Building a railway is far more meaningful than fighting wars

Wang Mengshu, while being interviewed by a New York Times reporter, said the above words by telephone from Beijing. Professor Mengshu, age 78, graduated from Tangshan Railway Institute, specializing in tunnel and space engineering. He developed and applied composite structures for lining tunnels.

During the 6.2-mile (10-kilometer) Dayaoshan Tunnel Project he advanced the technologies of smooth blasting, deep boring, anchor-bolt shotcrete, drilling pre-grouting, information-based two-way construction and pre-reinforced supporting systems for unstable ground. Dayaoshan Tunnel, longest of 263 on the 1,428-mile (2,3000-kilometer) Beijing-Guanzhou high-speed rail line, is a single-tube with a cross-section of 1,076 square feet of material excavated from above the rails, enough for double-trains, maintaining level and straight alignment, also using bridges, across topography.

He helped investigate the 2011 high-speed rail crash that injured 190 passengers, and killed 40. He specializes in underwater tunnels and as deputy chief engineer of the China Railway Tunnel Group, he heads the experts designing an 80-mile tunnel beneath the Bohai Sea.

He is director of the Tunnel and Underground Engineering Experimental Research Center of Beijing Jiaotong University, and for 20 years has been an elected member of the Chinese Academy of Engineering, the highest academic title in engineering science and technology in China.

Several months ago Professor Mengshu told the Beijing Times about his idea for a "China-Russia-Alaska-Canada-US 220-miles per hour railroad train," which would cross the Bering Strait, from Russia to Alaska, using a 125-mile long tunnel to transport passengers and cargo between China and the US in less than two days.

In his December New York Times interview, he said such an initiative is "a wish and a dream of not only China’s railway experts, but also of railway engineers in Russia, Canada and the US, whom I have spoken to." He said, "… building tunnels is not about the length. It has more to do with how deep it is in the sea than length. But why not? We have the technology, and it is a good thing to do. It would benefit generations to come, and the environment. It would connect continents.

"It would be a grand structure of human engineering. It depends on whether governments of the four countries can work together, make this dream come true and leave this amazing legacy for our children."

He admits the Chinese central government is not seriously considering it. He said that the other three countries that need be involved "have not made any public comments".

Professor Mengshu says, "The project is still a concept, at a very premature stage." Though technically feasible, it "demands serious negotiation among the nations concerned, not to mention substantial financial support. It’s too early to talk about the exact route."

When China dismantled its Ministry of Railways, it said farewell to the planned economy and hopes to forever avoid the "great-leap-forward" development approach to railway construction, which resulted in over-investment, excessive construction and aggravated debt risk.

Now the Chinese, because they still have less than half the total railway mileage of that in the United States, are hoping to dramatically expand private rail investment. In 2013, as Professor Mengshu observed, "a shortage of funds is the most urgent problem facing the country’s railway construction."

China, in dissolving the Ministry of Railways, established the China Railway Corporation to take over all commercial functions. China Railway Corporation was capitalized with bonds at US$167.4 billion, after a wide disagreement about the value of existing rail assets. Last month, China Railway Corporation announced that in 2014 alone it invested $132 billion, completing more than 5,236 miles of new railway construction and exceeding all goals for the year.

Sheng Guangzu, general manager of China Railway Corporation, told his annual work meeting, "China has accelerated railway construction both in scale and intensity to fulfill its annual targets in 2014 and the construction drive will continue in 2015."

At the end of six years from the launch of the first high-speed railway passenger service, 9,942 miles of China’s 69,593 total railroad miles are comprised of high-speed rail. By the end of 2015, China’s high-speed rail will have been expanded by another 1,243 miles, which though at a lesser rate, will continue being further expanded through at least 2020. Discussions about improved designs aims at placing of major rail hubs in critical locations, conjoined with metro-transit systems and major airport facilities.

Meanwhile, a separate 1,087-mile coal rail project, the West Inner Mongolia-Central China Railway, which will be partially completed this year, has absorbed $27.12 billion in funding. Prior to being dismantled, the Chinese Ministry of Railroads contributed 20%, for the first time not holding a 50% controlling interest. The other 80% has come from local governments and other entities. Private capital from 11 energy and coal companies contributed 15.7%.

