China

The US-Pakistani relationship is fast deteriorating. In May, I argued that unless President Asif Ali Zardari took decisive action against the ISI, the country’s military would continue to undermine relations with the West. Last week, the New York Times reached the same conclusion, calling for the removal of Lieutenant-General Ahmed Shuja Pasha. As President Zardari did nothing — probably fearing a military coup if he did act — the situation has merely been aggravated. What’s more, Secretary of State Hillary Clinton has warned that the US could suspend military aid to Pakistan unless it took unspecified steps to help find and fight terrorists. And the White House has since confirmed

The 24 members of the IMF board are meeting to see if they can agree that Christine Lagarde should be the organisation’s next leader without a formal vote. Lagarde has already gained formidable backing. 40 per cent of the membership had indicated its support before today’s meetings, while her closest competitor, Mexican Augustin Carstens, had mustered just 12 per cent of the IMF’s votes. The remaining 48 per cent is now concentrating behind Lagarde’s candidacy. Her popularity extends beyond Europe into the vital emerging markets.  Russian Finance Minister Alexei Kudrin gave his signature today, saying that he hopes she will ‘secure reform of the IMF in the interests of developing

The Chinese premier seems to like cars; the Chinese in general seem to like cars. China has bought MG in Britain and Volvo in Sweden, to which it has just added Saab. If the Chinese can make European car companies viable, then what’s the problem? Theoretically nothing: trade will help the Chinese and Europeans alike. But, as Robert Peston made clear in his questioning of Wen Jiabao, trade remains unbalanced. For example, European companies are excluded from public procurement contracts in China. It is also worth noting that China’s purchase of Spanish and Greek bonds over the past year, coupled with their promise to buy from Hungary, have made it

Wen Jibao’s comments to the BBC about the euro crisis dramatise the shift in economic power from west to east. Jibao remarked that: “Trust is more important than currency and gold and now, during the debt crisis, we again bring trust to Europe. I have total trust in Europe’s economic development”. But China’s role in the euro crisis is far less problematic than Russia’s. As Stratfor has highlighted, if Russia — or one of its effectively state controlled companies — were to buy a considerable stake in Greece’s gas company DEPA when it is privatised (as it will be as part of the bailout package)  it could render irrelevant the

The pressure is being turned up on Colonel Gaddafi, but it may still take a while to have an effect. The Libyan dictator retains some form of power and has told the only person who has been granted access to see him, South Africa’s Jacob Zuma, that he intends to stay on in Libya. He wants a ceasefire before anything else is discussed. The rebels in Benghazi, meanwhile, want him to go before anything else is discussed. And so the bombing goes on. At the UN, people talk of negotiated settlement, fearing that chaos would follow Gaddafi’s killing. That may be true, but there has been little evidence so far

Hillary Clinton has given a fascinating interview to the Atlantic Monthly’s Jeffrey Goldberg. The main topic of it is the Arab spring but it is her comments about China that are making waves. When Goldberg comments that the Chinese have been scared by the sight of dictatorships toppling across the Middle East, Clinton replies:“They’re worried, and they are trying to stop history, which is a fool’s errand. They cannot do it. But they’re going to hold it off as long as possible. “ As Goldberg says, it is quite remarkable to hear the US Secretary of State say so frankly that the Communist dictatorship in China will collapse at some point.

As the Libya crisis drags out, and Bashar al-Assad orders a crackdown in Syria, many have begun to doubt whether the changes seen in Tunisia and Egypt will actually spread to the rest of the Middle East. One former British ambassador recently suggested that perhaps the peoples of the Middle East preferred a mixture of authoritarianism and democracy — and that Britain should accept this; not impose its values and views.   But there is plenty of reason for optimism. The first is to look at the countries that have transformed themselves over the course of the last fifty years. Powerhouses like India and Brazil, but also smaller countries such

As one famous artist vanished in Beijing, another appeared. Bob Dylan has begun a tour of China in the same week as Ai Weiwei became the most prominent victim of Beijing’s current repression drive. Ai has been unlawfully incarcerated for what the authorities describe as ‘economic crimes’, and the cry has gone out for his release. Except that the cry has been more of a whimper. Western governments have largely ignored Beijing’s clampdown, which began in February as democratic activism spread from Cairo to Chinese websites. No trade sanctions or UN Resolutions are being issued here, just stern communiqués. Some human rights activists have called on Bob Dylan’s celebrity to

The multiple crises in North Africa, from the revolution in Tunisia, through the protests in Egypt and to the conflict in Libya, has reinvigorated British foreign policy. In the last couple of years classic international issues have been pushed to the side by a need to focus on economic statecraft. Foreign ministers became less important as finance ministers gained prominence. This will now change, as leaders shift their focus onto the Libya crisis. The UN is again in focus, not the G20. The second change may be on East/West dynamics. Before the crisis, the air was thick with talk of a multipolar world and how power was flowing roughly from