x Abu Dhabi, UAEMonday 24 July 2017

China's spending spree

A $586 billion economic stimulus plan announced by the Chinese government may mark the transition away from an export-oriented to a domestically-focused economy. This is one of the strongest actions to date by any country to counter the effects of the global financial crisis. A raid on Syria in October was one of several conducted in recent years carried out under a secret order giving the US military authority to attack al Qa'eda anywhere in the world. Obama is expected to move quickly to close Guantanamo.

"China announced a huge economic stimulus plan on Sunday aimed at bolstering its weakening economy, a sweeping move that could also help fight the effects of the global slowdown," The New York Times reported. "At a time when major infrastructure projects are being put off around the world, China said it would spend an estimated $586 billion over the next two years - roughly seven per cent of its gross domestic product each year - to construct new railways, subways and airports and to rebuild communities devastated by an earthquake in the southwest in May. "The package, announced Sunday evening by the State Council, or cabinet, is the largest economic stimulus effort ever undertaken by the Chinese government." Time magazine said: "some analysts said the move marks a significant turning point in the development of China's economy that will be felt for years to come. 'I think in a decade, we'll be looking back at this moment and saying, "This was it. This was when things really changed and China's economy transitioned from externally, export-oriented to an internal focus," ' says Ben Simpfendorfer, China economist with the Royal Bank of Scotland in Hong Kong. He Liping, a professor of economics at Peking University, agreed: 'I personally see this crisis as an opportunity to reduce our dependence on export and adopt a healthier path'." The Times noted: "The government's legitimacy is heavily dependent on its continued ability to deliver what Chinese have grown used to - not just the big-figure GDP numbers, but the assurances that urban growth is strong enough to support itself. Chinese moving from the country to cities has, over the past decade, been perhaps history's biggest ever flow of human migration. Depending on which analyst you listen to, that flow is supported by minimum economic growth rates of between six per cent and eight per cent. Slip below that, and the millions of workers in the Pearl River Delta expected to lose their jobs next year may start wondering out loud whether those jobs are ever coming back. Those people are not all going to jump on a train back to the sticks, which could make for some very noisy urban disappointment. There are already economists who were, before Sunday, predicting that 2009 growth would fall below six per cent - if Beijing's own internal charts showed the same thing, then the package starts to make an awful lot of sense." The Los Angeles Times said: "The massive two-year stimulus package, which one analyst described as China's version of America's New Deal, represents one of the most aggressive actions to date by a country to counter the effects of the global financial crisis. "It comes as China's president, Hu Jintao, prepares to join President Bush and other world leaders Saturday for a global economic summit in Washington. President-elect Barack Obama has called on US lawmakers to take swift action to pass a stimulus package as well. "During the summit, leaders of major economies are expected to discuss a coordinated fiscal stimulus, much like lock-step actions by nations in recent weeks to inject capital into banks and to lower interest rates." Forbes magazine said: "Don't judge a stimulus package by its half-trillion-dollar price tag. China's early Christmas present is not as big as it seems. "Taking into account expenditures that were expected to take place in any case, the amount of new spending proposed by Beijing is actually a small proportion of the headline figure. The package also gives excessive weight to infrastructure spending and loan expansion rather than targeting domestic consumption, which must rise much more to sustain China's growth, some analysts say. The spending will not likely occur fast enough to offset the global downturn nor be big enough to deliver a sustained boost to commodity producers, they add. Still, the move highlights Beijing's desire to inject a confidence boost to market sentiment and to demonstrate to the world the government's engagement in the situation." Meanwhile, The Washington Post reported: "Financial leaders from 20 of the world's largest economies delivered a message Sunday that governments need to act faster and be ready to cut interest rates or increase spending in order to fortify ailing world markets. " 'We are in extraordinary times, the global economy is facing shocks which are wholly without precedent and we need a new approach,' said Stephen Timms, Britain's treasury secretary. 'It is a global crisis. It therefore requires an international response. And the first priority needs to be urgent action to stabilise the financial sector.' "While short on specifics, the Group of 20's two-day conference in Sao Paulo laid out a set of principles ahead of a meeting among the nations' heads of state in Washington later this week. Among them: the need for more financial market regulation and coordinated government action, and the importance of giving smaller, emerging market economies more voice in how to resolve the crisis." The New York Times said: "Despite a spirit of cooperation at the event, an air of bitterness also pervaded. Luiz In·cio Lula da Silva, Brazil's president, and his finance minister, Guido Mantega, blamed the United States and other developed countries for spreading financial gloom to all corners of the globe. " 'No country is safe from the financial crisis,' Mr da Silva said in a speech opening the event on Saturday. 'They are all being infected by problems that originated in the advanced countries.' "Mr da Silva was no longer trying to say that Brazil, Latin America's biggest economy, was immune from the housing and banking crisis afflicting the United States, as he did in the first days of the banking crisis, when he had boasted that the financial contagion would 'not cross the ocean'. "Instead, Mr da Silva and Mr Mantega sought to assert the role of the Group of 20 in discussions typically dominated by the Group of 7 organisation of advanced economies - Britain, Canada, France, Germany, Italy, Japan and the United States. The Group of 20, formed in the aftermath of the Asian financial crisis of the late 1990s, is composed of the Group of 7 and 13 developing countries. "Those 13 include the 'Bric' countries, a grouping of the world's fastest-developing nations - Brazil, Russia, India and China - which sought to assert their heftier role in the global economy."

