Malaysia slides in global Corruption perception index

KUALA LUMPUR: Malaysia's ranking dropped four places in the Corruption Perceptions Index (CPI) last year.

The index, released by Transparency International, showed that Malaysia was ranked 54th out of 168 countries this year compared to 50th out of 175 countries last year.

Malaysia ranked 52 the previous year.

he CPI scores and ranks are determined by the perceived level of corruption in the country's public sector.

Transparency International-Malaysia president Datuk Akhbar Satar said Malaysia's position would be even worse if seven other countries were included in last year's evaluation as their scores were above Malaysia in 2014.

"Despite many steps implemented, the level of corruption experienced in Malaysia does not seem to be decreasing," he said.

Globally, Denmark received the highest rank with a score of 91 followed by Finland (90) and Sweden (89).

Malaysia slides four points down global corruption perception index

Issues surrounding 1Malaysia Development Berhad and the RM2.6bil donation were among reasons why Malaysia slipped four points down the global corruption perception index (CPI).

The survey of the CPI of 168 nations for 2015 revealed the country's score dropped from 52% to 50% compared to 2014 while its ranking slid from 50 to 54.

Transparency International Malaysia president Datuk Akhbar Satar said the recent controversy surrounding 1MDB and the RM2.6bil donations contributed to the drop.

"There were 175 countries that were surveyed last year.

"However, seven countries were not included in the survey which would have pushed our ranking down further," he said during the announcement of the global CPI

Among the nations that scored the top marks were Denmark (91%), Finland (90%), Sweden (89%), New Zealand (88%), Netherlands and Norway (87%).

Among the nations to score the lowest were Angola, South Sudan, Sudan, Afghanistan, North Korea and Somalia.

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South China Sea among world's freest and safest shipping lanes

China was the earliest to explore, name, develop and administer various South China sea islands. Our ancestors worked diligently here for generations. Beijing's control is justified, says Wang Yi

http://t.cn/RGEz7El

BEIJING: The South China Sea is one of the world’s freest and safest shipping lanes, Chinese Foreign Minister Wang Yi said, arguing that Beijing’s control over the disputed waters was justified because it was the first to “discover” them.

China has come under fire from the United States and its allies in recent months over its land reclamation activities in the South China Sea, through which US$5 trillion (RM20.3 trillion) in ship-borne trade passes annually.

The US Navy has carried out freedom of navigation exercises, sailing near the disputed islands to underscore its rights to operate in the seas. Those patrols, and reports that China is deploying advanced missiles, fighters and radar equipment on islands there, have led Washington and Beijing to trade accusations of militarising the region.

The freedom of navigation does not equal the “freedom to run amok”, Wang told his yearly news conference on the sidelines of China’s annual parliament meeting.

“In fact, based on the joint efforts of China and other regional countries, the South China Sea is currently one of the safest and freest shipping lanes in the world,” Wang said.

“China was the earliest to explore, name, develop and administer various South China Sea islands. Our ancestors worked diligently here for generations,” Wang said.

“History will prove who is the visitor and who is the genuine host,” he said, adding that China would “consider inviting” foreign journalists to islands under its control when the conditions are right.

China was neither the earliest country to deploy weapons to the South China Sea nor the country with the most weapons there, Wang added, without saying which country was. Beijing claims almost all of the South China Sea, but Brunei, Malaysia, the Philippines, Taiwan and Vietnam have overlapping claims.

US Defense Secretary Ash Carter has warned of “specific consequences” if China takes “aggressive” action in the region.

He has said the US military was increasing deployments to the Asia-Pacific region and would spend US$425mil (RM1.7bil) through 2020 to pay for more exercises and training with countries in the region that were unnerved by China’s actions.

Wang was also asked about the Philippines case against China in an arbitration court in The Hague on the South China Sea dispute. Manila has asked Beijing to respect the decision, which is expected in May.

China refuses to recognise the case and says all disputes should be resolved through bilateral talks.

Wang repeated that China was quite within its rights not to participate and accused unnamed others of being behind the case.

“The Philippines’ stubbornness is clearly the result of behind-the-scene instigation and political manipulation,” he said, without elaborating. — Reuters

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MH370 families file biggest lawsuit in Malaysia

KUALA LUMPUR: Seventy-six next of kin of the passengers on board Flight MH370 have launched the biggest suit in the courts here against Malaysian Airline System Bhd and four others over the plane’s disappearance.

With the deadlines to do so up by today, the group – made up of 66 Chinese nationals, eight Indians and two Americans – filed the suit last Thursday, naming MAS, Malaysia Airline Bhd (MAB), Department of Civil Aviation (DCA) director-general, Royal Malaysian Air Force (RMAF) and the Government as defendants.

They are claiming for negligence, breach of contract, breach of statutory duty and breach of Montreal Convention against MAS

Lawyer N.Ganesan representing Indian, Chinese and American families said this is the biggest lawsuit against MAS in Malaysia as it involves a large number of families as plaintiffs.

