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  • 2019.11.11 Monday
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一定期間更新がないため広告を表示しています


Rogue Powers

  On July 12th, the Permanent Court of Arbitration in the Hague rejected China's territorial claims in the South China Sea, finding in favor of the Philippines in a case brought in 2013. Nevertheless, China has been taking a obstinate position toward the judgement. Not only China but also Russia and the U.S. frequently violate international law.                                            The Arbitration Tribunal completely rejected China's "Nine-dotted Line" claim, stating, "there was no evidence that China has historically exercised exclusive control over the water or resources." Nevertheless, China will obviously not accept the judgement, which will hurt China's reputation. However, we cannot force China to follow the decision.                                             In the "Arctic Sunrise" case, Russia took a similar course to China . Russia captured Green-peace members who had climbed on a watchtower in a Russian outpost in 2013. The Netherlands filed the incident for the Permanent Court of Arbitration, in which Russia refused to participate. The Arbitration Tribunal ordered Russia to compensate the Netherlands for the illegal capture. Nonetheless, Russia refused to to follow the decision. In addition, Russia militarily annexed Crimea in 2014. As a result, economic sanctions were imposed on Russia, and it was excluded from the group of 8.                                             In 1986, the International Court of Justice decided in a case brought by Nicaragua that the U.S.'s assistance to the anti-government militia was illegal, and ordered the U.S. to compensate Nicaragua. Nonetheless, the U.S. refused to follow the judgement. When Nicaragua brought a complaint to the U.N. Security Council, the U.S. exercised its veto power against the draft resolution. The U.S. was internationally condemned.                                       It's not uncommon that China, Russia and the U.S. violate international law, and exercise their veto rights for selfish reasons. The other Permanent Members, the U.K. and France, have overlooked China's invasion of Tibet while arbitrarily interfering with domestic matters of powerless countries, such as Myanmar via economic sanctions.                                             We should realize that the United Nations is ineffectual.   

The Influence of the U.K. Referendum

  On June 24th, the United Kingdom decided to leave the European Union. I believe that the British economy will fall into decline. However, in terms of GDP, the U.K. accounts for only 4% of the global economy. And, the U.K. is not a significant market for Japan. The problem for Japan is the strong yen.               As of noon on the 24th, the exchange rate was just 99 yen to 1 USD. The Japanese yen appreciated 7.60 yen in only 1 day. The strong yen will surely take its toll on the Japanese economy, not only in terms of exports but also on domestic tourism.              Many Japanese companies are based in the U.K. as a foothold to the EU market. Toyota Motor Manufacturing U.K. produces 190,000 cars per year, 75% of which are exported to European countries. Honda also founded production lines in the U.K., manufacturing 115,000 cars annually, 90% of which are exported into the EU market. They are now considering relocating their operations.              Many financial institutions are based in London. Under the EU “Passport System”, they can easily open their branches in EU countries. However, without this benefit, they might relocate their offices to Frankfurt or Paris. Their staff will be transferred or laid-off. London might lose its status as the financial center in Europe.              Working class voters voted for independence from the EU partly because of competition from immigration. As a result of the secession, many of them might lose their jobs.              62% of Scotts voted to remain in the EU. In 2014, their referendum decided not to become independent from the U.K., predicated on the necessity to remain as a member of the EU. Scotland is going to demand independence from the U.K again.               As a result of secession, the British economy might temporarily prosper. For 2 years from a notification of secession, EU laws are still in effect, and tariffs will not be imposed. The British pound will most likely depreciate, which will increase the U.K.’s exports.              Still, leaving from the EU whose population is a half billion, not only the British economy but also the U.K.’s political clout will decline further. The IMF forecasts that the U.K.’s economic growth will fall into negative territory (-0.8%) for the first time in 8 years in 2017.               In Japan, the Nikkei average plummeted by 1,286 yen which is the greatest plunge since April 2000 when the IT bubble burst. Owing to the strong yen, prices of oil and imported commodities will probably decrease. However, after the Lheeman Shock, many workers were laid-off and graduates had difficulty in landing a job. I hope that Japan won’t fall into default again.            

