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It’s time to resuscitate the Asia-Pacific Quad It’s time to resuscitate the Asia-Pacific Quad

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NewsHub2016 was quite a year. The Middle East continued its violent downward spiral ; a failed coup in Turkey erased the last vestiges of democracy in that country; the new president of the Philippines launched a bloody, nation-wide vigilante war on drugs ; North Korea conducted its fifth nuclear test , and its biggest to date; and China was deemed in flagrant violation of international law, a judgement it rejected with no real consequences. The European Union, already facing an existential crisis, was buffeted by the influx of refugees , secessionism by the United Kingdom , rising political populism , a continuing sovereign debt crisis , a low-intensity war to its immediate east , and high-profile terrorist incidents in Brussels , Nice, and Berlin. Afghanistan’s long-running conflict continued its slide into negligence by the world’s powers, while Pakistan’s security establishment intensified its policy of regular terrorist attacks against Indian military facilities. And, of course, the United States sprung the biggest surprise of all with the election of Donald Trump , a man of no prior political experience and uneven temperament who has questioned every underlying principle of the Washington Consensus.
The new year is thus a sobering moment to take stock of the international order, whose benefits to peace, security, development, and public welfare around the world are too often taken for granted. Indeed, the United States, China, Russia, United Kingdom, and other major powers almost seemed to be in a race to the bottom over the past year in presenting their credentials as responsible global leaders. Moreover, international institutions—whether the United Nations, European Union, Association of Southeast Asian Nations (ASEAN), or NATO—showed themselves to be incapable or ill-equipped to deal with some of the chief global challenges.
There are no quick and easy fixes to stemming this tide, but modest steps can be taken around the margins. An important—indeed, singular—objective now should be to preserve a stable balance of power in the Indo-Pacific, the vast strategic space which is home to 60 percent of the world’s population and an even higher proportion of its economic growth. This region remains a possible flashpoint for great power conflict, most notably between China and the United States. A further erosion of the Asian order would also have terrible consequences for the international economy at a moment of particular vulnerability.
Against this backdrop, one minor but important corrective might be a resuscitation of an informal grouping of democratic maritime powers in the region, with a focus on both the Indian and Pacific Oceans. The obvious candidates include the United States, India, Japan, and Australia (or “Quad”). The four countries collectively launched ad hoc operations to provide relief following the devastating Indian Ocean tsunami in 2004. In Manila in 2007, the prime ministers of India, Japan, and Australia met with then U. S. Vice President Dick Cheney on the sidelines of the ASEAN Regional Forum, marking the first Quadrilateral summit. Later that year, the four countries along with Singapore held a large multilateral naval exercise in the Indian Ocean that involved over 25 ships and 20,000 personnel. China, which saw the exercises as part of a containment strategy, registered diplomatic protests with all four capitals.
Beijing’s expression of displeasure had an immediate effect. In early 2008, the new government of Kevin Rudd in Australia made it clear that it would not participate in future quadrilateral activities, apparently in deference to Chinese sensitivities. This, combined with the fall of Japanese Prime Minister Shinzo Abe (who was seen as the progenitor of the concept), the end of George W. Bush’s presidential tenure, and opposition from Indian Prime Minister Manmohan Singh’s political allies, seemed to doom the idea of the Quad for good.
But the rationale for a similar arrangement today is even greater and the political circumstances are also more favorable. Having returned to power, Abe has radically reformed Japan’s national security structures. India’s Prime Minister Narendra Modi has been diplomatically active and has prioritized a closer partnership in the Indo-Pacific with the United States and Abe’s Japan. For many years, questions remained about Australia’s commitment and inclination, colored by Rudd’s unilateral decision to withdraw from the Quad. But while the Australian economy remains heavily reliant on resource exports to China, Canberra is not under any illusions about its strategic orientation. In fact, developments in the South China Sea and Indian Ocean seem to have hardened the resolve of Australia’s security establishment. There is also a case for including more countries into an emerging soft security architecture for the region, including possibly Indonesia and the Philippines.
Today, of course, the big question mark surrounds Washington. Trump and his advisors have sent contradictory signals. On the one hand, a skepticism of overseas commitments and the unfamiliarity of some of his advisors with Asian security matters might make the region appear a lower priority for the incoming administration. On the other hand, the recent row with China over Taiwan and a commitment to increase military spending and American naval capabilities mean that Trump might be more favorably-disposed towards such burden-sharing arrangements than his predecessor Barack Obama.
There is, of course, a risk that China would read any such activities as evidence of containment or encirclement. But deferring to Chinese sensitivities has done little over the past eight years to moderate Beijing’s assertiveness, whether in the East or South China Seas, or in the Indian Ocean. At best, greater transparency about the nature of any security activities and continuous dialogue with China about how its rise can continue in a manner that reassures others in its periphery might help mitigate the security dilemma.
Moreover, the emergence of a plurilateral security architecture in the Asia-Pacific (whether quadrilateral or otherwise) should not be mistaken for an Asian NATO, or any such collective security organization. It would be a grave error for Beijing to see it as such, not least because its opposition would be self-fulfilling and could realize its worst fears. Additionally, any “hard” security arrangement resembling an alliance would run counter to the wishes of its participants, particularly India, which sees security treaties as undermining its sovereignty and thus unnecessarily constraining. Instead, any such arrangement would serve the valuable purpose of facilitating an exchange of information and viewpoints among leaders of the major democratic Indo-Pacific powers in an increasingly uncertain world. That alone is a reason for its resurrection.
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Beijing launches environmental police force to tackle air pollution

