Congress Restless Over Chinese Trade

After more than a decade of one-sided trade policies, which have permitted the wholesale export of the US manufacturing sector to mainland China and other parts of Asia, Congress is finally beginning to worry. In confirmation hearings, the Bush administration's nominee for US Trade Representative voiced the growing concern about the trade policies that have fueled rapid Chinese economic growth and increasing militarism.

Rob Portman, a Republican member of the House of Representatives, responded to mounting anger in Congress over Chinese trade practices by saying he would go there soon to “deliver a strong message in person to Chinese officials.”

“China does not always play by the rules,” he said in testimony that criticised China for intellectual property piracy and industrial policies that exclude US goods. “We need a tougher approach.”

While China offered huge opportunities for US exporters, he said “unless we can solve those problems the [US] consensus on trade is endangered.”

His comments are a further sign that pressure is mounting for the administration to adopt a harder line on trade with China. Congress has been considering various proposals that would allow the US to impose additional duties on Chinese goods to offset the benefits from what critics say is an undervalued currency. The US Treasury, which has long been seeking to coax China adopt a more flexible currency, said last week that China needs to move immediately.

Mr Portman took the rare step for a USTR nominee on Thursday by commenting directly on currency valuations, saying he agreed with Democratic senator Charles Schumer that China should “revalue” its currency.

Mr. Portman's tough rhetoric was enthusiastically received by congressional leaders, who reminded him that the administration has previously resisted confronting the Chinese on trade matter.

Overall the Senate Finance committee gave an enthusiastic reception to Mr Portman, with senior Republicans and Democrats on the committee saying they hoped to rush through his confirmation early next week.

In what one Democrat senator called a “bouquet tossing contest,” committee members lavished praise on the Ohio congressman. “Your problem is not with Congress,” said Max Baucus, the senior Democrat on the committee. “It's with the administration. The administration needs to get tougher.”

Mr. Portman's comments come amid increasing claims by American and European corporations that Chinese companies with which they do business are deliberately lying about their work practices so as to avoid scrutiny on human rights and labor standards.

[Chinese] Factory managers' forgery of payroll documents and time cards is increasingly sophisticated, according to auditors and western buyers who work with Chinese factories. Some estimate that more than half of the factories surveyed in social compliance audits have falsified at least some of their records.

“A few years ago, we were able to detect when records were altered by simply interviewing workers. Now workers are coached,” said Daryl Brown, vice-president for global ethics and business practices at Liz Claiborne.

Of course, the US has allowed the trade situation to deteriorate to such a point that any trade action against China by the US could profoundly - if temporarily - hurt the US economy. The Economist, ever the cheerleader for free trade with even despotic regimes like China, views congressional concern over China's trade-fueled economic and military buildup as "China bashing" and looks askance at efforts to reign in the export of American industry to China. Nevertheless, the Economist rightly points out that massive deficit spending by the Congress and Bush administration has put America in quite a pickle when it comes to taking action with China.

Less encouragingly, the political and economic risks are bigger this time round. In the 1980s Japan, for all its faults, was always viewed as a democratic ally in Asia. By contrast, China is now seen as a nasty communist regime and a dangerous rival. In the mid-1980s, America's current-account deficit was smaller, 3.5% of GDP in 1985 compared with 6.3% today, and its debt stock lower. Today, America is the world's biggest debtor, with China as an important creditor. A sharp reversal in China's appetite for American Treasury bonds could send interest rates soaring.

This might come sooner rather than later, according to Alan Greenspan, the chairman of the Federal Reserve. In testimony before the Senate budget committee this week, he stated that the Chinese government’s massive exchange-rate interventions were causing growing imbalances in the domestic economy that will force China to abandon its currency peg. Once this happens, the central bank can stop stockpiling dollar reserves—meaning its demand for American government securities will also dry up. Critics wonder if Congress, which has made little effort to curb America’s soaring budget deficits, has quite thought things through.

Chinese financing of America's monolithic national debt has left the US vulnerable to Chinese financial pressure, which may curtail the US's ability to deal resolutely with China in both trade and foreign affairs. The US needs to radically cut its public spending and reduce its deficits; it also needs to put the brakes on its out-of-control trade with China. Unfortunately, thanks to Washington's shortsightedness, it may not be able to do both at the same time.