In the statement of claim filed last Thursday, the families alleged that the plane’s disappearance on 8 March 2014 was caused by MAS’ negligence and the national carrier had breached the Montreal Convention by causing the injuries and death of all 239 passengers and crew..

Besides MAS, the families also named the director-general of the Department of Civil Aviation (DCA), Royal Malaysian Air Force (RMAF), and the government.

They claimed that DCA, RMAF and the government had conspired with MAS in conducting the investigation in a “grossly negligent manner” to delay the search, causing the death of all the passengers and crew.

They also contended the government and MAS had acted fraudulently and in a dishonest manner by hiding information about MH370’s disappearance from the public, and the families of passengers and crew.

The 76 next of kin are seeking damages and losses they suffered after their loved ones went missing.

“The families opted to file the lawsuit here because they have confidence in our court,” said Ganesan when met at the High Court here.

He also pleaded with the government not to move to strike out the lawsuit.

“This lawsuit deserves a day in court, and all the families deserve a fair trial,” he said.

When asked if the families were given consent by the MAS administrator under the MAS Act to initiate the lawsuit, the lawyer said they were denied consent. “They had previously said in the media that they would act in ‘good faith’ to determine fair and equitable compensation.”

“What they said was they were inviting next of kin to initiate lawsuits against them.”

Ganesan disclosed that an American law firm, Hod Hurst Orseck, will be joining the families’ legal team.

“They are the experts in civil aviation. We will be having the firm’s partners, Steven Marks and Roy Altman with me and lawyer Tommy Thomas.”

“When necessary, we will be filing for leave to the court for them to be conducting the trial,” he said.

Last week, 12 families of passengers from Malaysia, Ukraine, Russia and China sued MAS and the government for damages, shortly before the two years deadline for initiating a civil suit under the Montreal Convention.

Sources: The Star news and Free Malaysia Today

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Malaysian citizens' declaration to oust Prime Minister

The signing of the Citizens' Declaration on Friday was hailed as a landmark re-alignment of forces in the country as it brought together the establishment loyal to former premier Dr Mahathir Mohamad, the opposition and civil society.

Much of the spotlight have been on the top activists, opposition leaders and members of the ruling coalition who signed declaration, which among others called for the ouster of scandal-plagued Prime Minister Najib Abdul Razak and institutional reforms.

But little attention has been given to how the 37-paragraph document (see below) came about as it reflected the behind the scenes debates and negotiations in the run-up to the high-profile announcement.

Citizens' declaration spells out demands for removal of Najib

Former prime minister Dr Mahathir Mohamad, ex-deputy prime minister Muhyiddin Yassin, opposition and NGO figures have inked a declaration for the removal of Prime Minister Najib Abdul Razak and to institute reforms.

Below is the list of demands contained in what is described as the Citizens’ Declaration:

1. We, the undersigned citizens of Malaysia, append below our concerns over the deteriorating political, economic and social conditions in the country.

2. We wish to draw the attention of the people of Malaysia to the damage done to the country under the premiership of Najib Abdul Razak.

3. Under his administration, the country has ascended to become one of the 10 most corrupt countries in the world according to Ernst and Young in their Asia Pacific Fraud Survey Report Series 2013. The 2015 Corruption Perception Index showed Malaysia has dropped four places from 50 to 54.

4. This is because he believes that money can ensure his position as prime minister of Malaysia. He believes that "Cash is King".

5. Allocations to all ministries and public institutions including universities have been reduced because of shortages of funds. Even when allocations are budgeted for, no money was available.

6. In 2009, he decided to set up a sovereign wealth fund to earn income for the government.

7. He created the 1MDB which became indebted with RM42 billion of loans which it is unable to repay. It is no longer a sovereign wealth fund. It is a sovereign debt fund.

8. 1MDB borrowed approximately RM20 billion to acquire three power plant companies for an over-priced (sum of) RM12.1 billion. Despite being awarded new power plant contracts and extensions to the expiring power-producing concessions, the 1MDB power companies were sold for RM9.83 billion, or a loss of RM2.72 billion.

9. 1MDB invested or lent a total of US$1.83 billion to Petrosaudi International (PSI) Limited between 2009 and 2011 under the pretext of bogus projects or non-existent assets. Bank Negara Malaysia had demanded 1MDB return the above money to Malaysia as its approval was given based on misinformation submitted by 1MDB. Of this sum, a total of US$1.4 billion was directly and indirectly siphoned off to Good Star Limited and other companies controlled by Low Taek Jho.

10. To hide the missing funds, 1MDB "disposed" of its investments and loans to PSI for US$2.318 billion, claiming to have made a profit of US$488 million. However, no money was returned to Malaysia. Instead, 1MDB claimed it invested the funds in Cayman Islands that was subsequently found to be an unlicensed investment manager. KPMG was sacked as 1MDB's auditors for refusing to confirm the value of the investment in the mysterious Cayman fund.

