Xin Nian Kuai Le!

Wish everyone a Happy, Prosperous and Healthy New Year of the Ox!

May we overcome the challenges and succeed!

Gearing into 'Post-War' Mode

Respected Australian economic think tank, Access Economic's in its December 2008 business outlook paints a grim picture for the Australian economy in 2009 and its director, Chris Richardson said that the federal budget is 'buggered' and a recession is inevitable. The only comfort is that among the developed economies, Australia will experience a small recession as opposed to the deadlier ones overseas. And without fail China is in the centre role of Australia's economic quagmire.

Resource-rich states like WA and Qld will be hard hit as China's demand for resources soften while NSW has already joined the US and its in recession. Victoria will be next in line.

Prime Minister Kevin Rudd has returned from his holidays and was back to work this morning and on my twitter he posted: 'The Global Financial Crisis will create some tough challenges in 2009, but my priority remains the economy and jobs.'

I replied to his twit, 'Keep us afloat, Kev. Cheers'.

I am sure he and Treasurer Wayne Swan would be pulling their hairs and cringing over the gloomy economic outlook. Is there a way out of this mess?

What would I do if I am in Kev's shoes? My instinct tells me to shift the cabinet into a 'war-time mode' government in terms of policy execution and decision making process but managing the economy as if we are in a post-war mode; focusing on rebuilding the economy by spending on what is most needed by the country such as:

1. Improving public transportation;
   
2. Critical infrastruture expenditure;
3. Financial system reform/tweaking;
4. Fix the local credit market;
   
5. Encourage business and labour union partnership;
6. Lower taxes;
7. Education investment;
8. Increase defence budget; and
   
9. Provide incentive for community/grassroot economic self-reliance stimulus.

But whether the government is able to do so is another question that has to be answered before embarking on this plan. There are also other critical issues that have to be solved first such as budgetary constraints, funding, and federal-state cooperation. If the blockades are removed the end goals of this move should result in that the money spent would eventually reach the real economy and in the hands of the ordinary people and provide a new bedrock for an economic recovery.

Can we do it?

North Korea - China's new frontier? My View

In my previous post I posted up a news piece about Tokyo Governor Shintaro Ishihara's suggestion on China taking over North Korea if the country descends into political chaos following the demise of Kim Jong-Il. As an East Asian political junkie this piece of news of course roused my attention but not a new one.

I always wonder what are the ramifications if Kim Jong-Il dies in power leaving a power vacuum which I believe will be fiercely contested by the factions of the ruling Worker's Party of Korea and the military. Within the party there would be the nationalist faction and the pro-China faction fighting to fill up the power vacuum. On the other hand the powerful military, which Kim Jong-Il currently relies on for his power credibility under the Songun (Military First) policy, will seek the ruling reins as well which is very much unwanted by the international community for fear of launching an agressive stance to reunite the two Koreas by force. There could be a possible tie up between the Party's nationalist faction and the military to take control of Pyongyang. Beyond the borders of the Democratic People's Republic of Korea, the international community prefers a pro-China leadership for a very obvious reason: Stability.

It is envisioned that a post-Kim Jong-Il pro-China North Korea would follow the footstep of China's economic reform 30 years ago; slowly opening up its economy, allowing private enterprises to operate and eventually establish a socialist market economy (with Korean characteristics). The biggest stakeholder in this is of course, South Korea. Despite the fiery nationalistic streak in many South Koreans, the South Korean government of the day are pragmatic over its Northern siblings erring to China for reform inspirations.

South Korea cannot absord the North even if the option of confederation is chosen. The economic consequences would be severe and the lessons from the reunification of West and East Germany presents a clear case for the South not to proceed with a pre-mature reunfication.

However the biggest question is the process of the transition of power. Will there be a smooth power transition or a bloody power struggle between the factions and the military. Any possible power struggle will not be welcomed and if the country does descends into chaos, China is the only country capable of intervening and restoring control. Afterall China understands North Korea inside out, better than South Korea, and act as a gateworld to the world for this hermit communist nation.

If intervention is the option, many experts believe that China will take direct control of the country for many years and some even think that North Korea could eventually become another Chinese province. Not an entirely absurd scenario since China has its own ethnic Korean prefecture - Yanbian Korean Autonomous Prefecture in Jilin province bordering North Korea.

Japan would certainly love the idea of North Korea being absorbed by China as the threat by the North to rain missles on Japan will be eliminated. No wonder the firecely nationalistic Shintaro Ishihara, who dislikes China and the Koreas, put forward the idea for the Chinese to take North Korea into its fold.

What about my take? For the first time, I agree with Mr. Ishihara. Who wants trouble in the peninsula that could drag China, USA, Russia, South Korea and Japan when the world is trying to achieve peace in the Middle East, eradicate terrorism and solve the global economic crisis?

Previous Post: North Korea - China's new frontier?

North Korea - China's new frontier?

Bumped into this piece of news on Tokyo Governor, Shintaro Ishihara's suggestion on China taking over North Korea if the northern half of the Korean peninsula descends into political chaos:

by Staff Writers

Tokyo (AFP) Jan 13, 2009

Tokyo's outspoken governor Shintaro Ishihara said Tuesday that North Korea would be best taken over by China, allowing the impoverished hardline communist state to collapse peacefully.
Ishihara, who often provokes controversy with hawkish remarks, said six-way talks spearheaded by the United States had made little progress in ending North Korea's nuclear weapons drive or integrating it into the world.

"I think China's integration of North Korea would be the easiest solution, even for the United States. I suspect an underlying motive along this line already exists," Ishihara told a news conference.

"I wouldn't imagine that China would refuse the idea," he said.

Ishihara acknowledged that the idea would "probably" meet opposition in South Korea, which maintains hope of reunification with its communist neighbour after six decades divided by the Cold War's last frontier.

Koreans historically fought Chinese influence over the peninsula. Both Seoul and Pyongyang were angered several years ago when Beijing appeared to deny that parts of northeastern China were originally a Korean kingdom.

But Ishihara said that Seoul would benefit if North Korea became part of China.

"If South Korea agrees to the idea, I think that country (North Korea) would collapse naturally and it would bring back a civil society" instead of just dictatorship, he said.

Ishihara was speaking at the Foreign Correspondents' Club of Japan alongside other regional governors who launched a group to pressure North Korea over its abductions of Japanese in the 1970s and 1980s to train spies.

The governors said they would lobby the Japanese government to do more to break a deadlock in a North Korean plan to reinvestigate the kidnappings.

Ishihara, 76, is an acclaimed novelist turned popular three-term governor of the world's biggest city.

China and the two Koreas have often bristled at Ishihara's brash remarks, including his calls for Japan to shed its pacifist constitution and his justifications for Japan's past invasions of Asia.

This idea is not new and a number of analysts have taken up this scenario as a possible event but it takes a loudmouth politican like Ishihara to bring the case into the mainstream spotlight.

If time allows I will write my opinion on this 'takeover' scenario.

Get touchy feely

It wasn't the first time that I was told that my official work correspondences can be quite 'official', 'technical' or to the extent of almost being a legalistic matter, as if I was writting a case law.

Today I was told to tone down by a partner in the firm who was exposed to my correspondences with third parties for the first time.

"Ben, you aren't wrong but just try to keep it......you know...friendly...touchy feely ....", he smiled and gave a wink.

"Yes, Sir!", I stood at attention and saluted. No, the salutation didn't happen but it could....really could have happened. I just have to get 'touchy feely'.