Wednesday, December 12, 2018

Kerry B. Collison Asia News: Will Israel leave Australia’s back door open for ...

Kerry B. Collison Asia News: Will Israel leave Australia’s back door open for ...: Australia should be careful to ensure defence cooperation with Israel does not leave a back door open for Chinese infiltration. The h...

Will Israel leave Australia’s back door open for Chinese infiltration?

Australia should be careful to ensure defence cooperation with Israel does not leave a back door open for Chinese infiltration.

The hosting of the Israel-China Innovation Conference in Jerusalem on 24-25 October 2018 highlighted the growing ties between Israel and China.

Chinese Vice President Wang Qishan attended the conference, as did Alibaba’s Jack Ma and former Google CEO Eric Schmidt. The Conference was sponsored by the Israeli Ministry of Foreign Affairs (which sits with the Prime Minister). There were representatives from 13 different Chinese and Israeli government agencies. Wang is the highest-ranking Chinese official to visit Israel since President Jiang Zemin’s visit in 2000.

Wang emphasised Israel’s importance to China, saying “Israel leads the world in electronics, information technology, modern medicine, and agriculture… China is still striving to achieve modernisation.”

Leading Chinese tech companies, such as Huawei, Legend and Xiaomi, have established operations in Israel. In 2017, 34 Chinese companies were investing in Israeli companies, up from 18 in 2013. This amounts to around US $500 to $600 million or approximately 12 per cent of the total capital raised by all Israeli startups between 2013 and 2017.

Israeli Prime Minister Benjamin Netanyahu has made it his mission to improve relations with China. In 2017, he travelled to China where he met President Xi Jinping and the two agreed to upgrade the relationship to a Comprehensive Innovation Partnership (during the trip 25 cooperation agreements were signed valued at around $2 billion). Netanyahu wants a free trade agreement between the two countries by 2019.

Wang and Netanyahu led the fourth meeting of the China-Israel Innovation Committee, which is an intergovernmental meeting aimed at improving cooperation in economy and trade, science and technology, health, agriculture, environmental quality, education and academy.

Another important example of the increased cooperation between Israel and China was the Technion Institute of Technology, Israel’s equivalent of MIT, opening a joint venture in Shantou Province with Shantou University in 2017. The event was attended by Hong Kong billionaire Li Ka-shing, who had donated US $130 million to the Technion in 2013.

Netanyahu’s commitment to open the Chinese market to Israeli companies explains why there has been a boom in economic terms between the two countries. In 2017, the volume of trade between the two countries totalled $9.67 billion – with Chinese exports to Israel twice as large as Israeli exports headed the other way. China is now Israel’s second largest trading partner after the US.

With China seen as a key market, the Israeli Ministry of Economy and Industry has established six economic offices in China (by comparison, Israel has four in the US). In 2017, the two countries opened direct flights from Tel Aviv to Shanghai and from Tel Aviv to Chengdu, which may explain why in 2017, Israel received over 110,000 Chinese visitors.

The Israelis have reportedly made it clear to the Chinese that defence technology is off the table, although healthcare, sustainable development equipment, bio-technology, medical equipment and precision farming, are all fair game. Notably, the Israelis say nothing about ‘dual use’ products.

The problem with the improved relationship is that one doesn’t know how the Chinese will exploit the technology, especially innovations relating to artificial intelligence and civilian cybersecurity (around 120 Israeli hi-tech companies receive Chinese investment).

In a remarkable op-ed, Gilad Cohen, the Deputy Director General for Asia-Pacific Affairs at the Israeli Ministry of Foreign Affairs, discounted the growing criticism appearing in the Israeli media over the extent of China’s penetration into Israel.

In September 2018, Shaul Chorev, the former deputy commander of Israel’s navy and chairman of the Atomic Energy Commission, warned as to the danger of Chinese penetration, specifically the fact that the Shanghai International Port Group would manage Israel’s port of Haifa for 21 years, starting from 2021.

Similarly, Ephraim Halevy, the former head of Israel’s national intelligence agency, has gone on record saying that growing Chinese influence is a threat to Israeli national security. This may explain why Dorit Salinger, Israel’s Commissioner of Capital Markets has blocked Fosun’s $462 million attempt to acquire Phoenix Holdings, an insurance and financial group.

Cohen’s response to such concerns was dismissive, arguing that Israel has nothing to worry about when it comes to China as Israel “is not a country like Djibouti or Somalia”. Cohen further emphasised the economic aspect of the relationship before also pointing out that Israel is committed to penetrating the Far East.

In a separate op-ed, Cohen described criticism over Duterte’s visit as “superficial and exaggerated”. Like his boss Netanyahu, Cohen seems to only see dollar signs when it comes to relationships with Asian nations – in the op-ed on Duterte, Cohen notes the economic potential of six million Filipino Christian pilgrims to Israel.

The commitment to earn hard cash may also explain why Netanyahu conveniently ignores China’s relationship with Iran, his bĂȘte noire. In other words, money and politics trump ideology.

Israel’s domestic debate about Chinese penetration has parallels with Australia.

