MH17 black boxes handovered to Malaysia to be passed to AAIB UK via Dutch investigators


Malaysian experts hand over MH17 black boxes to Dutch investigators
MH17 black Boxes

THE HAGUE, July 22 — The black boxes from the crashed flight MH17 have been handed over to Dutch investigators in Ukraine, the Dutch Foreign Ministry announced late Tuesday.

“The black boxes from flight MH17 have been handed over by Malaysian experts to the Dutch Safety Board (OVV) that is leading the international investigation,” the ministry said.

According to local media, the black boxes will be sent to Farnborough in Britain, where experts can read the data stored in the black boxes and try to find the exact cause of the crash.

The ministry said, the experts from the Dutch safety board will travel with other experts from several countries together, to send the black boxes to Farnborough.

For now, the Dutch side is in charge of the investigation of the crash, which caused 193 Dutch citizens’ lives.

The Boeing 777 en route from Amsterdam to Kuala Lumpur crashed near the eastern Ukrainian city of Donetsk Thursday, killing all 298 people on board.

The Dutch government announced early Tuesday that a flight with the first victims’ bodies will arrive in Eindhoven, the Netherlands on Wednesday.   Xinhua

Malaysian official: MH17′s black boxes to be passed to AAIB

Malaysian Transport Minister Liow Tiong Lai said Wednesday in a statement that the international investigation team, led by the Netherlands, had decided to pass the black boxes to the UK Air Accidents Investigation Branch (AAIB) for forensic analysis.

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    PETALING JAYA: Datuk Seri Najib Tun Razak’s successful brokering … Airlines Flight MH17 victims, came in for praise from the international media. … be a diplomatic success for Malaysia if all participants honoured the deal.

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MH17 probe must steer clear of politics


MH17 Carton

The whirling aftermath of the crash of Malaysia Airlines flight MH17 is now upon us, with Western-led international opinion turning the spotlight on Russia. We believe that the entire case must be investigated fairly and thoroughly. The United Nations or the International Civil Aviation Organization must play a leading role, and all sides must coordinate without preconditions or preconceptions.

US Secretary of State John Kerry and Russia Foreign Minister Sergei Lavrov have agreed that all evidence from the downed plane should be made available for international investigation, and that experts should be given access to the site.

This is good news. Moscow must take a proactive stance toward this investigation.

The West has fingered Russia as the main suspect in the tragedy. Under such circumstances, any hesitation on Russia’s part will provoke more blame from the West. If there is no result to the investigation, Russia will, by default, be named the perpetrator. Therefore, letting the facts of the case speak suits Russia’s interests.

The Western rush to judge Russia is not based on evidence or logic. Russia had no motive to bring down MH17; doing so would only narrow its political and moral space to operate in the Ukrainian crisis. The tragedy has no political benefit for Ukrainian rebel forces, either.

Russia has been back-footed, forced into a passive stance by Western reaction. It is yet another example of the power of Western opinion as a political tool.

Politically speaking, shooting down a passenger jet would be ridiculous. It could have been an error, the precondition for which is the chaos within Ukraine.

The truth is the most persuasive tool of all. As the targeting of civilian air traffic is a mortal threat to all air passengers, a fair investigation is in the interest of all sides. The investigation process must steer clear of any political interference. The truth must be made public once it is found out.

Without a doubt, we live in a highly politicized world. Political zealotry has always been part and parcel of revolutionary passions.

The West has successfully put itself in a position to dictate “political correctness” in international discourse. Those unwilling to work with Western interests will often find themselves in a tough position.

The crash of MH17 is a tragedy of immense proportions. But the discussion swirling around this event has centered around three positions: shock at and condemnation of the event itself, quibbling over the Ukrainian crisis, and defining the opposition between Russia and the West. The first seems to be overwhelmed by the latter two, disrupting any investigation into the tragedy.

We sincerely hope the investigation will stick to factual and technological questions. People need the truth rather than another geopolitical rivalry.

Source:Global Times Published: 2014-7-21 0:13:01

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MH17 needs impartial investigation

[2014-07-19 06:47] The cause of the downing of the aircraft, a Boeing 777-200, must be found as soon as possible, and those responsible must be identified and brought to justice.

MH17 shot down, more questions than answers


MH17 who shot

While there is no doubt that shooting down MH17 was a grave crime, everything else remains uncertain.

ALL the big questions about MH17 began only after the passenger jet fell from the sky and crashed to the ground.

Up to that point, everything about it was routine and unspectacular: leaving Amsterdam’s Schiphol airport at a quarter past noon (6.15pm Malaysian time) on Thursday, it was scheduled to arrive at KLIA early Friday morning.

Flying at a cruising altitude of 10km over Ukraine, it was 300m above a closed airspace over a zone of conflict. The International Air Transport Association (IATA) had confirmed this was an established altitude for commercial aircraft.

Then at 10.15pm Malaysian time on Thursday, radio contact was abruptly lost. All the necessary answers for the fate of the plane also began from that point.

From there, uncovering the truth becomes a tedious and messy business. Among the challenges is that while politics should not interfere in investigations, just about everything in the politics of Ukraine comes wrapped within that tragedy.

For a start, all three principals in eastern Ukraine’s bitter conflict – the Ukraine government, pro-Russia separatists and Russia – deny any responsibility for downing MH17. Yet one of these parties has to be directly responsible for it.