Back in 2012, Professor Mengshu observed, "It would take a long time, say 12 or 13 years, to recover the investment. Whether investors could profit depends on the operating efficiency of the project. Protecting the interest of private investors in state-dominated sectors is an issue that has yet to be solved."

American industrialists, like the key personalities involved with the Washington Corporations, Burlington Northern Santa Fe, Union Pacific and our Electric Utilities will undoubtedly be able to offer Professor Mengshu a set of recommendations for an effective system for accelerating the return of private capital.

Our universities will know what they best can contribute to improve construction and operating technologies, as well as identify and obviate environmental concerns associated with high-speed rail. The main needed ingredients seem to be civic and political leadership. Surely we have leaders of Panama Canal caliber at our state and national levels.

Professor Mengshu observes, "That depends on how the governments of the four countries prioritize," and "that depends entirely on politics".

Though the amounts of capital required to construct a connecting railway between China and Montana are staggering, they are insignificant compared to conservative estimates of $1 trillion expended for just the war in Iraq, which we were told "would pay for itself". We stumbled like led sleep-walkers into in Iraq. And to what end?

In the case of railways, the economic and cultural returns, not to mention the avoidance of just one little-bitty war, would be immense. More than the people of any nation, we in the US should profoundly agree that, "Building a railway is far more meaningful than fighting wars."

John B Driscoll, a retired US Army officer, is a former Montana State Legislator and Majority Leader & Speaker whose areas of expertise include electricity policy, terrorism counter action, and distributed learning and knowledge management.

US, Japan Cautiously Rebuild Ties With Thailand

 

Concerned at rising Chinese influence since last year’s coup, the two countries adopt a pragmatic approach.

The United States and Japan drew international attention this month, as both countries separately marked positive shifts in their relations with Thailand. While the United States kicked off the annual Cobra Gold military exercises – the largest joint military exercise in the Asia-Pacific – Japanese Prime Minister Shinzo Abe met with Thailand’s Prime Minister Prayuth Chan-ocha, releasing a joint statement that called for broader bilateral economic ties.

Both actions attracted significant attention, in part because Thailand is currently ruled by a military junta, which came to power following a coup in May 2014. Thailand is governed by martial law and officials have stated that the restoration of democracy will not happen until early 2016.

This political situation notwithstanding, the United States and Japan affirmed their relationships with Thailand, both likely under with the intent of countering China’s growing influence in the region – the United States with security cooperation and Japan with economic aid. Thailand is a longstanding U.S. security ally in the Asia-Pacific, with the Cobra Gold exercises first held at a bilateral level beginning in 1982.

Last year’s coup prompted the United States to suspend security assistance and cancel exchange programs with Thailand, as the U.S. is legally prohibited from providing military assistance to any country whose elected leader is removed from power by a coup. Yet China’s increasing overtures towards Thailand in the months since, particularly towards strengthening security cooperation, have been a cause for concern in Washington. Chinese military officials met with their Thai counterparts on February 6, and China took part in Cobra Gold for the first time this year. In an effort to balance relations with Thailand while signaling its concerns for democratic restoration, the U.S. compromise was to continue Cobra Gold while scaling back the size and scope of activities. While the United States has acknowledged the difficulties of the U.S.-Thai relationship, its efforts represent a good step in trying to balance its democratic values with its strategic interests in the Southeast Asia region.

For Japan, Abe’s joint statement with Prayuth stressed the importance of quickly restoring democracy to Thailand, stating that “reform of the country towards a sustainable and inclusive democracy” is “crucial.” At the same time, the two leaders signed a memorandum of intent on cooperation, affirming Japan’s involvement in railway and other infrastructure development projects in Thailand. Like the United States, Japan’s relationship with Thailand was affected by the military coup, as Japan initially suspended high-level diplomatic exchanges with Thailand. Yet, as Japan’s direct investment in Thailand fell by 37 percent while China’s increased by 800 percent in 2014, Tokyo has sought to reestablish ties. With China seeking to strategically focus its aid on Southeast Asia through various economic initiatives such as the Asian Infrastructure Investment Bank and 21st Century Maritime Silk Road, Japan is more aware of its need to maintain positive relations with Thailand.