The Turbulence in 2016 The Turbulence in 2016


 This year, markets have started off with turbulence and anxiety. The Shanghai Stock Market plunged on the first trading day, triggering global stock markets to plummet.

 On January 4th, the Shanghai Stock index plunged by 7%, The Chinese ‘Circuit Breaker’ system automatically suspended trading. The Dow-Jones index fell by 432.42 points, and the Nikkei average plummeted by 582.73 yen. All Asian stock markets also tumbled.

 On the 7th, China’s People’s Bank pegged its rate as 6.5646 yuan to 1 USD, the lowest in 4 years and 10 month. The Shanghai index plunged by over 7% on anxiety about consistent and accelerating capital outflows from China and the burden put on the foreign-currency debt of Chinese companies. The Chinese authorities relied on the ‘Circuit Breaker’ again.

 On the 3rd, Saudi Arabia broke off diplomatic relations with Iran. Bahrain and Sudan followed Saudi Arabia on the following day. In Iran, a mob assaulted the Saudi Arabian Embassy in protest against the execution of 47 Shiites including a famous Shiite cleric for political reasons on the 2nd.

 On the 7th, West-Texas Intermediate Crude hit its lowest record in about 12 years at 32.1 dollars, even lower than during the Lheeman Shock at 32.4 dollars. I believe that cooperation in decreasing oil production will be difficult because of the diplomatic breakdown between Saudi Arabia and Iran. Oil prices will continue to be sluggish in any events.

 I’m not surprised by the present turmoil in stock markets. However, I expected that Japanese yen would further depreciate due to the rate hike in the U.S. Contrary to my supposition, however, the yen is appreciating (118.23 yen to 1 USD as of the 8th). After the Lheeman Shock, foreign currencies depreciated against USD, with the exception of the yen. In times of economic turbulence, the yen appreciates because investors consider Japanese yen as a safe haven currency. Japan’s national bonds are also being purchased by global investors as a hedge against uncertainty.

 Japan’s economy is still robust at the moment. I basically have an optimistic view on the Japanese economy. However, Japan had suffered greatly from the strong yen previously. The current economic turbulence might incur a similar situation. And, if China collapses, the global economy will be thrown into a depression, including Japan. I’m crossing my fingers that the Chinese bubble will have a soft landing.


The Influence of the U.S. Rate Hike


 On December 16th, the U.S. Federal Reserve Board (FRB) raised interest rates by a quarter point. It was the first time the Federal Reserve has raised interest rates since June 2006. I believe that Japan's economy will further prosper from the U.S. rate hike unless China collapses or a global depression occurs.

 Under the administration of the Democratic Party of Japan, the Japanese economy had been suffering from an appreciating yen. However, since the Abe Cabinet promoted a weaker yen, Japan's economy has improved. And, the U.S. rate hike will lead to a stronger dollar vis-a-vis other currencies including the yen, which will further stimulate the Japanese economy.

 In addition, on the 15th, the U.S. decided to lift a ban on exporting its oil, which will benefit oil importers such as Japan. In 2014, the U.S. became the largest oil producing country due to new sources such as shale oil, surpassing Saudi Arabia. Moreover, Iran is going to resume exporting its oil. Oil prices will continue to moderate or even decrease. Oil exporters would be further constrained.

 There is a reasonable possibility that Russia will go into default again. Prime Minister Abe should not have talks with Russian President Putin for the time being in order to favorably lead to a negotiation on the Northern Territory territorial dispute. I believe that it's possible that Japan could restore all the islands.

The U.S. rate hike will attract investment money from overseas, which would fuel the American economy. On the other hand, emerging economies have to raise their rates in order to curve excessive cash outflows. In fragile economies, the strong dollar might incur currency crises. The weaker their currencies become, the more burdensome their foreign currency bonds become.

 As of the 17th, the Chinese renminbi has depreciated for 10 consecutive business days. In China, additional easing of financial institutions' interest rates is scheduled to be implemented on account of the recession. However, it might lead to increased capital outflows from China.

 I'm crossing my fingers that the bursting of the Chinese bubble will have a soft landing in order not to trigger a global depression.