Shooting down the aircraft by whatever means is a deliberate act of murder and destruction. The question that follows is whether the perpetrator did so in ignorance, mistaking MH17 for an enemy aircraft, or as a terrorist in the knowledge that it was a civilian plane.

Denial is familiar and predictable, especially for such a dastardly act and an international tragedy on such a scale. It serves two immediate purposes: avoiding blame, and damning the enemy further by shifting blame there.

As reliable information trickles in or not at all, the effective knowledge vacuum sucks in more predictable allegations and denials.

The resulting mass of claims, counter-claims, assumptions, suppositions, conjectures and fabrications form yet another unwelcome barrier to investigations.

In the absence of a forthright and verifiable admission of guilt, all three parties should be suspect.

The lack of reliable information only complicates the task of investigation, particularly at a time when all who seek the truth must be particularly prudent and patient.

Each of the three parties has its own mix of deniability and culpability. That makes any investigation even more difficult.

Identifying the guilty party and building a case against it depend on the known facts of the tragedy. Investigations then proceed as more facts become available – known, then verified, and then established.

MH17 was attacked in Ukrainian airspace and crashed near the village of Grabovo and the town of Torez in the eastern province of Donetsk, some 50km from the Russian border.

Local eyewitnesses said they saw a plane falling and hearing two explosions before the aircraft crashed to the ground and broke into two. Some debris was strewn over a 700km radius, with the bulk of the wreckage found within a tight 100m radius of the crash spot.

Separatist rebels blame the Ukrainian government, the government blames the rebels, and some in Kiev even allege a Russian hand – acting independently, or more plausibly in assisting the rebels.

What are the known indications so far? These depend on the kind of attack or weapon system used.

To both Ukraine and the private Russian news agency Interfax from the start, MH 17 was downed by a BUK missile. How could they be so certain when everything about the crash was still murky?

BUK missiles come in a set of four laser-guided, medium-range surface-to-air projectiles mounted on a tank or truck, with an altitude range of 22km to 30km. They travel at up to four times the cruising speed of a civilian aircraft.

The BUK (also known as the SA-11) is a Russian-made missile system used by both Ukraine and Russia. The rebels’ “standard” shoulder-launched missiles do not have anywhere near that range.

However, that does not clear the rebels necessarily.

There have been reports in recent days that rebels had taken over a Ukrainian military base in the area that housed the BUK missile system.

Other reports tell of Ukrainian forces having lately pushed back the rebels in eastern Ukraine and limited their room for manoeuvre.

How strong the rebels actually were in the territory where MH17 was attacked on Thursday is still unclear, that itself being indicative of the uncertainties that prevail.

Another missile “of choice” alleged to have been used on MH17 is the SA-17 or “Grizzly”, which has an 11% greater altitude range. Both missile systems operate more independently than more sophisticated Russian missile systems which can distinguish between civilian and military aircraft.

A local resident who saw the crash however said MH17 could also have been downed by a jet fighter.

Two implications follow from that: the attacker must have known the target was a civilian aircraft, and a national air force would have been responsible.

If a fighter jet had been involved, it would explain the tight debris field that some observers had noted.

It would also be consistent with witness reports of the plane breaking up upon crashing rather than disintegrating in the air.

Another version of events, reportedly from a Russian source, is that a (Ukrainian) Sukhoi Su-25 fighter jet had shot down MH17 and the rebels then shot down the assailant.

While that may explain some rebels’ remarks about having downed an aircraft at the time, it is too convoluted – even convenient – to be credible.

Such a scenario would mean the Ukrainian air force had been responsible. Russian-made Sukhois are used by both Russia and Ukraine, since Ukraine had been a part of the former Soviet Union.

The closest thing to a “smoking gun” piece of evidence within hours of the tragedy was the SBU’s (Ukrainian intelligence service’s) claimed possession of a recorded phone intercept of a conversation between some rebels and Russians.

Allegedly, a group of local Cossacks near the Chernukhin checkpoint were said to be the perpetrators. MH17 was apparently mistaken for an AN-26 Ukrainian transport plane, which rebels in eastern Ukraine had downed before.

Amid all the speculation and finger-pointing however, the consensus is that a missile or missiles had hit MH17. And the most likely perpetrators were a group of rebels in the area.

Conventional wisdom also says that this makes it more difficult for Russia to handle the situation. The reality could well be the opposite.

After Crimea (the autonomous republic of Crimea and Sevastopol) left Ukraine to join Russia earlier this year, rebels in eastern Ukraine had agitated to do likewise.

However, they have proven to be a diplomatic headache and embarrassment for Russia. Unlike Crimea, eastern Ukraine is a contiguous part of Ukraine politically and historically, even if the area also has numerous ethnic Russians like Crimea.

Moscow has thus been loath to see any part of Ukraine take the Crimea route, much as that may please Russian ultra-nationalists. Thus the civil war in Ukraine, concentrated as it is in the eastern provinces. The rebels have since chafed at Moscow’s unwillingness to annex their territory. But if they are now seen to have committed a grave international crime in downing a civilian aircraft, the infamy presents Russia with the best opportunity yet to cut them off for good.

By Bunn Nagara Behind The Headlines The Star Columnists/Asia News Network
> Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.