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NewsHubBEIJING: The smog-hit Chinese capital of Beijing will establish a police force to deal specifically with environmental offences as part of its efforts to clean up its air and crack down on persistent polluters.
The smog police will crack down on open-air barbecues, garbage incineration, biomass burning and dust from roads, Beijing’s acting mayor Cai Qi said on Saturday, according to the official Xinhua news agency.
„These acts of non-compliance with regulations are actually the result of lax supervision and weak law enforcement,“ Cai told a government meeting.
Nearly three years into a „war on pollution“, large swathes of northern China were engulfed in smog over the New Year, with dangerous air quality readings in major cities like Beijing, Tianjin and Xian forcing many people to stay in doors.
The smog which blanketed cities, disrupting flights, port operations and schools, was caused by increased coal use for winter heating and unfavourable weather conditions.
The central government has promised to make greater use of police and law courts to prosecute companies and local officials responsible for exceeding emissions limits.
But while China’s environmental legislation has been beefed up in recent years, authorities have long struggled to build up the staff required to enforce laws.
China’s continuing reliance on fossil fuels, especially in the north, made the fight against pollution difficult, China’s environment minister Chen Jining said on Friday.
He said the six provinces and regions hit hardest by smog over the last month, including Beijing, consume a third of the country’s total coal and emit around 30-40 percent of China’s major atmospheric pollutants, despite accounting for just 7.2 percent of China’s total area.
But he said China would still be able to solve its pollution problems faster than western countries, including Germany.
„They needed 20-40 years to solve it. I believe we will do it faster than they did,“ Chen said, according to a transcript posted on the State Council’s website. „We shouldn’t lose confidence because of a few days of heavy pollution,“ he added.
China last week announced it would plough 2.5 trillion yuan (US$361 billion) into renewable power generation by 2020.

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Volkswagen Brand Sales Increase in 2016 Despite Emissions Scandal

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NewsHubBERLIN—Volkswagen AG’s emissions-cheating scandal took a hefty dent out of sales of its VW brand in 2016, but strong growth in China and Eastern Europe helped offset declines in other major markets.
Shares of Volkswagen rose strongly Monday after it said VW-brand car sales increased significantly in December and after a senior executive voiced hope that the company would soon resolve a criminal investigation in the U. S.
Sales…

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Three 'Terror' Suspects Killed in Xinjiang, China

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NewsHubThree alleged terror suspects were shot dead by police officers in China’s Xinjiang Province on Sunday night. The police had been in pursuit of the suspects, who resisted arrest, for their connection to a terror incident that transpired in 2015.
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Reuters reported that the region’s governing body explained that the incident occurred in Hotan after police officials were faced with hostility from the „violent terror group. “
„We shot the thugs dead at the scene,“ the government told the Tianshan Net official news site. „There were no casualties on our side. “
So far, additional information on the Sunday incident has been withheld.
A similar incident had been witnessed two weeks earlier in western Xinjiang, where members of the East Turkistan Islamic Movement (ETIM) rammed a car into the government compound in Karakax County.
The suspects launched an attack and detonated a bomb on the location. In retaliation, police officials shot and killed three of the culprits. An official and a security guard from the government side, however, lost their lives due to the incident.
Following the tragedy, the region’s governing body revamped its anti-terrorism measures and carried out an investigation to the area chief, He Jun, over failure to perform his duty as well as discipline violations.
Prior to the attack, Xinjiang enjoys a peaceful state with no major crimes being reported in the past few months. Rights groups and analysts argued that China’s harsh regulations imposed on the Uighurs religion and culture are to blame for the rising violence.

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"Inflatable Trump Chickens" Are Being Sold In China

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NewsHubThis giant rooster sculpture outside of a mall in Taiyuan, China has gone viral. #TrumpRooster welcomes #ChineseNewYear in Taiyuan, N China’s Shanxi province https://t.co/quosHmdMgQ It was erected to usher in the Year of the Rooster on the Chinese zodiac calendar, which will begin eight days after President-elect Donald Trump is inaugurated. Bless whomever was responsible for this statue in Taiyuan, China. Year of the rooster, indeed!

