China's Joy for Becoming No 2 Nation with Highest Military Budget

The increment of China's defense budget for 2010 has dropped by 7.5 percent as compared with the 2009 defense budget increment of about 15 percent. Such budget increment has broken China's two-digit defense budget increment in the past 20 years. We trust this budget would be a great disappointment to Beijing's the hawkish group whose ambition is for Beijing to have an expanded modernized military.

Before China's NPC (National People's Congress) and CPPCC (Chinese People's Political Consultative Conference) convened its joint session this year, a new book titled "China's Dream" written by Liu Mingfu, a senior colonel in the People's Liberation Army, came out with a view that says China's dream is to replace the United States to be the No. 1 militarily strong country."

As a matter of fact the new thought of the hawkish camp within the Chinese military is to use the modernized national defense as support for domestic need so that the national defense can lead China's economy to a new height and to allow the emergence of Chinese as a race. As such, the reduction of China's defense expenditure increment percentage this year as compared with in 2009 is definitely not in line with the new thought of the hawkish camp within the People's Liberation Army.

Message of Peaceful Emergence
Of interest is that in an article titled "China's New Military Budget Sends Message of Peaceful Emergence", that appeared in Singapore's Lianhe Zaobao recent, the article says: "According to many specialists, the new military budget as announced by China is a powerful message to show that China is moving toward peaceful emergence. The Chinese authorities have no intention to exert strong emphasis on building a strong military base and weaponries. In recent days, many people from Beijing also hold such a view."

However, as the writer of this article, I do not agree with such logic. When China reduces its increment percentage of defense budget, you say China is sending out the message of peaceful emergence. However when China begins to increase the percentage of its defense budget, people then come out with the "China Threat" theory. If even people in China say that the reduction of China's defense budget increment is an indication that China is moving toward peaceful emergence, then it will only prove to people who hold China Threat view that the reverse is also true.

In a report published by the Sweden Stockholm International Peace Research Institute in 2009, we learn that in 2008, the United States remained the largest military expenditure country and China has moved up as the second country with highest military expenditure. However, this report also mentioned that the annual military expenditure of China was only one-eighths of the US annual military expenditure. From 1988 to 1997, China's annual defense budget increment was about 14.5 percent. From 1998 to 2007, China's annual defense budget increment was 16.9 percent. It is only during this year that China's increment in defense budget has dropped from two digits to one digit.

Increase in Military Expenditure
In retrospect, when I wrote "The joy of China in becoming the No 2 highest military expenditure country," this article could make China sounds rather arrogant. But as I explained above, this was not the case. It was only when China was economically strong that it would consider increment in military expenditure. Since China does have increase in military expenditure every year, the military should make good use of what they were given then. The writer of this article absolute disagrees with the notion that the decrease in percentage of China's increment in defense budget as compared with last year is an indication that shows China is moving along the path of peaceful emergence.

As a matter of fact, China does not have to care about what other said about its defense budget, or how it is going to spend its defense budget. If the Chinese authority feels that it is time to increase the percentage of its defense budget, it will increase it. If China feels there is a need to decrease the percentage of its defense budget increment, it will decrease the same.

The way China handles its defense budget should not be viewed as once China reduces the increment of its defense budget percentage, China is moving toward the path of peaceful emergence. Likewise we should not think that when China increases its military budget, China will be a military threat to other countries. It is important for the propaganda officers in Beijing to understand such logic.

Defense Budget Issue

In my opinion, when China handles its defense budget issue, Beijing only needs to make clear the following two points. First, in the past, China has never claimed in wanting to become the world superpower. China has not invaded other countries using military power. When China becomes strong, China will not violate other countries' national interest too. However, no country should attempt to violate China's territory and China's core interest also. Second, China is a big country with vast land and huge population. China has a heavy responsibility to maintain its national defense and security. China must have a corresponding military budget to handle such a heavy defense responsibility. China's GNP (Gross National Product) will soon supersede Japan and become the world second largest economies. When Japan has the military protection coming from the United States, it is most natural and normal for China's military expenditure to become No. 2 in world rating after the United States.

Malaysia-China Bilateral Agreements

Chinese Ambassador to Malaysia Liu Jian pointed out that one of the important tasks for the Chinese Embassy in Malaysia to do this year is to aggressively work on the implementation of many cooperation agreements signed between China and Malaysia when the Chinese and Malaysia national leaders paid official visit to each other's country in 2009.

Mutual Exchange of Visits
Liu Jian said: "In 2009, the fruitful mutual exchange of visits between Malaysian and Chinese national leaders has resulted in the sealing of several cooperation agreements. We cannot allow these agreements to stay at document or memorandum of understanding stage. We must make effort to implement all the consensus and agreements reached between the two countries."

