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Volume 10
Issue 33 & 34
Wednesday, September 27 2006
This issue highlights:
CHINA REMAINS KEY INTERNATIONAL VOCAL POINT
A three-day scholarly conference on US-China foreign relations from 1969 to 1980 ends in the American capital today, during a week when issues related to China featured prominently in several countries.
The Washington conference is sponsored by the US Department of State and George Washington University. It covers the historic period when normalisation of relations between the two countries "altered the international landscape of the Cold War dramatically," according to a State Department announcement.
Featured in the discussions are key American officials of the era, such as Brent Scowcroft, the national security advisor to both presidents Gerald Ford and George Herbert Walker Bush; Zbigniew Brzezinski, the national security advisor to President Jimmy Carter; and Winston Lord, senior diplomat and ambassador to China from 1985 to 1989.
The conference is taking place in conjunction with the release of the latest volume of official records of the US foreign relations, which cover the period 1969-1972.
The normalisation of relations between the United States and the People's Republic of China followed a long and complicated diplomatic process that began as early as the mid-1950s. In 1969, the United States started relaxing trade restrictions and other impediments to bilateral contacts.
In February 1972, during President Richard Nixon's historic trip to China, the US and Chinese governments issued the "Shanghai Communiqué," in which both nations pledged to work toward the full normalisation of diplomatic relations. The US at that stage acknowledged the Chinese position that "there is only one China and . Taiwan is part of China."
Diplomatic relations between both countries were established on January 1, 1979. At that time the US transferred diplomatic recognition from Taipei to Beijing, while Beijing acknowledged that the American people would continue to carry out commercial, cultural, and other unofficial contacts with the people of Taiwan.
The three-day conference draws on the recollections of key policymakers from several US administrations and on "documents unearthed from scholars from around the world." It will examine the key factors that contributed to the breakthrough in US-Chinese relations initiated by President Nixon and cemented by President Carter.
Chinese currency concerns
Meanwhile, US Treasury Secretary Henry Paulson, travelling to Beijing last week, proposed that the Chinese authorities move faster in revaluing the low Yuan, perceived to be 40% undervalued.
The visit took place during a period when critics argue that a low Yuan relative to the US dollar makes Chinese goods cheaper for American consumers, but costs jobs by making it harder for US manufacturers to compete. China's trade surplus with the US was $202 billion in 2005 and is still increasing.
While Secretary Paulson was in China, two senators, Democrat Charles Schumer from New York State and Republican Lindsey Graham from South Carolina, pressed for action on their legislation that imposes a 27, 5% tariff on goods from China if Beijing does not significantly increase the value of its currency within six months.
Secretary Paulson met with President Hu Jintao, and Prime Minister Wen Jiabao while in Beijing. Announcing the beginning of a new strategic dialogue with China, Paulson said afterwards his meetings had exceeded his expectations.
South Africa
South Africa earlier announced quota restrictions on a series of textile and clothing products imported from China. On September 14, the Department of Trade and Industry (DTI) announced the delay of the implementation date of the quota restrictions following various submissions from stakeholders by September 8 on the proposed quota allocation to importers.
The reason for the delay is to enable all the relevant players in the value chain to put in place arrangements for adjustments to the restrictions and to take advantage of the opportunities.
ANNUAL NEPAD PARTNERSHIPS SUMMIT IN NEW YORK
The annual Bending the Arc summit took place in New York on September 18 on the eve of the opening of the UN General Assembly. More than 100 leaders from the private sector, the United Nations, civil society and donor governments attended.
Bending the Arc is a NEPAD (New Partnership for Africa's Development) project for engaging business in development and accelerating Africa's progress towards the Millennium Development Goals (MDGs).
The project benefits from the support of the United Nations Fund for International Partnerships (UNFIP), the United Nations Office of the Special Adviser for Africa (UNOSAA), the African Business Roundtable (ABR) and Africapractice.
Foundations for growth
Dr. Bamanga Tukur, Chairman of the African Business Roundtable, detailed many investment climate reforms in Africa, which are laying the foundations for growth.
He is quoted in the current issue of the weekly NEPAD Dialogue as saying: "For the first time, Africa has been ranked in the top three reforming regions, after Eastern Europe and the OECD countries.
"Forty-five regulatory reforms in 30 economies in the region reduced the time, cost, and hassle for businesses to comply with legal and administrative requirements last year. And this race to reform is not limited to a handful of cases; two-thirds of African countries made at least one reform.
"These improvements in the business climate have not gone unnoticed," he continued. "Investors around the world are now pricking up their ears, hearing news of these reforms and realising that opportunity beckons in Africa. Those slow off the mark will regret it."
