Full Spectrum Economic War has replaced Trade War

May 21, 2019

by Chris Faure for The Saker Blog

Full Spectrum Economic War has replaced Trade War

The Trading Community

I grew up in the dark continent on farms, where, in the local trading town, my parents owned the meat businesses, the Jews owned the general store, the Indians owned the fabric store and sold shoes and pointy bras.  My mom owned the fashion store and hairdresser. Of course, there was the mechanic who fixed cars and tractors and big harvesting machinery and the movie house where I saw the first opera when the traveling opera came to town and fell in love. Of course, there was the school, the doctor and the pharmacist and a Church or three. We also had the Portuguese Cafe, where we could buy chocolates and candies and bread and milk and fresh English fish and chips. The joint clientele of this trading community was the forestry workers, the mine workers and the farmers of the area. It was a well-off little community with a large forestry industry and gold mining.

While we told the most offensive jokes about the Jews and the Indians and the Portuguese, and to be sure they must have told the nastiest jokes about us European style white ones, we all equally hated the Colonizing English rulers and together told dirty jokes about them while all the kids happily went to school together and played together.

This little farming town was bound together by its trading class.

When the trade started to fracture with bigger food stores and chain mechanics, the town fractured, and where our main street was with the trading class, now there are only a bunch of Korean stores, selling stuff that only Korean folks buy, to Korean folks.

The Power of Trade

This is the power of trade, it can bind people together, or it can fracture communities and whole countries. The Chinese know this, hence BRI has no structure for war, only for trade.

We look with dismay at the geopolitical situation, and it is clear that something has to give as the U.S. clearly cannot hold on all the fronts they have opened.  Mr. Trump may end up having to choose his favorite war, the one where he feels comfortable, and he does not have to see or count dead bodies and spectacular explosions, but he can hide the results of the Silent Economic war from his own eyes while standing on the China Bad plank as his 2020 mission to win the election.

Tom Luongo says: “At this point, Trump is fighting a war with everyone not named Israel and Saudi Arabia.

Just like our little town, this economic war will fracture farming communities, trading communities, and countries. As we have seen in India, we are beginning to get similar notices of desperation suicides of farmers in the U.S.

Silent Killer

An economic war is a Silent Killer. It will create conditions for the US to become Gulag America deeply into cultural schizophrenia to avoid all of their so-called enemies, and for China to take the lead as biggest trader in the world today while the U.S. is off fighting their own internal windmills.

The ‘Understandings’

It seems as if Steve Bannon (after his successful trip to change Brazil into a neocon enclave and start similar initiatives colored with racism and shades of white supremacist, in Europe), has been called back to run this Economic War. He began with an Op-Ed in the Washington Post. While WaPo is not my regular reading, this one spells out the 6 ‘understandings’ that the U.S. should have about this Economic War.

https://www.washingtonpost.com/opinions/steve-bannon-were-in-an-economic-war-with-china-its-futile-to-compromise/2019/05/06/0055af36-7014-11e9-9eb4-0828f5389013_story.html?utm_term=.e13839eda6b1

It makes interesting reading to read the understandings in full. The 6 understandings are in short, and my comments are on the right hand side.  (Please read the full set of ‘understandings’ at the link.)

The first understanding: The CCP has been waging economic war against industrial democracies ever since China joined the World Trade Organization (WTO) in 2001, and now China has emerged as the greatest economic and national security threat the United States has ever faced. Note: Direct aim at the CCP (Chinese Communist Party) – Steve is fighting communism and it is the same old story … Those warmongering ChiComs are coming to get us!
The second understanding: The trade deal under negotiation this month is not a deal between two similar systems seeking closer ties, as its cheerleaders on Wall Street and in the media and academia argue. Rather, this is a fundamental clash between two radically different economic models. And of course, if you read the full second understanding, the Chinese economic model is terrible, putrid and simply wrong and those enlightened Westerners have the best method and are morally oh so superior.
The third understanding: Chinese state capitalism is highly profitable for its owners — the members of the CCP. Stagnant state-owned enterprises gain a competitive edge through massive government subsidies, and the cost savings won by stealing the intellectual property, technology, and innovations of foreigners. Chinese State Capitalism he says – The State should not own anything, he says. But, if you take a look at what is happening right now with Google and Western Technology companies, they are ‘joined at the hip’ with The State in the West and they have all joined the have all joined the economic war (See below).  Jump for Trump and the Western technologists say How High.
The fourth understanding: Certain Trump advisers inside and outside the White House are playing on the president’s well-earned pride in a rising stock market and a fear he might lose the Farm Belt to try to box him into a weak deal. But it is a decidedly false narrative that any failure to reach a deal will lead to a market meltdown and economic implosion. Now Steve takes a turn at protecting Mr. Trump for the 2020 election. In reality, the farm belt is up in arms and really upset that Mr. Trump calls them Patriots, while he is destroying their livelihoods. Farmer’s bailouts only manage to extend the agony of the farm belt.
The fifth understanding: Even the toughest agreement needs effective monitoring, which is difficult even with accommodating partners and perhaps impossible with China. The danger is for the president to sign what appears to be a reasonable deal and find out several years later that the United States was hoodwinked. And, if the Chinese boogieman does not get you now, it might just do so in the future.  One just cannot trust these yellow hordes, according to Bannon.
The sixth understanding: The world now bears witness to a rapidly militarizing totalitarian state imprisoning millions in work camps; persecuting Uighurs, Christians and Buddhists; and spying on, and enslaving, its own population. And this is so trite that it is funny. China is persecuting its own people. Have we not heard this drumbeat before?

And here comes the cherry on the Bannon cake of ‘understanding’: “The central issues that must be faced are China’s intentions on the world stage and what those ambitions mean for U.S. prosperity. With our country at a crossroads, it is more important than ever that Trump follows his instincts and not soften his stance against the greatest existential threat ever faced by the United States.