US raid on Syria in October was one of several conducted in recent years

"The United States military since 2004 has used broad, secret authority to carry out nearly a dozen previously undisclosed attacks against al Qa'eda and other militants in Syria, Pakistan and elsewhere, according to senior American officials," The New York Times reported. "These military raids, typically carried out by Special Operations forces, were authorised by a classified order that Defense Secretary Donald H Rumsfeld signed in the spring of 2004 with the approval of President Bush, the officials said. The secret order gave the military new authority to attack the Qa'eda terrorist network anywhere in the world, and a more sweeping mandate to conduct operations in countries not at war with the United States. "In 2006, for example, a Navy Seal team raided a suspected militants' compound in the Bajaur region of Pakistan, according to a former top official of the Central Intelligence Agency. Officials watched the entire mission - captured by the video camera of a remotely piloted Predator aircraft - in real time in the CIA's Counterterrorist Center at the agency's headquarters in Virginia 7,000 miles away. "Some of the military missions have been conducted in close coordination with the CIA, according to senior American officials, who said that in others, like the Special Operations raid in Syria on Oct 26 of this year, the military commandos acted in support of CIA-directed operations." The report said: "The recent raid into Syria was not the first time that Special Operations forces had operated in that country, according to a senior military official and an outside adviser to the Pentagon. "Since the Iraq war began, the official and the outside adviser said, Special Operations forces have several times made cross-border raids aimed at militants and infrastructure aiding the flow of foreign fighters into Iraq. "The raid in late October, however, was much more noticeable than the previous raids, military officials said, which helps explain why it drew a sharp protest from the Syrian government." The San Francicso Chronicle, reporting from Abu Kamal said the October raid: "put this eastern border town near Iraq on the world stage and many of its residents on edge. " 'At the beginning of the war, we were scared. Then we got used to it. Now we're scared again - and angry,' said Yusef Tara, who spoke to a reporter near the site of the Oct 26 US commando raid against an alleged al Qa'eda in Iraq hideout that Damascus says killed eight civilians. "In this tightly controlled police state that had been trying to change its image and end years of global seclusion, protest groups are now allowed to stage anti-American rallies. And even though YouTube is banned, video footage of four US helicopters carrying out the raid is making the rounds on cell phones. "The anti-American sentiment is in sharp contrast to months of toned-down rhetoric against the Bush administration as the two countries edged toward serious talks. The United States had been pleased that Syria accepted Iraqi refugees, made peace overtures to Israel, established full relations with Lebanon and shared intelligence about al Qa'eda radicals. Two months ago, Secretary of State Condoleezza Rice met in New York with her Syrian counterpart, Walid Moallem, in the highest-level talks between the two nations since 2005. "At the same time, the United States accused Syria of not doing enough to curb the flow of militant fighters from Syria into Iraq. "Now, the local media refers to the United States in language reserved for Israel after a military operation in the West Bank or Gaza Strip - war crimes, martyrs, terrorists and deaths of innocent civilians."

Obama preparing to close Guantanamo

"President-elect Obama's advisers are quietly crafting a proposal to ship dozens, if not hundreds, of imprisoned terrorism suspects to the United States to face criminal trials, a plan that would make good on his promise to close the Guantanamo Bay prison but could require creation of a controversial new system of justice," The Associated Press reported. "During his campaign, Obama described Guantanamo as a 'sad chapter in American history' and has said generally that the US legal system is equipped to handle the detainees. But he has offered few details on what he planned to do once the facility is closed. "Under plans being put together in Obama's camp, some detainees would be released and many others would be prosecuted in US criminal courts." Reuters reported: "Five human rights groups urged European governments on Monday to accept Guantanamo prisoners who cannot be sent home for fear of persecution, while a sixth group called on US President-elect Barack Obama to sign an order shutting the prison camp on the day he takes office. "The global efforts are aimed at pressuring Obama to make good on his campaign pledge to close the widely reviled Guantanamo detention camp and halt the special tribunals that try foreign terrorism suspects outside the regular courts. " 'President-elect Obama, with a stroke of your presidential pen, on Day One of your administration, you can ensure that our government will be faithful to the Constitution and to the principles upon which America was founded,' the American Civil Liberties Union said in a full-page ad in The New York Times. " 'Give us back the America we believe in,' the ACLU urged Obama, who takes office on Jan 20."

pwoodward@thenational.ae