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Posted on on October 31st, 2008
by Pincas Jawetz (


Asia-EU Summit to Address ‘Financial Tsunami.’

Analysis by Antoaneta Bezlova, IPS, October 23, 2008

BEIJING, Oct 22 (IPS) – Cast in the role of global saviour in the unfolding financial turmoil, China is playing host to a meeting of Asian and European leaders in Beijing this week that is expected to castigate the Anglo-Saxon model of capitalism and press for a reshaped global economic order.

“Can Asia be global economy’s best hope,” asked an editorial in the Economic Observer last week. Noting that Asia hardly played any role during the global economic recovery after the Great Depression of 1929, the paper suggested that the continent’s established and emerging economies constituted the world’s best chance for recovery after the “financial tsunami”.

“And even if the Wall Street demise does not instantly signify the triumph of Mahathir’s Asian model, it is the beginning of a much-needed readjustment of economic power in the world,” it concluded.

More than 40 leaders will converge in the Chinese capital for the 7th Asian European Meeting (ASEM) summit from Oct. 24 to 25 to discuss the global financial crisis and a plan for joint action.

Aside from the 27 EU countries, 10 ASEAN countries, the European Commission, China, Japan and South Korea, the summit will be attended by three other Asian countries — India, Pakistan and Mongolia. The talks will be co-chaired by France, which holds the European Union’s presidency, and China.


“China maintains that the international community should strengthen cooperation and jointly handle the current financial crisis on the basis of equal consultation,” foreign ministry spokesman Qin Gang said in Beijing on Tuesday. But he warned that “developing countries’ interests and concerns should be fully respected and safeguarded.”

China — a major emerging economy which sits on 1.8 trillion US dollars worth of foreign exchange reserves — has been looked upon as an important player to lead the way out of the global financial meltdown.

U.S. Treasury Department officials and politicians have all called on Beijing to show a pro-active attitude and join efforts with the Western world to fight the worst financial crisis since the Great Depression.

Qin Gang said Beijing had adopted a “responsible and constructive attitude” in dealing with the crisis. But few details have emerged over the role China is expected to play. Latest economic figures show that the country’s economy is also vulnerable to the effects of the global economic slowdown.

The National Statistics Bureau said on Monday the economy expanded by just nine percent in the third quarter, the slowest rate in five years. By comparison, the economy grew 10.6 percent in the first quarter and 10.1 in the second quarter of 2008. The slowdown was blamed on plummeting demand for Chinese goods as consumers in the U.S. and Europe cut back on spending.

In recent weeks Beijing has grown more critical over the lack of financial surveillance in developed economies, which it blames for the spiralling crisis. The deputy governor of China’s central bank, Yi Gang, who took part in the emergency G20 meeting in Washington earlier this month, chastised the International Monetary Fund for allowing too much leverage in the system and failing to exert control of big Western financial institutions.

He told the media that “weak financial-policy discipline resulted in excess global liquidity and disorderly capital flows”. The line has been echoed in a numerous articles and columns in the Chinese media attempting to dissect the reasons for the downfall of Wall Street powerhouses. Some have sung an “eulogy to U.S. capitalism” while others have proclaimed the end of the “era of Washington consensus”.

But there has been less certainty about what would replace the current order of international capitalism. “The demise of Wall Street Anglo-Saxon model doesn’t signify the victory of China’s financial modus operandi,” said a commentary in the 21st Century Economic Herald.

“Even as we criticise Wall Street’s excesses, we should be aware that China’s model of financial operation is not necessarily the answer,” it said. “True, Chinese banks are stable and they don’t pursue excessive profits blindly. But they are far from free from red tape and administrative interference.”

According to Qin Gang the ASEM summit offers the “perfect platform” for leaders to discuss ways of dealing with the crisis.

British Prime Minister Gordon Brown has proposed a global system of financial supervision that would empower international bodies including the International Monetary fund to monitor global markets and act as early warning systems. French President Nicolas Sarkozy — one of the summit’s coordinators — has pledged to use the meeting as a platform to persuade Asian nations to take part in a plan for the rebuilding of international capitalism.

“What has happened is an act of treason against the values of capitalism; it is not a result of the market economy,” said Sarkozy during a speech Tuesday at the European Parliament in Strasbourg.

“The most simple solution” for the global summits would be to bring the G8 (group of eight) largest industrialised nations together with the five biggest emerging economies, led by China and India, he told European politicians.

Chinese analysts anticipate that the summit may produce an agreement for the establishment of a joint trust fund between Asia and Europe, similar to the one launched during the second ASEM summit in London in 1998, to combat the Asian financial crisis.