11. 1MDB claimed that the Cayman Islands investment has been fully redeemed. (A sum of) US$1.22 billion was reportedly redeemed on Nov 5 2014 but was substantially utilised on the very same day to compensate Aabar Investments PJS for the termination of options granted to Aabar to acquire 49 of 1MDB's power companies. This is a lie because the parent of Aabar, International Petroleum Investment Corporation (IPIC), did not mention receipt of any such payments in its audited accounts published on the London Stock Exchange. Instead, the accounts stated that 1MDB owes IPIC the sum of US$481 million for the termination.

12. 1MDB also took another loan of US$975 million from a Duetsche Bank-led consortium in September 2014, for the very same purpose of compensating Aabar for the terminated options. The Wall Street Journal has exposed the fact that this money may have been paid to a different British Virgin Islands entity with a similar name, "Aabar Investment PJS Limited", whose beneficial owner is completely unrelated to IPIC. The simple scam has fooled even the 1MDB auditors, Deloitte Malaysia, into believing that the payments were indeed received by IPIC's Aabar.

13. 1MDB announced that it made a second and final RM1.1 billion redemption of the Cayman Islands investment in January 2015. Initially the PM told Parliament that the sum was held in cash in BSI Bank, Singapore. However, two months later in May 2015, he informed Parliament that it was not in cash but "assets". Subsequently, it was explained that these assets were "units" which meant that they were never redeemed in the first place. This proved that 1MDB and the PM have been consistently lying to the Malaysian public. It also means that the money invested in Petrosaudi, which was reinvested in Cayman Islands, is still missing and unaccounted for.

14. A former Umno vice-head of the Batu Kawan division made a police report on the loss of large sums of money by 1MDB. No investigations were carried out by the police. Instead, he was interrogated by police, detained and charged under anti-terror law (Sosma) for sabotage of the Malaysian economy. His lawyer was also arrested and charged under the same law. This has the effect of frightening people from making police reports on the 1MDB.

15. The Wall Street Journal reported that Najib had US$681 million in his private account at Ambank.

16. Najib denied this at first but later admitted he had the huge amount of money in his account. He claimed that it was a gift from an Arab; then that it was a donation to help him win GE13 in Malaysia; then that it was given because of his dedication to the fight against Islamic terrorists. He then claimed to have received the money from a Saudi prince, then from the King of Saudi Arabia who had passed away.

17. Later a Saudi minister stated there was no record of such a gift by the Saudis. He suggested it was probably a Saudi investment. The amount was small.

18. Najib expressed his intention to sue the Wall Street Journal. But he did not. Instead, he asked his lawyers to ask the Wall Street Journal why it published the report.

19. To this day the WSJ continues to report more and more details about the US$681 million he has in his private account. He has not sued WSJ, which he can do in the country the WSJ is published.

20. Concerned over the huge sum of money in Najib's private account, a task force was set up in Malaysia to investigate the origin of the money. Four government institutions became members of the task force. They are the police, the attorney-general, Bank Negara and the Malaysian Anti-Corruption Commission.

21. Before the task force was able to finish its work, the attorney-general was removed by Najib claiming that he was sick and could not continue to work. Basically Najib had misrepresented to the king to get the attorney-general to be replaced. The Public Accounts Committee was basically paralysed by Najib removing its chairman and members to prevent its investigations of the 1MDB. A new chairman, friendly to Najib, was appointed and he promptly declared that Najib had done nothing wrong.

22. He then appointed a new attorney-general. Shortly thereafter the new attorney-general dismissed a recommendation by Bank Negara for action to be taken, claiming that nothing in the report showed Najib had done any wrong.

23. Bank Negara appealed but this was brushed aside.

24. The new attorney-general also dismissed another report by the MACC. The contents of the report are not revealed and threats are made against revealing its contents.

25. The new attorney-general has, without valid explanations, dismissed the recommendations of the two institutions that possess the powers and expertise in their areas.

26. That dismissal prevented the matter from being determined by a court of law after all the evidence was evaluated. By doing that, the attorney-general has acted as prosecutor and judge. Due process and the rule of law has been denied.

27. The sacked deputy prime minister later revealed that the former attorney-general has shown him proof of Najib's wrongdoings relating to the scandals. At the same time, various foreign government agencies, namely from Switzerland, the United States, Hong Kong and Britain have initiated investigations on the 1MDB.

28. The press in Malaysia is heavily censored so that Malaysians have to rely on the foreign press. Yet when Malaysians discuss or write about the foreign press reports, the government (inspector-general of police) invited people to make police reports so that the police can carry out questioning and investigations against the person concerned.

29. This is in contrast to the failure of the police to investigate the police report formally made against Najib, Jho Low and the reports to the attorney-general by Bank Negara and MACC. The attorney-general even threatens to amend the law to provide for jail for life with 10 strokes of the rotan against anyone "leaking" government papers. This means that crimes committed in the administration can be hidden from the public.

30. The attorney-general claims that a part of the RM2.6 billion (about RM2.3 billion) has been returned to the donor or donors. Apart from this statement, no proof has been provided.

31. The people are suffering.

32. Najib's GST and increases in toll rates have increased the cost of living, forcing some businesses to close down and also causing foreign-owned industries to stop operations and relocate to other countries, creating unemployment.

