China’s ‘String of Pearls’ – Real or Fake?

I’ve got a new post up looking at the Chinese investment strategy in South Asia, and in particular, the theory that China is acquiring a ‘string of pearls,’ a network of strategic assets in Pakistan, Burma, Nepal et al that will encircle and contain India. My post is a response to a post by Dan Drezner at Foreign Policy, in which he contends that the ‘string of pearls’ is something western journalists cooked up in our imaginations because it feeds into fears about Big Scary China. I disagree.

My post argues that the ‘string of pearls’ is a real strategy, an extension of longstanding Cold War alliances China had in the region, and that its primary function is economic, not military. But I concede that the strategy may be failing or weakening, in part because China is growing wary of Pakistan, in part because China is growing less wary of India, and in part because the U.S. presence in Afghanistan has altered regional dynamics.

Read it all here.

Economic Peace: Some Thoughts from Barcelona

Returning from a brief (9 days) blogging hiatus with a post at Foreign Exchange. The subject: a panel I was asked to speak on at IESE’s sustainable business conference in Barcelona this weekend. My topic was ‘economic peace and the private sector’s role in fostering political stability.’ An excerpt:

Specifically, the reductive tendency leads us to place emphasis on macroeconomic growth as a cure-all, when as we’ve seen in Obasanjo’s Nigeria or Ben Ali’s Tunisia or Musharraf’s Pakistan, growth can correlate quite easily with increasing political instability and conflict. For one thing, there’s the question of distribution, of how much growth is trickling down the bottom of the economic ladder to those most likely to be embroiled in crime or violence.

But even if ‘economic growth’ is replaced by a genuine focus on job creation and the building of a stable middle class, a critical challenge remains. In a society which has chosen—and this is an ideological choice—to invest its resources in militarism or theocracy but not in education or health care, an angry young man with a steady income still can’t spend it providing for his family: the services he needs aren’t there to be purchased.

Instead, they’re available to him for free from the same crowd of ‘non-state actors’ responsible for his country’s turmoil. In other words, those actors—be they mobsters or terrorists or warlords—aren’t grafting an abstract ideology onto his poverty and rage; they are producing an alternative society, complete with the services the state does not provide. It’s an ideological battle, not an economic one, to transfer a whole society’s focus and collective, public, wealth into building the social structures that make an income valuable. Without those, a little money’s not worth the paper it’s printed on.

You can read the rest here.

One postscript: left to my own devices, I’d probably have parachuted into Barcelona for a day; attended the conference and jetted out. With encouragement and company from qwghlm, I took four whole days off work. I didn’t check Twitter and Google Reader every 5 minutes; I missed thousands of tweets and hundreds of news stories; and when we got back and I caught up, I found that nothing had fundamentally changed on the big stories I’d been following. Gaddafi? Still in power. Raymond Davis? Still in legal limbo. Me? Recharged and ready to report on both.

Indo-Pak Peace Talks Resume

Big news out of the Subcontinent this week: India and Pakistan are resuming peace talks after almost two years’ stalemate. The talks, which Foreign Secretary Nirupama Rao is calling the ‘comprehensive dialogue,’ will cover political, economic and security issues and will be structured not only around meetings between the two countries’ heads of state and foreign ministries, but also the ministries overseeing commerce, culture and natural resources. This structure will prevent, significantly, progress on any one area from being held hostage by stagnation on another.

Will these talks bear fruit? I’m skeptical, though not for the usual reasons. Read why here.

Assorted Questions on Egypt

A quick post at Foreign Exchange laying out what I see as outstanding questions as we head into the wee hours, Cairo-time. Here’s hoping one of the intrepid reporters there right now takes some of these on:

…for the last few years, the key value of Egypt’s relationship to Israel has been economic: some $500 million worth of total trade in oil, food crops, consumer products, growing at a remarkable rate-roughly doubled since 2007 alone. If the political peace holds, but relations are frostier post-Mubarak, as Israeli representatives say they will be, and if the borders around Gaza tighten as a result, what happens to that trade? Or, will the dependency of populations in both countries on that trade prevent a political regression?

The reporters themselves seem to have become the story in the last 36 hours in a way that reminds me somewhat of the press crackdown in Pakistan in the waning hours of the Musharraf regime, but even more of the press evangelism of the 1830 revolution in Paris which old readers will know I spent some time mulling over many moons ago. Actually, what we’re witnessing across North Africa and the Middle East is somewhere in between the two, and I’m still working out how they fit together. Stay tuned.

China’s New Pakistan Strategy

Post at Foreign Exchange today looks at the geostrategic significance of some new investment MOUs between China and Pakistan. The post is a follow-up to a story I wrote for Forbes in the spring about Chinese investment in Balochistan, where I highlighted a mining contract gone sour under Chinese pressure. That contract finally fell apart last week, and the lessons I learned reporting on it hang heavily over my analysis of the new deals:

Throughout my travels in South Asia, I’ve heard stories about what it means to do business with China. The running refrain has always been that Chinese investors are politically neutral, that they protect their own material interests while doing their best to appease local leaders with a cut of any deal, but with very little concern for the day-to-day running of local life. This is always subtly (or not so subtly) contrasted to an American approach of promoting foreign investment as a mechanism of societal makeover. In much of South Asia, Chinese investment has proven appealing to those who would rather not be re-made. That was very much the theme of my time in Balochistan. This weekend’s deals do not fit that mold…

Want to know why? Read it here.