Central American Gang Plagues US Cities

Washington's stubborn refusal to protect US borders has resulted in the flooding of American cities with criminals from Mexico, Central and South America. One particularly violent gang, Mara Salvatrucha (commonly known as MS-13), which hails from various parts of Honduras and Guatemala and is reknown for beheading its enemies with machetes in those places, has established itself across the US, from Miami to California and as far north as Long Island, New York. Now Houston, Texas, finds itself under siege from MS-13.

A notorious Central American gang tied to a Huffman child's shooting death has waged a war of violence across Houston since last year, culminating in a SWAT standoff that netted several arrests, police said Tuesday.

Five of the 20 arrested so far have been charged in connection with four homicides in the Houston area, including the slaying of 18-month-old Aiden Naquin, who was shot in the head while strapped in an infant car seat April 12.

The Houston Police Department’s Lt. Robert Manzo displays photos of suspects arrested during a three-week initiative.

Houston police would not identify the gang by name because of restrictions imposed by a departmental policy. It is believed to be the violent MS-13 gang, also known as Mara Salvatrucha.

Harris County sheriff's detectives have said they believe Miguel Angel Castro, 21, the man charged in the death of the Naquin child, is a member of MS-13. Houston police acknowledged the homicides they have investigated in recent weeks involved 'multiple members of a single gang.'

'Their crimes run the gamut, from robberies to gang rivalries — that kind of thing,' said Houston Police Department Homicide Lt. Murray Smith, who was part of a three-week initiative that linked the homicides.

'In most cases, I believe, the victims were random ... Certainly, they targeted the Hispanic community.' Smith said some of the suspects have admitted to being part of the gang.

Naturally, none of this was necessary. Had the US government bothered to enforce American law and US territorial integrity, there wouldn't be enough members of MS-13 in the US to cause trouble. The families of those murdered by MS-13 should place the blame first with the those who committed the crimes, and second with those who let them into the US or tolerated their continued presence in the US.

Almost all of those arrested during the SWAT standoff last week and in the months leading up to it are believed to be illegal immigrants, Smith said. One was confirmed to be from the United States, he said.

Most claim to be from Mexico, while others are believed to be from El Salvador or Guatemala. The U.S. Bureau of Immigration and Customs Enforcement will help Houston police determine the men's identities and nationalities.

Police said more killings may be linked to the gang. They confirmed they are reviewing at least four other homicides but declined to give details on those cases Tuesday.

Many of the 20 arrested were caught last week when police went to an apartment in the 6400 block of West Bellfort to serve four arrest warrants for robbery and aggravated assault.

MS-13 members have apparently compiled quite a laundry list of murders throughout Houston.

Police said they linked the homicides to the same gang when five homicide investigators began studying the cases full-time last month, looking at ballistics evidence, witnesses statements and interviews with people. They started with a list of crimes linked by one gun.

During this three-week initiative, three more homicides occurred, involving the same gang — the toddler's shooting death in Huffman and two slayings in Houston.

Smith said he was surprised to find this many people involved in this much criminal activity in such a short time span.

'They're a very vicious group, like most of the gangs when they come to our attention ... Obviously, they have very little regard for human life,' Smith said.

MS-13 has little regard for human life, and the Bush administration and Congress have little regard for American law, territorial integrity and the safety and protection of the American people. How does permitting the unmitigated invasion violent foreign gangs into American cities advance the "culture of life" to which President Bush pays so much lip-service?

Israel Learns the Price of Chinese Arms Sales

When the US pleaded with European Union leaders not to relax their embargo against arms sales to China earlier this year, Brussels diplomats responded by pointing out that Israel, America's closest ally in the Middle East, has been selling weapons technology to Beijing for years, a fact that gets only limited attention in the US press. Now Washington appears to be taking a hardline with Tel Aviv, making it clear to the Israeli leadership that continued technology transfers to China will come at a cost to US-Israeli relations.

The United States has frozen Israel out of the development of a prestigious jet fighter as punishment for its military cooperation with China, Israeli defense industry executives said Sunday.