According to the 2014 PEW Global Attitudes survey, China is well-regarded in Thailand, with 72 percent of the public generally perceiving the country favorably. The majority of Thais believe that China is the leading global economic power and 44 percent believe that China will or has already replaced the United States as the leading superpower (compared to 38 percent who believe otherwise). Yet in terms of Thailand’s greatest ally, the United States is still considered to be the primary partner, and Japan is even more favorably regarded than China, at 81 percent. A similar survey conducted by the Japanese Ministry of Foreign Affairs showed high approval of Japan as a “reliable,” “friendly” and “trustworthy” partner for Thailand. Like much of Southeast Asia, Thailand relies on all three countries: China is Thailand’s top bilateral trading partner, Japan is its largest foreign direct investor, and until the 2014 coup, the United States had provided millions in military assistance each year to Thailand through Foreign Military Financing and International Military Education and Training funds. The absence of the United States and Japan creates an easy opportunity for increased Chinese influence. With tensions and instability regarding territorial disputes and maritime law already prominent in the region, the United States and Japan need to be proactive in maintaining their positive images if they want to counter China’s influence in a meaningful and impactful way.

There is a regional power balance at play in Southeast Asia, with the United States, Japan and China all active participants. The United States and Japan do not want to antagonize China, but they also do not want China’s influence – in Thailand and the broader region – to continue expanding. In the case of Thailand, both the United States and Japan focused on separate, complementary aspects – the United States on security and Japan on economic cooperation. This kind of coordinated activity allows the two countries to minimize the domestic fallout from supporting a non-democratic regime, while maintaining a positive presence in the region. This is strategic pragmatism, reflecting the aligned nature of U.S. and Japanese interests in Southeast Asia, and representing the potential for increased U.S.-Japan coordination in encouraging peace and stability in the Asia-Pacific region.

Hana Rudolph is a Research Assistant with the East Asia Program at The Stimson Center, a global security think tank in Washington, D.C. 

 

On Friday paramilitary authorities in Bali carried out a frightening re-enactment of their highly militarised transfer, involving handcuffed prisoners and armoured tanks.

Indonesia: Sacred Virgins and the Death of a Secular Surabaya

 

Surabaya’s pious female mayor, appears never to have consulted Voltaire’s wisdom. Virginity, in Risma’s view — or more specifically, religious chastity — is so important that it must be imposed on individuals by the state.

 

Let’s talk about sex

Thanks to condoms, birth control pills and various oher contraceptives, sex can now be enjoyed freely and safely by all of humankind, regardless of marital status. Fact.

What is to be gained, then, from needlessly prolonging one’s virgin years, even as the body desires sexual fulfillment?

Why should unmarried couples be expected to waste years of their lives proactively avoiding sex, when we know that sex is essentially harmless — not to mention immensely pleasurable — if performed safely and with mutual consent?

As the 18th-century philosopher Voltaire once said: “To think of virginity as a virtue — and not a barrier that separates ignorance from knowledge — is an infantile superstition.”

Tri Rismaharini, Surabaya’s pious female mayor, appears never to have consulted Voltaire’s wisdom. Virginity, in Risma’s view — or more specifically, religious chastity — is so important that it must be imposed on individuals by the state.

As a secularist and a human rights defender, I find it difficult to conceive of anything more dystopian, anything more contrary to individual liberty, than Risma’s ban on Valentine’s Day and her de facto criminalization of premarital sex.

For those who have forgotten, or are not yet familiar with Surabaya’s Valentine’s Day raids, allow me to explain how “Mother Risma” recently attempted to “save” her young constituents from the sin of premarital sex.