Terrorism Spurs a Reassessment of Immigration


 A series of terrorism incidents is spurring anti-immigration movements. I believe that this trend will continue at least for the time being.

 On November 13th, a wave of simultaneous terror attacks hit Paris, killing 130 people and injuring more than 350. Capitalizing on the brutal attacks, the National Front (FN) party emerged as the leader in regional elections on December 6th. The far-right party won nearly 30% of the national vote, the highest it has scored in local elections.

 On December 2nd, 14 people were killed and another 17 injured after heavily armed attackers fired on a party at a welfare facility in San Bernardino, California. Republican presidential candidate Donald Trump stated that Muslims should be banned from entering the United States. A survey conducted by CNN from Nov. 27th to Dec. 1st showed that his approval rate surged to 36%, an increase of 9% from October, leaving Ben Carson far behind at 20%.

 On the 5th, a man stabbed 3 people with a knife at an east London Tube station, reportedly screaming,, "This is for Syria" before the police detained him. The U.K. Independence Party insists on an anti-immigration policy as well as withdrawing from the European Union (EU).

 In Austria, the far-right Freedom Party recorded stunning gains in regional elections in September. The anti-mass-migration party doubled its vote to finish a strong second in the nation.

 In Switzerland, the anti-immigration Swiss People's Party (SVP) won the biggest share of the vote in national parliament elections in October.

 In Poland, the conservative Law and Justice party won parliament elections in October with more than a third of the vote; they also promote an anti-immigration policy.

 In Croatia, in November, the right-wing Patriotic Coalition led by the Croatian Democratic Union (HDZ) won the first national election since joining the EU in 2013. Croatia swung to the right with the HDZ beating the governing social democrats.

 On November 23rd, a Korean man planted a bomb in a restroom at the Yasukuni Shrine in Tokyo. Fortunately, no one was killed or injured. Koreans are viewed as somewhat of a social blight similar to the situation with illegal Mexican immigrants in the U.S. Many Koreans commit crimes (their crime rate is 3 times higher than Japanese citizens), and as high as 14.2% of Korean residents are living on welfare in Japan, without working, exploiting our taxes. There is an anti-Korean group called 'Zaitoku-kai', whose members are nearly 12,000 and growing. I believe that the anti-immigration trend will further spread in Japan.
 


China on the Verge of Its Own Demise


 On October 29th, the UN Permanent Court of Arbitration decided that it would go forward with suit filed by the Philippines concerning its territorial conflict with China in the South China Sea. After World War 2, China has been attempting to make a grab for more territory. However, its territorial aggression will be halted at last.

 In 1953, China renamed an 'Eleven-dotted Line' formerly declared by the Nationalist Party in 1947 to 'Nine-dotted Line,' which claimed Chinese sovereignty over all islands and rights to all resources in the South China Sea. Its claim is unlikely to be justifiable under international law.

 China has refused to solve territorial disputes at the International Court of Justice or other international judicial courts. In January 2013, however, the Philippines brought its territorial complaint before the Permanent Court of Arbitration through the UN Convention on the Law of the Sea, stating that China unilaterally occupied reefs and seas claimed by the Philippines.

 China insists that the Permanent Court of Arbitration does not have jurisdiction over matters of sovereignty. And, China even went so far as to not participate in oral proceedings in July. However, the international court accepted 7 out of 15 cases that the Philippines filed.

 China stubbornly remains opposed to the court's decision, belligerently claiming that the decision was invalid and that world court decisions are non-binding for China.

 Oral arguments are scheduled to begin in January next year. China is anticipated to be in abstentia. In that case, only the Philippines' evidence will be formally admitted, and the court will likely return an unfavorable decision vis-a-vis China, I believe.

 On November 11th, Indonesia announced that it would also be bringing a territorial dispute against China before an international court. I believe that Vietnam may follow suit.

 Even a Chinese scholar at a Chinese governmental think tank commented, "The basis of China's sovereignty in the South China Sea is dubious. The government has never presented a clear definition of the 'Nine-dotted Line.' We don't know much about it. China has a scant chance to win at the Permanent Court of Arbitration. Even though China insists on its invalidity, if China loses at the international courts at one after another, China would further become isolated in the international community. It might even affect the government's leadership domestically. "

 China seems to be working forward its own demise not only economically but also politically.