Just then they came in sight of thirty or forty windmills that rise from that plain. And no sooner did Don Quixote see them that he said to his squire, “Fortune is guiding our affairs better than we ourselves could have wished. Do you see over yonder, friend Sancho, thirty or forty hulking giants? I intend to do battle with them and slay them. With their spoils we shall begin to be rich for this is a righteous war and the removal of so foul a brood from off the face of the earth is a service God will bless.””What giants?” asked Sancho Panza.”Those you see over there,” replied his master, “with their long arms. Some of them have arms well nigh two leagues in length.””Take care, sir,” cried Sancho. “Those over there are not giants but windmills. Those things that seem to be their arms are sails which, when they are whirled around by the wind, turn the millstone.” Cervantes’ Don Quixote

Now Bannon is on the media trip to tilt at these windmills and stop the world’s millstones from turning.

https://www.youtube.com/watch?v=oYraLI04WiU

Who is posing the existential threats? “Us” Versus “Them”

So now China is an existential threat to the United States. Does this not sound like creating the basis for war talk to you? What of this is different from the Russia derangement? It is just the same old story, the same old positioning of creating enemies, using different words. Civilizational differences are now weaponized by those who we can argue do not have a civilizational history of any great import.  Hamburgers, Hotdogs, Disney, Madonna and Barbie Dolls do not a civilization make.

So, while the U.S. demanded structural reforms from China during the Trade War, and China absolutely refused, at the end of last week, Trump took aim at big Chinese businesses, placing them on lists where trade becomes almost impossible and creating an Economic War.   Huawei and ZTE Corp are easily recognized here. The U.S. Department of Commerce announced that Chinese technology giant Huawei and 70 of its affiliated companies would be included in an “entity list” of export controls, prohibiting Huawei from buying technology or parts from U.S. companies. Today we see that Google, Intel,, and a raft of other Western technology companies are joining this economic war to kill a Chinese enterprise and all who work for it. And they call it righteous.

https://www.bloomberg.com/news/articles/2019-05-19/google-to-end-some-huawei-business-ties-after-trump-crackdown

As is usual in the “Us” Versus “Them” U.S. methodology, we can always wait for the backtracking after the insulting war talk. Early yesterday morning the penny dropped for U.S. companies using Huawei technology, and they had to quickly ask for a reprieve from the U.S. Commerce Department because somewhere they use Huawei equipment. A 90-day reprieve for certain U.S. broadband companies and wireless customers was granted to figure out plan B.  (Spoiler alert – there isn’t a plan B).   Your broadband possibly runs on Huawei equipment and let me explain how close this economic war is to you and me.

From the White House into My House

A few months ago, I had to buy a new smartphone and eventually settled on a sweet little Huawei, reasonable on price and the most intuitive smartphone ever. I got to like this phone. This morning, I hear that Google decided not to extend usage licenses to Huawei for the Android operating system.

So, now Mr. Trump’s economic war is causing havoc directly with my phone – This is not the kind of fight that will leave you or me untouched.

Future Huawei phones, which run Google’s Android operating system, are set to lose access to updates to some Google apps, including YouTube and Maps, but don’t worry, but the existing devices will be safe.

Soft Pressure

Also, the soft pressure on China is increasing. China is being interfered with in terms of oil imports (Iran, Venezuela) and the South China Sea issues which China is busy negotiating with their neighbors are continually being interfered with by U.S. aircraft carriers or some level of task force of some or other kind making passage to test ‘freedom of navigation.’ And in the U.S., not to be left behind, the U.S. Department of Homeland Security issued a warning on Monday that Chinese-made commercial drones may be sending sensitive flight data to China. Nearly 80% of the drones used in the U.S. and Canada come from DJI, a Chinese commercial drone manufacturer and these drones are widely used by farmers, law enforcement and any child that has a play drone.

Vietnam is the place about 20 years behind China in terms of wages and level of development. It is beginning to hop with manufacturing facilities moving there, to avoid trade tariffs. These businesses are still in Chinese hands. It won’t be long though, and these businesses may as well save their money as this is an Economic War that will not leave any place undisturbed.

Take a look at those winning trade deals

Can this man negotiate a trade deal?  Or is he trying to lead a country with ‘off the cuff’ decisions?

Donald J. Trump‏Verified account @realDonaldTrump

“Starting Monday, our great Farmers can begin doing business again with Mexico and Canada. They have both taken the tariff penalties off of your great agricultural product. Please be sure that you are treated fairly. Any complaints should immediately go to @SecretarySonny Perdue! 7:29 PM – 19 May 2019″

Aha, it looks like progress, yes? What is not mentioned is that tariffs on Mexican and Canadian steel and Aluminum were dropped, and in a reciprocal action, Mexico and Canada lifted tariffs on the agricultural products. So, that great trade deal that Trump negotiated with Mexico and Canada is back to where it was, and it is no reprieve. There is only some normalization.

“But now Canada and Mexico will get a reprieve, as the U.S. has reached a deal to lift tariffs on steel and Aluminum coming from those two countries. This eliminates a huge hurdle to the ratification of the United States-Mexico-Canada Agreement (USMCA), the revised version of NAFTA.”

https://www.vox.com/2019/5/17/18629556/trump-steel-aluminum-tariffs-canada-mexico-usmca

Fuggetaboutit

We still ask ourselves the same question. What is it going to take for the U.S. to make their appropriate place in a multi-polar world because they will not be allowed to be a single hegemonic power player any longer.  There is no doubt about this.  Consider Dmitry Orlov’s long list of things that the US can no longer get done.  (Color revolutions, false flag attacks, troop pullouts, trade wars.  The one thing they can still get done is causing humanitarian disasters).