Liu Jian said that Malaysia and China have made good use of the opportunity of the 35th anniversary celebration of diplomatic ties to realize mutual visits of Malaysian and Chinese national leaders to each other's country. During these exchange visits, both countries have signed many important documents and speed up the Malaysia-China bilateral development.

Trade Volume in 2009
According to Ambassador Liu Jian, the signed cooperation agreements between Malaysia and China have included financial cooperation. He said the bilateral trade volume between Malaysia and China was very high. This trade volume accounted for one fourths of China's total trade volume with ASEAN as a group. He said for 2010, Malaysia and China would ensure such smooth trade between the two countries would continue.

In 2009 during the global financial crisis, the trade between Malaysia and China was still able to reach the target of close to M$ 52 billion. It was the first time the Malaysian Government mentioned that China has become the largest importing country for Malaysia.

Ambassador Liu Jian also disclosed that the Chinese Embassy in Malaysia would continue to make effort to sustain high level visits between Malaysia and China. Among the high level visit will be the visit of Vice Chairperson of China's Standing Committee of the National People's Congress (NPC) Wang Zhaoguo' to Malaysia toward the end of March. He said exchanges in other fields also included political parties, parliamentarians and state counselors, ministers and government department officials. It was hoped that through official exchanges and cooperation, visiting officials from both countries could help to push the Malaysia-China relationship to a higher level and to bring more tangible benefits to both nations.

Ambassador Liu Jian said that another job for him to do was to promote more investment opportunities for both nations. He said since 2009, many Chinese trade delegations have visited Malaysia. They were interested in investing in Malaysia. At this moment some of these trade delegations have already signed some cooperation projects with Malaysian partners.

Domestic Demand of Goods
In 2009, Chinese tourists to Malaysia were 1.04 million. To Ambassador Liu Jian, tourism development between Malaysia and China was a good way to enhance understanding between the two countries. This would also include the exploration of business opportunities. Tourism could play a very good role to promote bilateral market and bilateral domestic demand of goods.
As for the bilateral cooperation in higher education, Chinese Ambassador to Malaysia Liu Jian pointed out that all along, China has maintained a positive attitude in the recognition of Malaysia's university degrees. He hoped that Malaysia could also fully recognize the qualifications of Chinese universities. He added that in 2009, although Malaysia and China have signed a higher education cooperation agreement, but between the two there were still a number of pending problems. These problems have included the mutual recognition of university degrees or issues relating to academic qualifications.

Nevertheless, having a signed agreement on higher education can allow both countries to base on principle and direction to make final decision. The positive meaning of having a bilateral higher education agreement cannot be underestimated.

Ambassador Liu Jian said in 2009, a total of 12,000 Chinese students have come to Malaysia for further study. These students have helped to promote the youth exchange activities between Malaysia and China.

Unilateral Action Island Disputes
As for the dispute over sovereignty right over the Nansha Island (South Spratly Island), Chinese Ambassador to Malaysia Liu Jian pointed out that China has always advocated the use of a peaceful and negotiation method to resolve the island disputes in order to avoid the conflicting issue from affecting the overall situation and relationship between China and concerned countries, including Malaysia.

China and Malaysia have reached a consensus on how to resolve the sovereignty conflicts over the islands. Both countries have agreed that in addition to using peaceful negotiation method to resolve the maritime sovereignty issue over islands along South China Sea, both countries have also requested neither party should take unilateral action on the island conflict to avoid complicating the case.

Assessment
It can be said that the reason why Malaysia and China could attain such good rapport was because the national leaders of both countries have attached great importance to care about the bilateral ties.

In addition to that the good relationship between Malaysia and China could not do without the active participation and support of the Malaysian media and the Malaysian public at large.

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.

Political Reforms in China

Chinese Prime Minister Wen Jiabao presented his government work report recently at the 3rd session of the 11th National People's Congress (NPC). In this report, Prime Minister Wen Jiabao emphasized the importance of political reform for China. He also referred to the need for people to criticize as well as to keep watch on the government. Prime Minister Wen Jiabao's report has aroused a high degree of attention from the local and overseas media.

Factor in National Building
In a gist, this is what Chinese Prime Minister Wen Jiabao tried to express in his government work report: "China's reform is a comprehensive reform that includes the reform of economic system, the reform of political system as well as reform in other fields. Without the reform in political system, it is impossible to carry out reform in the economic system and to come out with modernization structure." From here we can clearly see that Chinese Prime Minister Wen Jiabao has put political reform as top priority among other reforms. As such public opinions usually view that through Prime Minister Wen Jiabao's work report, China has sent out a message that it would push forward the reform of its political system.

In fact, political reforms in China are not something new. The need to carry out political reforms have mentioned by former Chinese leader Deng Xiaoping during the early stage of New China. China has long put reform of political system as a decisive factor in the national building. As early as in 28 June 1986, Deng Xiaoping has, at the Standing Committee of the CPC Central Committee Political Bureau mentioned that: "The success of economic reforms will have to depend on the success of political reforms. If we only do economic reform without going for political reform, economic reforms cannot be carried through. This is because in the first place, economic reforms will encounter many man-made human blockages."

