July 15, 2011
BEIJING - Lately, the waters have grown rough around China.
With the South China Sea disputes still simmering, new turmoil has broken out in the East China Sea. First, ten fishing boats filled with Japanese right-wing extremists forced their way onto the Diaoyu Islands. Then, South Korea decided to submit an official document to the United Nations' Commission on the Limits of the Continental Shelf, outlining their new territorial claims in the East China Sea. According to this document, South Korea's continental shelf claim extends not only to Okinawa, but also includes the China Inland Sea.
So from Northeast Asia to Southeast Asia, China is simultaneously engaged in full-fledged territorial water and island sovereignty disputes. Beijing is facing a number of small countries, advancing and surrounding it at the same time.
And this is hardly the only trouble that China's diplomacy faces today. China's biggest problem is reflected in its diplomatic guiding principles and philosophy. The "harmonious world" concept that we have always insisted on is not compatible with the fact that China is now the world's second biggest economy. And it is not trusted by others. The rise of China has aroused much reaction, suspicion, anxiety and even rejection.
In the Middle East, which is gradually becoming more and more meaningful for China, some officials complain that China is a fence-sitter afraid to take clear stances.
China's most important strategic partner, Russia, is the provider of advanced arms to Vietnam, with whom China is stuck in a major row over a territorial sovereignty dispute. While China has been seeking energy cooperation with three Central Asian countries, Russia has been interfering either openly or secretly.
And then there's Europe: China is actively investing in the continent, increasing its imports from European Union members and buying Euro bonds to respond to their serious credit crisis and rising nationalism. But still: this does nothing to change the reality that Europe is still the firmest ally of the United States.
Looking for a friend
China doesn't have a real friend in the world. Not in the other "BRIC" countries of Brazil, Russia and India, nor in the Shanghai Cooperation Organization group that includes countries like Kazakhstan, Kyrgyzstan, Tajikistan, India, Iran, Pakistan, Sri Lanka, and Belarus. These are just forums provided to each member state to have a place for proclaiming their positions, not real international organizations which have a status in accordance with international law. Among all the big global states, China is the only one that faces such a lonely situation.
Besides, subject to the guiding ideology of China's diplomatic practice, more attention is paid to saving face than gaining concrete returns. For instance, when having to evacuate its citizens or providing consular protection abroad, the diplomatic personnel attach much more importance to domestic propaganda back home than to offering real help to the people in need. This is why when it faces major issues like the territorial disputes in the South China Sea and the East China Sea, it is totally helpless.
The fundamental problem is that China's diplomatic ideology does not reflect China's reality. It's a country where the GDP is the world's second highest, but its diplomatic thinking is of a mid-level player in a multi-polar world trying to keep a low profile. It lacks an overall strategic and international perspective.
The recognized principle on the international stage is strength, or even the rule of the jungle.
In terms of strength, China is second in the world. It needs to protect its economic interests around the world. Emphasizing its vision of a "harmonious world" or constantly abstaining from voting on the UN Security Council only makes the outside world think that China is opaque, that it does not uphold international justice, or even dare to defend its national interests. It's only logical that other countries will rally together to compete against China under such circumstances.
China's diplomacy must be in line with the fact that it is the world's largest creditor nation, and has the courage to protect its own interests while also playing a role in helping the outside world as best it can.
Among the various paths available, the most realistic would be to pursue the so-called G2.
The concept of G2 was first raised by Dr. Fred Bergsten, Director of the Peterson Institute for International Economics in 2008. It holds that the "Group of Two" – the U.S. and China – should align their positions towards world affairs and, in particular, towards Asia-Pacific affairs.
The U.S. needs China too
When President Obama visited China in 2009, he made this recommendation to the Chinese leaders. The background was that America's economy would not recover in the short term, while problems were bound to persist in Afghanistan -- and it needed China's assistance, especially in the Asia-Pacific region.
Lately, the U.S. has also gotten involved in depth with the war in Libya, and the unrest in the countries in North Africa and in the Middle East. This reflects the decline of America's strength. Some U.S. leaders think that China does not threaten the United States militarily, that China is not exporting its ideology, and its economic development has an obvious global driving effect, while America has more and more problems which need China's help to resolve. America needs a G2.
Yet many Chinese people are skeptical about the G2 model, citing both trust issues, as well as individual interests. However, with calm thinking, it becomes easy to see that strength is the most important factor determining the development of international relationships, and the evolution of the international dimension of a country.
One has to pay the price of being a leader. Sometimes you wind up losing more than you gain. It is a basic international duty. And if China agrees to build the G2 with the US, at least the security situation around China should improve considerably.
The last and most important point is that foreign and domestic affairs are complementary and inseparable. To solve its current domestic problem of incompatibility between the economic base and the superstructure, China needs a stable exterior environment.
A G2 could provide such steady conditions. Otherwise, even just the "unlimited internet access' proclaimed by Hilary Clinton or an "internet freedom strategy" is enough to make China's life very uneasy. A G2 could provide a basis of good will between two allies, instead of insidious mutual destruction. China needs a relatively stable transition period to solve its domestic problems. Dealing well with America is the key to achieve that goal.
Read the original article in Chinese
The Economic Observer is a weekly Chinese-language newspaper founded in April 2001. It is one of the top business publications in China. The main editorial office is based in Beijing, China. Inspired by the Financial Times of Britain, the newspaper is printed on peach-colored paper.
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It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.
October 27, 2021
PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.
Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.
Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.
Share capital of one billion
The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).
The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.
Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.
While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.
The infamous typo that brought the Air Next scam down
Raising Initial Coin Offering
Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.
For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."
What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".
Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.
Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.
Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.
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