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 Malaysia Airlines has released Flight MH17′s passenger manifest, naming the 283 travelers who died in Thursday’s horrific crash.

Be willing to embrace change


Change_embraceTrade and open markets power China ahead. By embracing openness, China has transformed itself and perhaps even the world.

Change is the essence of life. Be willing to surrender what you are for what you could become

MY first impression of China when I first visited in 1985 was one of backwardness. There were bicycles and Mao suits everywhere.

I was fortunate because my second visit was 22 years later, in 2007. Frankly, I was astounded by what I saw. People went about in the latest fashions and cars had replaced the bicycles.

Fast forward to 2014 – when I again visited in conjunction with the 40th anniversary of Malaysia and China’s bilateral ties, accompanying Prime Minister Datuk Seri Najib Tun Razak – and we found that the pace of development was just as frenetic.

Incidentally, this was my second visit to China this year and I still have a couple more trips planned.

China is now the second biggest economy in the world and in Purchasing Power Parity (PPP) terms, the largest.

The World Bank estimates that the number of Chinese living under the international poverty line (US$1.25 a day) fell from 43% of the world’s total poor population in 1981 to 13% in 2010.

China’s Gross Domestic Product (GDP) per capita doubled to 38,354 yuan (RM19,672) from 2009 to 2012 alone.

Change, it seems, is the only constant in China. But how did this come about?

I would argue that it’s because they embraced reform and openness.

Under Deng Xiaoping, China sought “socialism with Chinese characteristics”: in effect, opening itself and its markets to the wider world.

One significant initiative which China embarked upon was joining the World Trade Organisation (WTO) in 2001.

This was a watershed and was not an easy decision for China.

Accession, especially in China’s case, is a lengthy and thorough pro­cess. Negotiations for China to join WTO took 15 years.

Countries often had to make significant concessions to the entire WTO membership and no exceptions were made for China.

However, the Chinese government proved willing to dismantle much of its restrictive institutional regime.

But WTO membership for China was not just to get better access to international markets.

It was also a defensive measure: to prevent unilateral actions from being taken against their goods by trading partners.

For instance, as a member of the WTO, China is protected from unilateral tariff hikes.

Other countries with grievances against it will have to bring their case to WTO’s tribunals.

Among the requirements for WTO entry, China also had to reduce its bound tariffs on industrial goods to an average of about 9% by 2005. Agricultural tariffs were cut to 15% while most quotas and licence requirements were eliminated.

All in all, China had to relax over 7,000 tariffs, quotas and other trade barriers.

Furthermore, it had to open up its markets to foreign firms and end state-controlled distribution of products.

China, significantly, made more market-opening commitments for services than most WTO members had.

From a centrally planned economy, China has now embraced capitalistic economic principles.

At the same time, China moved to strengthen its own capacities. It moved away from agro-based exports to manufacturing.

Also, the first of many Special Economic Zones were established in 1980, including today’s iconic Shenzen.

All of these were bold and unprecedented moves, all the more so given China’s strong nationalism and its traditional aversion to foreign entanglements. But open up it did and the results are clear for all to see.

In 2013, the WTO reported that China had overtaken the United States as the largest trading nation in the world, with total trade valued at US$4.16 trillion (RM13.23 trillion).

In that year, China’s total exports value was US$2.21 trillion (RM7.03 trillion) compared to US$1.58 trillion (RM5.02 trillion) for the US.

China, in fact, is now the largest trading partner for more than 120 countries, including Malaysia.

China is also the biggest market for automobiles, with 20 million cars sold in 2013. In comparison, the US sold only 14 million cars.

Indeed, from 2002 (after it joined the WTO) to 2013, the growth of its total trade rocketed to an annual average of more than 21%.

Its GDP for the corresponding period grew from US$1.3 trillion (RM4.13 trillion) to over US$9 trillion (RM28.6 trillion) in 2013.

Of course, China’s leaders had no way of knowing that all of these reforms would bear such remarkable fruit.

It was a risk they had to take, but it was one that paid off handsomely.

By embracing openness, China has transformed itself and perhaps even the world.

The lessons from China for Malaysia and other countries are clear: we have to be willing to embrace change.

Otherwise, the only other option is stagnation and decline.

By Datuk Seri Mustapa Mohamed

Datuk Seri Mustapa Mohamed is Minister of International Trade and Industry. The views expressed here are entirely the writer’s own. Fair and reasonable comments are most ­welcome at mustapa@miti.gov.my

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China to lead as superpower


 China will surpass US to become leading superpower – global survey finds it will or already has surpassed the US

People the world over tend to believe that China will surpass the US to become the world’s leading superpower, China News Service said, citing a global survey.

Brics_China's Guide role

Conducted by the Pew Research Center, the survey of 48,643 respondents older than 18 in 44 countries found that 49 percent agree that China will eventually replace or has replaced the US as the world’s leading superpower, while 34 percent disagree.

This view is shared across all regions surveyed, especially among European countries. Across the seven European Union nations polled, 60 percent think China will or already has replaced the US.

In general, global views of China are positive. China’s growing economy is considered a good thing by most countries, though China’s increasing prosperity is considered a threat in some, one of which is the US.

China’s image in the US has deteriorated, with 35 percent expressing a positive view, down from half in 2011, the report said.