33. Despite protests by the people, Najib joined the US-sponsored Trans Pacific Partnership (TPP) which erodes our freedom to make policies and laws suitable for our country.

34. Today Malaysia's image is badly tarnished. Apart from being classified as one of the 10 most corrupt countries, Malaysia is now regarded as undemocratic. There is denial of freedom of speech and freedom of the press and people live in fear of arrest and detentions. Security laws are enacted to allow the prime minister (and not the king) to declare security areas where anyone could be arrested and detained without trial and tried under procedures that violate normal and fair criminal justice standards.

35. On the other hand, where errors are made in applying these laws by government officers, or where there is a blatant abuse of that power, the people are unable to hold them accountable. Whistleblowers are harassed and punished instead of being protected. Other repressive laws are used to stifle free speech and the legitimate comment about wrongdoings. The fundamental rights enshrined under the federal constitution have become meaningless.

36. For all these reasons, we, the undersigned citizens of Malaysia agree and support:

a) The removal of Najib as PM of Malaysia through non-violent and legally permissible means.

b) The removal of all those who have acted in concert with him.

c) A repeal of all recent laws and agreements that violate the fundamental rights guaranteed by the federal constitution and undermine policy choices.

d) A restoration of the integrity of the institutions that have been undermined, such as the police, the MACC, Bank Negara and the PAC.

37. We call upon all Malaysians, irrespective of race, religion, political affiliation, creed or parties, young and old to join us in saving Malaysia from the government headed by Najib, to pave the way for much-needed democratic and institutional reforms, and to restore the important principle of the separation of powers among the executive, legislature and judiciary which will ensure the independence, credibility, professionalism and integrity of our national institutions. - Malaysiakini

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Modern finance and money being managed like a Ponzi scheme ! Economic Collapse soon?

Ponzi schemes and modern finance

Andrew Sheng says when the originator of a scheme to pass on debt to others is also ‘too big to fail’ – like America – then the global economy is heading for some painful restructuring

The dilemma today is that the US is the world’s largest “too big to fail” debtor, with gross international liabilities of US$31 trillion, equivalent to 40 per cent of global GDP. Photo: AFP

THIS global financial crisis is not over, as the volatile start to the New Year showed that 2016 may be a precursor to the 10th anniversary of the 2007 sub-prime crisis, which itself evolved from 1997 Asian Financial Crisis, after which the US Fed cut interest rates and started the rapid financialisation of the US economy.

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Two terms came out of the crisis that we see almost everyday, but have not been explained well by modern financial theory. Most economists think of them as aberrations that are at the periphery of normal economic behaviour. In fact, “Ponzi schemes” and “Too-Big-to-Fail” are at the heart of individual and social behaviour which go a long way to explain what is happening today.

A Ponzi scheme is a scam named after American Charles Ponzi. The term Ponzi scheme started in the 1920s from an American Charles Ponzi, who thought of selling an idea in making money from arbitraging the value of international reply coupons in postage stamps to a larger and larger investor scheme where he made money by getting new investors to pay for promised high returns to old investors. Of course, this is the “borrowing from Peter-to-Pay-Paul principle”, where the music stops when everyone want their money back. Ponzi schemes should in principle collapse naturally because it is of course impossible to pay unusually high returns. By this time, the founder would have run away to the Caribbean with a lot of OPM (other people’s money).

 

A foreclosure sign tops a “for sale” sign outside a property in northwest Denver in this 2007 photo. The number of homeowners receiving foreclosure notices hit a record high in the spring, driven up by problems with subprime mortgages. Photo: AP

The securitisation (packaging) of sub-prime mortgages into CDOs (collateralised debt obligations) and turbo-charging these into CDO2 (creating a highly leveraged synthetic financial derivative) and selling these to investors with a AAA credit rating was a 21st century Ponzi variant.

In simple terms, this is like selling a box of rotting apples, getting a rating agency to say that the box is worth more than the individual apples, with a guarantee against losses by adding more (rotten apples). In the end, the investor is buying a box of rotting apples, in which all his savings have been eaten up by those who sold the boxes (the derivatives) in the first place.

There are two fundamental elements of Ponzi operations – the promise of very high returns (false expectations) and the widening of the investor circle. Variants of the Ponzi scheme can be found in asset bubbles and pyramid schemes, in which more and more investors (new suckers) are enticed in until they are the ones who bear the final losses. Like the game Musical Chairs, the ones who did not get out when the music stops are the losers.

Actually, Ponzi schemes work by the originator taking profits by selling (or passing) his losses to all his investors – the more suckers, the bigger his profits and the more people to share the losses.

Technically, a Ponzi scheme is sustainable if the new funds that come in actually deliver good returns, but because the Ponzi promises a return higher than anyone can actually deliver, most Ponzis end up as fraudulent schemes.

