CAIRO (Reuters) – Hosni Mubarak stepped down as Egypt’s president on Friday, handing over to the army and ending three decades of autocratic rule, bowing to escalating pressure from the military and protesters demanding that he go.

Vice President Omar Suleiman said a military council would run the affairs of the Arab world’s most populous nation. A free and fair presidential election has been promised for September.

A speaker made the announcement in Cairo’s Tahrir Square where hundreds of thousands broke down in tears, celebrated and hugged each other chanting: “The people have brought down the regime.” Others shouted: “Allahu Akbar (God is great).    [FULL  STORY]

At the same time, Egypt’s supreme council of armed forces is meeting to discuss its position on the crisis in Egypt, Al-Jazeera network reports.

Al-Jazeera confirms the AP report and says the army will made a statement later today.

Behind Thalassa’s doors, and those of dozens of other bouzouki clubs dotted around Athens, Greeks can still spend big — if only for one night. But outside, reality is bleak. Flush with wealth only a decade ago, Greece is now drowning in debt, and has been forced to go begging to Europe for help. In return, the government has promised a range of cuts, sending outraged citizens onto to the streets. On May 20 the city saw its second major protest — this one peaceful, unlike the one on May 5 in which five died — along with a 24-hour strike that shut down schools, businesses and public transportation. (See photos of the protests in Greece.)

If someone were looking for a symbol of the excesses that lead to the country’s financial crisis, they need look no further than the culture of bouzoukia, a uniquely Greek celebration of the good life. As the crowd in Thalassa cheers the thumping, high-wattage show, a mix of local pop and international hits (with only a token bouzouki, the mandolin-like traditional instrument that gives the clubs their name), Greece’s economic woes seem far away. That’s precisely why people come.

Giorgos Papadapoulos, 28 is a bouzouki regular. He used to come to the clubs three or four times a month, but in April he lost his job as a bus driver ferrying people to a local casino. “A month ago I had €2,500 ($3,000), now all I’ve got is this,” he says, pulling €5 out of his pocket. “I don’t know what I’m going to do tomorrow.” (Read if the crisis in Greece can be contained.)

Tonight he can’t afford a table, so he’s standing in the back with his platinum blond girlfriend on a €15 ($19) bar ticket. But he says has no regrets about spending his euros on entertainment, adding with a wry grin that he realizes it’s this attitude that got Greece into trouble. “It’s because we don’t save,” he says. “Whatever we have, we spend.”    more …

On the surface, China seems to have received little out of the bargain. However, as it deals with the potential for havoc from two looming transitions – in the Tibetan diaspora and on Taiwan – Beijing may feel that it has achieved an important breakthrough.

On March 30, China gave a measure of support to two cherished US diplomatic objectives.

First, Washington claimed (and Beijing did not deny) that China would participate in discussions relating to new United Nations Security Council sanctions against Iran.

Also, China announced that President Hu Jintao would participate in the non-proliferation conference convened by the United States in New York in April to advance President Barack Obama’s aim of restructuring the US-led global security regime around eliminating the threat of nuclear weapons.

Time will tell how much effective support or resistance China brings to these efforts. For the time being, however, China’s harvest appears to be rather meager.

It will join the sanctions effort against its key economic and geopolitical ally in the Middle East – Iran – and be present at the creation of the planned fourth iteration of US geopolitical leadership in the past 70 years, this time centered on non-proliferation (instead of combating fascism, communism, or terrorism).

The most widely reported quid pro quo – that Hu will be spared the embarrassment of China being labeled a currency manipulator during his US visit, so Beijing can revalue the yuan over the summer on its own terms and gird its loins for an international battle over the exchange rate in time for the US mid-term election season – seems scant compensation.

However, the Chinese government has been publicly clear and consistent over several months concerning what it really wanted from the United States: reaffirmation of the US one-China policy as it relates to Taiwan and Tibet.

A visit in early March by the Obama administration’s top two China hands, Deputy Secretary of State James Steinberg and Jeffrey Bader, senior director for the US National Security Council for Asian Affairs, failed to achieve the desired result. Apparently they came to Beijing primed to talk about the US pre-occupation with Iran sanctions and nothing else. This prompted the Chinese to go to the extent of producing former US secretary of state Henry Kissinger for a photo-op with Vice Premier Li Keqiang, to emphasize the People’s Republic’s (PRC) nostalgia for the strategic engagement of the Richard Nixon years.

Based on two special postings on the Ministry of Foreign Affairs website, the PRC believes it finally got what it needed.

Even as the Obama administration was, with cautious exultation, notifying the press that China would participate in the Iran sanctions exercise. On March 30, in its news section, the ministry reported: “US Deputy Secretary of State James Steinberg Reiterates the One China Policy”. [1]

Its account of remarks by Steinberg at the US Press Club “in the small hours of March 30″ stated:

The centerpiece is the one-China policy, which has not changed. The US side does not support independence for Taiwan and opposes unilateral attempts to change the status quo. The US side welcomes the continued improvement and development of cross-Straits relations. The US side hopes that the two sides of the Straits will resolve the issue peacefully through dialogue. The US side reiterated that it considers Tibet to be a part of China and does not support independence for Tibet.