Meanwhile, the rising power of China is generating anxiety among its neighbors. More than half of respondents in 11 Asian countries surveyed worry that territorial disputes will lead to conflict with China, including 93 percent of Filipinos, 85 percent of Japanese, 84 percent of Vietnamese and 83 percent of South Koreans.

Two-thirds of Americans and 62 percent of Chinese also say they are concerned.

Respondents in Japan, the Philippines and Vietnam see China as their top security threat, while the US is seen as the top security threat in three Asian nations: China, Pakistan and Malaysia.

Across the globe, young people tend to have more positive attitudes toward China than older respondents. In 23 countries, people aged 18 to 29 give China higher ratings than those 50 and older. In the UK, Mexico, the US and France, the gap between older and younger respondents is 20 percentage points.

World Sees China as Eventual Top Power, U.S. as Current Leading Economy

Source: Asia News Network

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Another Malaysian plane crash shrouded with mystery in Ukraine killing all 298 people!


MH17
MH17 crash

Photo taken on July 17, 2014 shows the debris at the crash site of a passenger plane near the village of Grabovo, Ukraine. A Malaysian flight crashed Thursday in eastern Ukraine near the Russian border, with all the 280 passengers and 15 crew members on board reportedly having been killed. (Xinhua/RIA Novosti)

MOSCOW, July 17 (Xinhua) — A Malaysian flight crashed Thursday in eastern Ukraine near the Russian border, with all the 283 passengers and 15 crew members on board reportedly having been killed.

A Malaysia Airlines Boeing 777, which was flying from Amsterdam to Kuala Lumpur, started descending 50 kilometers before entering Russian airspace, and was subsequently found burning on the ground on Ukrainian territory,” Interfax news agency quoted an aviation source as saying.

The plane disappeared from radar at an altitude of 10,000 meters and then crashed near the city of Shakhtarsk in Ukraine’s Donetsk region, it said, citing Ukrainian law enforcement authorities.

An advisor to Ukrainian Interior Minister Anton Herashchenko wrote on his Facebook that “280 passengers and 15 crew members have been killed.”

A Xinhua reporter was stopped by local militias some 5 km from the crash site, and was asked to wait for permission to move closer. Witnesses said they heard loud explosions and saw human remains and identity documents scattering around.

The Chinese Embassy authorities in Kiev maintained close contact with Ukrainian partners, and were verifying information on any potential Chinese casualties, an official told Xinhua.

Ukrainian President Petro Poroshenko said the plane could have been shot down, but the Ukrainian Armed Forces had nothing to do with it. Prime Minister Arseny Yatsenyuk said the government has formed a special investigative commission for the incident.

The Ukrainian Prosecutor General’s Office said law enforcement authorities could not access the crash site for investigation, as it is controlled by the self-proclaimed Donetsk People’s Republic (DPR).

Russian President Vladimir Putin Thursday informed U.S. President Barack Obama via telephone of the plane crash, and “had a detailed discussion on the acute crisis in Ukraine,” the Kremlin press service said in a statement.

Putin said both of the conflicting sides have to cease fire immediately, and Russia had taken measures to resume consultations of the contact group “with participation of representatives of southeastern Ukraine.”

The president has also offered his “deep condolences” to Malaysian Prime Minister Najib Razak over the deadly incident.

The cause of the crash was yet to be determined, but Kiev and eastern separatists have traded accusations over the responsibility. Kiev authorities said the militias shot down the plane with a Buk air defense system.

Meanwhile, Andrei Purgin, first deputy prime minister of the DPR, said they “simply do not have such air defense systems, our MANPADs have a firing range of only 3,000 to 4,000 meters,” Interfax reported. Purgin said they will give the plane’s flight recorders to Moscow for testing.

“Of course, we most likely will give them to the Interstate Aviation Committee (IAC), to Moscow. High-level experts, who will be able to determine exactly the reason of the catastrophe, work there,” he said.

The crash came on the same day the DPR separatists claimed they had shot down two Ukrainian warplanes, an An-26 transport jet and a SU-25 fighter, which Kiev laid the blame on Russia.

Malaysia Airlines said in a statement it had received notification from the Ukrainian air traffic control that it had lost contact with flight MH17 at 1415 GMT, some 30 km from the Tamak waypoint, approximately 50 km from the Russia-Ukraine border. The Boeing 777 had left Amsterdam at 12:15 p.m. local time and was expected to arrive in Kuala Lumpur at 6:10 a.m. (2210 GMT) on Friday, the airline said.

Malaysian Prime Minister Najib Razak said Friday on his twitter account that he was “shocked by reports that a Malaysian Airline plane crashed,” adding that they have launched an immediate investigation.

Meanwhile, Malaysian Deputy Foreign Minister Hamzah Zainuddin said that his ministry was working closely with the Russian and Ukraine governments on the tragic incident.

“We are working closely with both governments to get information,” he said, adding, “currently we have some of the information, only waiting to be verified.” – Xinhua

蘋果日報:

Plane may have been shot down’

PETALING JAYA: A Malaysia Airlines plane flying from Amsterdam to Kuala Lumpur has crashed in the Ukraine-Russia border, and Ukraine’s president said the jet may have been shot down.

Reports said the Boeing 777-200ER carrying 280 passengers and 15 crew is believed to have been shot down near the village of Grabovo in the rebellion-wracked region of Donetsk.