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Under globalisation, the smaller reserve-currency countries like the euro zone and Japan can engage in quantitative easing, because instead of getting inflation, their currencies depreciate against the dollar. Photo: Reuters

But the Ponzi element in modern finance should be understood with another phenomena – the Too-Big-To-Fail (TBTF) dilemma. We all know that if we borrow US$1,000 from the bank, we are in trouble if we can’t pay, but if we borrow US$1bil from the bank, it is the bank that is in trouble. Thus, if a Ponzi scheme reaches the scale of TBTF, it has to be “rescued” somehow, because if everyone had bought the Ponzi product, everyone ends up being the loser.

This is the essence of modern money. Advanced country central banks can engage in quantitative easing (QE or printing money in whatever way you want to call it) to bail out banks that are losing money, because their banks are TBTF. The difference between QE and Ponzi is that the QE interest rate promised is near zero to negative, but the escalation of scale is the same. I call these Qonzi schemes.

In theory, in a closed economy, if you print too much money, you would get higher inflation. This is why the Germans are very much against the European Central Bank’s QE measures.

However, in a world with excess production capacity, you would not get into high inflation, because there are many more people in the emerging economies who are willing to hold reserve currencies like the US dollar, euro and yen. Under globalisation, the smaller reserve currency countries like the eurozone and Japan can engage in QE, because instead of getting inflation, their currencies depreciate against the dollar. The losers call such action “beggar-thy-neighbour” policy.

In other words, currency depreciation countries gain by passing “losses” to others, because they gain competitive trade advantage. But if everyone depreciates at the same rate, the whole world ends up with more deflation. Remember, when the Ponzi music stops, all losses are crystalised. As Warren Buffett used to say, when the tide goes out, you know who has been swimming naked.

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The dilemma in the world today is that the US is the largest TBTF debtor in the world, with gross international liabilities of US$31 trillion, equivalent to 40% of world GDP (gross domestic product). In a world where interest rates are near zero, the threat of the Fed increasing interest rates causes capital flight into the dollar. But a dollar that also yields near zero interest rate, with the inability to reflate due to political constraints, plays exactly the deflationary role of gold in the 1930s.

Hence, a strong dollar is deflationary on the whole world. As geopolitical tensions rise, flight into the dollar causes its own deflation. The latest US net international investment position is a deficit of US$7 trillion or 40% of GDP at the end of 2014, sharply up from US$1.3 trillion in 2007. A strong dollar in which the US would run larger even current account deficits is clearly unsustainable for the US and its creditors.

During the Asian financial crisis, countries with net liabilities of over 50% of GDP got into crisis. But the US is the TBTF country in the international monetary system. Further QE will not solve this dilemma. The only solution is painful structural adjustment by all concerned. This is why investors are all so downbeat.

Consequently, I see no alternative but a coming new Plaza Accord to ensure that the dollar does not get too strong, with a concerted effort to have global reflation. Otherwise, watch out for more “Qonzi” schemes.

- Andrew Sheng writes on global issues from the Asian perspective.

Peter Schiff Warns Of Economic Collapse In 28 May 2016 DAYLY NEWS

Philippine ship towed over safety concerns - No more tricks allowed in South China Sea

China confirmed on Wednesday that it sent ships to the Wufang Jiao, an atoll of the Nansha Islands, to tow a stranded Philippine ship to ensure navigation safety and protect the marine environment.

Foreign Ministry spokesperson Hong Lei made the remarks at a daily press conference in response to a Philippine media report that said China's Wufang Jiao did not allow Philippine fishermen to approach it.

According to Hong, a foreign fishing boat was stranded near Wufang Jiao at the end of 2015. After several failed towing attempts, the shipowner abandoned the ship and removed all its major equipment.

To prevent the stranded ship from affecting navigation and damaging maritime environment, China's Ministry of Transportation sent salvage ships to tow the ship and dispose of it appropriately, Hong added.

During the process, China persuaded fishing boats in the operation waters to leave to ensure navigation safety and necessary operation conditions, Hong said, adding that the salvage ships had returned after the operation.

The spokesperson reaffirmed China's sovereignty over the Nansha Islands and its adjacent waters. China will implement the Declaration on the Conduct of Parties in the South China Sea (DOC) comprehensively and effectively with the members of ASEAN and jointly maintain the peace and stability of the South China Sea, Hong added.- Xinhua

No more ship-grounding tricks allowed in South China Sea

The Chinese foreign ministry confirmed Wednesday that China had towed away a foreign ship that was grounded on Wufang Jiao in the South China Sea. For safety concerns, China urged nearby fishing ships to leave.

However, Philippine media and some Western reports rendered a different picture of the same affair, saying several Chinese ships were sent to patrol the surrounding waters after a Philippine boat was grounded, and "blocked" the waterway.

In their reports, Wufang Jiao and the surrounding waters are the Philippines' "traditional fishing grounds." Due to the blockage of Chinese vessels, Philippine fishermen could not go fishing, feeling they were being bullied by China.

This is not the first time a Philippine vessel was grounded on South China Sea islands and reefs. In 1999, the Philippines sent a warship and grounded it on Renai Reef. Manila kept promising to China that it would tow it away as soon as possible, but 17 years have passed, and Manila shamelessly broke its promise, delivering provisions to the ship and reinforcing its structure, in an attempt to make it a permanent stronghold.

