Letters and Blogs

DPRK deserves respect, not sticks or carrots

Opinions are divided on how to deal with the Democratic People's Republic of Korea (DPRK). So what's the best thing to do to foster world peace and development when a country with a seat in the UN decides to go nuclear?

Countries such as India and Pakistan have done the same with little or no attention from governments across the world or the international media simply because they are not in direct conflict with the US.

Unfortunately, the sole superpower still claims the right to decide which country is allowed to do what. Such an absurd situation cannot last forever.

Of course people, be they Chinese or Western, have the right to suggest the most rational measures to achieve nuclear non-proliferation, and eventually denuclearization of the entire planet. The best suggestions have to be the most impartial and sensible.

First, we should accept the DPRK for what it is: a member of the international community, not a "rogue state," or part of an "axis of evil". The DPRK government is capable of assuring its people of basic human rights - survival, social stability and protection from other countries' armies. It's capable of pushing forward scientific and cultural developments, too.

Though it seems untrue, technically the DPRK is still at war with the Republic of Korea (ROK), and the American army still holds military bases and troops in the ROK.

China and the DPRK enjoy a special relationship. They fought together in the heydays of the US imperialist push into Asia when four-star American generals were in favor of nuclear-bombing the region. China helped its neighbor in the spirit of revolutionary internationalism, and in its own national interest.

That was rationality at its profoundest - cooperating with other countries for common progress, mutual respect and equality. Those times were characterized by war and revolution. We need the same respect and tactful manners today in diplomatic relations.

If it's preposterous for American officials to declare that they will not tolerate a nuclear DPRK, it is ridiculous to hear voices in the Chinese media that suggest the use of "carrots and sticks" to tackle Pyongyang, even if they propose more carrots than sticks. Sticks and carrots are not for sovereign states.

The least that is required of elementary international democracy is respect for others.

Claudio Cervini

via email

Is there an alternative to US bonds?

A front-page report in China Daily on Tuesday speculated that China was likely to continue buying US Treasury bills. That may not be the best option, but still it's a reasonable choice at this stage.

Some experts suggest China can use its foreign exchange reserves to buy gold instead, for the yellow metal's price has jumped since the financial tsunami struck. But once we consider the amount of gold that can be bought, it would cease to be a realistic option. The annual global production of gold is about 50 million ounces and worth about $48.7 billion at its current price ($974.9 per ounce). The figure may look huge, but is dwarfed by the China's annual current and capital accounts surplus - $445.1 billion last year. If only a tenth of that surplus had been used to buy gold, its price would have shot through the sky.

A similar situation could arise, though smaller in proportion, if China uses the bulk of its foreign reserves to buy commodities such as crude oil or iron ore.

How about assets denominated with other foreign currencies then? Japan's economy looks gloomier than that of the US, the Euro Zone and the UK have been severely battered by the global economic crisis. Since last September, the values of the euro and pound have plunged against the dollar. So dollar-denominated assets still seem the safest.

Since there's no other feasible option for China to do away with its dependence on US Treasury bills, it needs a group of professional and experienced international investment experts to diversify and optimize its investment portfolio. The setting up of China Investment Corporation two years ago was a positive step in that direction. But the huge loss from its deals with Blackstone and Morgan Stanley shows that China still has a long and tough way to go before it can steer well in the winds of the international financial market. Until then, China has to allow the US Treasury bills to form a major chunk of its foreign reserves.

Alex Niu

via email

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(China Daily 06/05/2009 page9)