US Senator Ted Cruz meets Taiwan’s Tsai in Texas and fires a broadside at Beijing

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NewsHubTexas senator Ted Cruz and governor Greg Abbott said they met Taiwan president Tsai Ing-wen on Sunday, while she was passing through Texas on her way to diplomatic stops in Central America. Cruz said China’s consulate had asked, in “a curious letter”, that the Houston congressional delegation “uphold the ‘One-China policy’” and not meet the Taiwanese leader. In December, US president-elect Donald Trump spoke with Tsai by phone, breaking decades of US precedent in relations with China. Cruz, a Republican who endorsed Trump after losing to him in the presidential primary, had previously defended Trump’s call. “The People’s Republic of China needs to understand that in America we make decisions about meeting with visitors for ourselves,” Cruz said in a statement on Sunday. “This is not about the PRC. This is about the US relationship with Taiwan, an ally we are legally bound to defend. The Chinese do not give us veto power over those with whom they meet. We will continue to meet with anyone, including the Taiwanese, as we see fit.” Cruz added that he and Tsai discussed “arms sales, diplomatic exchanges and economic relations”, and that he hoped to increase trade between Texas and Taiwanese markets. In a separate statement , Abbott said he and Tsai discussed agriculture and gas trade, and exchanged gifts. Tsai received “a clock bearing the Texas State Seal”, Abbott said, and the governor received a vase. Abbott said the issues discussed were energy, trade relations and commercial ties between Taiwan and Texas. American lawmakers often meet Taiwanese presidents when they pass through the US, despite tensions between federal officials. Tsai incurred China’s anger over her refusal to endorse Beijing’s policy that the mainland and Taiwan constitute a single Chinese nation. Beijing lodged a complaint with the US over Trump’s call with Tsai, the first between American and Taiwanese leaders since ties were cut in 1979 at China’s request. Barack Obama’s White House reassured China, but Trump continued to threaten exacerbating tensions with Beijing. Not long after his 10-minute conversation with Tsai, the president-elect went on a tirade against China on Twitter. He wrote: “Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into their country (the US doesn’t tax them) or to build a massive military complex in the middle of the South China Sea? I don’t think so!” He then accused China of stealing an underwater drone that it seized in contested waters, calling it an “unpresidented [sic] act”. “We should tell China that we don’t want the drone they stole back,” he wrote. “Let them keep it!”

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McDonald's gives up control of its China business in $2 billion deal

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NewsHubCitic, a massive Chinese financial firm, is taking the majority stake in McDonald’s ( MCD ) operations in mainland China and Hong Kong.
U. S. private equity giant The Carlyle Group, is also buying into the investment combo, taking a 28% stake. McDonald’s will hold the remaining 20% of the business.
McDonald’s CEO Steve Easterbrook said the fast food company’s new partners would bring a better understanding of the Chinese market.
Related: More touch screens and table service just the beginning of McDonald’s change
The deal is the latest move in Easterbrook’s efforts to overhaul the global burger chain. In the U. S., it has launched more customized sandwiches with fancier ingredients, introduced all-day breakfast to the menu and brought in touch screens and table service.
Customers in China could also see changes soon. McDonald’s says „menu innovation“ and using digital technology are priorities for the new Chinese business.
Bringing in Citic and Carlyle doesn’t mean the McDonald’s brand is pulling back in China, where the economy is slowing down after decades of rapid growth.
The partners say they’re aiming to open more than 1,500 new restaurants in China and Hong Kong over the next five years, with a focus on bringing the golden arches to smaller Chinese cities.
Related: KFC China owner has a finger lickin‘ good debut
McDonald’s aim is to drastically reduce the number of stores it owns in favor of franchises. The China deal will enable it to slash its company-owned stores by 1,750.
McDonald’s announcement follows Yum Brands‘ spinoff of its China division late last year. The decision by the KFC parent came after pressure from activist shareholders.
Both big U. S. fast food companies had suffered in China in recent years after food safety scandals. McDonald’s and Yum ( YUM ) reported improving results at their Chinese businesses last year until they were hit by anti-U. S. protests in July.