The executives said the American decision was related to displeasure over Israeli arms deals with China, including its work on Harpy unmanned drones, acquired by China from state-owned Israel Aircraft Industries in the early 1990s. The U.S. fears the Harpys could be deployed during a Chinese invasion of Taiwan, which Washington has pledged to defend.

The executives spoke on condition of anonymity, citing the sensitivity of the matter.

There was no immediate comment from American officials, and Israeli Defense Ministry would not confirm or deny the report. "We are in the midst of a dialogue with the United States and hope that within its framework understandings will be reached soon," a ministry spokeswoman said.

Pentagon worries over the dramatic increase in Chinese military spending and Beijing's ambitions have finally reached the point where the US military establishment is no longer willing to overlook Israel's arms sales to China. Both Washington and Tel Aviv have been dancing around the issue for several years, though neither government has spoken openly of the disagreement. However, China's recent threats against Taiwan has put Pentagon planners on alert to the very real possibility of a Pacific war with China. Thus, the simmering argument may be about to break out into the open.

Israel was one of the principal foreign participants in the development of Lockheed Martin Corp.'s F-35, which is viewed as the American aircraft of the future. Priced at about $55 million, the plane is designed to combine supersonic speed with stealth technology at a relatively low price.

Parts of the Harpy drones were shipped to Israel last year for what American defense officials say was an upgrade of their capability to locate and destroy enemy radar installations.

Israel denies the American contention, saying the Harpy units were undergoing routine maintenance. Israeli military officials say work on the Harpy deal has been frozen.

Analysts of Chinese military development say the United States is doing its utmost to prevent China from acquiring equipment that could be used in an invasion of Taiwan.

Israel enjoys strong support in Washington. However, that support could be seriously threatened if Israel continues to sell arms to Beijing. After admonishing Europe not to export military technology to China, Washington can hardly continue to tolerate Israel doing the same thing. Freezing Israel out of military contracts is a quiet, but sharp, warning to the Jewish state. American politicians are loathe to openly criticize Israel because of Israel's powerful allies in Washington, including many conservative Christian leaders. However, the Chinese threat to US interests in the Pacific easily trumps the value of US-Israeli relations. If Israel continues its Chinese weapons sales, relations with the US will suffer.

Sino-Japanese Tensions Rise

Weeks of government prompted and tolerated protests against Japanese businesses and diplomatic installations throughout China have pushed Sino-Japanese relations to their lowest point in decades. Even Junichiro Koizumi, Japanese normally unflappable prime minister, makes no secret of Japanese anger at Beijing and his country's escalating fear of Chinese power.

[Prime Minister Koizumi] made clear his irritation with Beijing, and its tolerance of weekly demonstrations that have often turned to violence against symbols of Japan, including diplomatic offices and shops.

In a interview to be broadcast on Australian television, Mr Koizumi insisted that relations with China remain good but added: "I hope that the Chinese will, shall we say, become more grown up and will be able to look at friendly ties from broader perspectives with, shall I say, a cool head."

Tens of thousands of Chinese protesters have taken to the streets, infuriated that Tokyo's education ministry has approved a textbook that plays down Japan's wartime aggression.

The dispute over Japan's imperial history is a sign of a wider escalation of tensions in Asia over the economic and military growth of China. Its voracious appetite for imports has boosted the economy of the region, but its growing belligerence has alarmed some neighbours, particularly Japan and Taiwan.

The wave of "popular" Chinese protests come suspiciously on the heels of Tokyo's recent push for even closer military ties with the US and its sudden decision to include the defense of Taiwan as a top-level military concern.

The new Japanese national defence strategy last December for the first time named the rapidly re-arming China as a prime concern, saying: "We have to remain attentive to its future actions."

Two months later, Tokyo further infuriated Beijing with a joint declaration with Washington that the peaceful resolution of the dispute between China and Taiwan was a common "strategic objective".

Although phrased in diplomatic language, this was a clear warning to China not to seek to retake Taiwan by force.

America's reckless trade policy with China has flooded Beijing's coffers with easy cash. The militaristic communist despots who run China are now using that cash to rapidly build up China's military. Particularly worrying to Japan and other neighboring Asian countries, the Chinese military build up seems geared toward the establishment of a "blue water" Chinese navy, with which China could project its power throughout the Pacific.