Xi Jinping in a Pickle


On November 3rd, a U.S. Navy destroyer passed within 12-nautical miles of the newly created island in the Spratly Archipelago in the South China Sea which China claims. I'm all for the U.S.'s preserving freedom of navigation on the open seas.

 In 1974, China attacked South Vietnam and annexed the Paracel Archipelago form South Vietnam.

 In March 1988, the Chinese Navy murdered 64 Vietnamese soldiers with machine guns from its battleship, and annexed the Johnson Reef in the Spratly Archipelago. And, in 1995, China annexed the Mischief Reef in defiance of the Philippines. Recently, China has used 7 reefs in the Spratly Archipelago to build artificial structures that it claims to be territorial islands. According to international law, however, reefs which are ever naturally underwater can never qualify as territorial land. Furthermore, even in territorial waters, the United Nations Convention on the Law of the Seas, of which China is also a signatory, allows foreign countries' battleships to peacefully pass through territorial waters without molestation. The U.S.'s action is absolutely correct both legally and morally.

 The U.S. announced that it would dispatch its battleships twice a quarter or more. Needless to say, China cannot compete with the U.S. in terms of military power. China has to avoid a military conflict with the U.S.

 Nevertheless, there are many hard-liners in the People's Liberation Army and also among ordinary Chinese. Chinese President Xi Jinping cannot show a weak-kneed stance, or it would lead to political instability. Reportedly, the Chinese government has difficulty controlling the Chinese Army.

 If China takes a hard line or the Chinese Military launches an action of aggression without permission, the Chinese Military will be decimated by the U.S. Forces. Then, the Chinese people's dissatisfaction would reach its peak, which may lead to a demise of the present regime.

 China takes a predatory stance toward the weak, but does not attack a strong adversary. I'm very much interested in how Xi Jinping reacts to the U.S.'s action.




The Vietnamese Comfort Women


 On October 15th, a Vietnamese-American activist group held a press conference in Washington, D.C. to demand a formal apology from South Korea for atrocity of rape that the South Korean Army allegedly committed thousands of Vietnamese Women during the Vietnam War. South Korean President Park Geun-hye has criticized Japan, stating, "There is no future for a nation that does not face its history." She should not be a hypocrite.

 South Korean President Park Geun-hye visited the U.S. on the 13th, and reportedly had talks with U.S. President Barack Obama on the 16th. On the previous day, 'Voices from Vietnam', an activist group consisting of Vietnamese-American and Vietnamese living in the U.S. run an open letter in the Wall Street Journal claiming South Korean soldiers had raped thousands of Vietnamese women during the Vietnam War. In addition, they held a press conference to demand a formal South Korean apology.

 In 1999, 'Hankyoreh 21,' a South Korean weekly magazine, reported on the South Korean Army's atrocities during the Vietnam War. The following year, an American magazine Newsweek also reported on alleged atrocities. They stated that South Korean soldiers raped and slaughtered over 8,000 Vietnamese, most of whom were women, children and seniors.

 In 2001, the former South Korean President Kim Dae-Jung visited Vietnam, and apologized for the regrettable situation. However, after returning to South Korea, being condemned by opposing party members, he publicly reneged on his apology. Notably, then-vice-president Park Geun-hye fiercely criticized the then-president claiming that he had harmed South Korean soldiers' honor. In fact, her father, former President Park Chung-hee, dispatched the South Korean Army to Vietnam.

 After allegedly being raped, it is claimed that many of the victims were killed. Some women who claime to be survivors make the further claim that they became pregnant as a result. The alleged children of rape and biracial parentage are called 'Raittaihan.' Their numbers are reported to be from 5,000 to 30,000.

 South Korea has criticized Japan. However, according to an American journalist Michael Yon commenting on the "Comfort Women", it is "Very strange that there are allegations of 200,000 women being kidnapped, but only scant shreds of evidence here and there."