Philippines sent a warship and grounded it on Renai Reef

In recent years, China has taken countermeasures to prevent Philippine ships conveying construction materials to the ship, but out of humanitarian consideration, China allowed the Philippines to deliver provisions to the crew. Now the ship, a focal point of Sino-Philippine tension, is in bad condition and about to fall apart.

China will never allow Wufang Jiao to be a second Renai Reef. Towing away the grounded Philippine ship is a once-and-for-all measure to leave no troubles behind.

The Philippines is untrustworthy in the international community, often resorting to dirty tricks to deal with diplomatic issues. What it did on Renai Reef is a vivid reflection.

China has been exercising self-restraint amid fishing disputes with the Philippines in the South China Sea. However, Manila has captured and sentenced Chinese fishermen several times, and even shot Taiwanese fishermen dead. Manila's barbarity finally triggered a standoff near Huangyan Island in 2012. Since then, China has been in full control of the island.

Now, Manila hopes it can bring US troops back, like a Mafia gangster asking their "godfather" for help. The Philippines, obviously aware that international arbitration has no jurisdiction over territorial disputes, filed a petition to an international court in Hague. China's non-participation in the arbitration is protected by the UN Convention on the Law of the Sea, but the Philippines, with the support of the US, has used this chance to taint China's image internationally

All these shenanigans cannot twist the fact that it is the Philippines that breaks its promises and makes troubles over and over again. China's countermeasures are reasonable.

China has overwhelming advantages against the Philippines, but its disputes with the Philippines in the South China Sea are complicated due to the West's bias for Manila. China should be resolute in defending its legitimate rights, and be wise in dealing with the West's prejudice and US military and diplomatic interventions.

In recent years, China has gained major progress in stemming the encroachment of the Philippines in the South China Sea. Beijing is regaining strategic initiative in the region. The Philippines will have a new president this year, and Benigno Aquino III will step down. After the shift in leadership, Manila will be a spent arrow, and will have nothing left in its bag of tricks. - Global Times

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Political issues deserve diplomatic solutions to South China Sea disputes

REFERRING to "Ripples and rumbles in South China Sea" (see below) by K. Thanabalasingam, I wish to share a few more points vital to the issue.

Conventional knowledge is that China's claim to the islands is arbitrary and violates International Law. But what is left out is an impartial overview of the whole situation based on historical considerations and facts on the ground.

Claims made by Vietnam and China are mostly centred on history. The rest of the claimants are late comers after the 1951 Treaty of San Francisco and 1982 UNCLOS (United Nations Convention on the Law of the Sea).

To avoid complicating the issue, knowledge of history has to be put in perspective. Since there are no "historical titles" to validate, then whatever historical facts, maps or records have to be considered as evidence. At least it sheds light to validate its case.

China has been consistent in her claims since 1279. Marker stones and light houses were on the islands but most were destroyed by Vietnam and the Philippines. Even early European records affirmed Chinese fishermen took annual sojourns on Spratly islands for part of the year.

One interesting event that happened in 1953 involved a Tomas Cloma, (director of the Maritime Institute of the Philippines) who threw away all the marker stones and made a unilateral claim on some Spratly islands and later in December 1974 was forced to sell to the government for 1 peso only, now known as Kalayaan.

All these facts are buried and often not revealed by the West.

The infamous Treaty of San Francisco, also known as Treaty of Peace with Japan, was drafted by US and Allied Powers to settle post-war issues affecting nations. Whatever the circumstances, China/Taiwan and Korea were not invited to attend the negotiations which deprived them of a fair chance and the right to present their cases. This also breached the Cairo/Potsdam declarations.

After the devastating long war, China got the raw end of the deal with unsettled lands and islands. Scholars and historians viewed this as a deliberate manoeuvre by Western Powers especially the US to create ambiguities to serve their covert interests.

I totally agree with Thanabalasingam on the recent statement by the US and Allies to pre-empt the tribunal's verdict in favour of the Philippines is an act of prima facie and undermines the whole proceedings of the court. That is why under Article 298 of UNCLOS, China declared that it does not accept compulsory arbitral procedures relating to sea boundary delimitation in 2006. Without guessing, one could easily decipher why the Philippine chose the arbitration court.

On the ground, it doesn't need a military expert to see what's happening in the region. It is a tussle between China and US with puppets (the Philippines, Australia, Japan, Vietnam) joining in the fray.

The US's sole interest is to maintain her status quo and dominance in the region. China, a rising power, is a direct competitor. When Obama announced the pivot to Asia in 2012, tensions started building up day by day with increasing deployment of military assets to frightening level.

More bases have been opened to the US in the Philippines, Japan, Australia, and some Asean nations, creating a "ring of fire" to contain China.

To harness support US raises up the heat and false alarms on China's threat to "Freedom of Navigation", etc. Do you expect China to remain docile and silent? Freedom of navigation was not an issue for decades. Deliberately intruding into sovereign territory with frigates, spy planes, etc are direct provocations.