MAS said it lost contact with the aircraft at 1415GMT (10.15pm Malaysian time).

Flight MH17 left Amsterdam’s Schipol Airport at 12.15pm local time (6.15pm, Malaysian time) and had been scheduled to arrive in Kuala Lumpur at 6.10am today.

Interfax-Ukraine news agency quoting unnamed security sources said teams from the emergency services were trying to reach the scene. However, it has not been determined who is responsible for the act and whether it was intentional or accidental.

Crash site: Smoke rising at the site where MH17 is said to have crashed in the donetsk region in ukraine.

The fate of the passengers and crew has yet to be verified, but reports have quoted the Ukraine Interior Ministry as saying there were no survivors.

Ukrainian President Petro Poroshenko said in a statement in his website that the Ukraine armed forces did not fire at any targets in the sky.

The country’s Prime Minister Areseny Yatseniuk has ordered an investigation into what he said was an “airplane catastrophe”.

However, Anton Gerashenko, an adviser to the Ukraine interior minister, said on his Facebook page the plane was flying at an altitude of 10,000m when it was hit by a missile fired from a Buk launcher. The Buk missile system can fire missiles up to an altitude of 22,000m.

Rebel leaders have also denied involvement, telling Russian news agencies that they were not responsible for shooting down the plane and pledged to allow “international experts” access to the crash site.

The pro-Russian rebels, who are fighting central Kiev authorities, claimed the plane had been shot down by a Ukrainian jet.

“Witnesses saw the plane being attacked by a battle plane of the Ukrainian forces,” the government of the self-proclaimed Lugansk People’s Republic said in a statement. “After that, the passenger plane split into two in the air.”

MAS said on its Twitter feed that it “has lost contact of MH17 from Amsterdam. The last known position was over Ukrainian airspace. More details to follow.”

The region where the plane went down has seen severe fighting between Ukrainian forces and pro-Russia separatist rebels in recent days.

On Wednesday evening, a Ukrainian fighter jet was shot down by an air-to-air missile from a Russian plane, Ukrainian authorities said yesterday.

Earlier this week, Ukraine said a military transport plane was shot down on Monday by a missile fired from Russian territory.

This is the second tragedy involving MAS in four months, when a Beijing-bound airliner – also a Boeing 777-200ER – with 239 people on board went missing an hour after it took off from Kuala Lumpur International Airport on March 8. The search for Flight MH370 – in the southern Indian Ocean – is still ongoing. – The Star/Asia News Network

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US biased in push for S.China Sea ‘freeze’


????????????????????????????U.S. Navy personnel raise their flag during CARAT 2014. The United States and the Philippines kicked off joint naval exercises in the South China Sea near waters claimed by Beijing, amid tense territorial rows between China and its neighbors. AP/Noel Celis

Speaking at the US Department of State’s Annual South China Sea Conference on Friday, US Deputy Assistant Secretary for East Asian and Pacific Affairs Michael Fuchs said the claimants to territorial rights in the region should “freeze” provocative actions and “could recommit not to establish new outposts” as agreed in the Declaration of Conduct (DoC) signed between ASEAN countries and China in 2002. These suggestions appear to be fair, but even Western media has opined that this is aimed at deterring China. Only the day before, the US Senate had accused China of aggressive behavior in the South China Sea and urged China for restraint.

If the US called for a “freeze” right after the DoC was signed, that would be all to the good. But Vietnam and the Philippines have since then been exploiting oil and gas within the nine-dash line. The US came up with such views just as China started its own oil explorations. Its partiality is more than obvious.

It’s worth pointing out that the US is not a claimant to territorial rights in the South China Sea or a stakeholder in solving territorial disputes. It is a principle that the disputes should be solved by the parties involved.

Yet the US is a superpower which believes every international or regional affair has something to do with it. The Philippines and Vietnam want to draw support from the US to confront China. But the US needs to know that its interference has no basis in international law. If the US is sincere in making a contribution to peace in the South China Sea, it should take into consideration the interests and demands of all parties, including China.

But we doubt Washington’s intentions. So far, its moves regarding the South China Sea are like the extension of its pivot to Asia strategy. Many Chinese people feel that the US is making trouble through intervention.

Washington’s latest suggestions are a trap for Beijing. This timing is not beneficial for China. If China refuses to accept the suggestions, it can hardly convince the world. This is a farce initiated by the US which wants China to suffer the consequences.

Therefore, China should think about how to mediate with the US to prevent it from irritating us while reaping the gain. China should let the US eat some unexpected bitterness.

Western opinion will quibble about the South China Sea issue for a long time, which will be a challenge for China’s diplomacy in Southeast Asia. Safeguarding sovereignty and maintaining a peripheral strategic environment are both important for China. China should try to make a balance.

China must be confident and stick to the following principles: It has the right to safeguard its sovereignty and it has no intention to go to war. China is a regional power that has the initiative to control the conflict. Meanwhile, any country that confronts China has to bear the consequences. Finally, China will not make trouble, but equally is unafraid of any trouble.

Source: Global Times Published: 2014-7-14 0:18:01

Is timing right for Bank Negara Malaysia interest rate increased now!?


BN interest increaed 2014 BNBank Negara says going forward, the over all growth momentum is expected to be sustained.
BN interest increaed 2014

We are actually quite surprised that Bank Negara chose to make this measure this month!