Do you understand now that the U.S. in its current incarnation is not agreement capable as is the official stance of Russia, and China will not make a deal with them, but China will keep talking. The fear now is that China will prohibit any rare earth metal sales to the U.S. in a tit for tat action. Huawei will smile.

Think about all these issues through the prism of how the U.S. is trying to maintain it’s global hegemony. The Russia derangement is cooling down, and the China derangement has taken over the airwaves with the full U.S. Administration and the media in lockstep. Can we now say Russia won? A few days ago it was Russia Bad full-on coverage, and today it is China Bad full-on coverage.

There is nothing new here, excepting a welcome groundswell of resistance opposition in the strangest of places. In Latin America, there is a type of an eBay online store called Mercado Libre. To my great surprise, most products on there, seemingly overnight, changed to “imported directly from China” with free shipping and better prices.  I can pay in local currency and seamlessly the U.S. Dollar is not included in this buy or sell.

Mr. Trump can fuggetaboutit and, don’t mess with my phone!

Chinese Readiness

This economic war is a story that can also be told in headlines alone:

Top U.S. economist warns against American demonization of China – Jeffrey Sachs

http://www.globaltimes.cn/content/1150057.shtml

On Hostile Coexistence with China – Chas Freeman

https://chasfreeman.net/on-hostile-coexistence-with-china/

‘If trade stops, war starts,’ Alibaba founder – Jack Ma

https://www.rt.com/business/376431-jack-ma-trade-war-globalisation/

Chinese T.V. Station Pulls US-Made Films, Runs Classic Anti-US War Flicks Instead

https://sputniknews.com/asia/201905201075174494-Chinese-TV-Station-Pulls-US-Films-Runs-War-Flicks

I hear through the economic grapevine that there is now a popular and modern opposition song in China against the U.S. and economic war. I understand this is a war song. China and her people are ready for whatever shape or form this war will take, and Mr. Trump inadvertently unleashed the dragon, which may just spit fire and roast the U.S. first. Its time to go on record and say that my own expectation is that the Empire will fail in their objectives for this economic war, but much damage will be caused as the U.S. now is only able to cause damage.  It will in fact be impossible to find ‘the winner’.  How will a winner be defined and by who?  The Chinese ‘understanding’ is not only absolutely correct, but is the only ‘understanding’ worth knowing.  This ‘understanding’ is : There are no winners in an economic war, only horrendous costs for humanity.

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‘Clash of civilizations’ or crisis of civilization?

May 20, 2019

by Pepe Escobar : posted with permission

‘Clash of civilizations’ or crisis of civilization?

Talk about a graphic display of soft power: Beijing this week hosted the Conference on Dialogue of Asian Civilizations. 

Organized under the direct supervision of President Xi Jinping it took place amid an “Asian Culture Carnival.”  Sure, there were dubious, kitschy and syrupy overtones, but what really mattered was what Xi himself had to say to China and all of Asia.

In his keynote speech, the Chinese leader essentially stressed that one civilization forcing itself upon another is “foolish” and “disastrous.” In Xi’s concept of a dialogue of civilizations, he referred to the New Silk Roads, or Belt and Road Initiative (BRI), as programs that “have expanded the channels for communication exchanges.”

Xi’s composure and rationality present a stark, contrasting message to US President Donald Trump’s “Make America Great Again” campaign.

West vs East and South

Compare and contrast Xi’s comments with what happened at a security forum in Washington just over two weeks earlier. Then, a bureaucrat by the name of Kiron Skinner, the State Department’s policy planning director, characterized US-China rivalry as a “clash of civilizations,” and “a fight with a really different civilization and ideology the US hasn’t had before.”

And it got worse. This civilization was “not Caucasian” – a not so subtle 21st century resurrection of the “Yellow Peril.” (Let us recall: The “not Caucasian” Japan of World War II was the original “Yellow Peril.”) 

Divide and rule, spiced with racism, accounts for the toxic mix that has been embedded in the hegemonic US  narrative for decades now. The mix harks back to Samuel Huntington’s The Clash of Civilizations and the Remaking of World Order, published in 1996.

Huntington’s pseudo-theory, coming from someone who did not know much about the multi-polar complexity of Asia, not to mention African and South American cultures, was mercilessly debunked across vast swathes of the global South.  In fact, Huntington did not even come up with the original, flawed concept. That was the work of Anglo-American historian and commentator Bernard Lewis, who passes for a Middle East guru in the US.

Divide, rule, conquer

As Alastair Crooke, the founder of the Conflicts Forum, has outlinedLewis consistently preached divide and rule, tinged with racism, in Islamic states. He was a fervent proponent of regime change in Iran and his recipe for dealing with Arabs was “to hit them between the eyes with a big stick” because, in his world view, the only thing they respect is power.

Crooke reminds us that since the 1960s, Lewis has been a master at spotting vulnerabilities in “religious, class and ethnic differences as the means to bring an end to Middle Eastern states.” Lewis is a hero across a certain spectrum – a spectrum that includes former US Vice President Dick Cheney and US Secretary of State Mike Pompeo.

Now, we live in the era of “Lewis redux.” Given that the Islamic world is  largely subdued, in torpor or in turmoil, the clash of civilizations basically applies, on a downsized scale, to containing or destroying Shi’ite Iran.

Meanwhile the real clash – as the State Department insists – is with China.

Huntington, the sub-Lewis, did not include Russia among “The West.” The revisionist State Department does. Otherwise how could “Nixon in reverse”be justified? (“Nixon in reverse,” let us remember, is the Kissingerian recommendation to President Donald Trump: Apply divide and rule between Russia and China – but this time seducing Russia.)