"The balance of power is changing in favour of mainland China," said Masahi Nishihara, president of the National Defence Academy, Japan's equivalent of Sandhurst. "If there is a conflict between China and the United States over Taiwan, Japan would be almost immediately involved."

Mr Nishihara raised the prospect of a China mounting a Pearl Harbour-style surprise attack on the US military base in Okinawa to stop America coming to the rescue of Taiwan. "We need diplomacy to avoid conflict. But if it came to war, we would want the US to win."

He said China had now overtaken Japan in defence spending, and while the Japanese navy could still stand up to the Chinese, Tokyo had no nuclear submarines and no response to the hundreds of missiles on China's coast or the threat from North Korea.

These concerns led Japan to plead with Europe earlier this year not to end the European Union's ban on weapons sales to China.

"China is not a threat to Europe. For European countries that want to make money, China is a good market," said Mr Nishihara, "But for us China is a security threat."

Although Japan is one of the world's biggest spenders on defence, successive governments have preserved the country's pacifist constitution that gave up the right to settle international disputes by force. But Japan is undergoing a revolution of its defence doctrine, which has seen Tokyo send troops ever further afield, strengthen military ties with America and become more active in Asian security.

Containing China is likely to become the top US foreign policy goal over the next decade, once Washington finally wakes up from its current Wilsonian crusade to democratize the Middle East. Given the increasingly bellicose rhetoric coming from Beijing and the Chinese military leadership, that priority is likely to be shared by America's Pacific allies, for whom the US represents the only bulwark against Chinese power. Japanese pacifism could only be sustained in the absence of a threat to the Japanese mainland. Now that such a threat has materialized, expect to see Japanese defense policy adopt an increasingly aggressive posture to check China.

UK Government Hides Truth About Illegal Immigration

According to the London Times, Tony Blair's government has determined a rough estimate of the number of illegal aliens currently residing in Britain, despite Downing Street's claims to the contrary.

The government has secretly calculated there are about 500,000 illegal immigrants in Britain despite repeated claims by ministers that they do not know the scale of the problem.

The figure has been compiled by Home Office officials. Yet one of its ministers told MPs in February there was “no official estimate”.

The research was ordered by Tony Blair more than a year ago “as a matter of urgency” following a Downing Street summit on immigration, a confidential Whitehall memo reveals.

However, in the face of a political controversy over lax controls at Britain’s borders, experts involved were told not to reveal the figure. It includes not only migrants who have illegally entered Britain to work in the black market but also failed asylum seekers who should have been deported.

The estimate — equivalent to the population of Sheffield — is far higher than previous figures from campaigners such as Migration Watch UK and is likely to intensify the row over immigration.

The number of illegal aliens in Britain has doubtless been kept secret for political reasons. With an election looming and pressure to restrict legal immigration and clamp down on illegal immigration from the opposition Tories, the Blair government hardly needs any more bad news.

Last week the Tories claimed immigration controls were a shambles after an illegal immigrant was convicted of murdering a policeman and plotting a terrorist attack with the poison ricin.

David Davis, the shadow home secretary, said: “This government now admits that the number of illegal immigrants is at least 500,000 and it could be much more. But yet again it is covering up the truth from the public. This smacks of a desperate attempt to conceal its own facts.”

Experts who consulted on the government's study of illegal immigrant numbers affirmed both its existence and the secrecy with which it was conducted.

The existence of the estimate was confirmed this weekend by Professor John Salt, director of the Migration Research Unit at University College London, who was commissioned by the Home Office to study the number of illegal migrants.

“I have seen the first run through (of the figures),” he said. “I was consulted as an expert and I made some comments.”

Salt’s disclosure appears to contradict statements by Des Browne, the immigration minister, who told MPs in February there was “no official estimate for the number of illegal immigrants working in the United Kingdom”.

Only last week Charles Clarke, the home secretary, told the BBC’s Newsnight programme that he did not know how many illegal immigrants there were in Britain.