Raids and arrests

Beginning on Valentine’s Day morning, and ending on Feb. 15, Surabaya police blitzed through hotels and dormitories, arresting any couple suspected of having (or planning) premarital sex. That the couples had chosen to fornicate in private, with mutual consent, and mostly with the aid of contraception, was of no importance to Risma or the police. On Valentine’s Day, Risma declared, all premarital sex is equally abhorrent and deserving of arrest.

In addition to hotels and dormitories, police also raided Surabaya’s minimarts in search of unscrupulous vendors selling contraceptives to unmarried couples. Hundreds of condoms were thus confiscated by police, who feared that such items might enable unmarried couples to practice safe sex.

Police also seized several hundred kilograms of chocolate confections during the raids, ostensibly for being sold in combination with condoms. Susanto, a spokesman at the Indonesian Commission for Child Protection (KPAI), even claimed that some stores had given free condoms to young customers who purchased Valentine’s Day chocolates. Minimarts denied these allegations, however, claiming that images of so-called chocolate-condom “packages,” which appeared on social media, had been photoshopped by anti-Valentine’s activists.

By the end of the operation, 223 couples had been arrested by the police, according to Merdeka.com. The detainees were then held at a nearby “social center” following their arrest, where they were separated from one another until a parent or relative came to “pick them up.”

Their only crime? Attempting to have consensual sex behind closed doors, most probably with the aid of a condom.

Risma’s motives

Before we consider the morality of Risma’s Valentine’s Day purge, it is important to first understand why Risma feels justified in her use of state power to repress premarital sex.

In the year 2015, given how much we now know about safe sex, there is really only one type of person who has the audacity to campaign against sexual freedom for consenting individuals, and against the use of contraception among unmarried couples.

That person is, of course, a religious person.

“It is no accident that people of faith often want to curtail the private freedom of others,” the philosopher Sam Harris said in his 2006 book “The End of Faith.” “This impulse has less to do with the history of religion and more to do with its logic, because the very idea of privacy is incompatible with the existence of God.”

As a devout Muslim, Risma firmly believes that sex before marriage is a mortal sin — a crime against God. After all, if God were not the victim of this so-called crime, then who else could it be? Who else could bear witness to an offense that takes place behind closed doors, and who else could press charges in lieu of any human plaintiff? Needless to say, only an all-knowing and all-seeing entity could detect such a clandestine and victimless crime.

Preventing premarital sex out of fear that it would offend the almighty is clearly the motive for Risma’s ban on Valentine’s Day, and also explains her hostility to contraception. Strangely, however, when the dreaded Feb. 14 came along, Risma seemed hesitant to admit that her religious convictions were the true source of her concerns.

If Risma was honest about her motives, she would have openly declared that her belief in zina — the Islamic sin of fornication — compelled her to meddle in the sex lives of her constituents.

But instead of admitting this simple fact, Risma threw up a few classic red herrings, arguing that her proscription of Valentine’s Day is a defense against “Western culture” rather than an attempt to please God: “We hope that the ban [on Valentine's Day] will support our efforts to save Surabaya’s children from ‘new colonialism,’ ” Risma said on Feb. 14, “which takes the form of illegal drugs, alcohol and other negative Western cultural influences.”

This is a convenient way of shifting the blame for all the perceived vices of Risma’s own constituents — drug use, free sex etc. — onto an external factor beyond her control; in this case, of course, the evil West.

But why is that Western culture, as Risma’s conceives it, appears to be replete with “negative” influences? What is it about Western values that warrants such grotesque repression as Risma’s Valentine’s Day raids, and her cruel denial of contraceptives to young couples? What exactly is she afraid of?

First of all, I will grant Risma one point: Perhaps it is true that Western ideas about individual liberty and free sex have led to greater promiscuity in Surabaya. In fact, this is probably true of all urban areas throughout the developing world. This admission does not mean, however, that individual liberty and free sex are intrinsically immoral, simply because such ideas tend to encourage higher rates of fornication. Rather, for premarital sex to be immoral, it would have to result in some kind of harm to either of its participants. Sadly for Risma, however, we know all too well that premarital sex can be safely enjoyed with the aid of contraception.

So what’s the problem?