A revisionist Pentagon also came up with the “Indo-Pacific” concept. The only justification for the amalgam is that these two zones should conduct a foreign policy subjected to American hegemony.

The logic is always divide and rule and clash of civilizations – divisions provoking chaos all across Eurasia. 

But this strategy is being applied against the background of a crucial historical juncture: The era when BRI is being configured as the road map for progressive Eurasian integration.

Quo vadis, humanity?

It’s not hard to detect the faintest of smiles on the faces of Chinese strategists as they survey “The Big Picture” from the vantage point of 5,000 years of civilization. The Christian West as the unique road map to deliver humanity from evil – in fact, the foundation of Pax Americana – is regarded as an amusing fiction at best.

That fiction is now looking downright dangerous, wallowing in exceptionalism and demonization of “The Other” in myriad forms. The Other – from the Islamic Republic of Iran to atheist China, not to mention “autocratic” Russia – automatically qualifies as a manifestation of “evil.”

China, by contrast, is polytheist, pluralist, multi-polar – embracing Confucianism, Buddhism, Taoism. That is mirrored by the current drive towards a multi-polar world-system. What matters is unity in multiplicity – as Xi stressed in his keynote speech. In it, we find China and Persia, two ancient civilizations – not by accident linked by the Ancient Silk Road – thinking alike.

Then there’s the appalling state of the planet, which dwarfs the current appalling spectacle of political madness. UCLA geographer and global best-selling author Jared Diamond is not being terribly precise, but he estimates there’s a 49% chance “that the world as we know it will collapse by about 2050.”

As encapsulated by author Nafeez Ahmad: “Over the last 500 years or so, humanity has erected an ‘endless growth’ civilization premised on a particular patchwork of ideological worldviews, ethical values, political and economic structures, and personal behaviors. This is a paradigm that elevates the vision of human beings as disconnected, atomistic, competing material units, which seek to maximize their own material consumption as the principal mechanism for self-gratification.”

What we’re living now is not a clash of civilizations; it’s a crisis of civilization.

If the paradigm under which most of humanity barely survives is not changed – and there’s precious little evidence it will – there won’t be any civilizations left to clash.

We’re all actors in the New Silk Road play

May 05, 2019

By Pepe Escobar – posted with permission

We’re all actors in the New Silk Road play

Scores of nations across the Global South have adopted the Chinese development model over financing from the US or EU for very simple reasons

It’s the same old story: The dogs of demonization bark while the New Silk Road caravan advances. The Belt and Road Initiative (BRI), according to a projection by Anglo-Australian mining and metals giant BHP Billiton, will generate as much as US$1.3 trillion in myriad projects up to 2023 – only a decade after its official launch by Chinese President Xi Jinping in both Astana (now Nur-Sultan) and Jakarta.

It’s easy to forget that the BRI – a massive connectivity project, both geo-strategic and geo-economic, now in effect all across the Eurasian landmass, as well as straddling the South China Sea, plus the Indian Ocean all the way to East Africa – is less than six years old, and projected to last until 2049.

As I previously reported, the BRI is now configured as the authentic International Community 2.0 – much more representative than the Group of Twenty, not to mention the Group of Eight. Even before the start of the Belt and Road Forum in Beijing last week, 126 states and territories had signed BRI cooperation agreements. After the forum there are 131, plus Switzerland soon to join. The BRI is also engaged with no fewer than 29 international organizations, including the World Bank.

Considering only projects already being implemented, the World Bank estimates that BRI nations have reduced shipping times by up to 3.2%, and trade costs by up to 2.8%.

The BRI forum’s key takeaway was Beijing’s ability to execute a masterful geopolitical Sun Tzu maneuver – realizing that for the scheme to proceed more smoothly it would have to address key questions about debt sustainability, anti-corruption, consultative processes, plus emphasize “bottom-up” negotiations.

Scores of nations across the Global South, as well as some aspiring to developed world status, have adopted the Chinese investment and development model over financing from Washington or Brussels for three very simple reasons: no strings attached, no one-size-fits-all straitjacket, and no interference in their internal affairs.

That’s the case in BRI projects focused on the group of China plus Central and European nations, now called 17+1 (Greece just joined). The BRI has been on a roll implementing the China-Europe Land-Sea Express Line, from Athens to Hamburg via Skopje and Belgrade – with a branch out to the Mediterranean port of Bar in Montenegro, just across from Italy – and then to Budapest, the ultimate crossroads in Eastern Europe, and all the way north via the Czech Republic to Hamburg.

Additionally, the Land-Sea Express Line will connect to the Pan-European Corridor linking Bari, Bar, Belgrade and Timisoara in Romania.

Three silk roads stretching from China to Southeast Asia Europe and Africa, Jan 2017.
New Silk Roads stretch from China to Europe, Southeast Asia and Africa. Image: CFR

ASEAN goes BRI

The Association of Southeast Asian Nations is arguably the crucial front to ensure the BRI’s further success – side by side with the China-Pakistan Economic Corridor (CPEC). And all 10 ASEAN leaders attended the BRI forum.

Beijing’s strategic outlook involves the positioning of Thailand as ASEAN’s key transportation hub. Thus it needs to complete the $12 billion, multi-phase, 873-kilometer high-speed rail line linking central and northeastern Thailand to the rail line being built from Kunming to Vientiane, which is due to be completed in 2021.

This is the flagship project of the BRI’s China-Indochina Peninsula Economic Corridor, connecting southern China with mainland Southeast Asia all the way to Singapore.

At the recent BRI forum, China, Thailand and Laos signed a memorandum of understanding on building the stretch between Nong Khai and Vientiane. Now comes the hard slog of renegotiating the terms for building the 607km stretch from Bangkok to Nong Khai, on the Thai side of the Mekong.

