Topic: China "Can't Believe Its Luck" On Investment Bank - page 2. (Read 3642 times)

Times are changing my friend. The Chinese government have made it clear that they want the CNY to replace the USD as the global reserve currency. And already they have received the support from a large number of other powerful nations for this initiative. For example, Russia is offloading its US Treasury Bonds, and conducting its trade with China in CNY.

http://en.wikipedia.org/wiki/Internationalization_of_the_renminbi

You got be kidding me.
We even don't believe CNY by ourself. Of course CNY is worse than US dollar. Why the Investment Bank use US dollar, because no one will accept CNY.
Do you know the mechanism to issue CNY?
Of course, you don't. I don't know too because it's the top-secret of the government.
At least, the mechanism to issue US dollar is transparent.
How can you trust a currency when you don't know the mechanism to issue it?

The United States is taking undue advantage of the status of USD as the world's reserve currency. Now it is time to end that. I don't know whether CNY will be any better than the USD or not. But for sure, it can't be worse than the US Dollar. And we need multiple reserve currencies instead of a single one. Other important currencies such as JPY, RUR, EUR, CHF, AUD, INR, UKP, CAD.etc should be given the same status as the USD, and the international trade should be conducted in them.

Yes, the dollar has had a considerable bounce since last year especially in anticipation of interest rate hikes. When that gets postponed and QE4 (or is it 5?) arrives it´ll probably soon be back in the dumps.

The world needs some push back to Uncle Sam for sure, just can't imagine major players trusting China. Remember, when the USA got it's rating downgraded, the dollar got stronger.

Yes, in fact China´s exports to Asia, Russia and Brazil amount to more than to U.S. and Europe combined. So, to maintain trade growth they´ve been gradually shifting from those stagnant and debt-ridden economies to more lively ones. Maybe that Euro thing has to do with Chinese investments over there I don´t know.

It will be better for China to keep away from the Euro. The Euro is losing its value day-by-day, and I am sure that the situation will continue in the near future also. I don't think that China will be getting any benefit out of this. Why can't China float a currency bloc with the BRICS nations? India or Brazil can substitute the European Union.

Is China Floating a China-Euro Currency Bloc?

Published on Jun 4, 2015

SHOW NOTES: https://www.corbettreport.com/?p=15014

In today's thought for the day James discusses an editorial from The Global Times about China's upcoming inclusion in the IMF's SDR basket. Is China sending up a trial balloon for the idea of deeper Chinese-European monetary integration, and if so what would this mean for the ongoing creation of the new monetary world order?

Why China has the upper hand in the South China Sea

By Barry C. Lynn June 3, 2015

Washington’s failure in recent years to keep careful watch over what goods are made where — especially when it comes to such vital items as electronics and drugs — means the United States now depends far more on China than vice versa.

Back in the 1990s, advocates of liberalizing U.S. trade with China said economic interdependence would inevitably lead to peaceful coexistence. But one-sided dependencies invite adventurism, as China’s growing belligerence today proves.

Washington must now address the fundamental flaws in the international trade system that gave China such a big advantage. The White House claims the proposed Trans-Pacific Partnership will help offset China’s increasing heft. Unfortunately, the pact, which includes 11 Pacific Rim allies but excludes Beijing, will do nothing to fix the problems.

The fact that the global trading system is not working as promised is most dramatically evident in the seas around China. Beijing is engaged in a pattern of provocation bordering on recklessness. In late 2013, China unilaterally imposed an “air defense declaration zone” covering portions of the East China Sea. Earlier this year, the Chinese navy set about transforming a reef in the Spratly Islands into a military base.

International relations in East and South Asia are tenser than at any time since the 1960s. Japanese Prime Minister Shinzo Abe last year compared the situation to 1914 just before World War One. The U.S. Navy recently began to directly challenge China’s claims of sovereignty over large swaths of the South China Sea.

This is the opposite of what was supposed to happen when the United States and its allies created the World Trade Organization in the mid-1990s and then invited Beijing to join. President Bill Clinton asserted that “growing interdependence would have a liberalizing effect in China.”

Worse, the extreme industrial interdependence fostered by the World Trade Organization appears to have put powerful levers into China’s hands.

During the Cold War, the United States promoted high degrees of integration with allies, including Japan, Germany, Britain and Canada. Washington did this to promote mutual prosperity and peaceful coexistence. Yet even though each of these nations was smaller than the United States — and all were more or less democratic — Americans chose not to rely entirely on any of these close friends for any vital good.

