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York Centre for Asian Research Update                        Issue 18, Friday, July 15, 2005

Melissa Marschke starts her postdoctoral research at YCAR

Melissa arrived at York this July to start her postdoctoral research with the Social Science and Humanities Research Council Major Collaborative Research Initiative (SSHRC-MCRI) project on the Agrarian Transition in Southeast Asia. This project involves the University of Montreal, York University, University of Laval, McGill University, University of Toronto, University of Waterloo, Trent University, and University of British Columbia in Canada and other institutions in the UK, Australia and Southeast Asia.

Melissa completed her PhD at the University of Manitoba in Winnipeg. She specializes in community-based management, livelihood and decision-making issues, and has worked as a consultant on writing and analysis issues and in project implementation in Cambodia, Thailand and Vietnam. Melissa will be teaching a course in development studies in Fall 2005.

YCAR visiting scholars from China: Xiaodong Nie and Yuemei Yan

Xiaodong started his visiting scholarship at YCAR in May 2004. He is the vice-president of the Federation of Industry and Commerce at the Haidan District in Beijing, China. He has a Master of Law in Peking University and his research focuses on the Canadian Chamber of Commerce - its history and evolution, organizational structure and management, legal basis as well as its relations with the government and international community. He will be applying the lessons that he will learn from his research in Canada when he returns to China in May 2006.

Yuemei started her visiting scholarship at YCAR in October 2004 and with us till October 2006. She is an associate professor of compilation in the Central Compilation and Translation Bureau, a government research institution on Marxism and social science in Beijing, China. She did her Master of Philosophy at the Institute of Developmental History of Marxism and Leninism at Renmin University in Beijng, China with an area of specialization on the history of Marxian philosophy. Her research aims to follow the tracks  of development of Marxism study outside China, including new trends and theories, but specifically focusing on three issues: (1) recent views and arguments regarding the contemporary relevancy and significance of Marxism, (2) new views on the vitality of contemporary capitalism, and (3) current studies on Marx's major works and manuscripts.

Me and My Shadows at the Eco Garden Party at High Park, Toronto 
Me and My Shadows will be doing "Seed Mosaics of the Indonesian Tree of Life (Gunungan)" at the 
Eco Camp at High Park on Sunday, July 17 from 1-3 pm. Create your own tree of life and 
decorate it with an assortment of seeds and beans under the large maple tree at the garden site! 
A general partnership owned and operated by Susan Allen and Susiawan, Me and My Shadows works in the field of learning 
through the arts and movement and offers diverse performances and workshops in Javanese/Balinese shadow puppetry, 
mask-making, creative movement and yoga to engage all ages in creative, active, cultural expression and sharing. 
Susan Allen and Susiawan performed a wayang shadow puppet show at YCAR's recent tsunami concert in February 2005.  
For more information on the High Park Eco Camp contact: 416-392-1329, 

Call for Papers: 13th Annual CANCAPS Conference  
2-4 December 2005, Crowne Plaza Hotel, Ottawa

The 13th Annual CANCAPS Conference will be held this year in Ottawa. The overall theme of the Conference will be: Asia in Search of Identity and Security. This year, there will be three plenary sessions:

   * Implementing the Canadian International Policy Statement in Asia
   * The East Asia Community
   * Non Traditional Threats in Asia

There will be one panel sponsored by each of our two working groups.

CANCAPS is looking for paper proposals for the remaining seven panels. Some possible topics include:

   * Competition between China and Japan and its impact on Asia
   * Arms Races and Proliferation in Asia
   * India’s Security Policy
   * Implications of the American Empire in Asia: Evaluating Hegemony
   * Political Economy and Demography: Outsourcing and Immigration Implications for Canada
   * A Distinctive Canadian Approach to Peace and Conflict in Asia
   * Identity and Diaspora: The Role of Remittances in Time of Environmental Crisis
   * Energy Security and the Environment: Sources or Consequences of Internal Conflicts?
   * The rise of neo-nationalism in Asia
   * Terrorism and Religious Identity

This list is not exhaustive and does not reflect a priority ranking of the topics. If you have any other proposal that could fit into the security fields covered by CANCAPS (including Afghanistan), please feel free to send it to us. The organizers will select paper proposals on the basis of how well they contribute to the overall structure of the panels and, as always, on their merit.

