U.S. President Donald Trump has revived China’s fears by once again calling it a currency manipulator, weeks after many felt the issue had been shelved. Trump reemphasized his stand last week, hours after Treasury Secretary Steven Mnuchin indicated China would not be singled out for adverse treatment on the currency issue.

“Well they, I think, they’re grand champions at manipulation of currency. So I haven’t held back,” Trump told Reuters, adding, “We’ll see what happens.”

The U.S. Treasury Department is expected to make a call on the issue on April 15. But Mnuchin may have to disclose the administration’s plans at the G20 finance ministers’ meeting March 17-18 in Bonn.

Many economists believe the Chinese Yuan is not being deliberately devalued as in the past. The International Monetary Fund said last year the Chinese currency’s value was broadly in line with its economic fundamentals.

“There is no evidence of currency manipulation in recent times, beyond the occasional buying and selling of foreign exchange to stabilize volatilities, which all countries, rich and poor, do,” said Kaushik Basu, Professor at Cornell University and a former Chief Economist of the World Bank. “I hope the U.S. would not declare China a currency manipulator, which would not be right and would also unleash destabilizing forces in foreign exchange markets the world over.”

In normal practice, the U.S. Treasury would apply three criteria to determine if China deserves the label of a currency manipulator when it meets on April 15.

“If the Treasury Department adheres to its three criteria, it won’t [declare China as a manipulator], since China currently only meets one of the three criteria. It could decide, though, to ignore those criteria,” said Scott Kennedy, director of the project on Chinese business and political economy at the Washington-based Center for Strategic and International Studies. “The ultimate decision will turn on broader U.S. policy toward China, which is still being decided.”

This is bad timing for China where foreign direct investments (FDI) reversed, falling 9.2 percent in January. The slide came after FDI grew 3.9 percent in November and 4.1 percent in December. Figures for February, which will be available after 8-10 days, would explain more clearly if the slide is a trend or just a monthly variation.

“The drop in FDI seen in China recently may well be in response to Trump’s threats to build barriers. But there are other factors too. There has been a bunched up profit repatriation from China by China’s foreign investors in recent times, which contributed to the decline in net FDI,” said Basu.

Minister’s removal

Beijing suddenly replaced Minister for Commerce Gao Hucheng on Friday soon after the slippage in FDI numbers and Trump reiterating his threat of declaring China a currency manipulator.

Before his removal, Gao told a press conference, “We never use one month’s figure to summarize a long-term trend, and an early Spring Festival last month was another factor to affect the country’s monthly FDI volume,” said Gao, adding, “The FDI in any country will come and go with the development of the economy and changing industrial structure.”

China’s FDI fell 13 percent year on year in 2016.

“I don’t think such short-term volatility in FDI data can meaningfully be attributed to any Trump effect. It is most likely merely noise in the data caused by a lot of random business decisions,” said Jacob Kirkegaard, economist with the Peterson Institute of International Affairs.

Analysts are divided on whether President Xi Jinping decided to replace Gao as part of Beijing’s preparations to deal with economic challenges expected to come from the Trump administration, or merely because he was close to the retirement age stipulated by the Communist Party.

“It suggests the commerce minister has reached retirement age and Xi is starting to consider the composition of the Cabinet for his second term,” said Kennedy. “Zhong Shan [the new commerce minister] may or may not stay on.”

Investors pulling out

The American Chamber of Commerce in China said 25 percent of U.S. companies in China have moved their operations to other countries or are planning to do so.

Kennedy said this is a result of worsening investment conditions in China and the application of tighter capital controls.

“I think as Chinese growth slows and financial risks increase, combined with a more discriminatory treatment of foreign investors in China, many foreign investors will rightly ask if their investments in China continue to be justified by the ‘Ooh, it’s a billion people so we gotta be there’ factor,” said Kirkegaard. “… If foreign businesses don’t make much money in China they will stop coming.”
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President Donald Trump’s administration is ramping up pressure against North Korea’s nuclear ambition, while building ties with regional allies and partners to counter the rising danger of a nuclear-armed North Korea.

In a statement Monday, the State Department said North Korea’s nuclear and ballistic missile programs directly threaten the security of the South Korea, Japan and the United States.

The statement came after talks in which officials from Washington, Tokyo and Seoul examined ways to restrict Pyongyang’s weapons funding and “explored a joint way forward toward the complete, verifiable and irreversible denuclearization of North Korea.”

State Department Special Representative for North Korea Policy Joseph Yun hosted the trilateral meeting with his Japanese and South Korean counterparts to address Pyongyang’s nuclear threat, following a trilateral foreign ministerial meeting on the sidelines of the G-20 meeting in Bonn, Germany.

“The officials considered other possible measures under national authorities, including means to restrict further the revenue sources for North Korea’s weapons programs, particularly illicit activities,” according to the statement.

Foundation for Defense of Democracies senior fellow Anthony Ruggiero told VOA that such “strong words need to be followed by robust actions.”