It seems obvious to me that Risma’s ban on Valentine’s Day has absolutely nothing to do with keeping her constituents safe from physical or psychological harm, and everything to do with not angering her God. And if this is not clear enough already, then I invite you to play a thought experiment.

A thought experiment

Suppose that some product of “Western culture” inspired two unmarried Surabayans to purchase a condom and have consensual sex. The couple go off and have an enjoyable tryst, nobody gets harmed, and nobody else is even aware that an act of fornication has taken place. For Risma to claim that such sex is an immoral manifestation of “new colonialism,” or that it reflects a “negative … cultural influence,” would be incredibly odd, given that the outcomes of the event were entirely positive.

Western culture should not be considered immoral simply because it encourages premarital sex. If anything, Western-style sexual freedom appears to be a superbly ethical idea, since it encourages only safe sex among consensual partners, and considers the use of contraception to be a necessary precondition.

This rather straightforward moral calculus changes entirely, however, with the introduction of an omniscient God figure who has placed a jealous ban on premarital sex. In this context — which Risma considers to be our contemporary reality — fornication is considered immoral not for its real-world consequences, but for the apparent displeasure it causes to God.

Using this rationale, then, if God really is all-knowing and all-seeing, then he is presumably watching in tortuous agony each time an unmarried Surabayan sets off to the 7-Eleven to buy a condom. Astonishingly, however, time after time, God fails to defend his young virgins from the evil lure of contraception and fornication. This inertia, of course, begs a few questions.

“Why doesn’t he intervene?” one of Risma’s chaste supporters might ask. “Why doesn’t he, with all his incredible powers, simply remove the condoms from the shelf and save the young virgin from sin?”

These are very reasonable and pertinent questions, to which those who believe in God must provide answers, particularly those, like Risma, who are so convinced of God’s existence that they believe his will should be imposed on everyone else by force. In order of logical probability, then, consider the following options:

1) God is secretly a closet public health nerd, and he knows that contraception is one of the greatest inventions in human history — or, perhaps, he invented it himself! — and thus resolves to let the young virgin do the sensible thing and purchase a condom at the 7-Eleven.

2) God really can see all of the world’s unmarried couples during the act of fornication, but is unable to intervene because he is either too tired, too busy, concentrating on something more important, or not truly omnipotent.

3) God really can see all of the world’s fornicators, doing their thing, but does not intervene because he feels that sexual morality is a private matter.

4) God does not exist, has never existed, and therefore does not have an opinion on sexual morality, let alone the capacity to police it.

The fact that God never intervenes to prevent his young virgins from fornicating — even on the dreaded Valentine’s Day! — ought to suggest to Risma that God really doesn’t so much care about how, why, where, when or with whom his subjects choose to have sex, or whether or not they use protection. (If he exists at all, that is.)

Risma, commanded by God?

This leads me on to another doctrinal conundrum that Risma routinely fails to address: If ultimately God judges his adherents at the gates of heaven, rather than here on Earth, then why is it Risma’s duty, as the publicly elected mayor of Surabaya, to punish those who privately disobey his commands?

This, I believe, really gets to the core of Risma’s bigoted view of premarital sex, and the danger of her religious beliefs in general. To put it briefly, Risma is convinced that she has been elected to serve God, first and foremost, as well as the people of Surabaya. In fact, in June 2014, Risma said exactly that: “Morally, I am accountable to God and the people of Surabaya [emphasis added].”

This conflict between Risma’s two perceived benefactors — one real and one imagined — is causing her to make totally irrational policy decisions based on religious dogma and fear of God, rather than pursuing what is best for her constituents. Clearly, God and the people of Surabaya have very different interests, particularly when it comes to sexual fulfillment.

After the disastrous shutdown of Surabaya’s Dolly red-light district in June last year, Risma’s Valentine’s Day raids are really just the latest tragic installment in a long line of God-fearing policy blunders, driven by her religious faith.

Make no mistake, Risma believes that her power as an elected politician can and should be used to impose her personal religious prejudice on private individuals, insofar as it pleases God’s prudish will.