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Chinese Media Warns Trump of ‘Revenge’ if ‘One China' Policy is abandoned

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NewsHubChina’s popular nationalistic tabloid on Sunday warned US President-elect Donald Trump that Beijing would set on a „revenge“ mode if he renounces the „One China“ policy. The warning comes barely hours after Taiwanese president Tsai Ing-wen made a controversial stopover at America’s Houston city before flying to South America.   
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The Global Times editorial categorically stated that the „One China“ principle holds paramount importance in the Sino-US relationship and any compromise on it is simply unacceptable.
„Sticking to (the one China) principle is not a capricious request by China upon US presidents, but an obligation of US presidents to maintain China-US relations and respect the existing order of the Asia-Pacific,“ it said.
The editorial claimed that if the  Trump administration attempts to abandon  the one China principle, then „Chinese people will demand the government to take revenge. There is no room for bargaining. “
The use of word „bargaining“ seems to deliberate on the part of Global Times editorial, since Trump had categorically stated that US ought to use the „One China“ policy as a bargaining chip against the Chinese government.
Meanwhile, several senior US Republican lawmakers met Taiwan’s president Tsai during her brief stopover at Houston on Sunday. The meeting seen as an open challenge to China included prominent members like Texas Senator Ted Cruz and Governor Greg Abbott.
Shortly after the meeting, Cruz issued a stern statement against China saying that Beijing needs to understand that Americans are free to make decisions about meeting the visiting leaders.
China apparently had warned the US not to allow the Taiwanese leader to make a transit stopover in the country while on a enroute to Central America.
However, Chinese leadership can breathe a sigh of relief that Trump did not held any meeting with Tsai on Sunday. The US president-elect cited „diplomatic protocol“ for his inability to meet the Taiwanese leader during her US stopover.  
However, Trump last week indicated media reporters that he is open to meet Tsai after his official coronation on Jan. 20.

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Cruz Meets With Taiwan’s Leader, Rebuffs China’s Objections

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Chinese sensibilities collided with Texas-style diplomacy Sunday as Sen. Ted Cruz, R-Texas, told China to mind its own business after receiving objections to his Houston meeting with Taiwanese President Tsai Ing-wen.
Tsai, who stopped in Texas to visit with Cruz and Gov. Greg Abbott, was en route to Central America when she met with the two Texas leaders. Prior to the meeting, Cruz said in a statement, China had objected to the visit.
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Under the so-called one China policy, the U. S. maintains diplomatic relations with China but not Taiwan, even though it maintains commercial ties with the island, which China claims is a breakaway province and not a separate nation. Taiwan, off the coast of China, became the refuge for China’s Nationalist government after Mao Zedong took power in 1949.
On Sunday, Cruz said he would meet with whomever he wanted to, no matter what China had to say.
“The People’s Republic of China needs to understand that in America we make decisions about meeting with visitors for ourselves,” Cruz said in a statement.
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“This is about the U. S. relationship with Taiwan, an ally we are legally bound to defend. The Chinese do not give us veto power over those with whom they meet. We will continue to meet with anyone, including the Taiwanese, as we see fit,” he said.
“The US-Taiwan relationship is not on the negotiating table. It is bound in statute and founded on common interests. I look forward to working with President Tsai to strengthen our partnership,” Cruz added.
Tsai talked about trade as well as arms sales, Cruz said. Abbott said he and Tsai discussed energy and trade.
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China, however, objected no matter what issues were on the table.
“We are firmly opposed to the Taiwan leader’s engagement with U. S. officials under the pretext of transit, and her attempt to undermine China-U. S. relations,” said foreign ministry spokesman Lu Kang.
Relations between China and the U. S. have been frosty ever since President-elect Donald Trump took a phone call from Tsai after the election, a move China said violated diplomatic protocols.
The Global Times newspaper, which is controlled by China’s government, said Beijing was “ fully prepared ” to break ties with the U. S. if Trump establishes relations with Taiwan.
“If Trump reneges on the One China policy after taking office, the Chinese people will demand the government to take revenge. There is no room for bargaining,” said the paper.
One expert noted that Tsai is keeping her options open.
“Taiwan has maintained relations with China hawks in the Republican Party over the past several administrations,” said Ian Rowen , a postdoctoral fellow at Academia Sinica in Taipei, Taiwan. “Cruz is influential above and beyond many senators, given his performance in the last election campaign. It makes sense to add Cruz, whatever his relationship is going to be with the Trump administration.”
“In general, it raises Tsai’s national and international stature to be going on trips like this,” Rowen said. “There is, however, the potential for a shift in U. S.-Taiwan relations, so of course she’s going to seize the opportunity to meet with as many officials as possible.”

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Citic, Carlyle pay US$2.08b for McDonald’s Hong Kong, China franchises

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NewsHubMcDonald’s Corp. said it will sell 80 per cent of its fast-food restaurant business in Hong Kong and mainland China in a deal valued at HK$16.14 billion (US$2.08 billion) to the largest Chinese international trust company and US private equity firm Carlyle Group. After the cash-and-shares transaction, CITIC and CITIC Capital will own a 51 per cent controlling stake, while Carlyle will own 28 per cent. McDonald’s, based in Illinois state, will keep 20 per cent interests in the company, according to press release by the three companies. The formation of the partnership will act as the master franchisee responsible for McDonald’s businesses in mainland China and Hong Kong for 20 years, the press release said.

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