Malaysia managed to renegotiate the budget and route of its Eastern Coast Rail Link. Plus, China and Myanmar are renegotiating the $3.6 billion Myitsone Dam project.

At least nine of no fewer than 23 projects, part of the China-Myanmar Economic Corridor, are rolling – including a special economic zone (SEZ) in Kyauk Phyu in the west, the Kyauk Phyu-Kunming railway and three border cooperation zones in Kachin and Shan states. Myanmar is absolutely key for China to enjoy strategic access to the Indian Ocean.

Elsewhere in maritime Southeast Asia, the $6 billion, 150km Jakarta-Bandung high-speed rail is a goer, despite facing accusations of non-transparency by Indonesia’s Investment Coordination Board. Still, the Joko Widowo administration’s second term is bound to be involved in no less than $91 billion worth of BRI-related projects to develop four different economic corridors.

One thing is common to these multiple BRI negotiation fronts – the Lost in Translation syndrome. Imagine terms and contracts mired in a maze of cross-references and a trilingual swamp (Mandarin, English and then Thai, Lao, Indonesian, etc).

Not to mention the clash between local red tape and the ultra-streamlined Chinese infrastructure-building juggernaut – perfected to the millimeter for the past few decades.

Still, Beijing is learning the key lessons, admitting it’s essential to renegotiate key terms, amend deals, pay close attention to local input, and, essentially, allow more transparency.

Chinese contractors must employ more local workers, encourage technology transfer, and be very aware of negative environmental impacts. There are suggestions that an overseas BRI arbitration court – for instance in neutral Geneva – could be set up in addition to BRI courts in Shenzhen and Xian, in the interests of more transparency.

 

All aboard for a Silk Road journey. Photo: Pepe Escobar

Hop on a camel and join the band

Wang Huiyao, founder of the Center for China and Globalization think-tank in Beijing, correctly argues that the BRI “has become a plan for global development – the kind the world has been sorely lacking since the financial crisis of 2008.”

That was certainly the intent even during the long gestation period before the birth of the BRI in 2013. The Chinese system works like this. The top of the pyramid issues a guideline, or a plan, and then the subsequent layers of the pyramid come up with their own implementation strategies, tweaking the process non-stop. It’s always a variant of Little Helmsman Deng Xiaoping’s famous dictum “crossing the river while feeling the stones.”

As it stands, there’s no evidence the US government will be engaged with the BRI, not to mention “try to shape it to bring about a more multipolar Asia,” as my friend Parag Khanna argues. The BRI itself – along with other mechanisms such as the Eurasian Economic Union – is already configuring a multipolar Asia. And no one across Eurasia – apart from Hindutva fanatics and Japanese supremacists – is buying the Pentagon narrative of China as an existential threat.

It’s quite enlightening to pay attention to the words of former Hong Kong governor Tung Chee-hwa, who seems to display more wisdom in his 80s now, as chairman of the Chinese Consultative People’s Congress, than when he was lodged in Government House.

And then we could travel in time to the Ancient Silk Road – which as a trade and cultural exchange network between East and West was a de facto prototype of globalization.

We’ll find out that among the non-stop Ancient Silk Road travelers – and merchants, messengers, pilgrims – there was also a motley crew of jugglers, acrobats, musicians, dancers and actors. Centuries later, history strikes again, and we are all actors now in a massive, global development caravan.

China and Russia: Whoopin’ Uncle Sam at His Own Game

 • MAY 2, 2019

Your Geopolitical Quiz for the Day:

2nd Belt and Road Forum – An Informational

April 30, 2019

Chris Faure for The Saker Blog

President Xi Jinping announced The Belt and Road initiative or ‘the new Silk Road,’ six years ago during a state visit to Kazakhstan. The idea is to establish and maintain trade corridors between more than 60 countries in Central Asia, Europe, and Africa. The design is inspired by the legacy of the historical Silk Road that connected the East and the West for centuries. Some of the objectives are unimpeded trade, financial integration and people-to-people bonds. The 2nd Belt and Road Forum came to completion Saturday, April 27th in Beijing, and while 60 countries initially were envisaged, even Mexico has now announced its interest with much activity around Belt and Road in South America as well.  This initiative is growing.

Politicians and entrepreneurs from 150 nations attended the second Belt and Road forum.  This is 3/4 of the world.  President Putin took part in the event, addressed the delegates, held a meeting with President Xi Jinping as well as a series of bilateral sideline meetings. China’s elite Tsinghua University awarded him with an honorary doctorate.

Mr. Putin’s presser at the end of the forum again confirmed:

  • China is merely putting stability into place.
  • Russia and China are closely aligned strategic partners.
  • China has to strengthen the principles of international trade and create conditions for growth in their interests. China should develop transport infrastructure, aviation, ports, railroads, trucks, roads, but this is not enough.
  • And here it becomes interesting because Mr. Putin stops talking about China and starts talking about what became clear in this process to Russia and this was it! “We need to strengthen the fundamentals of international trade, international cooperation.”  “Russia wants to use its potential in full, and China does this in a very civilized manner. (I love the word civilized in this context!)
  • “I think this prospect, this initiative has an excellent outlook.”
  • He goes on to say that ‘almost all the countries are interested in this’ and ‘nobody wants to see trade wars except possibly for the countries that initiate such processes’.

https://www.youtube.com/watch?v=vUGj5eTsPUk

Mr. Putin arrived at this 2nd Belt and Road Forum straight from his meeting with Kim Jong Un from North Korea where he stated that there are no secrets. North Korea is looking for security assurances, and a group of countries needs to be drawn together to give them this, to advance de-nuclearization of the Korean Peninsula.