This sort of authoritarianism should be of tremendous concern to anyone who believes that Indonesia is better off as a secular democracy, in which religious adherence is a private matter for each individual, and not to be enforced by the state. (I note that Indonesia’s Constitution mandates a compulsory belief in God — this, too, is problematic, and shall be considered in Part 2.)

For some strange reason, though, few commentators have been brave enough to speak out against Risma’s lurch toward theocracy, even as she hacks away at Indonesia’s secular Constitution.

Among unelected religious officials, the urge to police the sex lives of private individuals is, of course, pathologically common. But Risma’s insistence on using secular, state institutions — such as the police and local government — to enforce religious observance is something entirely different, and vastly more dangerous.

I am going to pay Risma the compliment of assuming that she does not want Surabaya to become another Aceh, Tehran or Riyadh. However, given her recent attempts to micro-manage the sex lives of her constituents, it does seem that Risma is somewhat tantalized by the idea of using state power to enforce her own petty religious prejudice on everyone else, whether they like it or not.

This creeping theocracy has to stop.

Patrick Tibke is a Jakarta-based writer and a recent graduate of the Southeast Asian Studies program at SOAS, University of London.

 

Indonesia’s ‘Alcatraz’ Island a breeding ground for hard-liners

With national and international attention fixed upon the notorious Nusakambangan prison island following last month’s controversial execution of five foreigners convicted of drug trafficking, local Muslim leaders in Cilacap regency, Central Java, are using the spotlight to call attention to another issue: the radicalization of inmates
and residents in the surrounding area.

They have warned the government that the island and its surrounding areas, dubbed “Indonesia’s Alcatraz”, have long been used as a recruiting ground for hard-line Muslim groups whose activities often go unnoticed by security agencies due to the area’s remoteness.

These groups, they said, were affiliated with the infamous Abu Bakar Ba’asyir, who is currently serving a prison sentence on the island for terror-related crimes.

“The hard-liners grow well in Nusakambangan and the surroundings. Cadres are trained and indoctrinated at a number of sites there,” Nahdlatul Ulama Cilacap branch secretary Hazam Bisri told The Jakarta Post, on Tuesday. The Nahdlatul Ulama (NU) is the nation’s largest Muslim organization.

Hazam said there were at least three locations where hard-line Muslim groups attempted to recruit new followers: in Selok Jero, Kampung Laut and the prison itself.

Radicalization activities inside the prison, according to Hazam, were conducted by Ba’asyir and other convicted terrorists with visitors to the complex.

Quoting local NU data, Hazam said there were at least 70 convicted terrorists serving prison terms on the island.

“Each of the inmates will teach and indoctrinate an average of five people on each visit ,” Hazam said.

Selok Jero is a bit far from the prison compound, but it is where newly recruited members take their oaths. A mosque reportedly has also been built there, without the consent of the authorities.

“It has the same access as Kampung Laut. But to get there one must pass through a narrow route on a small boat,” Hazam said.

 Meanwhile, in Kampung Laut, about 100 Ba’asyir cadres are actively recruiting new cadres among the local inhabitants. Forty have taken up residence in the area.

Chairman of the Cilacap Interfaith Communication Forum (FKUB), Taufik Hidayatulloh, expressed similar concerns over the radicalization efforts.“They spread propaganda to locals to reject the presence of churches and even to flatten worship venues,” Taufik said.

Taufik said the government should boost the presence of the Indonesian Military and the National Police on the island.

“There is no police precinct or military subdistrict command [Koramil] in Kampung Laut. You could say it’s a safe haven for jihadists,” Taufik said.

Thejakartapost.

Shanghai experiment is a major step towards financial liberalisation

 

Since September 2013 China has been operating a new form of free trade zone (FTZ) based in a small area of Shanghai, called the China (Shanghai) Pilot Free Trade Zone (SPFTZ). Only 28 square kilometres in area, the SPFTZ is a concrete first step to China’s new development model, the so-called ‘new normal’. China’s adjustment to growth at a relatively lower but still increasing rate will be assisted by the SPFTZ’s substantial steps towards financial liberalisation.

