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Strategies & Market Trends : HONG KONG -- Ignore unavailable to you. Want to Upgrade?


To: Dayuhan who wrote (2555)11/11/1998 6:20:00 PM
From: Tom  Respond to of 2951
 
Steve, Regarding your concern that the recent return to normal may not be authentic, what comes immediately to mind is what good effect all the G-7 rhetoric may have had; especially when we consider how oversold many of the WestPac equities markets were. Therein lies, as you say, a "collective desire to pretend things are better." Not much substance behind recent gains. The underlying numbers are not changing for the better. Smoke and mirrors.

On Brasil: There have been some deals made that people like you and I aren't always aware of. For instance, the automakers and their suppliers -- an enormous industry in Brasil -- have agreed not to begin laying-off workers until 01/99. Wouldn't want to shake the foundation while constructing the facade. I see also where their Congress has today balked on one of the new resolutions.

Elsewhere in the Cone: I read an interview a couple of months back that a newspaper in Buenos Aires conducted with one of the local citizens. Two months ago he was telling his family they must tighten their belts for what was happening in the economy. The Asian Crisis was mentioned. Brasil doesn't benefit from reforms similar to those instituted in Argentina over recent years. And Argentina is being hurt. Extrapolate for conditions in Brasil.

Much depends on how much time U.S. policymakers and their global counterparts can buy. We'll wait and see. And do the waiting in cash.

Did you know, Steve, that Japanese dealers were reported early last week to be two weeks behind on delivering gold purchases to individual local clients?

"Support the U.S. dollar. Here, we have plenty. Keep your hands of the yellow stuff." For the Asians,.... Boy, talk about interrupting and influencing culture.



To: Dayuhan who wrote (2555)11/11/1998 9:27:00 PM
From: Tom  Read Replies (1) | Respond to of 2951
 
Expecting visitors, Steve?

WITH CHINESE THREAT, FILIPINOS WEIGH U.S. PRESENCE

By Uli Schmetzer, Chicago Tribune Foreign Correspondent. Tribune news services contributed to this report.

November 11, 1998

MANILA -- Defense Secretary Orlando Mercado has called for a return of U.S. troops to the Philippines, seven years after the country's Senate closed down all American bases in response to a wave of nationalist fervor.

In the last year, legislators have been debating the wisdom of closing the bases in 1992 when their leases expired. At the time, many felt a U.S. military presence in the Philippines was needed to deter Chinese expansion in the South China Sea.

The issue has become more pressing in recent days after Chinese warships and cargo vessels transporting building materials were spotted around Mischief Reef in the disputed Spratly Islands. Manila says the reef is well within its maritime sovereignty; Beijing argues that the entire South China Sea is Chinese territory.

The Spratly Islands near Palawan are a cluster of atolls, reefs and shoals believed to be rich in minerals. Five nations claim part of the Spratlys -- Vietnam, the Philippines, Thailand, Malaysia and the Sultanate of Brunei. China claims all the islands.

"If there is no American presence, we all know who would come in. Isn't it already obvious?" Mercado asked in a clear reference to the Chinese activity around Mischief Reef. "Before we know it, the Chinese could be in Palawan," he said.

Mercado called on the Philippine Senate to ratify a visiting forces agreement with Washington, paving the way for joint military exercises and the presence of U.S. troops in the Philippines.

Filipinos hope the U.S. Navy in the Pacific will come to their aid if the Chinese take over more islands.

Catholic bishops oppose the agreement, arguing that the return of U.S. troops will increase prostitution and contribute to undermining the nation's morals. The agreement also is bogged down by Filipino demands that U.S. military personnel be placed under Filipino jurisdiction while stationed there. Washington has rejected this clause.

Western diplomats believe Manila will waive the jurisdiction issue in light of the Chinese fishing boats and naval vessels gathering in the disputed maritime area off Palawan.

Mercado said the Chinese task force around Mischief Reef "can only mean one thing, that China will build barracks and add wharves and causeways in the future so their vessels can dock." Reconnaissance reports, apparently from U.S. sources, indicated increased Chinese activity around Mischief Reef last month. Planes in recent days have spotted a task force of naval vessels and cargo ships loaded with construction equipment. China already has built modern shelters on the reef, but Beijing alleges they will house "fishermen."

The poorly equipped Philippine navy, which can barely muster a few old patrol boats, is no match for Chinese warships. "We can only go and look. We don't have the capacity to do anything else," admitted a naval officer. "We don't have patrol boats good enough to scare the Chinese, let alone force them to leave." Nonetheless, Philippine officials said Wednesday that they will increase naval patrols in the area.

President Joseph Estrada called the planned action in Mischief Reef a "blockade," but his spokesman said the Philippine leader was referring to increased naval patrols. "This is not in any way a military confrontation. This is to discourage particularly Chinese vessels, fishing vessels, from entering into that particular area," spokesman Jerry Barican said.

For years, Southeast Asian countries have feared that Beijing will make good on its unilateral declaration in 1992 that China has sovereign rights over all the South China Sea. Chinese gunboats, sometimes described as "survey vessels," have sailed into offshore exclusive zones, triggering protests from Tokyo, Taipei, Hanoi and Manila.

In the U.S., Jim Przystup, a senior fellow at the National Defense University's Institute for National Security Studies, welcomed the internal Philippine debate over renewed U.S. presence there. "It's important that we extend our access in that region, and establishing a presence in the Philippines would certainly do that," Przystup said.

He emphasized that an American presence need not and should not mean military bases on Philippine soil, an issue of contention between the two countries. "If we can maintain a presence without bases, that would meet our strategic needs," he said. "It's significant that a Philippines government official would state this publicly. A lot depends on what the terms and conditions of such a presence would be."

Military analysts are divided over whether Beijing wants to flex its muscles or is more determined to bag the rich mineral resources and marine life around the disputed reefs, shoals and islets.

Last year, Chinese army frogmen built structures on Filipino reefs in the Spratly archipelago. Filipino naval frogmen destroyed some of the structures. Chinese frigates have accompanied oil-drilling rigs off Vietnam or caused spats with Japan and Taiwan over their presence around the disputed Diaoyu or Senkaku islands. These actions contradicted Beijing's promise to resolve any maritime differences through talks.

Former Philippine President Fidel Ramos once said China's behavior in the disputed Spratly archipelago was a "litmus test whether China, as a great power, intends to play by international rules or makes its own."

The 190 isles, reefs and shoals that make up the Spratlys are on strategic shipping lanes from the Middle East, particularly to and from Japan.

Surveys say the Spratlys contain one of the world's greatest natural gas reserves, quantities of oil and rich marine life.