Today, the United States depends on China for myriad items that U.S. citizens need every day. These include 100 percent of key electronics and chemical components. They even include basic ingredients for some of the nation’s most important drugs, including antibiotics. Given that supply chains often run on a just-in-time basis, in which goods are produced only as fast as they are consumed, there are often no backup supplies nearby.

China, by contrast, depends on the United States for little of vital importance. For what it does import in quantity, like energy and metals, it holds large stockpiles.

And unlike Washington’s main trading partners of the past two decades, China’s economy is bigger than America’s and growing fast. China is also by no means a democracy. Quite the contrary. The United States finds itself increasingly dependent on the good will — and stability — of the world’s most powerful and sophisticated autocracy.

The World Trade Organization freed U.S. corporations and foreign nations to restructure every assembly line on which Americans depend in almost every respect, such as by concentrating production wherever and however they wished.

Washington’s challenge now is to understand what this revolution means in the real world. Most specifically, how exactly does Washington’s asymmetrical dependence on China affect U.S. sovereignty and freedom of action? Might it, for example, lead Beijing to conclude that the United States will not use force in response to Chinese aggression?

The proposed Trans-Pacific Partnership, at best, amounts to a doubling down on a strategy that failed. At worst, it sets Americans to fighting with one another at a time when the international threats they face grow ever more complicated and dire.

Globalization is a smart and viable strategy. U.S. trade policy from the end of World War Two to the mid-1990s proved that.

Rather than waste more time on the Trans-Pacific Partnership, Washington must figure out how the extreme changes of the 1990s upset those balances. More to the point, it must swiftly figure out how to live and trade peacefully with China in what is fast becoming a post-global world.

http://blogs.reuters.com/great-debate/2015/06/03/how-u-s-dependence-on-chinese-goods-invites-beijing-adventurism/

WW3 may start soon, Soros warns, unless US loosens up on China

Published on May 22, 2015
There's a warning that World War 3 will erupt in just a few years - unless the US financial system loosens up on China. Billionaire investor George Soros says America needs to let Beijing join the global currency basket, or the consequences could prove catastrophic.

https://www.youtube.com/watch?v=MwwhVoR4Jqs

China perhaps got tired of the humiliation it received from the Asian Development Bank (ADB). China was having only 5% voting right in the ADB, while Japan was having 13% rights. The United States, which is a country located outside Asia, was also having 13% voting rights. The Asian Infrastructure Investment Bank will soon destroy the ADB. After that the US and Japan can take their voting rights to elsewhere. 

May 27, 2015 5:12 pm

A bank made in China and better than the western model

David Pilling
 
It is possible that the AIIB will even exceed the standards of existing development lenders

Groucho Marx said he would refuse to join any club that would have him as a member. He did not however try to discourage his friends from signing up. That is what the US did when it came to the Asian Infrastructure Investment Bank, a China-led institution that Washington regarded with some suspicion.
One Beijing-based US executive scoffed at the very notion that China could run a multilateral institution. It did not know the first thing about how such a bank should be governed, he said.

Opponents of the AIIB whispered that it would lend to dictators, despoil the environment and trample on human rights. (Western institutions, of course, have never done any such thing.) The AIIB may turn out very differently from this caricature.
It is just possible that it will even exceed the standards of existing institutions. With 57 members, including Europeans such as the UK, Germany and Sweden, it is evolving fast and may end up an entirely different institution from the one Beijing envisaged.

Last week, members met in Singapore to draw up articles of agreement. With input from both China, which has proved it knows a thing or two about development, and western countries, which have a better record of implementing safeguards, the project has made a promising start.
The bank will have initial capital of $100bn, double that originally intended. That will make it a serious challenger to the Asian Development Bank, the 50-year-old Tokyo-dominated regional bank with capital of $150bn. China will have the biggest capital quota, probably about 25 per cent. India will have the second-largest, then Russia, Germany, Australia and Indonesia. Overall, 75 per cent of the bank’s capital — and therefore voting rights — are likely to be Asian. Initial indications are that China will not have a veto.
The bank will be based in Beijing. It will have a non-resident board that meets periodically in the Chinese capital and convenes by video conference. At first glance, this could raise the suspicion that the AIIB will have less rigorous oversight than the World Bank, with its resident board that approves all loans. Yet many see the World Bank board as expensive — it costs $70m a year — and cumbersome.