The ministry also specially excerpted a passage from spokesperson Qin Gang’s regular press conference expressing satisfaction with Steinberg’s “positive remarks” on Taiwan and Tibet.

China’s obsession with the one-China policy is, on one level, difficult to appreciate.

Western governments, media outlets and human-rights organizations do relish pulling the dragon’s whiskers on the issues of Taiwan and Tibet. However, as a matter of realpolitik, China’s economic and geopolitical clout ensures that its interests in these two regions are acknowledged as paramount.

However, transitions are looming in Tibet and Taiwan and, with them the possibility that not only new leaders but new paradigms will emerge.     more …

The Wall Street Journal
March 24, 2010
By JOHN BOLTON

Google’s decision to stop censoring searches on its China-based servers, rerouting search requests instead to its uncensored Hong Kong facilities, is historic. Google has shown itself unwilling simply to be on the receiving end of whatever Beijing dishes out—and highlighted the growing importance of Hong Kong and Taiwan in shaping the decisions that foreign businesses in China must make.

When an enterprise of Google’s global dimensions and visibility reverses course in China and is no longer a passive, compliant subject of government diktats, it sends a message to enterprises world-wide: You can do the same. Submissive participation in the mainland Chinese market is neither inevitable nor unavoidable. Do not fear to assert your interests, and those of your present and potential Chinese customers.

For the most part, foreign companies doing business in mainland China previously assumed that their risks lay on the side of not complying with Beijing’s orders, however burdensome or threatening to profits or property interests, physical or intellectual. Leaving the Chinese market was unthinkable, and defying or contesting Beijing’s directions just as unthinkable.

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Bloomberg News

Outside the Hong Kong Exchange
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Of course, as Google could envision, bucking this conventional wisdom is hardly risk free. Google may be mistaken about its own commercial interests and have to climb down in the near future—Chinese authorities are already filtering results from Google’s Hong Kong search engine for mainland users. Beijing’s rapid and angry response shows it fully understands the dimensions of this clash, and it may yet win, forcing Google back into censoring searches, or pushing it entirely from the mainland for being uppity.

The company announced starkly that “the Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement.” That position shows how aggressively Beijing’s current leadership will act to control domestic information flows, and foreign businesses generally.    more …

China has invested billions of dollars in its armed forces and is developing advanced fighters and missiles, considering building its first aircraft carrier and is trying to slim its bloated ranks down to a lean, high-tech military.

The 2010 Defense budget unveiled last week was 7.5 percent higher than last year, a modest rise by China’s recent standards, but impressive compared to other big powers.

Those rises have raised alarm in Taiwan, the self-ruled island China claims as its own, the rest of the region, and especially in the United States, the world’s only superpower with a military reach that far exceeds China’s.

In a report to Congress published last month, the Pentagon said it was concerned by China’s missile buildup and increasingly advanced capabilities in the Pacific region.

Yet while China’s People’s Liberation Army (PLA) looks increasingly fierce on paper, analysts — and even Chinese army officers — say it will be a long time before the country has the means to effectively challenge U.S. power, if ever.

“What is their readiness level? How effective are these things they’ve developed themselves?” said Drew Thompson, of the Nixon Center, a think tank in Washington.

“Is their indigenous technology really working, or does it simply exist like a lot of things in the Chinese system, on paper? I would posit it probably leans more toward the latter.”

After a spike in tension that has stoked nationalist Chinese calls for a hard shove back against U.S. influence, some PLA officers are also trying to discourage chest-thumping.

“There’s no way China can threaten the United States,” Lt. Gen. Li Dianren, a professor at the National Defense University, told Reuters on the sidelines of the annual session of parliament.

“Anyone with even a bit of common sense knows that our capabilities do not come even close to matching those of the U.S. In terms of economics, technology and the military, the gap is huge. How can we threaten them?” he added.    more …

Your plane for one – the Asian carriers’ jet, like its European counterpart, was assembled either in Seattle or in Toulouse, France, but it is a million miles away from the aircraft you are used to flying within Europe or North America. Plonk yourself down on a suspiciously comfortable seat and there is the large television panel with an array of entertainment. Great food, courteous service. And then you remember, this is the “economy” class, which beats the “business” class on any European or American airline.

Deplane and walk past the immigration without much fuss; as you reach the baggage belts you are shocked to find your checked-in baggage already there. Then you look up and see rows of baggage belts in either direction, all quietly whirring away and depositing their contents with an almost sinister efficiency.

Recovering from the shock, you recall the last time you traveled through an airport in Europe or North America: how long it took to go past the immigration counter; baggage that turned up an hour after you arrived at the belt, if it did at all; and the airlines that almost inevitably go on strike at the most inconvenient moments.     more …

In January, the U.S. moved forward on a long-delayed, $6.4 billion arms deal for Taiwan that includes assault helicopters, surface-to-air missiles and mine-hunting vessels. The deal had initially been approved by the Bush administration in 2008, but the new administration under President Barack Obama was slow to issue the individual contracts necessary to provide the weapons.