From the beginning, the SPFTZ has been a pilot zone not only for trade but also for broader reform. There have been four major areas of institutional reform over the past year. This includes reform of the foreign investment, financial, trade, and legal and regulatory systems. Of these, financial innovation attracts the most interest.

The People’s Bank of China and three regulatory commissions on banking, securities, and insurance have adopted 51 new regulations underpinning a new financial architecture in the SPFTZ. These include a free trade accounts system that enables eligible organisations and individuals to enjoy the same regulatory rules on their yuan as apply to foreign currencies. Cross-border payments, receipts, and exchange related to direct investment by enterprises can be processed directly by banks. Eligible individuals can now make various kinds of overseas investments, including securities investment. Financial institutions in Shanghai can also independently price the foreign currency deposits of enterprise clients. And banks can directly provide cross-border RMB settlement services in current accounts and direct investment accounts to their clients.

All these features are aimed at loosening capital controls in the SPFTZ, while maintaining them for now in most of the rest of China. Similar arrangements are in place in Tianjin, Fujian and Guangdong FTZs. But the impacts of financial market changes cannot be confined to small geographic areas. As such, they will likely affect the capital controls in China as a whole.

In fact, research by the authors shows that the impact of capital controls in China is lower since the SPFTZ. Capital flows have increased rapidly since the SPFTZ. The price spread between the CNY (the onshore exchange rate of RMB) and CNH (the offshore exchange rate of RMB in Hong Kong) has also shown a tendency to diminish. Furthermore, a formal price test — analysing the combination of onshore RMB interest rates, offshore US dollar interest rates and non-deliverable forward (NDF) exchange rates — indicates that there was a regime break in China’s capital controls when the SPFTZ started.

These spill-over effects are more as the result of intentional policy design than of a careless failure of planning. Chinese reform is generally characterised by its evolutionary strategy, where tentative policy experiments in confined areas are only replicated in other areas when they succeed. Although financial architecture usually occurs organically, in that it gradually results from a myriad of individual agreements, China can still find ways to trial reforms while avoiding an unfavourable impact on its whole economy.

That the SPFTZ is expanding to 120 square kilometres and three similar FTZs in Tianjin, Fujian and Guangdong are operational proves that loosening capital controls is in accordance with the purpose of the central government. Beijing may gradually abandon its current policy of a stable RMB and capital controls to a floating currency and liberalised capital market.

A liberalised capital market is a part of the broader objective of the new generation of Chinese leaders, whose aim is to create a more structurally balanced, domestic demand driven, environmentally friendly, and equitable form of economic development. In this sense, the SPFTZ heralds the ‘new normal’ that will characterise China in the coming decades.

Daqing Yao is an Associate Research Professor at the Institute of World Economy at the Shanghai Academy of Social Sciences.

John Whalley is Professor in the Department of Economics, Western University.

The authors are grateful to the Ontario Research Fund and the Centre for International Governance Innovation for financial support. This article refers to the materials from the authors’ recent paper: Daqing Yao and John Whalley, ‘An Evaluation of the Impact of the China (Shanghai) Pilot Free Trade Zone (SPFTZ)’, NBER Working Paper No. 20901.

 

Revitalising Japan’s security policy: Between pacifism and the modern world

 

This year marks the 70th anniversary of the end of World War II. Such milestones offer an opportunity to reflect on the progress made and the steps needed to ensure that such tragic events are never repeated.

Thus it is unfortunate that so many decades on debates surrounding Japan’s wartime history are still stirring controversy in the region. While Japan has issued a number of apologies, the most significant came on the 50th anniversary of the end of the war, when then Prime Minister Tomiichi Murayama made the now famous Murayama Statement. That statement offers a straight-forward apology and squarely acknowledges that Japan followed ‘a mistaken national policy…and, through its colonial rule and aggression, caused tremendous damage and suffering to the people of many countries, particularly to those of Asian nations’. It has been maintained as the official position of all successive Japanese governments under both the Liberal Democratic Party (LDP) and the Democratic Party of Japan. The basic nature of the statement leaves no room for equivocation, and it is critical that Japan adhere to this statement if it is to maintain its standing in the international community.