From here we know that the political reform spirit as expressed by Chinese Prime Minister Wen Jiabao in his work report and Deng Xiaoping's political reform spirit is but a continuation of the Chinese leaders' political ideology. However, the significance of Prime Minister Wen Jiabao's expression of political reform lies in the fact that this is the first time the Chinese Government has used such a clear format to put in a government work report that the reforms of China's political system is the decisive factor for China to open up reform in other areas of national development. In other words, political reforms in China will not stop at the theoretical level, now, but must work through the government to put it into practice.

Implementation Stage
In accordance with Deng Xiaoping's original design, political and economic reforms are the two interdependent legs that must go together in order to achieve reformation in China. However, after the 1989 Tiananmen incident, reforms of China's political system, was not mentioned by the Chinese leaders for a long time. What we heard was but the one-sided result of its economic reforms. It was also during this period that while China was going through a rapid economic development and economic prosperity era, China has, at the same time, also experienced unprecedented intense societal conflicts of many kinds. As an editorial of the Lianhe Zaobao that came out on the eve of China's CPPCC and NPC joint session said: The Communist Party of China (CPC) has already well-aware of the pending societal issues and has in 2007 and made major preparations aimed to correct these societal conflicts at the NPC. What Chinese Prime Minister Wen Jiabao did this year was to put forward part of the political reforms as mentioned at the 2007 NPC into government's implementation stage.

However, one must take note that even the Chinese Government is determined to promote political reforms, now, the type of political reforms the Chinese Government has in mind is by no means the type of political reforms ordinary people has in mind. In China's political reforms, the "four basic cardinal principles" of the CCP will not be changed. In other words, the CCP's political life and leadership in China will not be changed even if it has carried out political reforms. At the opening CPPCC session, CPPCC Chairman Jia Qinglin has stressed strongly that China would resist the multiparty system and the two house system of the West. From what Jia Qinglin said that it was suffice to reflect the CPC's firm stance to adhere to its basic party principles.

New Political Environment
In modern political life, good political systems must be subordinated to the public. Public authority must also be subjected to checks and balances. In a democratic country, this is achieved through the elections of political parties to represent people's voices. The difficulties of China's political reforms are that under the premise of CPC's unwavering ruling status, the Chinese leaders must ensure that the CPC can still strengthen its self-restraint and self-monitoring power.

In his government work report, Prime Minister Wen Jiabao mentioned that the Chinese Government would create the conditions for people to criticize and supervise the government operations. Such statement by Wen Jiabao has shown that the top Chinese leadership, in fact, knows very well that if the government ruled by the CPC moves toward the alienation direction goes against the wish of the people because of the lack of a monitoring mechanism in the government, the consequence can be extremely worrisome to the CPC leaders. The question is: How can China create such conditions for political reforms? What are the conditions for China to create such a new political environment?

CPPCC-NPC Joint Sessions
In recent years, the democracy networks that prevail in the internet and the internet media have to a certain degree, have criticized the Chinese Government and served a watchdog role to check on the Chinese Government. However, there are limitations for these internet bodies to serve the watchdog role for the Chinese Government because they cannot serve the check and balance role to confront the political systems of the ruling party as well as for the ruling government.

The only way for China to have a watchdog mechanism on governmental affairs is to go back to the basic solution to carry out reforms in the government. If the CPC and the Chinese Government can create conditions to allow the CPPCC-NPC joint sessions to maximize the role to carry out some political reform, to certain extent, China can solve this problem. For example, China can explore if it can allow CPPCC to reassume some of its earlier functions when it was newly formed.

China should also explore if it can allow certain members of the CPC that hold strong democratic principle to form a real political party with substance? Within the NPC framework, China should also see if the NPC can truly represent the largest representation of public opinions, so that the NPC can truly exercise the power to present the will of people.

For decades, we have not heard the type of intense and vigorous debates in the CPPCC as we used to hear during the early days of the CPPCC when Mao Zedong and Liang Shuming used to voice out their different opinions at the CPPCC. We also notice that at the local level, it has now become the norm for the CPC secretary general to concurrently also taking up the role to become the organization CPPCC chairman.

Legislative and Supervisory Powers
Regardless of what innovation the Chinese leaders want to carry out political reforms, but if the CPPCC and NPC cannot fully and effectively exercise their legislative and supervisory powers stipulated under the Chinese Constitution, and turn China's political reforms into a true democratic and representative of public opinion mechanism that can monitor government operations; and if the CPPCC and NPC continue to become a tool for the CPC to carry out the will of the ruling party, there is no point to talk about political reforms in China. Without substance, political reform will be something that China cannot achieve at this very moment.