AFTER keeping interest rates low for the past three years to support economic growth, Bank Negara has finally decided that it is the time to “normalise” interest rates.

In response to firm growth prospects and expecting inflationary pressure to continue, the benchmark overnight policy rate (OPR) was raised by 25 basis points (bps) to 3.25% on Thursday.

This is the first hike since May 2011 and the reasons, although not spelled out, were broadly hinted towards containing inflation and curbing rising household debt.

Most economists are unperturbed with the move, as the central bank has hinted of an imminent hike in OPR after the Monetary Policy Committee (MPC) meeting in May.

According to a Bloomberg survey, 15 out of 21 economists estimated a hike.

“Amid firm growth prospects and with inflation remaining above its long-run average, the MPC decided to adjust the degree of monetary accommodation,” Bank Negara says in a statement.

The economy grew by 6.2% year-on-year in the first quarter with private consumption up 7.1% and private investment expanding by 14.1%.

The prolonged period of low interest rates in Malaysia has been supportive on the domestic economy, hence the recent rate hike has sparked the question whether the time is right for a hike amid a recovery in the global economy.

“Despite higher costs of living, stable income growth and favourable labour-market conditions are expected to buoy private consumption growth,” said CIMB Research in a report.

It expects the country’s economic growth to increase to 5.5% this year and 5.2% in 2015.

Bank Negara remained positive on Malaysia’s growth outlook, riding on the back of recovery in exports, robust investment activity and anchored by private consumption.

Financial imbalances

“Going forward, the overall growth momentum is expected to be sustained.

“Exports will continue to benefit from the recovery in the advanced economies and from regional demand. Investment activity is projected to remain robust, led by the private sector,” says Bank Negara.

There are a lot of factors that could derail the recovery in the world’s economy, including a risk in China’s growth slowing and a slower recovery in Europe and the United States.

“We are actually quite surprised that Bank Negara chose to make this measure this month. The fact that the latest normalisation drive would push the ringgit higher and that puzzles us as export momentum may decelerate in the next few months due to waning competitiveness,” says M&A Securities.

Nonetheless, it believes the economy is capable of absorbing the adjustment.

Prior to the 2008-09 Global Financial Crisis, Malaysia’s OPR stood at 3.5%. The country’s OPR was subsequently cut down to as low as 2% to support the domestic economy during the height of the global downturn in early 2009 before being raised gradually to the present level.

Between November 2008 and February 2009, Bank Negara had cut the OPR by 175 basis points in response to the global economic crisis. “The rise in OPR will likely to improve Malaysia’s attractiveness amongst foreign investors, leading a stronger capital inflows, lower bond yields and appreciating ringgit,” says AllianceDBS Research chief economist Manokaran Mottain in a report.

He says that since the previous MPC meeting in May, the market has been influenced by this expectation.

Year-to-date, the ringgit had rallied to RM3.172 per US dollar on July 9, registering a 2.06% gain. However, at the close yesterday, the ringgit closed lower at RM3.21 against the greenback.

The central bank also highlights that the increase in the OPR is to ease the risk of financial imbalances, which may effect the economy’s growth prospect.

“At the new level of the OPR, the stance of the monetary policy remains supportive of the economy,” Bank Negara says.

The OPR is an overnight interest rate set by Bank Negara. It is the interest rate at which a bank lends to another bank.

A rate hike would have an impact on businesses and consumers, as changes in the OPR would be passed on through changes in the base lending rate (BLR).

Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz was reported as saying that signs of financial imbalances would also factor into policy decisions, because a prolonged period of accommodation could encourage investors to misprice risk and misallocate resources.

“Higher interest rates should help to ensure a positive real rate of return for deposit savings and deter households from turning to riskier investments,” says CIMB Research.

The low interest rate environment has resulted in rising household debt level, which reached a record of 86.8% of gross domestic product at the end of last year.

“Although the increase in the OPR will likely have some impact on consumer spending and business activities, it will help to moderate the increase in prices,” says RHB Research Institute.

It expects inflation to moderate but to remain high, hovering above 3%.

Most economists are expecting OPR to remain unchanged at 3.25% for the rest of the year, although price pressures are likely to remain.

They say Bank Negara may resume its interest rate normalisation only next year.

“The price pressure is likely to remain, in view of further subsidy rationalisation (another round of fuel-price hike this year),” CIMB Research says.

Muted impact

“Another 25bps hike will crimp domestic demand,” Manokaran opines, adding that there are other measures that may be taken if household debt continues to grow at a worrying pace.

Malaysia is the first country in the South-East Asia to increase its benchmark rate on the back of improve confidence in exports growth and robust investment activity.

According to CIMB Research, Malaysia’s equity market has already priced in an interest rate hike following the May MPC meeting.

The research house says while the is negative for equities, the impact on the stock market should be muted as the increase is minimal.

“Rate hikes are negative for cyclical sectors such as property and auto, as well as consumer stocks due to lower disposable income,” it says.

In the property sector, rising interest rates would increase mortgage payment and reduce affordability.

However, CIMB opines that the impact of a gradual rise in interest rates will be mitigated as the key drivers of property demand are the overall economy and the stock market.

“But the overall impact should be muted as net gearing for corporate Malaysia is less than 10%,” it adds.