Tukur concluded by saying: "Across the continent today, I am delighted to say that we are seeing a successful pattern emerge. Put the right investment policy framework in place; tell the right people all about it, and investment flows will begin. The role of the news media in communicating this information cannot be underestimated."
BUSH-MBEKI: TWO LEADERS WITH TWO VISIONS
South African President Thabo Mbeki on September 17, addressing the faithful at the Summit of the Non-aligned Movement (NAM) in Havana, called for a "stronger, more compelling" United Nations in the face of unilateral intervention by the big powers in the affairs of weaker states.
This was followed days later by a strong attack on the wealthy nations of the world, which according to Mr. Mbeki, are holding back global development through their "unequal relationship" with poor countries.
"Addressing the 61st session of the United Nations (UN) General Assembly in New York, he had this to say: "This common commitment for a global partnership for development cannot be transformed into reality when the rich and powerful insist on an unequal relationship with the poor."
He added that the absence of a global partnership for development had almost led to the collapse of the Doha Round of trade talks. The apathy of rich nations was also behind the failure to implement the Monterrey consensus on financing development.
As South African president and current chairman of the Group of 77, Mbeki criticised the UN for being unable to meet its goals as it did not reflect "expansion of the global family of free nations", and called for its reform.
"Clearly, for the UN to continue occupying its moral high ground it has to reform itself urgently, and lead by practical example as to what is meant to be democratic," he added.
Bush's message
On the same day on the same UN podium US President George W. Bush presented a different message to the world.
He told the General Assembly that the government of President Mahmoud Ahmadinejad was using Iran's resources to fund global terrorism and to pursue nuclear weapons.
Addressing a portion of his remarks to Iranians, he said "you deserve an opportunity to determine your own future" and an economy that reward their talents.
"The greatest obstacle to this future is that your rulers have chosen to deny you liberty, and to use your nation's resources to fund terrorism and fuel extremism and pursue nuclear weapons," Bush said.
Bush added: "Despite what the regime tells you, we have no objection to Iran's pursuit of a truly peaceful nuclear power programme." He told the Iranians that he looks forward "to the day when you can live in freedom and America and Iran can be good friends and close partners in the cause of peace."
The main thrust of his speech was in urging the world to support the forces of moderation and reform in the greater Middle East. The US president said he wanted to speak directly to the people in the region, assuring Iraqis, Lebanese and Afghans of continued US support for their efforts to build new democracies while telling Syrians that their government's support of Hamas and Hezbollah is "turning your country into a tool of Iran."
Speaking generally to the people across the Middle East, Bush sought to combat what he described as "propaganda" being spread by extremists "claiming that the West is engaged in a war against Islam. This propaganda is false, and its purpose is to confuse you and justify acts of terror. We respect Islam, but we will protect our people from those who pervert Islam to sow death and destruction."
In his 20 minute speech, President Bush also urged the United Nations to act quickly to deploy a robust peacekeeping force to the war-ravaged Darfur region of Sudan. Turning to the people of Darfur, he said: "Your lives and the credibility of the United Nations are at stake."
GROWING AMERICAN BUSINESS INTEREST IN SOUTH AFRICA
Growing US business interests in South Africa became evident again at two recent trade exhibitions in South Africa.
Both the Electra-Mining show in Johannesburg and the Africa Aerospace & Defence show in Cape Town attracted a number of US businesses, the majority being "first timers".
In hosting a reception on September 14 in honour of US exhibitors at the US Pavilion at the Electra-Mining show in Johannesburg, US Consul-General Stephen Coffman emphasised that the mining sector was the backbone of the South African economy. He added that the Electra-Mining show is one of the major points during the year where companies meet and create new business relationships, which further contribute to the growth of this prosperous sector.
EXCLUSIVE POINTERS*
The South African Reserve Bank estimates that real GDP growth recovered to a 4, 3% y/y increase in the second quarter after slowing to 3, 1% y/y in the first quarter from 4, 1 % y/y in the fourth quarter and a recent peak of 6, 6% y/y in the first quarter 2005. The Reserve Bank also estimates that real final domestic demand growth soared to 7, 7% y/y in the second quarter after being steady at 6, 8% y/y in the first and fourth quarters. Most economists expect final domestic demand to ease to the 5% level, but as yet there is no major slowdown.
The South African current account deficit widened to R27, 212 billion in the second quarter from R21, 814 billion in the first quarter.
The ratio of South African household debt to disposable income jumped to a record 69, 7% in the second quarter from 68, 2% in the first quarter 2006 and 59, 5% in the first quarter 2005.
Zimbabwe aims to export beef to China and Malaysia. This is part of the government's "Look East" policy. It is also in response to the banning of beef exports to the European Union after a foot-and-mouth outbreak in 2001.
(*Items supplied by Forecaster Weekly Review, Sunninghill, Johannesburg)
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