Daily Update, June 29, 2012: Rich leading families, NYT China, South China Sea

Today’s links begin with an exhausting-sounding investigation from a team of Bloomberg reporters into relatives of Chinese Vice President Xi Jinping, who is expected to become the country’s top leader this fall. Sometimes through assumed names, holding companies, and other tactics, many of Xi’s relations have significant business and real estate holdings. [READ THE STORY]

China’s “outward direct investment” (ODI) is a “game changer,” says Columbia University’s Jeffrey Sachs. Peking University’s Yiping Huang adds details:

So China is leveraging its ODI to buy natural resources, acquire strategic assets, and set up companies that will facilitate exports. “The single focus of all these activities is to strengthen and improve the competitiveness of [their] factories at home,” he says.

Huang calls this the “Chinese model” of ODI but says it is hardly unique to China. Other rapidly developing economies, such as Korea and Brazil, are pursuing similar strategies, but those countries’ outside initiatives have been overshadowed by China’s massive capital resources, he says. “The difference between China and Korea is that Korea is a small country,” Huang says. [FULL STORY]

There might be a big, non-resource investment coming up: China Development Bank is looking at a $1.7 billion tie-up with a San Francisco real estate developer.

The South China Sea is still keeping things interesting.

  • Philippine officials said their planes spotted Chinese fishing ships back in the area surrounding the disputed Scarborough Shoal on Monday.
  • On Wednesday, a new spat between China and Vietnam over oil exploration in the disputed Paracel Islands added to the recent bilateral dust-up that has seen Vietnam passing a law supporting its claim to the islands and China upgrading the administrative status of three of the islands.

    China National Offshore Oil Corp. said it was offering a new batch of oil-exploration blocks inside the 200-nautical-mile exclusive economic zone granted to Vietnam under the United Nations’ Law of the Sea.

    Vietnam’s government quickly objected, saying the Chinese state oil firm was moving into its territorial waters. On Wednesday, state-run Vietnam Oil & Gas, or PetroVietnam, weighed in, showing how territorial claims in the sea are increasingly being backed up by powerful companies in addition to rival governments, and potentially adding new sources of tension to the conflict. [FULL STORY]

  • On Thursday, a Chinese Defense Ministry spokesman said China is considering setting up a military unit in “Sansha city,” the newly created prefecture-level body that encompasses three islands also claimed by Vietnam. [China Daily report]
  • The official also said China is sending combat-ready patrols to the Spratly Islands.
  • July 2–10, the United States and the Philippines are planning joint military exercises in the South China Sea.

Speaking at a CSIS conference Wednesday, U.S. Assistant Secretary of State Kurt Campbell said the United States wants to work with China on the South China Sea, according to a press report. From the video: “We will have areas of difference, we will have areas where we compete… we want to build a strong, durable partnership with China that works for everyone” to build peace in Southeast Asia.

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Since 2006, Transpacifica has been a blog, and collection of resources on East Asian politics and international relations in the Asia-Pacific, with a special focus on China, Japan, and the United States. Transpacifica is edited and primarily written by Graham Webster, Research Scholar and Senior Fellow for U.S.–China Relations, Yale Law School China Center. Get in touch, or follow Graham on Twitter.

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