Salt, a world expert on immigration, said his estimate — provided to the Home Office — was between 450,000 and 500,000 illegal immigrants. “If I were in a court of law and asked what was my best estimate, that’s what I would say,” he said.

His paper had also originally included detailed estimates of the numbers of illegal migrants working here, but he said the figures were removed by the Home Office when it was published last year.

When he was given a copy of the department’s estimate of the number of illegal immigrants last October, he said officials had told him they did not want to release the information and had asked him to keep the figure confidential. “If they don’t want to release the information, I can’t release it,” he said this weekend.

However, a Home office source confirmed the department’s figure was similar to Salt’s estimate of 500,000. According to the confidential Downing Street memo, the research was ordered by Blair when he and Home Office ministers held an “asylum stocktake” at No 10 in March last year.

Though half a million illegal aliens pales to the estimated 10 million illegals (mostly Mexican) currently living in the US, recall that Britain has less than a quarter of the US population and an even smaller fraction of the US geographic expanse. Recall, too, that Britain is an island and does not share two and three thousand mile borders with other countries. This should make immigration controls considerably easier for the UK. What the study clearly demonstrates is the utter failure of the UK government to control its borders and to manage immigration policy to benefit the British people. It also reveals that the Labor government understands that British public opinion has swung strongly against its open door immigration policy and that the political consequences for Labor's lax immigration enforcement may be correspondingly harsh.

Chirac Panders Again ... Desperately

Desperate to stem the tide of public opinion mounting against the proposed European Union consitution, which will be put before French voters in May, Jacques Chirac is, predicatably, playing the anti-American card.

France's voice in Europe would be "silenced" and "Anglo-Saxon" enemies of the EU - in both Britain and America - would be delighted if the French reject a constitution "largely inspired by France and French values," he said.

Chirac's desperation appears to be growing in the face of new polls that show a solidifying majority behind the "No" vote. Even open bribes to France's powerful civil service unions haven't worked (see previous post).

An opinion poll in the newspaper Le Figaro suggests 54% of the French would vote No, while a separate poll for Paris Match magazine on Tuesday gave the No side 53% of the vote.

A similar poll a few months ago had estimated the No vote at only 40%, and until now, France's ruling elite has taken French support for Europe for granted.

For the past months, the Yes campaign has been all but invisible, while a disparate group of Eurosceptics, the far left and some Socialists has been campaigning vigorously across the country for a resounding No.

French voters may be motivated to vote against the EU constitution less as a rejection of closer European Union and more as a protest against the increasingly unpopular Chirac government.

Those who would reject the EU constitution have found a receptive audience in France, where voters are increasingly fed up with Jacques Chirac and in no mood to listen to the government.

Instead, a significant majority of the French seem to be planning to use the 29 May referendum to send a clear message of discontent to their president and his ruling centre-right party.

Their dissatisfaction stems as much from domestic issues such as high and rising unemployment, as over growing French unease about the direction Europe is taking.

EU enlargement to 25 countries - including many in eastern Europe - has made some in France feel Paris has less influence in Brussels, and is no longer leading Europe at all, despite France being a founding member.

French Prime Minister Jean-Pierre Raffarin has been reduced to pleading with the voters, saying that a Yes vote for the constitution will not be interpreted as approval for the government.

The French left has successfully argued that the proposed EU constitution will impose liberal free market reforms across Europe, ultimately dismantling in the elaborate and expensive French welfare state. Speaking to an TV audience recently, Mr. Chirac found his pleas for a "yes" vote greeted with profound skepticism.

M. Chirac's audience expressed doubts and confusion about the text. Even those who were broadly pro-treaty, said that - on reading it - they could not grasp its central point or understand much of the detail.

One young woman asked M. Chirac to give "two or three concrete" examples of how the constitution would benefit France. M. Chirac struggled to give a simple answer. He mentioned a boom in French trade with eastern Europe; the fact that the treaty would enshrine women's rights; and would increase co-operation against international crime.

But he kept coming back to his central message: France had nothing to fear; this was a French text, hated by "les Anglo Saxons".

M. Chirac was asked if he would follow the example General de Gaulle, who resigned as president in 1969 after losing a referendum on regional government. President Chirac said that he could reply to that question in one word: Non.