Mr. Xi JinPing addressed the leader’s round table of the Belt and Road forum and outlined the progress from the first forum. He says BRI should be “Open, Green and Clean.” By this, he means open to whoever in the world wants to participate, green in technology and clean in terms of bribery and corruption.

https://www.youtube.com/watch?v=ye4-M_WPDws

Xi JinPing made it very clear that the relationship between China and Russia is epitomized by:

  • the highest degree of mutual trust,
  • the highest level of coordination and,
  • the highest strategic value since the two countries established diplomatic ties 70 years ago.

But besides all the positive language, what actually happened at this 2nd Belt and Road forum?

Let’s first take a look at the name. Belt and Road Forum for International Development. China holds that BRI is not a geopolitical extension or projection of power, but rather a methodology that can lift all boats, or The Sun Shines Over Everyone.

No less than 283 concrete results in six categories were announced as deliverables of this 2nd Belt and Road Forum. Note how this is stated, as deliverables, and not as plans, or objectives or as vague promises for the future. These deliverables are indeed a juggernaut of world development.

Have we ever seen such a size of hopeful international development in our lifetimes? I think not.

Let us look at just 3 of those 283 concrete deliverables:

From the Category of Investment Projects and Project Lists:

8.The Silk Road Fund of China established co-investment platforms with the International Company for Water and Power Projects of Saudi Arabia, the Three Gorges Corporation and the International Finance Corporation of China and the General Electric of the United States. The Silk Road Fund is establishing a co-investment platform with the Surbana Jurong Private Limited of Singapore.

I count impacts in at least four countries.

From the Category of Financing Projects:

3.The Export-Import Bank of China signed loan agreements on road projects with the Ministry of Finance of Serbia, the Ministry of Economy and Finance of Cambodia and the KazAvtoZhol of Kazakhstan respectively, on bridge rail link and pipeline projects with the Ministry of Finance of Bangladesh, on photovoltaic and hydroelectric power plant projects with the Ministry of Finance of Argentina and the Ministry of Economy and Finance of the Republic of Guinea respectively, on steel plant project with the Ministry of Development Planning of Bolivia, on railway projects with the Ministry of Transport of Egypt and the Federal Ministry of Finance of Nigeria respectively, and signed working capital facility agreements with the AL Khalij Commercial Bank of Qatar and the Global Bank Corporation of Panama.

I count impacts in at least 11 countries.

From the Category of Projects by Local Authorities and Enterprises:

Local authorities and enterprises built the China-Serbia Friendship Industrial Park in Serbia; developed Industry and Sci-tech Cooperation Project of China-UAE Industrial Capacity Cooperation Demonstration Zone; developed Cambodian Sihanoukville Special Economic Zone industry upgrade and social development cooperation program; invested in and constructed Zhongtai New Silk Road Tajikistan Agriculture Industrial Park in Tajikistan; implemented the PhaseⅡ of Diamniadio Integrated Industrial Park in Senegal; upgraded and constructed the Project of Chan Mya Shwe Pyi Bus Terminal in Mandalay, Myanmar; invested in and constructed the Belt and Road Logistics and Trade Complex in the United Arab Emirates; acquired Tata Steel Southeast Asian Plants in Singapore and Thailand; undertook with Saudi Aramco the Fine Chemicals and Raw Materials Engineering Project in Panjin, Liaoning Province, China; built Tharcoal block-178MTPA open-pit coal mine & 2*660MW coal-based power plant integrate project in Pakistan; invested in and constructed the project of high-performance radial tires with an annual output of 13.62 million in Serbia; developed 1.5mtpa cement clinker project in Nepal; engaged in laterite nickel ore for battery-grade nickel chemical (nickel sulfate crystal with an annual output of 50,000 tons of nickel) production in Indonesia; constructed PTA/PET project in Saudi Arabia; developed a healthcare medical diagnostic integrated project in Kenya; and constructed China-Uzbekistan Medical Science and Technology Park in Uzbekistan.

I stopped counting when I found impacts in more than ten countries.

As you will immediately notice, the 283 concrete results are not in ones or twos but encompass many countries and many projects. It is already clear that what Mr. Putin said, seems to be very accurate: “We need to strengthen the fundamentals of international tradeinternational cooperation.” “Russia wants to use its potential in full, and China does this in a very civilized manner.”

(Of course the West remains somewhat clueless and cannot really decode this language of civilized cooperation and I really wonder who has mastered The Art of the Deal).

So, if we pull across the crystal ball which is hazy at best, I respectfully submit that we, globally, have passed the nexus point and that we are now de facto living in a multi-polar world. Here is the list of Deliverables of the Second Belt and Road Forum for International Cooperation

And here you can download the full text of the joint communique of leaders’ roundtable.

A snippet: The ancient Silk Road contributed to the strengthening of the connectivity and the expansion of the world economy in the spirit of promoting peace and cooperation, openness, inclusiveness, equality, mutual learning and mutual benefit. We look forward to restoring and rejuvenating such spirit, through the Belt and Road Initiative and other cooperation frameworks and initiatives.”

You will agree, this is a global juggernaut. It remains to be seen what the dying empire will do in its final frenzy, but we can already now ask the questions: Are we building a better world here? Will economic development and peaceful international cooperation lead a peaceful world, or does military power projection lead, into the future? Are we seeing a new and improved erstwhile United Nations being born where ‘international tradeinternational cooperation’ form the basis of moving to ‘people-to-people’ bonds’?

The New Silk Roads reach the next level

April 29, 2019

The New Silk Roads reach the next level

By Pepe Escobar and posted by agreement with the author.

The Beijing leadership seems to be aware that transparency is key for the global success of BRI, which is now supported by over 120 states and territories

The Belt and Road Forum in Beijing was a graphic demonstration of how tactical adjustments are essential to enhance the appeal of a complex overall strategy. Talk about a turbo-charged 4.0 version of the legendary Deng Xiaoping maxim “crossing the river while feeling the stones.”