Sad to see nations taking sides just to gain a little leverage to support their claims. As far as I can see, these islands are "bread crumbs" created to inflict tension and even wars among nations. Political issues deserve diplomatic solutions. Don't allow a Middle East or Ukraine crisis in Asia.

I trust my country will take the path of engagement and diplomacy.

By Ali Saw Kuala Lumpur The Sundaily

Ripples and rumbles in the South China Sea

AFTER the conclusion of the 27th Asean Summit and Related Summits chaired by Malaysia here in late November 2015, I felt optimistic the year 2016 might see a lessening of tensions in the South China Sea and perhaps even witness a Code of Conduct being signed between all the claimant states. I suppose this was hoping too much.

What we have seen instead is a rapid increase in tensions caused by China's actions in the South China Sea. Understandably, claimant Asean states are anxious and concerned over these latest developments.

Since the start of this year, China has conducted several test flights from its airfield in the Fiery Cross Reef in the Spratly Islands Group. There was also news reports that China had moved an oil rig into disputed waters between China and Vietnam.

This brings to mind the January 1974 Chinese/Vietnamese clash over the Paracel Islands with Vietnam suffering heavy losses and being evicted from the Paracels.

More recently it has been reported and confirmed that China has installed long-range anti-aircraft missiles on Woody Island in the disputed Paracels chain.

This does not auger well for calm and confidence-building between the various Asean claimant states and the Republic of China.

In addition, the occasional reported intrusions of Chinese coastguard vessels into other nations' territorial waters is cause for concern.

The recent statement by the US and some European nations that China must abide by the decision to be made by the UN Permanent Court of Arbitration at The Hague, hearing the Philippines request to invalidate China's claims, is rather premature in my humble opinion.

The US and other western nations' statement would have been better coming after the tribunal's verdict expected sometime near the middle of this year, if it turns out to be in Philippines favour. As it is, I feel the statement pre-empts the tribunal's verdict.

I had written an article on the South China Sea dispute and stated my personal views in June 2015. I am of the firm belief, based on International Law and UNCLOS (United Nations Convention on the Law of the Sea), that China's claim to virtually the whole of the South China Sea is arbitrary and unprecedented.

No country has ever claimed such a large expanse of international maritime waters before. There is no provision anywhere that I am aware of for a historical claim, especially when such a claim has never been exercised or enforced until more recent times. China is not only a party to UNCLOS but it has also ratified it. Therefore, China is bound by UNCLOS.

A point to bear in mind is that there are laws and rules to what constitutes an island. Under UNCLOS no shoal or reef can be reclaimed and turned into an island.

A reclaimed land is artificial and not natural. Hence the question of territorial waters or other claims for the artificial island does not arise.

The Code of Conduct of Parties in the South China Sea (DOC) signed by all members of Asean and the People's Republic of China on Nov 4, 2002 unfortunately has a number of setbacks. There is also a Code for Unplanned Encounters at Sea (CUES). Although this is mainly to avoid any untoward sea incident between US Navy ships and Republic of China Navy (ROCN) ships. I feel that CUES should also be used more by Asean claimant states' naval ships and the ROCN ships.

Although I am disheartened by the latest developments in the South China Sea, I sincerely hope that these ripples and rumbles do not develop into a full blown hurricane or typhoon.

By Rear Admiral (Rtd) Tan Sri K. Thanabalasingam was the third chief of the Royal Malaysian Navy and the first Malaysian to be appointed to the post.Comments: letters@thesundaily.com

The U.S. should keep away from the South China Sea for regional peace

China is forced to deploy defensive facilities on islands in the South China Sea in response to early militarization action from other parties and to the U.S. close-up reconnaissance in this region, said a China's professor who specializes in international affairs.





Shen Dingli, a professor specializing in international affairs from Fudan University, wrote in a column that if the U.S. expects fewer disputes in the South China Sea, the country should not choose any side and not support those who infringe upon China's national interests. The U.S. should make those countries withdraw from the region.

Shen stated that the U.S. should reduce its close-up reconnaissance in the region so that China will not need to spare much time to deploy forces in the region.

According to Shen, statements of spokespersons from China's Ministry of Foreign Affairs and Ministry of National Defense clearly show China's attitude towards this issue.

First of all, China deploys defensive facilities in order to cope with other countries' militarization in this area. Secondly, China benefits from freedom of navigation and China is willing to maintain this freedom within the international law in cooperation with ASEAN countries. Thirdly, China urges the U.S. to respect its legitimate interests when it comes to sovereign of artificial islands in the South China Sea.

Shen also said that if the U.S. really cares about China's deployment of radars and missiles on relevant islands, it should reduce the close-up reconnaissance by its missile destroyers and strategic bombers in this area.  By Yuan Can (People's Daily Online)

US militarizing South China Sea

Compared with the progress Chinese Foreign Minister Wang Yi and US Secretary of State John Kerry seem to have achieved on sanctions against the Democratic People's Republic of Korea, finding common ground to resolve their differences over the South China Sea has proved more difficult.