Prime Minister Shinzo Abe has indicated that he will make a commemorative statement on 15 August, the anniversary of Japan’s surrender. Following the recent controversy in Japan over the references to comfort women in American history textbooks, there has also been speculation that Abe may seek to undercut the Murayama Statement. But any move to contradict Murayama’s words seems unlikely since doing so would undermine the Abe administration’s national security agenda as well as Japan’s hard-earned reputation as a nation committed to peace.

In fact, the path that Japan has followed over the last 70 years is nothing short of extraordinary. After the war, Japan reinvented itself as a peaceful nation by going through a remarkable democratisation and by promulgating a new constitution that included the famous Article 9 ‘peace clause’. Japan built an egalitarian society, achieved rapid economic recovery to become the second largest economy in the world in less than 25 years, utilised its wealth to establish itself as a leader in technological innovation, and became one of the world’s leading providers of official development assistance — all the while never firing a single bullet. Japan’s peaceful identity and its contributions to global public goods have been recognised around the world, as evinced by its positive image in global opinion polls.

Looking forward, Japan must make clear to the world that it is continuing to face up to its wartime conduct; that it recognises the pivotal role of US support, which enabled Japan to reinvent itself; and that, based on its proud record over the past 70 years, it will continue to work for the peace and prosperity of the region in the future.

To best position itself for future regional cooperation, the Japanese government must pay more attention to how its foreign policy is perceived among its neighbours. Most critically, it must clarify where it is moving with the reinterpretation of Article 9 of the constitution, which it is undertaking in order to allow the Japan Self-Defense Forces (SDF) to engage in collective self-defence. While the contemporary security environment makes it important to move forward with a common-sense reinterpretation of Article 9 that will allow limited forms of collective self-defence, more rigorous explanation is required to demonstrate that the reinterpretation set out in the cabinet’s July 2014 decision will maintain the constitution’s original spirit.

The Abe cabinet’s reinterpretation names three new conditions for the use of force beyond cases where the Japanese homeland is under attack: ‘When an armed attack against a foreign country that is in a close relationship with Japan…threatens Japan’s survival and poses a clear danger to fundamentally overturn the [Japanese] people’s right to life, liberty and pursuit of happiness’; when there are ‘no other means to repel the attack’; and when the use of force is limited ‘to the minimum extent necessary’.

These conditions appear restrictive, but since they do not come with any geographical limits, there is significant potential to push the envelope toward a more expansive interpretation. For instance, the Islamic State of Iraq and the Levant (ISIL) could theoretically be interpreted as posing a threat to the Japanese people’s constitutional right to life, liberty, and the pursuit of happiness. Some may argue that this would open the door for the SDF to participate in coalition air strikes against ISIL in Syria and Iraq, a scenario that goes well beyond the spirit of the constitution.

As the Abe government seeks to pass the legislation needed to implement collective self-defence, the debate is bound to be influenced by ISIL’s recent killing of two Japanese hostages. Abe has hinted at the possibility of new legislation to permit the SDF to engage in rescue operations for Japanese nationals abroad with the consent of host nations. This debate goes to the very heart of Japan’s post-war identity. On the one hand, liberals argue that Japan plays a unique role as a pacifist nation and that, as a country not directly party to any conflicts, its Middle East policy and humanitarian assistance significantly contribute to regional stability. On the other hand, conservatives argue that Japan cannot isolate itself from the global phenomenon of terrorism and must be prepared to use the SDF to safeguard Japanese interests. While there are merits to both arguments, Japan’s national security policy must be determined in a calm and rational manner. The danger now is that Japan’s security policy and postwar identity may be shifted by a wave of emotional nationalism following these tragic deaths. In shaping new policy, a careful balance must be maintained between clarifying the legitimate roles of the SDF and maintaining Japan’s identity as a pacifist nation.

Hitoshi Tanaka is a senior fellow at JCIE and chairman of the Institute for International Strategy at the Japan Research Institute, Ltd. He previously served as Japan’s deputy minister for foreign affairs.