The update comes October 31, 2008 to the original posting of October 25, 2008 and it deals specifically with the place of Mongolia in all of the above. This because of a breakfast meeting at the Asia Society in New York today, October 31, 2008 – the traditional Halloween day, and I will mention after a few further lines why I say this.

The meeting today had the title – Mongolia Rising: The Incredible and Continuing Story of Mongolia’s Emergence as a Free Market Democracy.

At the breakfast meeting spoke the US Ambassador to Mongolia, Mr. Mark C. Minton, and in the audience sat also Ambassador Ms. Enkhtsetseg Ochir, the Permanent Representative of Mongolia to the UN. Jamie F. Metzl, the Exec. VP of Asia Society chaired.

Strangely, when I looked up the website of the Asia Society, I found that on October 31, 2005   The Asia Society   Washington DC Center had a meeting on Mongolia. Here the strange coincidence of the Halloween date repeating itself exactly three years later and my possibility to compare the progress of relations between the US and Mongolia in the last three years – to the date.

The information from 2005 –…

Strangely, already at that first meeting there was a reference to Halloween, but that was a very serious meeting – “US-Mongolia Relations: History and Future Prospects.” That meeting, according to the pdf had a large cast of Ambassadors participating, including Tony Lake, and it was arranged before President Bush trip to Mongolia – the first Summit of a US President with a Mongolian President. Since then there was a return visit – a Summit of the presidents in the Washington DC White House in 2007.

Mr. Mark Minton, a career member of the US Foreign Service got to UlaanBataar in December 2006 after having served in Korea and Japan, so he was in Mongolia for the last two years of the US- Mongolia rapprochement.

So why Mongolia? It is a country, the size of Alaska, of 3 million people, and 45% live now in the capital area urban environment. Culturally they are close to Tibet and are of the same religious belief as the Tibetan Buddhism, thus I would assume also close culturally to Bhutan, but they were a nomadic people.

In the 20th century that brushed with Soviets, Chinese and Japanese occupation and are fiercely intent on preserving their freedom. Being geographically wedged in between China and Russia, they want that “third neighbor” that geography did not give them. So thy go the long distance and want the US as their third neighbor. To reach the US they developed their democracy so they can interact with countries beyond their two immediate neighbors. They reorganized their army as a peace making army and they participate in UN peace missions like Sierra Leone, and with the US in Iraq and Afghanistan. in exchange the US established an AID program involved in preventive health care and in construction workers education as the transformation from the nomadic lifestyle created needs for new skills in the housing sector; further the US Peace Corps are active in Mongolia – it is actually the largest per capita Peace Corps location. But obviously the US does not have Mongolia to itself, the Japanese foreign aid is the largest in Mongolia and the EU, Australia, and Canada are also active.

Democratization made large progress – there is transparency, a judiciary, there are elections and they have a market economy and the leaders are involved in diplomacy. They are visited often by the Dalai Lama and the university is in exchange with the University of Alaska.

Obviously, the US is interested in Mongolia’s mineral resources – so is China. Peabody Coal and Rio Tinto International are active in Mongolia. Hilton International opened this year. Mongolia is becoming a middle income country. It is landlocked but is starting to take advantage from its location by becoming a country of transit between China and Russia.

In the democracy department there was a blemish recently when after the summer elections there were riots. The Ambassador explained those as inexperience because they have an army but not good police service. The fact was that the army, that was trained for peace work, did not know how to act when called in after the opposition protests about the elections. The authorities panicked and the army was inefficient.

An adviser to Nature Conservancy criticised the ambassador as he said nothing about the environmental problems and the mining industry. Further there are issues resulting from foreigners buying up grazing land for meet production and farming.

The nuclear issue came up as Mongolia wants to be part of the six Party talks on North Korea programs. Further, what was not mentioned is that Mongolia declared its nuclear-weapon-free status. In effect I have in front of me UN General Assembly document A/c.1/63/L.28 where Kazakhstan, Morocco, and Mongolia brought up together Mongolia’s rejection of nuclear weapons. Also, in recognition of their specific situation, Japan let Mongolia host one of the six-Party talks commissions.

Japan is also looking into the problem with desert dust from Mongolia reaching Japan.

From all this material, what is China doing when insisting in bringing in Mongolia to the meeting they hosted between the 27 EU countries and the four major Asian economies, when besides Japan, India and Korea, they also invited Pakistan and Mongolia? We understood Pakistan as sort of balance to India, but now we also figure that bringing in Mongolia has more to do with trying to redirect this country towards Europe and weakening a runaway relationship with the US directly, or via Japan.

The bottom line is that because of size and economic potential, Mongolia is a country with much higher importance then it might be assumed from the mere 3 million people. China night then want to keep it in its own orbit and to guard it from   “third neighbors'” exaggerated footholds.

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