Ruggiero added that the three countries should implement increased sanctions aimed at North Korea’s provocative activities.

“China was not mentioned, but Beijing should at least be part of the focus of renewed North Korea sanctions,” he added.

At the White House, Chinese State Councilor Yang Jiechi on Monday talked to Trump briefly after Yang’s meeting with Trump’s national security adviser H.R. McMaster, as well as Trump’s son-in-law and adviser, Jared Kushner.

White House Press Secretary Sean Spicer said the conversation was an opportunity to speak on “shared interests and national security.”

Upcoming meetings

Yang is to meet Tuesday with U.S. Secretary of the State Rex Tillerson. The two spoke over the phone on February 21 during which U.S. officials said both “agreed on the need to address the threat that North Korea poses to regional stability.”

Japanese Prime Minister Shinzo Abe’s national security adviser, Shotaro Yachi, is also visiting Washington and is scheduled to meet with McMaster.

The meetings come after North Korea’s February 12 ballistic missile test.

The United States, China, Japan and South Korea are members of the so-called “six-party” talks, a series of multilateral negotiations held intermittently since 2003 for the purpose of dismantling North Korea’s nuclear program.

Under a 2005 six-party joint agreement with South Korea, the United States, China, Russia and Japan, North Korea agreed to abandon all nuclear weapons and existing programs in exchange for economic aid, security guarantees and improved diplomatic ties.

But Pyongyang failed to live up to its commitment and has since conducted several nuclear and missile tests.

Plans to bridge talks between North Korean officials and former American officials were reportedly dropped after the State Department withdrew visa approvals for Pyongyang’s top envoy on U.S. relations, according to The Wall Street Journal.

A State Department spokesperson declined to confirm the report of visa withdrawals and told VOA “we do not discuss the details of individual visa cases.”

Some former U.S. officials say it is time for Washington to take a different approach in its dealings with Pyongyang, such as directly engaging with the reclusive and unpredictable regime. They argue such engagement could help to determine ways to avoid a possible confrontation that is in no one’s interest.

Others, including Brookings Institution’s senior fellow Richard Bush, say they do not see the need for such a dialogue.

He notes North Korea “knows how it needs to change its goals to satisfy the other parties and how to contact the U.S. government to talk about such changes,” but does not want to change policy.

“The problem is not the difficulties in communication,” Bush added. “It’s a conflict of goals between North Korea and the United States.”
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Afghanistan’s Taliban says an American drone strike in northern Afghanistan has killed one of its senior commanders, who led insurgents to briefly capture the capital of Kunduz province in 2015.

Mullah Abdul Salam and several of his key commanders were killed Sunday in the Dashti Archi district of Kunduz, Afghan and Taliban officials confirmed Monday.

A spokesman for the Islamist insurgency, Zabihullah Mujahid, maintained that missiles fired by an unmanned U.S. aircraft killed Salam.

Afghan President Ashraf Ghani, while thanking his national security forces and praising their bravery at a special ceremony in Kabul, revealed the news about the death of the insurgent commander.

“Our security and defense forces yesterday [Sunday], as an important demonstration for the security of Kunduz, destroyed Mullah Salam along with his aides,” Ghani said, without elaborating.

A U.S. military spokesman confirmed an air raid had been carried out Sunday in Kunduz, but said there was no confirmation about its outcome.

Mullah Salam was the most senior Taliban leader eliminated since the group’s chief, Mullah Akhtar Mansoor, was killed in a U.S. drone strike in May 2016, while he was traveling through neighboring Pakistan’s Baluchistan province.

Salam was arrested in Pakistan in 2010, before he was freed along with other Taliban prisoners two years later at the insistence of the then-Afghan government, which hoped the insurgents would quit violence and help in the official reconciliation efforts.

But Salam rejoined the Taliban upon his return to Afghanistan and retook command of insurgents in Kunduz.

The insurgent commander was from Dashti Archi, one of the Taliban’s strongholds in the province, and some Afghan observers say they believe he played a key role in promoting the group’s contacts with Russia.
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The American mining company Freeport-McMoRan has brought the world’s biggest gold mine, in the Indonesian province of West Papua, to a standstill.  The corporation is butting heads with the Indonesian government over protectionist mining regulations.  And now that Freeport has started to dismiss tens of thousands of workers, the local economy is poised to take a huge hit.  In Mimika Regency, the West Papua province containing the Grasberg gold mine, 91 percent of the Gross Domestic Product (GDP) is attributed to Freeport.

Freeport Indonesia abruptly stopped production on February 10 and laid off 10 percent of its foreign workers. It employs 32,000 people in Indonesia, about 12,000 of whom are full-time employees. The freeze was a reaction to a shakeup in Freeport’s 30-year contract with the Indonesian government, signed in 1991. Indonesia has tried to levy additional obligations from Freeport in an attempt to increase domestic revenue from its natural resources. Freeport retaliated last week by threatening to pursue arbitration and sue the government for damages.