Please send your proposals as e-mail attachments to Gerard Hervouet, President of CANCAPS ( before 29 August 2005. Please also send copies of your proposals to Shaun Narine, Vice President of CANCAPS ( and Sarah Whitaker, CANCAPS Administrator (

The objective of CANCAPS is to promote research, publication, public awareness and exchange activities on Asia Pacific security issues and Canadian involvement therein.  Any Canadian citizen interested in Asia Pacific security is eligible for membership in CANCAPS. For membership information please visit

Education Law and Economic Growth

Vietnam's National Assembly passed the Education Law for the first time in April 1997. After much public discussion, debate and anticipation, the amended Education Law was ratified on 20 May 2005 with effect on 1 January 2006. The amendments, approved by less than 72 per cent of representatives, were disappointingly small in number and relatively trivial in nature. The main changes were: (i) the adoption of one national textbook for each education program, and (ii) the abolition of the Graduation Examination at the end of junior secondary school (Year 9). The Standing Committee of the National Assembly also indicated that it would take many years to perfect Vietnam's education law.

This reflects the current status of play in Vietnam. From the public viewpoint, there is an increasing need for widespread (sometimes radical) and urgent changes in the education sector. From the government's perspective, education policy must be an integral part of wider socio-economic policy. Since socio-economic reform in Vietnam has been gradual and piecemeal, education changes must accordingly be incremental. In other words, the nature and speed of education reform is not a choice, but is constrained by the government's approach to broader socio-economic policy objectives. This has frustrated the public, particularly those university professors who have been calling for immediate action.

The pace of education reform has slowed down in Vietnam after a promising start in the early 1990s when the 1992 constitution reaffirmed education as a top priority, and public spending on education as a percentage of GDP increased substantially in 1993. As a result, Vietnam's achievements in education have not matched its achievements in the economic sphere. A clear evidence of this is the decline of the difference in Vietnam's human development index ranking and its economic development (purchasing power parity GDP per capita) ranking. In 1994, this difference was at least 25. In 2002, this difference was a mere 12.

Examining more closely, this is partly due to the decline in the enrolment ratio of primary students in Vietnam. According to official data released by the Ministry of Education and Training, the total number of primary students in Vietnam declined annually from over 10.1 million 1999-2000 to 8.4 million in 2003-04. After adjusting for the decline in birth rate in recent years, the net result is a steady reduction in the enrolment ratio of primary students. This reduction, mainly attributable to school fees, affects low-income households disproportionately. It raises an equity issue about access to basic education, and contradicts the 1991 Law on Primary Education Proliferation, which reaffirmed the role and responsibility of the government in providing universal primary education to Vietnamese children.

In the last few years, the slowdown in FDI and grow rates (compared with those in the early 1990s), together with rapid regional integration, have focused the attention of both the public and policy makers on education as a process of human capital development. The catchy phrase 'socialization of education' has become increasingly used in public, despite its unclear meaning. Market privatization and international integration have revealed many weaknesses and challenges facing the Vietnamese education sector. Some of the broad issues and potential solutions will now be briefly mentioned.

It is clear that there is an excess demand for education, particularly at the post-secondary level. Since public funding is insufficient to satisfy public demand, the government should establish a more viable framework to encourage the role of the private sector (including foreign investors), especially not-for-profit organizations, in education, particularly at the tertiary level. This would allow the government to devote more of its limited resources to providing 'freer' education to primary students. A desirable associated development would be income tax reform aimed at collecting more taxes from high-income households. This would not only increase the amount of resources available for public education, but also minimize the effect of the implicit bias in education which favours higher-income families.

In terms of outcomes, the education sector should aim at producing graduates who can easily adapt and respond to a rapidly changing society. Unlike the previous generation of graduates who mainly served in public institutions, the new generation of graduates must possess a range of technical skills to work effectively in the public sector as well as the private sector. It is important to ensure that outcomes of the education system are broadly compatible with the demand for skilled and unskilled labour of the economy. But graduates need to possess more than just up-to-date technical knowledge and skills. The education system should also aim to nurture a new generation of entrepreneurs, the agents of change, who will contribute to Vietnam's market economy through a process of destructive creation. This calls for radical changes in teaching methods as well as learning culture.

