Up Bank's Branch When asked to comment on the internationalization of Chinese currency Renminbi (RMB), Ambassador Liu Jian that it would be a long process to get it done. First of all, China must begin with carrying out such process with neighboring countries surrounding China. He also hoped that after the establishment of Bank of China in Malaysia, the Industrial and Commerce Bank of China could also open a branch in Malaysia as planned.
He hoped that the setting up of this second Chinese bank in Malaysia could be materialized within this year. He commented that on the setting up of this second bank in Malaysia as far as China was concerned everything was ready. He believed there should not be any procedural problem on this.

Closer Cooperation in Education
Ambassador Liu Jian hoped that in this New Year, the educational cooperation between Malaysia and China could move closer. He said that there were about one million Chinese students studying in Malaysia. There were also about 2,000 Malaysian students doing their courses in China. He said the number of Chinese and Malaysian students pursuing courses in each other's county respectively were on the increase.
Ambassador Liu Jian stressed that the mutual recognition of university degrees from both nations would require the joint efforts of two nations. He suggested that the governments and local community from both countries should encourage and assist Malaysian students and Chinese students to study in each other's country, including the provision of scholarships to the students concerned.The US envoy to Malaysia was happy to note that a Confucius Institute has already been established at the University of Malaya. He hoped that more Confucius Institute could be established in other Malaysian universities so that Chinese language teaching and learning could be provided to more Malaysian students for them to understand the Chinese culture.On the development of bi-lateral tourism, Ambassador Liu Jian said that Chinese was in the process to expand its tourism market and domestic demand for it. He expected China would soon have a vigorous tourism development and that would also encourage more Chinese tourists to visit Malaysia.

Goals To Become Advanced Nations
US Ambassador to Malaysia Liu Jian described the ASEAN -China Free Trade Area as a very important first step for China and ASEAN countries to implement. He said that through this Free Trade Area agreement, "Asian power" could be enhanced. He said that through this Free Trade Area, Malaysia, China, and other ASEAN countries could have an additional economic development channel to strengthen respective trade.
He said that when we added 10 ASEAN countries plus China together, the total market has a potential market for 1.9 billion people. Therefore, the potential market development toward that direction was very huge. It could become one of the world new economies comparable to the European Union and the North American economic bloc.
Ambassador Liu Jian opined that the implementation of the ASEAN-China Free Trade Area would enable the trade between Malaysia and China to further expand. It would also create new cooperation opportunities between the two nations in agriculture and other sectors.
Ambassador Liu Jian said that China should enter the well-off society by 2020; Malaysia also has its Vision 2020 goal to become a developed nation. Therefore, it could be said that Malaysia and China share similar goal to become advanced countries. He said the two nations should further explore new cooperation points and opportunities to face a brighter future ahead of Malaysia and China.

ASEAN-China Free Trade Agreement

The ASEAN (Association of Southeast Asian Nations)-China Free Trade Area Agreement covering 1.9 billion persons in this free trade zone will become effective on 1 January, 2010. After 10 years of efforts between ASEAN and China, the smooth sailing of this significant agreement is a challenging test not only to ASEAN countries but also to China. Beginning 1 January, a new round of tariff reduction between China and six key ASEAN member states namely Malaysia, Brunei, Indonesia, the Philippines, Singapore, and Thailand will see more than 90 percent of the products from both parties with tariffs drop to near zero.
In November 2000, then Chinese Prime Minister Zhu Rongji put forth this idea of the formation of an ASEAN-China free trade zone with the purpose to lift the trade barriers between China and ASEAN member nations, so that China's huge market and ASEAN countries' natural resources could reach a mutually beneficial win-win trade relations.
However, within the past few years, the economy of China has increasingly consolidated and become powerful. This is most noticeable during the global financial turmoil when China's economic performance has continued to be outstanding. The strength of China's economy has become a concern to ASEAN member nations in the midst of the establishment of this ASEAN-China Free Trade Area Agreement. Such concern is in particularly reflected in ASEAN member countries that have high volume of trade dealings with China. The enterprises and business firms in five ASEAN member nations namely Malaysia, Singapore, Thailand, Indonesia, and the Philippines are worried that the exemption from customs duties for goods coming from China will challenge their local business survival with an influx of cheaper Chinese goods in the local market.