CIMB notes that the banking sector will benefit from the rate hike due to a positive re-pricing gap between lending and deposit rates.

“We estimate that a 25bps rise in OPR could enhance banks’ earnings by 1% to 2%.

“This would outweigh any slowdown in loan growth in an environment of higher interest rates, while asset quality is expected to be unaffected,” it says.

Contributed by Intan Farhana Zainul/The Star/Asia News Network

No justification for interest rate hike: Kenanga

Investment bank research head cites expectations of softer economic growth in H2

 
Adib Rawi Yahya/theSun

KUALA LUMPUR: Kenanga Investment Bank Bhd has taken the contrarian view and believes that an interest rate hike is unlikely to materialise today, saying that it would be unjustified given jittery economic fundamentals that would not be able to take such a hike.

Most analysts opine that Bank Negara is likely to raise the overnight policy rate (OPR) for the first time since May 2011 today, even though they tend to differ on the quantum of increase, between 25 basis points (bps) and 50 bps. The OPR currently stands at 3%.

Bank Negara is scheduled to hold its latest monetary policy committee (MPC) meeting this evening.

Kenanga Investment Bank deputy head of research Wan Suhaimie Saidie (pix) opined that this is not the right time to raise interest rate as economic growth is expected to trend lower in the second half compared with the first half of the year.

“Due to softer external demand and slow down in other parts of the world, I don’t think Bank Negara will raise interest rate, unless they revise the gross domestic product (GDP) higher,” he told a media briefing here yesterday.

Wan Suhaimie said as Malaysia is an open economy, the interest rate outlook will be externally dependent, whereby it has been observed that Bank Negara would shift towards tightening mode when the global manufacturing PMI breaches 54.0.

“However, it may take at least another three to six months before the index breaches 54.0,” he said, adding that there is little reason for Bank Negara to raise the OPR for the rest of the year.

Wan Suhaimie believes with the implementation of the goods and services tax (GST) next year, the local economy may even slow down for at least two quarters, making the case for an interest hike far from compelling.

Kenanga expects GDP in the first half to be close to 6%, while second half is projected to average by 5.2%, with a full year growth rate of 5.5%.

Wan Suhaimie said instead of raising the interest rate, Bank Negara could take additional macroprudential measures to address imbalances in the financial system, such as reducing the loan-to-value ratio and debt-to-income ratio.

According to data compiled by Kenanga, Bank Negara is one of the most conservative central banks in the world, with only 10 rate adjustments made over the past 10 years.

M&A Securities concurred with Kenanga on the unlikelihood of a hike in OPR today albeit for a different reason.

“Policy decisions would need to get the cabinet endorsement first. Being a caring government that would like to avoid political backlash, we think that the government would prefer Bank Negara Malaysia (BNM) to defer that to the September MPC meeting,” it said in an economic report yesterday.

It explained that on the back of rising cost of living and the upcoming stress of the goods and services tax, the last thing BNM and hence, the government would want to see is the adjustment be a burden the people.

“As 55% to 60% of Malaysian population, as in the Muslims would be observing the month of Ramadan of which their spending would increase, the government would risk its reputation if it proceeds with a policy hike. There is a small chance that the government would execute this in our opinion,” said M&A analyst Rosnani Rasul.

It said impact to the ringgit would also be more conducive if policy rates get adjusted in September and that an adjustment of 25 bps would suffice.

With no hike in the OPR, volatility in the market will continue and is likely to see the ringgit fall back to 3.20 to 3.30, Wan Suhaimie opined.

The ringgit has been rising lately, surging to as high as 3.1860 early this month in anticipation of an interest rate hike.

Contributed by Lee Weng Khuen sunbiz@thesundaily.com 10 July 2014

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China – US candid dialogue aims at easing anxiety


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The sixth round of China-US Strategic and Economic Dialogue and the fifth China-US High-Level Consultation on People-to-People Exchange are being held in Beijing these two days. At a time when this bilateral relationship remains subtle and both have speculated about each other’s strategic outlook, such high-level dialogue offers a chance for them to listen to their counterparts to ease anxieties brought by problems between them.

The strategists and public opinion in both countries have made thorough analyses of bilateral ties, yet they still fail to offer grounded conclusions. The fundamental reason is that in the history of international politics, such a big power relationship has never existed before.

The Chinese leadership envisioned the notion of a new type of great power relations, which the US leadership has accepted. The positive attitude of both has injected hope to the 21st century.

There will be more friction between the two. There will be twists and turns as China rises and the US tries to maintain its hegemony. Both can easily highlight a concrete problem, while high-level dialogue is needed to ease the speculation in both societies.

China’s rise seems to be the most uncertain factor for the Sino-US relationship and the political pattern of the Asia-Pacific region in the 21st century. A comprehensive understanding of China’s rise will help lay the foundation of this bilateral relationship.

The driving forces of China’s rise come from the demand of the Chinese people. No one can stop this process. China and the US should build up an open system that can accommodate China’s rise and soften the impact of China’s rise on the politics of Asia-Pacific and other regions.

Many view the territorial disputes between China and its neighboring countries as its ambition for expansion. The US should be able to see that China has no intention to create new geopolitical patterns through these disputes, nor would it make use of the conflicts to expand its strategic space.

