China and Russia's oil exchange

This week marked the completion of a major oil pipeline connecting the Russian province of Angarsk to the Chinese city of Daqing. This new development is in response to China’s growing need for oil, a need Russia is happy to help with. This agreement imposes an oil exchange between the two nations from 2011 until 2030. The new pipeline will essentially triple China’s oil supplies and marks a new level of cooperation between the two major nations.

“The smooth completion of the pipeline project is a model for the two countries' mutually beneficial win-win cooperation and a milestone for China-Russia energy cooperation,” said Hu Jintao at the agreement ceremony proceedings.

Although the volume of oil has been decided upon, the price as of yet has not been mentioned. This however seems a small detail given China’s economic standing. The two countries also seem to be taking this newfound agreement to heart in that they are touting it as incredibly beneficial to both sides not only in supply relations but also in public endeavors. Given this increase in oil, it will be interesting to see how China will put it too use.

http://www.youtube.com/watch?v=7tF680Dbk0Y

 

http://www.bbc.co.uk/news/business-11417781

http://www.thehindu.com/news/international/article799318.ece

Heavy anti-Japanese sentiment sweeps China

This week has been ripe with anti Japanese sentiment in China due to the controversy surrounding the fishing boat captain being held in Japan and his pending release. A court hearing extended the captain's sentence another ten days making Sep. 29th the earliest he could be released. China feels that this measure is " illegal and invalid" stressing that Japan has no right to detain the captain. This dispute arises from a controversy surrounding political control over a group of islands where the captain was arrested.

                                            http://www.bbc.co.uk/news/world-asia-pacific-11354735

The area of dispute is between eastern China and Okinawa. The small island chain that presides there is known as  Senkaku in Japan and Diaoyu in China. Although the islands are uninhabitable by humans, a certain species of wild goat lives there along with a rare type of mole.The area is however beneficial to humans in that it is reportedly a ripe fishing ground for both Chinese and Japanese sailors. There is also a possibility that the area has some untapped oil reserves. Although Japan at the present controls the area, China feels it has greater claim to the islands.

Japanese representatives say that the captain of the vessel intentionally rammed into one or two larger Japanese boats and that they were trying to "shoo him away". Alcohol may also have been a contributing factor to the captain's behavior.

Because of Japan's decisions, China has halted any high priority talks and ties with Japan. Some of these talks reportedly had to do with heavy topics such as aviation and coal. Not only were several of these high priority meetings held off, several protesters in China surrounded the Japanese embassy demanding the release of their captain. http://www.bbc.co.uk/news/world-asia-pacific-11234742

This protest also marks the anniversary of the Mukden incident from 1931. This is when a Japanese owned railroad track in southern Manchuria was bombed and Chinese nationalists were blamed. This then led to the Japanese occupation of the area, setting the stage for the later second Shino-Japanese war. There is however much controversy over who actually did the bombing with many believing the Japanese themselves to have done it for an excuse to occupy the area. Although tensions are high in China right now, it will be interesting to see how the upcoming few days will pan out and if any of the high priority talks will take place between the two countries.

 http://www.bbc.co.uk/news/world-asia-pacific-11363024
http://www.economist.com/node/17049121
http://en.wikipedia.org/wiki/Mukden_incident
http://www.bbc.co.uk/news/world-asia-pacific-11354735

China and Taiwan sign trade agreement.

Recently a new trade agreement between China and Taiwan was signed that cuts tariffs on several trade items. The tariffs on 539 Taiwanese exports entering China and 267 Chinese products entering Taiwan will be significantly reduced or removed altogether. This agreement was created to increase the trade as well as relations between the two. The increase in trade and access to Chinese markets will also likely make Taiwan more integrated into the global economy.

This increase in trade however has some Taiwanese citizens a bit worried. The potential amount of trade now possible, could allow big businesses in China to dominate local businesses in Taiwan. The opposite is also true for big businesses in Taiwan who may choose to move their operations to China to increase their market. The job market may also be severely affected by the closing of factories due to the increase in cheaper Chinese goods. One Taiwanese citizen, Mr.Chen Pei-jan says:

"Once we sign the trade deal, the people without technical skills will have a harder time competing for jobs.
Food, clothes and other items from China will flood in and these segments of the economy will be taken over by China.
Middle-aged people in low-skilled jobs in particular will have a hard time."

All of these possibilities leave some worried for the continuing independence of Taiwan, arguing that too much reliance on China may lead to later political issues and Chinese control of the job market. Although China still considers Taiwan within it's territory, many Taiwanese citizens would like to see Taiwan become an independent country.


http://www.bbc.co.uk/news/10434768
http://www.bbc.co.uk/news/10451574
http://www.bbc.co.uk/news/10434768
http://www.bbc.co.uk/news/10423409

North Korean leader Kim Jong-il's visit to China

Late this August, Korean leader Kim Jong-il traveled by protected train to China to meet with several leaders for reasons not entirely clear. Many believe that the meetings were to discuss the successorship of Kim Jong-il with his son Kim Jong-un. This however is only one possibility and one that the Korean Times sheds more light on. In an article written by Sunny Lee, Mr.Jin Jingyi a professor of international politics at the Department of Korean Studies is interviewed and says that the two countries economies were the main focus of conversation with the succession being only one piece of the whole. With the national Workers Party meeting coming soon, the venue in which Kim Jong-un is spectulated to debut, the economy is a hot subject for China and North Korea

“Of course, the party conference is important as it is an occasion to introduce some new faces in the leadership. But to successfully pull through such a national event, the leadership needs to create a festive atmosphere, with more food to go around for the public. So, North Korea requires an economy that can back the event.”

It is only a matter of time before these “new faces in the leadership” will make their debut at the conference and it will be interesting to see how this in turn will effect the economies of the two countries. Considering the reports of Kim Jong-il's bad health, it is more and more likely that the succession will take place shortly. 
 
BBC: http://www.bbc.co.uk/news/world-asia-pacific-11093216

The Korea Times: http://www.koreatimes.co.kr/www/news/nation/2010/09/116_72637.html

The Economist: http://www.economist.com/node/16945299