It is increasingly recognised that our greed has allowed the Chinese to outmanoeuvre and outplay us. This highlights the need to look at who our allies and friends are working with, to ensure that we don’t get infiltrated through the back door.

Malcolm Turnbull and Benjamin Netanyahu worked hard to improve relations between the two countries, with Netanyahu in February 2017 becoming the first Israeli prime minister to visit Australia.

Later that year, Australia and Israel signed a defence industry cooperation memorandum, with one of the aims being to set up the Australia-Israel Defence Industry Cooperation Joint Working Group. The goal was for Australia to benefit from Israel’s world-leading innovation in cyber technologies, because as part of Australia’s investment in defence, the government has allocated more than $1.6 billion to expand Australia’s innovation capabilities.

As Australian policymakers and businesses increasingly take the view that Chinese penetration of critical infrastructure assets should be curtailed, there will be more questions over the extent of China’s investment and presence in Israel.

For their part, Israeli policymakers must eventually decide whether greed trumps values, friendship and allies.

Isaac Kfir

Monday, December 10, 2018

Kerry B. Collison Asia News: Myanmar’s Kyaukphyu Port: The Dragon Enters In A B...

Kerry B. Collison Asia News: Myanmar’s Kyaukphyu Port: The Dragon Enters In A B...:   In a meeting with Suu Kyi, the Chairman of the China Development and Reforms Commission (NDRC), Ning Jizhe, tried to hustle Myanmar...

Myanmar’s Kyaukphyu Port: The Dragon Enters In A Big Way


In a meeting with Suu Kyi, the Chairman of the China Development and Reforms Commission (NDRC), Ning Jizhe, tried to hustle Myanmar to workout an ‘implementation Plan’ for the China-Myanmar Economic Corridor (CMEC) under the Belt Road Initiative. Suu Kyi stood her ground and made a very significant response that said – “the CMEC Projects (are) needed to be implemented in line with the Myanmar’s sustainable Development Plan and should support the long-term interest of both peoples.

The message was that it should not be in the interest of China alone but that of Myanmar also.

She also stressed that China needed to negotiate the projects systematically and in accordance with domestic rules and regulations.( thus avoid going to BRI Courts in Xian in China later)

This timely reminder to China is not only for Myanmar itself but for other countries who are negotiating various projects in this region under the BRI.

This reminds me of a well thought out remarks by an analyst of Sri Lankan origin Gajalakshmi Paramasivam, in connection with the projects in Sri Lanka. She pointed out that “Borrowing without the ability to repay results in slavery. One who is a slave does not have the capacity to work sovereign powers anytime, anywhere!”

It looks that countries in South and South East Asian region have begun to understand the sinister intentions of China in going ahead in a big way with mega projects in countries that do not have the ability to repay. The case of Hambantota port being swallowed up by China is a case in point.

The Mega project at Kyaukphyu on Myanmar’s east coast in Myanmar in Rakhine Province is another case in point.

After two years of intense behind the scenes negotiation, the CITIC Conglomerate of China and the Myanmar Government signed a deal on 8th November. It is not a coincidence that China took a major initiative at the same time to get the KIA the second most powerful insurgent unit to talk to the Myanmar Peace Commission to find ways to de-escalate the intense fighting going on between Myanmar Army (Tatmadaw) and the KIA.

The Chinese efforts to bring the warring parties to talk is not to be seen as a benign effort to bring peace to the region for its own sake, but to help the infra structure projects under the BRI and China Myanmar Economic Corridor that would necessarily need peace and stability in the region.

While signing the agreement, the Chairman of the CITIC Chang Zhenming said that the project is meant to be only the beginning for further steps! He admitted that the project comes under the BRI meant to connect Myanmar with Western China as well as an ‘economic corridor’ joining other ASEAN economies.

Knowing the resentment of the local people (Myitsone dam), U Set Aung, Chairman of the Kyaukphyu SEZ management Committee and Deputy Minister of Planning and Finance, bravely said that the project will not amount to a debt burden for Myanmar though it is too early to make such a statement. The Minister must also be aware that the same CITIC Group is negotiating to develop an industrial park with an investment of 2.7 billion US $ with 51 to 49 percent stake between the Chinese firm and Myanmar respectively. Two weeks earlier on- October 22nd to be precise, the Myanmar railways and the China Railway Group signed an MoU to build a railway line between Mandalay and Muisse on the Chinese border. This is part of an ambitious road/rail project to connect Yunnan with Mandalay to Yangon and on to the deep-water port at Kyaukphyu.

The project in the first phase involves the construction of two deep water berths ( brought down from 6) and an industrial Special Economic Zone Park.

The NLD Government knowing fully well the debt trap that would follow, has brought the projected investment from 7.3 Billion to 1.3 billion dollars and also brought down the stakes from 85-15 originally agreed to 70-30 ratio. Myanmar expects to give half of its stake to private companies.

What is missing in the whole dealing is transparency, a complaint that is being heard from Pakistan too.

Tall claims are now being made that 90 percent of managerial posts in the SEZ will be filled by Myanmar workers and a total of 100,000 locals are supposed to be benefitted!