David Dollar, a World Bank veteran who has acted as an unpaid consultant to the AIIB, says the World Bank had become so slow and risk-averse that most governments had stopped coming to it for infrastructure financing. He quotes an Indian official, exasperated at the pace of World Bank-sponsored projects, as saying: “Mr Dollar, the combination of our bureaucracy and your bureaucracy is deadly.”
The hope, he says, is that the AIIB can combine the best of both worlds. “The enthusiastic response of developing countries in Asia to the AIIB concept reflects their sympathy with the idea that a bank can have good safeguards and still be quicker and more efficient than the existing banks,” he writes.

In Jin Liqun, tipped to become the AIIB’s first president, China’s new institution has one of the country’s most experienced technocrats. He is a former deputy finance minister and a former ADB vice-president. His job will not be easy. With such high-profile western involvement, the AIIB will find its projects (a dam in Myanmar here, a highway through an Indonesian township there) scrutinised by board members from the likes of Germany. By inviting in so many foreign participants, Beijing has probably given up on the idea that the AIIB can be a crude instrument of Chinese diplomacy. It may even be having buyers’ regret.

In one way, though, the bank is a success before it has even started. It has triggered what one commentator calls “infrastructure wars”. The ADB has performed some accounting magic in order to increase the amount it can lend. ADB officials say the bank will review approval procedures so that it can match the AIIB’s expected greater speed. On the day that AIIB members met in Singapore, Shinzo Abe, Japan’s prime minister, announced that Tokyo would make $110bn available for infrastructure projects in Asia over five years. These, he implied, would be of higher quality than those led by China.
Like Groucho Marx, Japan and the US are not rushing to join the new club. Yet if the AIIB proves as effective as its advocates hope, before long even Tokyo and Washington may be angling for membership.

http://www.ft.com/cms/s/0/14c9f302-0397-11e5-a70f-00144feabdc0.html#axzz3bTNMBxTJ

US-China war 'inevitable' unless Washington drops demands over South China Sea

Warning from state-run China newspaper as Beijing reveals plans for development of disputed South China Sea islands

By Julian Ryall, Tokyo3:35PM BST 26 May 2015
China’s armed forces are to extend their operations and its air force will become an offensive as well as defensive force for the first time, in a major shift in policy that will strengthen fears of accidental conflict.
A policy document by the state council, or cabinet, said China faced a “grave and complex array of security threats”, justifying the change.
The People’s Liberation Army, including its navy and air force, will be allowed to “project power” further beyond its borders at sea and more assertively in the air in order to safeguard its maritime possessions, the white paper stated.

The navy will add “open seas protection” to a traditional remit of “offshore waters defence”, it said.
The posture risks escalating the tension over disputed islands in the South China Sea and elsewhere in the Pacific, where the United States is determined to protect the interests of allies like Taiwan and the Philippines.
Only last week, a US aircraft ignored repeated warnings from the Chinese military to fly a reconnaissance mission over the islands.

Global Times, a tabloid newspaper run by the Communist Party, said that China might have to “accept” there would be conflict with the United States.
“If the United States’ bottom line is that China has to halt its activities, then a US-China war is inevitable in the South China Sea”, said the paper, which is often seen as a mouth-piece of hardline nationalists in the government in Beijing.

State media reported on Tuesday that Beijing had begun building two lighthouses on reefs in the Spratly Islands, a smattering of outcrops that are claimed by an array of countries including not only China but also Vietnam and the Philippines.
Last month, satellite imagery revealed the Chinese had almost completed an air strip on another reef - Fiery Cross - while they are turning another rock, Mischief Reef, into a full island through land reclamation.

The Global Times article described the construction of runways, harbour facilities and buildings on the disputed Spratly Islands as the nation’s “most important bottom line”.
Speaking at a press conference in Beijing, Yang Yujun, a spokesman for the Defence Ministry, dismissed international criticism of China’s policies in the South China Sea, claiming the work was the same as building roads and homes on mainland China and that it would benefit “the whole of international society”.
“From the perspective of sovereignty, there is absolutely no difference”, he said, adding that “some external countries are also busy meddling in South China Sea affairs”.