Under the terms of the 1979 Taiwan Relations Act, the U.S. is required to provide for the self-defense of the island, which neither China nor the U.S. officially recognizes as an independent country. Taiwan and China split in 1949 following a bloody civil war.

Beijing has vowed to reunite China and Taiwan, by force if necessary. In 1996, the U.S. Navy sailed two aircraft carriers into the Taiwan Strait in reaction to Chinese threats against the island. Since then, China has spent billions of dollars buying submarines and anti-ship missiles meant to counter American carriers. But Chinese investment has not, as yet, produced a military capable of conquering Taiwan.

Citing the arms deal’s “serious harm and impacts on Sino-U.S. military relations,” Beijing announced it would cancel planned visits between U.S. and Chinese forces. This is China’s standard reaction to any U.S. military cooperation with Taiwan.

But Beijing’s move to sever military ties failed to halt joint U.S.-Chinese security patrols in earthquake-ravaged Haiti. And Beijing said it would allow the U.S. Navy aircraft carrier USS Nimitz to visit Hong Kong this week.

The mixed message is indicative of China’s internal confusion regarding its place in the world, according to security experts interviewed by World Politics Review. The experts were unanimous in describing Taiwan as Beijing’s overwhelming strategic priority. But they said the Taiwan fixation is complicated by China’s parallel efforts to become an otherwise responsible member of the regional security framework for Asia.     more …

The Chinese strongly objected to Washington’s latest arms deal with Taiwan. President Obama accused the Chinese of currency manipulation, while at Davos, Larry Summers, the director of the White House’s National Economic Council, made an oblique attack on China by referring to mercantilist policies. The disagreement between China and the United States at the Copenhagen climate summit in December has continued to reverberate.

Then there was the spat over Google’s claims that cyber attacks against the company had originated in China. The U.S. is increasingly critical of China’s opposition to sanctions against Iran. Now Beijing is fuming over the meeting this week between Mr. Obama and the Dalai Lama.

For the most part, however, the issues of contention are not new. The Chinese reaction to the Taiwan arms deal was entirely predictable, the only novelty being a threat of sanctions against the firms involved. Beijing’s response to the Dalai Lama meeting in Washington is equally predictable.

Mr. Obama’s statement about currency manipulation and the comments by Mr. Summers about mercantilism are a little different. True, they are not entirely new — the Treasury secretary, Timothy Geithner, accused the Chinese of currency manipulation a year ago. But since then, the U.S. administration had until now chosen to be more discreet.

Google and climate change are relatively new disputes. But we should not be surprised by them. China’s rise means that it is now involved in areas of the world and on issues where previously it had little or no stake. As China becomes a global power it is bound to come into conflict with the United States on a number of subjects.    more …

BEIJING (Reuters) – Senior Chinese military officers have proposed that their country boost defense spending, adjust PLA deployments, and possibly sell some U.S. bonds to punish Washington for its latest round of arms sales to Taiwan.

World

The calls for broad retaliation over the planned U.S. weapons sales to the disputed island came from officers at China’s National Defence University and Academy of Military Sciences, interviewed by Outlook Weekly, a Chinese-language magazine published by the official Xinhua news agency.

The interviews with Major Generals Zhu Chenghu and Luo Yuan and Senior Colonel Ke Chunqiao appeared in the issue published on Monday.

The People’s Liberation Army (PLA) plays no role in setting policy for China’s foreign exchange holdings. Officials in charge of that area have given no sign of any moves to sell U.S. Treasury bonds over the weapons sales, a move that could alarm markets and damage the value of China’s own holdings.

While far from representing fixed government policy, the open demands for retaliation by the PLA officers underscored the domestic pressures on Beijing to deliver on its threats to punish the Obama administration over the arms sales.

“Our retaliation should not be restricted to merely military matters, and we should adopt a strategic package of counter-punches covering politics, military affairs, diplomacy and economics to treat both the symptoms and root cause of this disease,” said Luo Yuan, a researcher at the Academy of Military Sciences.

“Just like two people rowing a boat, if the United States first throws the strokes into chaos, then so must we.”

Luo said Beijing could “attack by oblique means and stealthy feints” to make its point in Washington.

“For example, we could sanction them using economic means, such as dumping some U.S. government bonds,” Luo said.

The warnings from the PLA come after weeks of strains between Washington and Beijing, who have also been at odds over Internet controls and hacking, trade and currency quarrels, and President Barack Obama’s planned meeting with the Dalai Lama, the exiled Tibetan leader reviled by China as a “separatist.”

MILITARY SPENDING BOOST

Chinese has blasted the United States over the planned $6.4 billion arms package for Taiwan unveiled in late January, saying it will sanction U.S. firms that sell weapons to the self-ruled island that Beijing considers a breakaway province of China.

China is likely to unveil its official military budget for 2010 next month, when the Communist Party-controlled national parliament meets for its annual session.    more …