Even when China has no intention, its impact has been felt. Meanwhile, US support for Japan, the Philippines and Vietnam has caused some effect on China’s neighbors. These two factors should not interact with each other to intensify mutual strategic mistrust.

The significance of the heart-to-heart dialogue is the same as that of establishing a crisis-management mechanism. It may take a while before the two realize great power relations, but China-US relations are fundamentally different from ties between the US and the former Soviet Union.

There will be continuing pessimistic comments from the public in both countries. It is vital that both governments remain determined. It will be a significant political achievement if the two develop a relationship that is different from the one under the Yalta system during the last century.

Source:Global Times Published: 2014-7-9

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[2014-07-08 07:27] History is the best textbook. That is what President Xi Jinping said at the ceremony to mark the 77th anniversary of the Chinese People’s War Against Japanese Aggression on Monday.

Watch Japan’s surrender Video; Beware of Japan’s evil designs!


China publishes video of Japan´s surrender for first time

Beware of Japan’s evil designs

Japan militarism_AbeJapan militarism_Abe PlotThe volatile political situation in Europe (and partly in West Asia) led to the Great War 100 years ago, with the Austro-Hungarian Empire and Germany (or the Central Forces) on one side and Britain, France and Russia (or the Allies) on the other. What started essentially as a “European war” soon turned into a world war with the Ottoman Empire and Bulgaria joining the Central Forces and Italy, the United States and Japan joining the Allies.

The international situation today is radically different from what it was 100 years ago. Regional conflicts do exist, but there is no conflict between two major powers or blocs that seems unlikely to be resolved through talks. The main contradictions and conflicts today are the ones between the sole superpower, the US, and emerging powers like China and Russia. Despite the comparative decline in its power, the US is not willing to yield its self-perceived sphere of influence to China or Russia. But despite being uncomfortable with the idea of seeing a powerful China, the US has agreed to establish a “new type of major-power relationship” with China.

China is surrounded by complicated maritime disputes with Japan, Vietnam and the Philippines, but these countries seem to be acting on the instigation of the US, and are not in a position to engage in a large-scale military conflict or war with China. In fact, these countries’ attitude toward China depends on the direction Sino-US relations take.

About 120 years ago, Japan launched an aggressive war against China, which ended in the collapse of the Chinese navy and the signing of the unequal Treaty of Shimonoseki, which forced the Qing Dynasty (1644-1911) rulers to cede some of China’s territories and pay reparations to Japan. The main reason China suffered such a fiasco was that, as a weakening feudal country, it was not prepared to fight an asymmetrical war with an emerging capitalist power.

China, along with the rest of the world, has undergone considerable changes since then. Today China is the world’s second-largest economy and one of the five permanent members of the United Nations Security Council. Despite that – and despite possessing nuclear weapons – China is still a peace-loving nation striving to build a harmonious world.

After being defeated in World War II, Japan has had to follow a pacifist Constitution, written with the help of Allies, mainly the US. And coupled with the economic downturn since the 1980s and the international community’s stipulation that allows it to only develop its Self-Defense Forces – as opposed to a full-fledged military – Japan today is in a position that is totally different from the late 19th century.

Yet Japan has taken a dangerous step toward militarization by reinterpreting Article 9 of the Constitution. Since the move allows Japan to dispatch troops overseas to take part in “conflicts”, it should be seen as a warning not only to China but also to the international community as a whole.

With the peaceful rise of China and escalation of Sino-Japanese disputes, Japan has begun shifting its strategic focus southwestward. A series of military moves by Tokyo in recent years, such as the deployment of missiles on its southernmost island, Miyako-jima, which is closest to China’s Diaoyu Islands and the stationing of the most advanced missiles on the southern tip of Kyushu Island, indicate that Japan’s military policy is targeted mainly at China.

Japan also plans to build military bases on Miyako-jima, Amami-shima and Ishigaki-jima, its three southern islands nearest to the Diaoyu Islands, and deploy outpost forces there. During a recent visit to Miyako-jima, a senior Japanese defense official told local officials that “the local defense vacuum” should be filled in.

Japan’s military maneuvers in Miyako-jima, some 2,000 kilometers from Tokyo but only about 200 km from China’s Taiwan, are obviously aimed at strengthening its military might to counter China, especially over the Sino-Japanese maritime disputes. This is how a recent Russian TV program summed up the situation.

Japan has also set up a joint land-, air-and sea-based monitoring system over various straits. For example, every time a Chinese ship crosses the Tsugaru Strait, it will be under surveillance of Japanese warships, helicopters and P-3C aircraft.

While deploying its armed forces in its southwestern region, Japan has unashamedly presented a different face to the international community. For example, it has repeatedly complained that “China’s warplanes dangerously approach Japan’s (planes) ” and that “China’s warships lock their fire control radar at Japan’s (ships) “, to seek sympathy of the international community. By beefing up forces using the “China threat” theory, Japan has exposed its ulterior motive, that is, it is preparing for a possible war with China, even though such a war is not likely to break out.

Given the complicated international security situation, China should remain vigilant against Japan’s military designs and continue its efforts to achieve peaceful sustainable development and build a harmonious world in a bid to play a bigger role on the global stage.

By Li Daguang (China Daily)/Asia News Network
The author is a professor at the National Defense University, People’s Liberation Army.

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