Advantages and Disadvantages
On contrary, other less economically developed ASEAN countries, including countries that do not even have established stock market mechanism will probably welcome the formation of this ASEAN-China trade agreement. These countries include countries such as Cambodia and Laos. In the case of Laos, under the ASEAN-China Free Trade Area Agreement, China would give Laos zero tariffs or less than five percent tariffs of over 7,000 kinds of goods and products import to China. To Laos, having this ASEAN-China free tree agreement will undoubtedly give the country more advantages than disadvantages.
However, to Indonesia, which is the economic engine head of ASEAN, its business enterprises do not think the implementation of the ASEAN-China Free Trade Area Agreement is a good idea. Erwin, chair of the Indonesian Young Entrepreneurs Association Chairman has earlier called on the Indonesian Government not to make a rush in the implementation of the free trade area with China. He said that Indonesia had not yet prepared for such a free trade agreement with China. He even warned that when the ASEAN-China Free Trade Area Agreement became effective, a number of industrial areas, particularly the small and medium-sized industrial zones and the industries in special economic zones might face the risk of bankruptcy. In view of such concern, the Indonesian Government has now formed a joint committee with the Indonesian Young Entrepreneurs Association and the Indonesian Chamber of Commerce and Industries to gather feedback from business community and entrepreneurs on the impact of the ASEAN-China Free Trade Area Agreement.
As for Malaysia, although the business community and private sector do not have such a strong rebound over the ASEAN-China Free Trade Area Agreement as in Indonesia, nevertheless, some larger enterprises, in particular the automotive industries are concerned about the impact of having a comprehensive free trade agreement with China. This is because the Agreement can have a huge impact level on local automotive industries. If Malaysia were to follow the country's original national automotive policy announced in 2006, Malaysia would fully abolish the permit to import foreign cars by December 2010. But under Malaysia's latest national automotive policy guideline, the abolishment of the AP (Approved license to import foreign car) system has furthered been delayed to 2015.
Although the ASEAN-China Free Trade Area Agreement will become effective on 1 January, all indications have shown that to most ASEAN member countries, this new free trade agreement with China comes with mixed felling of happiness and worry. We can even say ASEAN member nations are more worried about the impact of this Agreement than happy about the new trade opportunities available. When market force of China's 1.3 billion populations and ASEAN's total 600 million population combine and compete in the same market, it is quite natural for varied businesses and enterprises in ASEAN countries to worry about the impact of it. The ASEAN business community and enterprises are concerned whether an ASEAN-China Free Trade Area Agreement concept that was mooted ten years ago could still hold the original goal in allowing mutual and win-win trade between ASEAN and China to reap fruitful result ten years later. This is because over the past ten years, the China's economy today has growth much stronger now than ten years ago. There is a concern on the part of some ASEAN countries that the implementation of the free trade agreement with China now will eventually lead to trade imbalance between ASEAN and China. Some ASEAN member nations are afraid that there will be increased trade in favor of China rather than in favor of ASEAN member countries. This is because China is a huge country with not only huge market for domestic consumption but also a strong ability to export and supplies cheaper goods to the ASEAN region.

Importance of Agreement
Even so, we have to accept the fact that the engine head of this ASEAN-China Free Trade Area Agreement has already started running. We cannot pull the button and stop its advancement. This ASEAN-China Free Trade Area Agreement is not only China's first free trade area agreement in foreign trade; it is also the first free trade zone agreement ASEAN negotiated with a foreign nation. As such, the importance of this ASEAN-China Free Trade Area Agreement cannot be undermined. The importance of ASEAN's trade agreement with China will become particularly significance when under this free trade agreement ASEAN nations begin to use China's renminbi (yuan) as the major trading currency when engaging trade with China. Such development can greatly enhance the possibility that China's renminbi or yuan will eventually become a major global trading currency in addition to the US dollars.
Overall, we can only say that the birth of ASEAN-China Free Trade Area Agreement is a necessity product in the current regional economic environment. However, whether this Agreement can be achieved and reaped the expected result will, to a great degree, depend on how ASEAN member countries can maintain a united stance on the vast and varied goods and products entered into the Agreement with China as near zero tariffs products. If ASEAN member countries cannot stand united as one and begin to have different version of free trade area with China, then as a whole, it is impossible for ASEAN to reap trade benefits from the huge Chinese market.