Analysts say neither Washington nor Beijing appear to be in the mood to back down and that there is a serious risk of a minor incident in airspace around the islands escalating rapidly.
“I think the concern has to be that China misjudges the situation”, said Robert Dujarric, director of the Institute of Contemporary Asian Studies at the Japan campus of Temple University.
“Neither party wants a war if it can be avoided, but there are red lines for both sides”, he said. “I worry whether Beijing considers the US to be a declining power and assumes that Washington will back down if it shoots down a US observation aircraft”.

Washington chose to “de-escalate” a major crisis that blew up after a Chinese fighter collided with a US Navy intelligence-gathering aircraft off Hainan Island in April 2001.
However, Prof. Dujarric said there would be a different response if a similar incident were to occur in what Washington insists is international air space over the South China Sea.
Recent developments have provoked new concerns in the region, with Ma Ying-jeou, the president of Taiwan, calling for the different nations laying claim to the South China Sea to put their differences aside and carry out joint development of natural resources.

http://www.telegraph.co.uk/news/worldnews/asia/china/11630185/US-China-war-inevitable-unless-Washington-drops-demands-over-South-China-Sea.html

Under the weight of nearly incalculable debt and liabilities, the United States is in terminal decline as the dominant superpower. Practically the entire world is lining up against them to form a brand new financial system that is no longer controlled by the US government.China may already be the largest economy in the world by many measurements. But the Chinese economy is in for some serious strain over the coming months and years as its massive credit bubble bursts.Where's the end of China’s path? Let's wait and see.

China's Plan to Lead the Globe

BY ERIC MARGOLIS • MAY 23, 2015 •

As tensions in the South China Sea between the US and China continue to rise, the US Navy and Air Force are quietly gearing up to fight a war in the disputed region.

If necessary, that is. Both sides say they don’t want any military confrontation on China’s extensive coastal waters, but both are acting as if a military conflict is increasingly likely.

Optimists say that a peaceful resolution of China’s rise as a great power is achievable. The economies of the two powers are so enmeshed that a war sounds unthinkable.

Such is the thesis of an important new book just out, “The China Dream,’ by Professor General Liu Mingfu, a leading Chinese military thinker and commentator who speaks with the voice of China’s military.

US-China trade accounted for $579 billion last year. Beijing holds $1.2 trillion of US Treasury securities, thus financing a big part of America’s massive trade deficit. China claims its low-cost exports to the US saved American consumers $600 billion in recent years.

China only wants its place in the sun, say its strategists, using the same words as German strategists did before World War I. It’s time for a multi-polar world. The age of American world empire is over, writes Liu Mingfu, words that will not endear him to Republican hawks and neoconservatives.

Pessimists retort that Britain and Germany fought two world wars even though they were major trading partners. History is replete with examples of rising powers eventually going to war with the status quo powers resisting their rival’s economic and military growth. The Franco-British-Russian alliance against Germany prior to World War I is a perfect example.

One need not be a swami to see that China’s surging power will soon clash with that of the American hegemon. The battle lines are already drawn: China’s aggressive claims to the South China Sea – viewed by the US Navy as an American lake. Taiwan. Tensions over Burma. Korea. China’s access to the open seas.

According to Prof. General Liu, the days of America’s world domination, or hegemony, as he terms it, are just about over. By 2030, China will be the world’s largest economy in absolute terms (today it rivals the US in purchasing power parity), regaining the geopolitical primacy it formerly enjoyed until the 1500’s when it was the world’s leading economic power.

The US must find a way to accommodate China’s growing power, a point also made for many years by this writer. A policy of containment is not likely to work unless India becomes a principal participant. My first book “War at the Top of the World” deals with the scenario of a future India-China war in the Himalayas, Karakoram and Burma. India has been very cautious in joining any American-sponsored alliance against China.

Liu writes that America must quietly cede some of its power to China in the same manner that the British Empire did to the United States after 1900. The United States and China must share power and jointly rule the world as benign hegemons.

He insists that China has no territorial ambitions and never will. “China suffered 470 foreign invasions within 65 years from 1840 to 1905,” asserts Liu, though incursions would be a more accurate term. During this period, China was raped and pillaged by the western colonial powers and Japan. Hatred of Japan seethes throughout Liu’s book, as it does among most Chinese.

One could argue that China’s annexation or ‘reunification’ of Tibet and Sinkiang were aggressions. China considers them part of historical China, along with truant province Taiwan.

Liu points out that China never invaded or seized its smaller neighbors Korea, Burma, Thailand, or Laos.