For all the somewhat straitjacket approach of Chinese official pronouncements, President Xi Jinping stressed a sort of “three musts” for the advance of the New Silk Roads, or Belt and Road Initiative (BRI) – debt sustainability, protection of the environment (or “green growth”), and no tolerance for corruption.

Add to that a growing battle against trade protectionism, more bilateral free-trade deals, more financing or investments, cooperation on third-party markets, and even a plan to sell Silk Road bonds.

In his keynote speech, Xi stressed how multilateral cooperation on “six corridors and six channels serving multiple countries and ports” is all go. He was referring to BRI’s six major connectivity corridors spanning Eurasia – and the fact that BRI is still in its planning stage; implementation actually starts in 2021.

The devil, of course, is in the details on multiple Chinese promises – further opening-up of the Chinese market to foreign investment; the possibility of majority equity in more industrial sectors; no more imposed technology transfers; more protection of intellectual property rights; and last but not least, no devaluation of the yuan.

And yet Beijing is learning fast. The final joint communique, emphasizing governance as much as economic development, was signed by Xi and 37 heads of state – from Italy, Greece and Portugal to Singapore and Thailand, not to mention new members such as Luxembourg, Peru, Cyprus and Yemen.

BRI is now supported by no less than 126 states and territories, plus a host of international organizations. This is the new, truthful, realistic face of the “international community” – way bigger, diversified and more representative than the G20.

The Beijing leadership seems to be aware that transparency is key for the global success of BRI. On the opening day of the forum, Finance Minister Liu Kun presented a 15-page debt sustainability framework based on similar standards applied by the Bretton Woods system – the IMF and the World Bank.

And the governor of the People’s Bank of China (PBOC), Yi Gang, stressed how long-term debt sustainability should be evaluated in relation to better infrastructure, better productivity, raising standards of living and reducing poverty. The PBOC has financed as much as $440 billion in BRI projects so far.

It’s all about Russia-China

Supported by vast infrastructure-building know-how and cutting-edge technology, Beijing is willing to renegotiate virtually everything BRI-related, from bank loans to overall project costs, from Malaysia and Thailand high-speed rail to the finer points of the flagship China-Pakistan Economic Corridor (CPEC), from physical infrastructure to the Digital Silk Road.

So much for US media hysteria over toxic “debt-trap diplomacy”.

Moreover, the West, as usual, ignored what was the absolutely key takeaway of the BRI forum: the deepening, on all fronts, of the Russia-China strategic partnership. It’s all here, in President Putin’s speech.

Russia’s President Vladimir Putin speaks during a press conference on the sidelines of the final day of the Belt and Road Forum in Beijing on April 27, 2019. Photo: Sergei Ilnitsky / AFP

Putin emphasized “harmonious and sustainable economic development and economic growth throughout the Eurasian space.” He noted how BRI “rhymes with Russia’s idea to establish a Greater Eurasian Partnership, a project designed to ‘integrate integration frameworks’, and therefore to promote a closer alignment of various bilateral and multilateral integration processes that are currently underway in Eurasia.”

I have reported extensively on the crucial BRI-Greater Eurasia symbiosis. And this was exactly the focus of the discussion when Putin met Xi on the sidelines of the forum. The Chinese Foreign Ministry vigorously stressed how Xi asked Putin to merge Eurasian Economic Union’s (EAEU) infrastructure projects with BRI.

What should be expected from the in-progress BRI-EAEU merger, which also includes the economic arm of the Shanghai Cooperation Organization (SCO) as well as ASEAN, is a massive, concerted Eurasian integration push. 

Putin could not have been more specific. “The Eurasian Union…has already signed a free-trade agreement with Vietnam and a provisional agreement with Iran, paving the way to the creation of a free-trade area. The preparation of similar instruments with Singapore and Serbia is nearing completion, and talks are underway with Israel, Egypt and India. We cooperate actively with the Shanghai Cooperation Organization and the Association of Southeast Asian Nations.”

All the pieces fall into place

Addressing the forum, Putin added another enticing dimension, with the China-driven Maritime Silk Road possibly joining the Russia-driven Northern Sea Route, “a global and competitive route connecting northeastern, eastern and southeastern Asia with Europe” will emerge. Once again, Eurasia integration in practice.

And then there are the other key Eurasian hubs, Iran and Pakistan.

After Tehran and Islamabad clinched a deal for joint border patrol on both sides of Balochistan, the next logical step would be closer BRI-related integration from Southwest Asia to South Asia.

Pakistan’s Prime Minister Imran Khan was a key participant in the forum, explaining the expansion that will transform Gwadar from a tiny fishing village to a global port and CPEC terminal that will link the Pacific via the Indian Ocean to the Mediterranean. Imran confirmed that Turkey had also been invited to be part of CPEC.

Many pieces are slowly falling into place across the immensely complex Eurasian integration chessboard. A key vector now depends on China being able to develop, refine and project soft power.

BRI, apart from its status of being the one and only 21st-century global development project, is also a global PR exercise. Compared to childish US geopolitical demonization, Beijing’s game is not that hard – just learn how to appropriately sell the ultimate geoeconomic paradigm shift to International Community 2.0.