The Indonesian Ministry of Energy and Mineral Resources could not be reached for comment on the issue.

Observers on the ground in Papua and from afar in Jakarta worry the shakeup will decimate the local economy and lead to violence in the historically unstable region. West Papua has long been a troubled  territory in Indonesia and its independence movement has long been met with brutal military action.

Activist concerns

“I don’t think the government comprehended the social impact of the Freeport freeze in Mimika,” said Octovianus Danunan, editor of the Radar Timika, a local newspaper. “Freeport runs two hospitals here, gives hundreds of scholarships to local students, and of course, provides jobs to thousands of Papuans. With these layoffs, people are extremely worried; their lines of credit are vanishing as we speak.”

“These layoffs have eliminated the livelihoods of a lot of people,” said John Gobai, a member of the Papua parliament. “We have heard from indigenous people here in Timika [the site of Freeport facilities] that people are becoming sick from stress. They are falling into an abyss of stress.”

According to an internal Freeport report from 2015, about 36 percent of its full-time employees are native Papuans.

“I suspect that, because they may lose their jobs, many employees will want to stage demonstrations… but then, ironically, they will be laid off because that’s the state policy. I think this whole situation is a human rights violation,” said Gobai.

“Violence is a very big possibility,” said Andreas Harsono, a Human Rights Watch researcher. “Timika is the wild, wild east of West Papua. It’s the location of more than 3,500 security officers stationed along the 90-mile mining road, not to say Papuan guerrillas and hundreds of military deserters, all looking for a slice of the gold and copper mine. Shooting along the road is a regularity rather than an irregularity. I cannot imagine the situation if Freeport goes ahead with dismissing all 30,000 mining workers there.”

Gobai said there have already been some protests on Freeport headquarters and he expects there will be more going forward.

Freeport’s CEO Richard Adkerson told Reuters that the company was committed to staying in Indonesia, not least because about one-third of West Papua’s economy comes from the Grasberg mine.

Freeport’s history in Indonesia

On February 12, Adkerson issued a hard 120-day ultimatum to the Indonesian government to back down on its new demands or else face arbitration from the mining giant.

Freeport’s involvement in Indonesia dates back to the Suharto military dictatorship, which signed over 250,000 acres of West Papuan territory in 1967.

Freeport was the first foreign company to sign a contract with the new Indonesian government and, due in part to this history, it is now the single largest employer in all of Indonesia.

The company enjoyed a complicated special relationship as a “quasi-state organization for Jakarta,” as Inside Indonesia details, throughout the Suharto era, but the relationship has cooled under subsequent, democratically elected presidents.

The friction that led to this month’s impasse is a 2009 mining law that would require Freeport to build a $2.9 billion smelter (in order to move resource exports higher up in the value chain from just raw materials) and divest the majority of its shares to Indonesian ownership within 10 years.

Freeport maintains that, since its current contract runs through 2021, it doesn’t need to act on the regulations yet. But Indonesian officials, led by Mines and Energy Minister Ignasius Jonan, have ramped up pressure for Freeport to convert its contract per the 2009 law to a “Special Business License,” which precipitated today’s standoff.

Situation in flux

Both Indonesia and Freeport are likely to see monetary losses from the clash, but Indonesia seems committed to asserting its terms for collaboration. The global commodities market for ore and other natural resources has also dipped in the last year, with a particular slowdown from China.

The ground situation is likely to be in constant flux over the coming months as the Indonesian government gears up for a fight. On Monday, the government announced it is grooming a state-owned aluminum enterprise to take over the Grasberg mine if it wins arbitration with Freeport.

“What the government really needs to think about is what compensation they can give to layoff victims in the present,” said Gobai. “These people are employees, but they are also citizens.”
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A suspected terrorist has been shot and killed by police in Indonesia after an improvised bomb exploded near a government building in the city of Bandung.

West Java police chief Anton Charliyan says no one was injured when a pressure cooker-rigged device exploded Monday in a nearby vacant lot.

Charliyan says the suspect ran into the building after the explosion and started a fire inside before he was eventually shot and killed during a gunbattle with police.

Indonesia has been the target of numerous terrorist attacks by Islamic militants for years, including the 2002 bombing attack on a Bali island nightclub that left 202 people dead.
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China is sending its first senior official to visit the U.S. since President Donald Trump took office.

State Councilor Yang Jiechi is Chinese President Xi Jinping’s top foreign policy adviser and a familiar face in Washington. He has served as China’s foreign minister and ambassador to the U.S.

The foreign ministry said Yang was scheduled to “exchange views on bilateral ties and issues of mutual concern” in meetings with high-ranking U.S. officials during his visit on Monday and Tuesday.

The future direction of relations between the world’s two largest economies has grown more uncertain following Trump’s accusations of unfair Chinese trading practices and threats to raise import tariffs.

Trump has also criticized China’s activities in the South China Sea and suggested he might use Taiwan as leverage in negotiations.
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