East Asian Community Concept Reveals Complex Reality of Asian Region

In the big Asia Pacific Economic Cooperation (APEC) family, when problems exist between Japan and the United States, the cordial family atmosphere has become somewhat embarrassing. More importantly, the logical thinking of the East Asian Community as proposed by Japanese Prime Minister Hatoyama even at this stage of conventional thinking, is that this is an East Asian Community involving “ASEAN plus 3 (ASEAN plus Japan and South Korea) or “ASEAN 10 plus 1” political pattern.
However, for such a regional integrated community, China is cautious. However, ASEAN hopes for an East Asian Community to have a wider scope to include the United States and India. In addition, the United States wants to get involved in it as well. Under such situation, the connotation of Japan's East Asian Community concept becomes unclear. It is blurred in its context of extension and expansion. The East Asian Community concept mooted by the Japanese leader can become a utopia.

Continual Rise of China
The main reason is that within the internal East Asia region, countries have not formed enough consensuses about this East Asian community. When the opinion of China, Japan and South Korea over the formation of East Asian Community remain unclear; with ASEAN member countries having doubt or even fear the continual rise of China; and with the United States worries that its status in East Asia might be sidelined, Hatoyama's East Asian Community looks more than a deep water bomb testing the water, but in the end opening up the geopolitical complexity of the East Asian region.
It brings to the reality that while the formation of this “regional body” is not difficult, but for all countries within the East Asian Community to reach consensus over what the community should do together become extremely difficult.

US-China Relationship
In addition, the US-China relationship has also become increasingly more and more difficult to predict. Interestingly, in addition to contradiction that exists in the US-Japan ties, of late, the function of APEC has also carried with it a dramatic color between China and the United States triggered by a speech delivered by Singapore Minister Mentor Lee Kuan Yew in the United States over his “Asian balance theory.”
This speech by Lee was interpreted by the Chinese media as “the United States wants to contain China theory.” While it is meaningless to debate the merits and demerits on this issue, but this incident does confirm two facts. First, the Asia-Pacific framework is going through a process of fundamental change. But this change is not caused by the chain reaction of China's growing strength.

Growing US Interest in Asia
This new change has caused anxiety and shock to ASEAN countries as they look at their old pattern of operations; this change has also forced China and the United States to reexamine the role they should play in the Asia-Pacific region. Second, on the surface, the United States says that it hopes China will play a “leading role” in the region, but beneath the surface, it is the US intention to increase its contact with ASEAN region. The US's intention to return to Asia has become the accelerated diplomatic strategy of the United States.
Following the US accession into the "Treaty of Amity and Cooperation", the United States can now engage in “ASEAN 10 plus 1” dialogue with ASEAN region. In addition, the United States is also keen to improve its relationship with Myanmar, one of the ASEAN countries. But the progressive engagement of contact with ASEAN by the United States is regarded by some public opinion in China as the United States exerting pressure on China.
Moreover, when the relationship between the United States and ASEAN countries turned deeper each time through contacts, ASEAN member countries would always regard such deeper contact as their diplomatic achievement. This stems from the basic principle that as small nations ASEAN member countries want to hold on as a group “to keep warm” so that the best interests of ASEAN can fit well in the power balance between China and the United States.
The United States is still a strong power. Although China is also getting stronger as days go by, the Chinese Government does not exclude or reject the presence of the United States in ASEAN. But to the Chinese common people, they feel that perhaps the United States really has the intention to resist the influence of China in Asia. Of concern is that the Chinese people and the Chinese community might send out a message that is different from the Chinese official view about the United States. Such message coming from the Chinese community will create a communication pattern, whereby the official stance over the role of the United States in Asia is quiet, but the public opinions are making a lot of noses about it. As such, to the United States and ASEAN, both parties should understand the societal situation in China and to deal with public opinions coming from China calmly. They cannot habitually blame China as adopting “nationalism” over their remarks on ASEAN or on the United States."

Importance of APEC
In fact, both the United States and China have a broader dialogue mechanism in the form of China-US Strategic Economic Dialogue mechanism. Both countries are also more concerned on using the G20 Summit as their global platform. To both China and the United States, the importance of APEC has somehow faded vis-a-vis the G20 Summit and the bilateral strategic dialogue between them. At this APEC Summit held in Singapore, many of the problems or the media arguments between China and the United States were triggered by ASEAN issue only. A metaphor to describe this phenomenon is that: “It is like a small ASEAN making two big countries jealous of each other.”
However, the characteristic of APEC Summit is harmony. Although it is difficult to untie the knot of certain issues in the US-China relationship, but over wines and drinks, the national leaders of both countries can still hold their glasses and send cheers to each other. More importantly, at this APEC, China has already reminded the United States not to engage too much in trade protectionism. This is a prelude the Chinese leader given to President Obama as he begins his China tour.