The fact is that the Kyaukphyu port and the infra structure road and rail projects are part of the desperate efforts of the Chinese to find an alternative route to the Indian Ocean and thus avoiding the Malacca Straits. By diversifying the sea trade route, China would save about 5000 Kms of sailing distance.

One cannot but conclude that the chief beneficiary of the Kyaukphyu Port is China.

It is hoped that the smaller countries in South and South Eastern region do not fall a prey to the allurements of “generous offers” of loans by China only to be enslaved eventually. The tactics are familiar. First get the country to be strategically dependent and then go for economic strangulation. Pakistan knows it!

The countries that are enthusiastically getting involved in the BRI which is actually Belt and Road Invasion should again be reminded of the dictum “Borrowing without the ability to repay results in slavery”

By S. Chandrasekharan



Saturday, December 8, 2018

Kerry B. Collison Asia News: US Navy’s New Indo-Pacific Theater Strategy

Kerry B. Collison Asia News: US Navy’s New Indo-Pacific Theater Strategy: A day or so ago the US Navy sent a guided-missile destroyer into Russian-claimed waters in the Sea of Japan in what it called a “free...

US Navy’s New Indo-Pacific Theater Strategy

A day or so ago the US Navy sent a guided-missile destroyer into Russian-claimed waters in the Sea of Japan in what it called a “freedom of navigation” operation. The operation comes as the US and Russia are in confrontation over a variety of serious security issues, including Russia’s violation of the terms of the 1987 Intermediate-Range Nuclear Forces Treaty (INF) and Moscow’s operations to control the Sea of Azov and to ultimately control the lands above the Crimea Peninsula.

The USS McCampbell, an Arleigh Burke-class destroyer operating from the US Navy base at Yokosuka, in Japan, sailed near Peter the Great Bay “to challenge Russia’s excessive maritime claims and uphold the rights, freedoms and lawful uses of the sea enjoyed by the United States and other nations.” Russia responded that the USS McCampbell never crossed into Russian waters and the destroyer was under surveillance the entire time. Russia’s concept of maritime property rights is part of Moscow’s belief in extended jurisdiction over seabeds.

A US Navy spokesperson said: “US Forces operate in the Indo-Pacific region on a daily basis. These operations demonstrate the United States will fly, sail and operate wherever international law allows. That is true in the Sea of Japan, as in other places around the globe.”

This idea of “Indo-Pacific” is important to note. US military doctrine toward China and East Asia underwent an upgrade at the Pentagon in May 2018. US Defense Secretary James Mattis announced that Pacific Command would now be the US Indo-Pacific Command to better reflect linkages and values in the region. For the Pentagon, relationships with Pacific and Indian Ocean allies and partners are proving critical to maintaining open and free maritime sea lanes.

Mattis stated that “…over many decades the former Pacific Command adapted to changing circumstance, and today carries that legacy forward as America focuses west.” The idea of “west” is meant to underscore Washington’s growing military relationship with India, which America is working with to counter Chinese maritime influence.

It is significant that as India is seeking to expand its naval “destiny” with a mix of Russian and European-made naval assets, Delhi bumps into Chinese regional interests. Attempting to expand its own interests, commercial activities, and energy goods imports, China has launched the “String of Pearls” project. This is the construction of a web of naval infrastructure, including ports and bases, throughout the Indian Ocean Region (IOR). These activities, along with the arms sales to IOR states, are rousing fears of Chinese control of blue water sea lanes, fueling an old rivalry between India and China.

The US Navy’s freedom of navigation operations have mostly involved making a show of sending ships into contended waters. The US Navy has conducted several such operations in the South China Sea, sailing past islands claimed by China near Gaven and Johnson reefs in the Spratly Islands. Just last week, the US sent the USS Chancellorsville, a guided-missile cruiser, near the Paracel Islands in the South China Sea to similarly challenge China’s maritime domain.

The US Navy has been exercising freedom of navigation numerous times over the past year, which is earning the ire of Beijing. For the Chinese, the US side is posing a grave threat to China’s sovereignty and security, severely damaged relations between the two militaries, and significantly undermined regional peace and stability. China thinks its sovereignty over the islands and their adjacent waters in the South China Sea is indisputable.

Thus, America is conducting freedom of navigation exercises around Russia and China as part of the wider move to protect naval sea lanes in accordance with international maritime law.

What we are seeing is an arc of maritime points that are coming into sharper focus. The Russia-China-India triangle in terms of sea lane security is important because of the interplay in terms of defense sales and technology shared between the three countries. Also, concepts of sovereignty between the countries, although not present in India yet, are strong and thus America is focusing on how the three countries use Belt and Road concepts in terms of sea lane logistics.

Overall, freedom of navigation exercises throughout the Indo-Pacific theater, stretching from Russia to India via many waterways and a few chokepoints, is now part of showing US resolve in terms of open sea lanes. America’s naval operations are supported by a number of countries in the region and thus state sovereignty is respected from this viewpoint. What is more important is that threats of coercion that focus on maritime trade are not rejected on the basis of what Secretary Mattis calls “predatory economics” as there appear to be many “belts and roads” in the Indo Pacific.



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