Busy week for me. Only time for a few short hits for today.

John Tkacik has a nifty piece in the Taipei Times that points out that the Chinese construction of the Senkakus as sacred national territory is of very recent vintage:

Japan first claimed the Senkakus in January 1895 after decades of shipwrecks and near disasters had convinced Tokyo that lighthouses needed to be erected there. The claim on the Senkakus, as such, had nothing to do with Japan’s colonial occupation of Taiwan as part of the settlement of the Sino-Japanese War that same year.

At the turn of the last century, President Ma Ying-jeou (馬英九) said, a Japanese businessman named Koga found that the main Senkaku Island held a fresh-water spring that could sustain about 200 people. He then brought workers, food and supplies to the main Senkaku Islands and built houses, reservoirs, docks, warehouses, sewers and farms for tuna fishing and canning. The tuna cannery business continued until World War II.

Clearly, for the purposes of international law, the Senkaku chain qualifies as “islands” because they are capable of “sustaining human habitation.”

This is important because under the UN Convention on the Law of the Sea — to which both China and Japan are parties — an “island” brings to its owner a 200 nautical mile (370km) “exclusive economic zone” and sovereign claim to the resources and seabed minerals therein.

On May 15, 1972, after 25 years of military occupation, the US relinquished to Japan “all rights and interests” over the Okinawa territories, the State Department said, “including the Senkaku Islands, which we had been administering under Article of the Treaty.”

Prior to 1969, neither Beijing nor Taipei indicated any desire for the Senkaku Islands. Maps printed in Taiwan before 1969 either failed to depict them entirely, failed to name them or included boundary delineations to the west of the islands (inferring they were in Japanese waters).

In my collection of maps, I have a facsimile of plate 18 of the Zhonghua Renmin Gongheguo Fen Sheng Ditu (People’s Republic of China Provincial Map) of “Fujian Province, Taiwan Province” published in mimi (confidential) form by the Zhonghua Renmin Gongheguo Guojia Cehui Zongju (Headquarters, National Surveillance Bureau), Beijing, 1969, which identified the Senkaku Islands as the “Jiange Qundao” — using the Chinese characters for the Japanese name “Senkaku Island Group” — rather than the Chinese name “Diaoyu.”

A People’s Daily commentary of June 1953, which called on the people of Okinawa to resist the US imperialists occupying their homelands, enumerated the “Jiange” (Senkaku) islands as part of the Ryukyu chain, clear evidence that the Beijing government considered the islands part of Japan even in the heat of the Korean War.

Prior to 1968, no one in either Taipei or Beijing knew of any particular benefit in owning the Senkaku Islands. In 1968, however, geologists K.O. Emery and Hiroshi Niino, writing for the UN Economic Commission for Asia and the Far East (UNECAFE), noted that “a high probability exists that the continental shelf between Taiwan and Japan may be one of the most prolific oil reservoirs in the world.”

…and yet there are people who deny that China is expansionist.

Little flap this week…first Kaohsiung, headed by DPP Mayor Chen Chu, was left off the list of cities getting direct charter flights. Then….it was back on again later in the week. DPP local officials have been complaining that the infrastructure spending has been directed away from their localities.

The Central Bank raised interest rates slightly today.

The central bank toughened its monetary policy yesterday, hiking its benchmark interest rate by 0.125 percentage points and ordering lenders to put aside more saving reserves in an attempt to curb inflation stoked by surging fuel, food and raw material prices.

When interest rates rise, borrowing falls. When people stop asking for credit, they stop buying new stuff like cars, land, and factories. Economic activity then slows.

Further, as interest rates rise, foreigners want to put their money into Taiwan to cash in on the higher rates. Those investors buy NT dollars, driving up the value of the NT dollar as demand rises. When the NT dollar goes up, exports fall because they are more expensive for outsiders.

The Central Bank also made Taiwan banks hold more money in their reserves. This means they take cash out of the economy. Money is a commodity like any other — if there is less of it in the economy, the price will go up. What is the price of money? The interest rate…

Of course, it is very likely this will affect the stock market. Not positively.

Simply put, rising interest rates mean a slowing economy. Not good for Mr. Ma. Even Taiwan’s majority-Blue media can’t keep that under wraps forever. Wonder what new three-day wonder scandal will overwhelm the media next?