Just as Wang has stressed, the responsibility for non-militarization of the South China Sea is not China's alone. The United States should lend an attentive ear to China's stance.

On Tuesday, at a hearing before the Senate Armed Services Committee, Admiral Harry Harris, head of the US Pacific Command, said China's deployment of missiles and new radars on its islands and reefs in the South China Sea and its building of airstrips are "changing the operational landscape" in the waters.

The media in the US also hyped up China sending Annihilates-11 fighters to the Xisha Islands. These voices may be a prelude to Washington escalating the flexing of its muscles in the South China Sea.

Yet as a non-regional country, it is irresponsible of the US to intervene in the South China Sea in disregard of the possibility that has emerged that China and the other parties to the disputes in the waters will be able to stabilize the situation rather than let it spiral out of control.

If those in the region were allowed to settle the disputes themselves, the South China Sea would be free from concerns and troubles within the foreseeable future.

It is the US' direct interventions in the South China Sea that are exacerbating tensions and adding uncertainty.

The US' provocative signals have seriously increased Chinese people's sense of urgency to strengthen the country's military capabilities. When US military vessels and warplanes intruded into the 12-nautical-mile territorial seas around China's islands and reefs, Chinese people have reasons to believe their country should not remain indifferent even if its military might is still inferior to that of the US.

On issues concerning national sovereignty, the Chinese military will follow the will of its people.- Global Times

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China space station will be completed by 2020, the super "eye" to speed up space rendezvous

http://t.cn/RGWRDib

China announces its second space laboratory, the 'TIANGONG 2,' will blast off into orbit later this autumn, but that's not it! Shortly afterwards, a manned spacecraft will also be sent to dock with the lab with two astronauts set to stay longer in space than any of their predecessors.

China is pressing ahead its ultimate space goal. Tiangong-2, or "Heavenly Palace-2," will be the country's second space lab to be deployed above earth.

"Tiangong-2 will launch in the third quarter of this year. It will carry out various space scientific and application experiments," said Wu Ping, Deputy Director of China Manned Space Program Office.

If the launch is successful, the Shenzhou-11 spacecraft will follow shortly carrying 2 astronauts, who'll spend 30 days in orbit- a new record for China.

China aims to build own space station by 2020

But that's only part of the bigger picture. China's greater goal is to build its very own space station by 20-20 and it looks to be on course, to do just this.

"It takes numerous launches and docks to finish the ultimate goal. We will organize a series of missions from the middle of this year to the first half of next year," said Wu.

Tiangong-2 is a prototype for a space station. Its predecessor Tiangong-1 has been in orbit for nearly five years. In 2012 and 2013, manned spacecraft successfully docked with the space lab.

"The difference is Tiangong-2 is a space station in a real sense. Technical adjustments have been made based on experience and data from Tiangong One- which will continue scientific missions," said Wu.

Preparations are also underway for China's FIRST cargo spaceship, which is set to launch next year and dock with Tiangong 2.

Wu also said:"It will test key technologies in the construction and operation of a space station, such as cargo transportation, and propellant supply in orbit."

The international space station is scheduled to retire by 2020, when China is on course to become the only country with a permanent presence in space.

World's most sensitive 'eye' - Chinese experts develop best rendezvous and docking CCD Sensor

BEIJING, June 22 2015 (Xinhua) -- Chinese space experts have developed the world's most sensitive "eye" that enables the autonomous rendezvous and docking of two spacecraft -- flying eight times faster than bullets -- more efficiently and safely.

The "eye" is China's newly developed third-generation rendezvous and docking CCD optical imaging sensor. It will be used on China's second orbiting space lab, Tiangong-2, the Chang'e-5 lunar probe and the permanent manned space station, according to China Academy of Space Technology (CAST).

China plans to launch Tiangong-2 in 2016, and send Chang'e-5 to collect samples from the moon and return to earth around 2017. It also aims to put a permanent manned space station into service around 2022.

"Good 'eyesight' is crucial for one spacecraft chasing another for hundreds of thousands of kilometers to achieve a perfect rendezvous and docking -- it's like threading the needle," says Gong Dezhu, a CAST designer who worked on the CCD optical imaging sensor.

"The last 150 meters between the two spacecraft is the most critical moment. A slight deviation during docking might lead to a disaster like the one caused by Mann, the main antagonist in the movie Interstellar," Gong says.

Compared with the CCD optical imaging sensor used in the docking of Tiangong-1 and the Shenzhou spacecraft, the new "eye" can see clearer under direct sunlight, which will greatly improve safety. The window period of the docking process will be twice the length, Gong says.

"And the reaction time between the 'eye' capturing the first sight of its target and recognizing it has been shortened from 10 seconds to less than one second," Gong says.

The sensor's weight and power consumption is only half that of comparable products internationally, says Gong.


Such "eyes" can also be used on mechanical arms, and for refueling and repairing of spacecraft, as well as aerial refueling and docking of underwater vehicles, experts say. - Xinhua

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