To summarize, the challenges facing Vietnam's education sector are massive and urgent. Better outcomes in this sector can only be achieved through the leadership's determination and the public's sacrifice.

WATCHPOINT: How the government reacts to the current calls from educational experts for changes will shape the direction of education reform in Vietnam for the rest of this decade. - Associate Professor Binh Tran-Nam, Australian Taxation Studies Program, University of New South Wales.

The Chinese Challenge by Paul Krugman, The New York Times, June 28, 2005

KrugmanPRINCETON, New Jersey Fifteen years ago, when Japanese companies were busily buying up chunks of corporate America, I was one of those urging Americans not to panic. You might therefore expect me to offer similar soothing words now that the Chinese are doing the same thing. But the Chinese challenge - highlighted by the bids for Maytag and Unocal - looks a lot more serious than the Japanese challenge ever did.

There's nothing shocking per se about the fact that Chinese buyers are now seeking control over some American companies. After all, there's no natural law that says Americans will always be in charge. Power usually ends up in the hands of those who hold the purse strings. America, which imports far more than it exports, has been living for years on borrowed funds, and lately China has been buying many of our IOUs.

Until now, the Chinese have mainly invested in U.S. government bonds. But bonds yield neither a high rate of return nor control over how the money is spent. The only reason for China to acquire lots of U.S. bonds is for protection against currency speculators - and at this point China's reserves of dollars are so large that a speculative attack on the dollar looks far more likely than a speculative attack on the yuan.

So it was predictable that, sooner or later, the Chinese would stop buying so many dollar bonds. Either they would stop buying American IOUs altogether, causing a plunge in the dollar, or they would stop being satisfied with the role of passive financiers and demand the power that comes with ownership. And we should be relieved that at least for now the Chinese aren't dumping their dollars; they're using them to buy American companies.

Yet there are two reasons why Chinese investment in America seems different from Japanese investment 15 years ago.

One difference is that, judging from early indications, the Chinese won't squander their money as badly as the Japanese did.

The Japanese, back in the day, tended to go for prestige investments - Rockefeller Center, movie studios - that transferred lots of money to the American sellers, but never generated much return for the buyers. The result was, in effect, a subsidy to the United States.

The Chinese seem shrewder than that. Although Maytag is a piece of American business history, it isn't a prestige buy for Haier, the Chinese appliance manufacturer. Instead, it's a reasonable way to acquire a brand name and a distribution network to serve Haier's growing manufacturing capability.

That doesn't mean that America will lose from the deal. Maytag's stockholders will gain, and the company will probably shed fewer American workers under Chinese ownership than it would have otherwise. Still, the deal won't be as one-sided as the deals with the Japanese often were.

The more important difference from Japan's investment is that China, unlike Japan, really does seem to be emerging as America's strategic rival and a competitor for scarce resources - which makes last week's other big Chinese offer more than just a business proposition.

The China National Offshore Oil Corp., a company that is 70 percent owned by the Chinese government, is seeking to acquire control of Unocal, an energy company with global reach. In particular, Unocal has a history - oddly ignored in much reporting on the Chinese offer - of doing business with problematic regimes in difficult places, including the Burmese junta and the Taliban. One indication of Unocal's reach: Zalmay Khalilzad, who was U.S. ambassador to Afghanistan for 18 months and was just confirmed as ambassador to Iraq, was a Unocal consultant.

Unocal sounds, in other words, like exactly the kind of company the Chinese government might want to control if it envisions a sort of "great game" in which major economic powers scramble for access to far-flung oil and natural gas reserves. (Buying a company is a lot cheaper, in lives and money, than invading an oil-producing country.) So the Unocal story gains extra resonance from the latest surge in oil prices.

If it were up to me, I'd block the Chinese bid for Unocal. But it would be a lot easier to take that position if the United States weren't so dependent on China right now, not just to buy its IOUs, but to help America deal with North Korea now that the U.S. military is bogged down in Iraq.


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