 

زخمٌ جديدٌ في «طريق الحرير» الصينية: مواجهة لـ«الحمائية» الأميركية

Image result for ‫منتدى الحزام والطريق‬‎

الأخبار

 الثلاثاء 30 نيسان 2019

انتهت أعمال قمة «منتدى الحزام والطريق»، التي عُقدت في بكين بحضور أكثر من 37 من رؤساء دول وحكومات ووفود، مسجّلة صفقات يزيد إجمالي قيمتها على 64 مليار دولار أميركي

اختتم الرئيس الصيني شي جين بينغ، قبل يومين، قمة «منتدى الحزام والطريق»، بحضور قادة من 37 دولة ومنظمة دولية، من بينهم الرئيس الروسي فلاديمير بوتين. القمة، وهي الثانية للمنتدى، شكّلت مرحلة جديدة في مسيرة مبادرة «حزامٌ واحد وطريقٌ واحد» التي أطلقتها بكين قبل ستة أعوام، وتهدف إلى إعادة إحياء طريق الحرير التاريخي، الذي كان يربط الصين بعشرات الدول تجارياً.

شي أعلن في نهاية القمة التي احتضنتها بكين لمدة ثلاثة أيّام، التوصل إلى توافقات واسعة بشأن تدعيم «التعاون العالي الجودة» في إطار المبادرة، مع سعيٍ لطمأنة المتشككين في أن مشروع البنية التحتية الهائل سيركز على «تنمية مفتوحة ونظيفة وصديقة للبيئة» مع الأطراف المختلفة، التي تُجري «مشاورات على قدم المساواة»، مؤكداً أن مزيداً من الدول ستنضم إلى هذا المشروع لإنشاء بنى تحتية تربط بين آسيا وأوروبا وأفريقيا. وفي مؤتمر صحافي، أكد الرئيس الصيني أن مبادئ السوق ستطبق في جميع مشاريع التعاون التي تتضمنها المبادرة التي تهدف إلى إحياء «طريق الحرير» القديم الذي كان يربط بين الصين وآسيا وأوروبا، مشيراً إلى أن الشركات هي المحرك الأساسي لكل مشاريع المبادرة التي ستطبق عليها كل مبادئ السوق، فيما تلعب الدول دوراً داعماً.

أكّد شي أن المبادرة ستواصل رفض «الحمائية» في انتقاد لواشنطن التي تتبع سياسة حمائية (أ ف ب )

وفي تصريحات خلال الجلسة الختامية للقمة، قال شي إن «المزيد من الأصدقاء والشركاء سينضمون إلى المبادرة»، موضحاً أن «الجميع دعم فكرة تطوير شراكة، واتفقوا على تعزيز آليات التعاون». ووُقّعت اتفاقيات تعاون بقيمة تزيد على 64 مليار دولار أميركي في مؤتمر للمديرين التنفيذيين خلال المنتدى. كذلك، أشار البيان الختامي المشترك إلى أن الزعماء اتفقوا على أن يحترم تمويل المشاريع الأهداف العالمية المتعلقة بالديون، وعلى الترويج للنمو الاقتصادي الصديق للبيئة». من جهتها، أعلنت الصين، في بيانٍ منفصل، أنها وقّعت مذكّرة تفاهم مع دول عديدة، من بينها إيطاليا وبيرو وباربادوس ولوكسمبورغ وجاميكا.

أمّا على صعيد مهاجمة الولايات المتحدة المبادرة الصينية، واتهامها بإيقاع الدول النامية في ديون بعرض تمويل رخيص لا يمكنها تحمّله، فقد حاول شي في خطابه تبديد هذه المخاوف. وقال: «هذا العام، يرسل المنتدى رسالة واضحة: المزيد من الأصدقاء والشركاء سينضمون إلى دائرة الحزام والطريق»، مؤكداً أن المبادرة ستواصل رفض «الحمائية»، في انتقاد لواشنطن التي تبنّت سياسات حمائية في عهد الرئيس دونالد ترامب.

والمبادرة التي تم اقتراحها عام 2013، امتدت من آسيا وأوروبا إلى أفريقيا والأميركيتين وأوقيانوسيا، لتفتح مساحة جديدة للاقتصاد العالمي بنتائج أفضل من المتوقع. ووقّع أكثر من 150 دولة ومنظمة دولية على وثائق تعاون مع الصين في إطار المبادرة. واللافت أنه خلال السنوات الخمس الماضية، تجاوز حجم التجارة بين الصين والدول الأخرى المشاركة في المبادرة 6 تريليونات دولار أميركي، فيما تجاوزت استثمارات الصين في الدول المشاركة في المبادرة 90 مليار دولار. كذلك، حظيت المبادرة بدعم قوي من قبل القادة ورجال الأعمال الأجانب. وقد تمظهر ذلك في الكلمات الافتتاحية للرؤساء.

تم توقيع اتفاقيات تعاون في القمة بقيمة تزيد على 64 مليار دولار أميركي

من جانبه، دعا بوتين الدول المشاركة في المنتدى للانضمام إلى مشروعي الطريق البحري الشمالي و«طريق الحرير». وفي كلمته، أوضح الرئيس الروسي أن بلاده تولي اهتماماً كبيراً لتطوير الطريق البحري الشمالي، مضيفاً: «نحن نفكر في إمكانية ربطه بطريق الحرير الصيني، وبالتالي إقامة طريق نقل عالمي وتنافسي، يربط شمال شرق، وشرق وجنوب شرق آسيا بأوروبا». وأكد بوتين أن هذا المشروع الضخم يعني قيام تعاون وثيق بين دول أورآسيا لزيادة حركة الترانزيت وبناء محطات استقبال البضائع والحاويات في الموانئ، وكذلك المراكز اللوجيستية.

يُذكر أن الطريق البحري الشمالي هو وجهة نقل تمتد من المحيط الأطلسي إلى المحيط الهادئ على طول سواحل شمالي روسيا في الدائرة القطبية الشمالية. ويعبر هذا الطريق بحور الشمال بمحاذاة سيبيريا إلى الشرق الأقصى الروسي على الحدود مع اليابان وكوريا، وصار متاحاً أمام حركة الملاحة البحرية مع ذوبان الجليد في القطب الشمالي.

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