 South Korea has failed to investigate their own possible acts of wrongdoings in Vietnam. However, owing to the Internet, public pressure is moving for the true facts to come to light. Former U.S. Senator Norm Coleman, who supports Vietnam War rape and assault victims' call for a formal apology, insists that President Park should publicly apologize for South Korea's sexual violence in Vietnam.

 As Park Geun-hye stated, there is no future for a nation that cannot face its history.



Never Surrender to Propaganda:The Nanjing Massacre


 The International Advisory Committee of UNESCO's Memory of the World Register decided to register documents pertaining to the Nanjing Massacre in China. The Abe Cabinet is considering halting funding for UNESCO over the decision. At least 300,000 Chinese were massacred in December 1937. However, the population of Nanking at the time was 200,000. In addition, the following month, the population increased by at least 50,000. Japan should take a resolute stance against China's propaganda.

 A letter dated December17th, 1937, written by John Rabe, the chairman of the International Committee for the Nanking Safety Zone, petitioning food assistance to the Imperial Japanese Embassy, stating, "We 22 Westerners cannot feed 200,000 Chinese civilians and protect them night and day." Miner Searle Bates, another member at the same committee also wrote a letter dated December 21st to the Japanese Embassy, "We come to petition in the name of humanity that the following steps to be taken for the welfare of the 200,000 civilians in Nanking." Thus, the population of Nanking at the time was assumed by Westerners to be 200,000. How could 300,000 people have been killed?

 And, "DOCUMENTS: NANKING SAGETY ZONE" dated January 14th, 1938, composed by John Rabe shows, "Therefore probably 250,000 to 300,000 civilians are in the city." The population increased by 50,000 to 100,000 in about a month. If there had been a massacre, people would have fled from the area.

 Mr. Yoshinori Kobayashi cast doubt on the authenticity of the Nanking Massacre. The same people appear in various photos. How many times were they killed? The photo of the experiment on one person signifies an autopsy of a Japanese victim because the cadaver was wearing 'tabi' (Japan's traditional sox). An original photo of disabled captives shows that they were treated at the Nanking camp.

 According to the committee's report, from December 12th, 1937 to November 7th, 1938, there were 25 murder cases, and the number of victims was 49 persons. There was no accusation of the civilian massacre on the report.

 In bet that China is attempting to scapegoat Japan in order to avert attention from China's ongoing holocausts to Tibetans and Uighurs. Japan should not surrender to China's propaganda.

 Japan's funding for UNICEF is the second largest (10.8%), next to the U.S. (22.0%). The U.S. stopped contributing in opposition to Palestine's participation in UNICEF. Japan should take a resolute stance against UNICEF's unfair treatment.


The Next Black Monday


 A decade has passed since analysts started predicting the Chinese Bubble was on the verge of bursting. Chinese stocks nosedived in June, America stocks plummeted in July, and Japanese stocks tumbled on August 21st. Stock markets are trembling globally.

 Stock prices on the Shanghai exchange had soared 250% since June, 2014. Mid-June, however, stock prices have plummeted by 30% in 3 weeks. And, more than 14,000 companies, accounting for about half of all the listed companies, requested a temporary suspension on all trading of their stocks. The Chinese government banned stock holders with large positions of 5% or more in a company from selling their stocks for 6 months.

 In China, the real estate bubble burst more than a year ago. The government pushed out residents in urban areas, and developed the land. The prices of real estate soared. However, rich Chinese bought several houses to flip, rather than to own for their own. The supply of houses exceeded the demand, and the prices plunged. Consequently, Chinese shifted their investments from real estate to stocks.

 China's developers, contractors, steel companies, cement producers, machinery makers, etc. are now in a plight. In order to prop them up, China established the Asian Infrastructure Investment Bank (AIIB). However, infrastructure projects take years of preparation before they actually launch. There is a remote possibility that the AIIB will save China's construction and infrastructure sector.

 China's emergence as an economic power has benefited the global economy. It imported cars from the U.S., machinery and parts from Japan, cars and chemical products from Germany, iron ore and coal from Australia, and food from Brazil and Canada. If the Chinese market collapses, the global economy will be devastated.

 I sincerely hope that the Chinese bubble will have a soft landing.



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