Instead, China’s emperors always preferred to dominate without aggression so that its smaller neighbors respected the will of China and acted respectfully – rather as the United States in the 20 th century with Latin America. China, writes Liu, wants peace and prosperity in order to keep growing its economy. China remains an inward-looking colossus, content to be the Middle Kingdom.

America, according to the undiplomatic Liu, is a paranoid giant, afraid of the outside world and addicted to the need for enemies abroad. “Americans feel lost without any enemy.” Washington’s occupation and despoliation of so many countries, notably in the Muslim world, generates endless enemies and a war psychosis. America, he claims, is a half-democracy: democratic at home but promoting dictatorships abroad. He seems to believe that China is as democratic at home as the US – a claim that defies reality.

Liu asserts that China is devoted to peaceful relations, non-interference in other nations, and the desire to help build world prosperity, not just its own power or political system. What’s more, Liu modestly asserts, China should lead world development since Chinese are more intelligent and cultured than any other people and heirs to a 5,000-year history!

Interestingly, Liu depicts the 1950 Korean War as a major victory for China because it showed that an Asian nation could fight off the world’s greatest military power. He claims that the US did not invade North Vietnam out of fear of the Chinese People’s Liberation Army after its bloody experience in Korea.

Will Washington back off and allow China to be the master of Asia? It seems highly doubtful. But unless some kind of modus vivendi is found, a military confrontation is likely to follow, one that the US might very well lose. China would be fighting virtually at home or just off its coast. The US, by contrast, would fight thousands of miles across the Pacific from its distant bases. The US might even win, but China would undoubtedly come back for more.

The “China Dream” thesis has been actively taken up by China’s communist leadership. But two things might derail China’s rise to world domination. First, China’s history is replete with example of internal strife, civil wars, and regionalism. This “Chinese curse” could come back to haunt Beijing.

Second, as I read Liu’s panegyric to Chinese greatness and peaceful humanism, I kept recalling Lord Acton’s wise maxim about absolute power corrupting absolutely. It happened in Washington, and there’s no reason why it might not occur in Beijing.


(Reprinted from EricMargolis.com by permission of author or representative)

http://www.unz.com/emargolis/chinas-plan-to-lead-the-globe/

China's AIIB Bank: Part of a Much Bigger Master Plan

In his latest book Henry Kissinger anticipated China’s initiative to create the first new international organization of the 21st century. He didn’t foresee the Asian Infrastructure Investment Bank (AIIB) as such, but argued that as China continued to increase its global economic weight, it would inevitably seek its security, in part, by building international organizations in which it sat at the center. And that this would rightly or wrongly be seen as a challenge to the post-World War II US-centric international architecture.

China and other major developing economies have long expressed their dissatisfaction with US and European dominated international institutions created at the end of WWII. China’s efforts to increase its contributions and hence voting power in the IMF, for instance, have been stalled for years in the US Congress. The reservation of the top job in each of the World Bank and the IMF for citizens of the US and EU, respectively, is offensive. The deal between the two that has stuck for over sixty years smacks of a global Tammany Hall racket. .... more

http://nationalinterest.org/blog/the-buzz/chinas-aiib-bank-part-much-bigger-master-plan-12748

Well, a good chunk of the Chinese investments will most likely go to rebuild countries that Uncle Sam has blown to smithereens in numerous war scams. Someone has to do it, you can´t expect psychopaths to ever take responsibility for their actions.

AIIB: China's 'Phase Zero Operation'?
Can Beijing’s claim that it wants to provide ‘global public goods’ via the AIIB be taken at face value?

A month after controversy erupted over the announcement that multiple U.S. allies will join China’s new Asian Infrastructure Investment Bank (AIIB), the Obama administration’s response was clearly misguided. Concerned that the AIIB represented a power play by China for influence in the rest of the world at the expense of the U.S., administration officials criticized the bank for not adhering to the “high standards” required of U.S. and Western-led international institutions such as the World Bank and the Asian Development Bank. ....more

http://thediplomat.com/2015/04/aiib-chinas-phase-zero-operation/

High standards ? Yeah yeah yeah 

It´ll probably collapse at an opportune time before the next U.S. "election" so it can all be blamed on the outgoing puppet and the next desired puppet will thus come riding in like a savior. Then rinse and repeat for the next cycle.

Anyone placing bets how much longer the US can keep up the current trajectory before the house of cards comes crashing down or will this just gradually just keep diminishing? The most interesting and perhaps unfortunate aspect to this whole thing is the sheer numbers of people who have no plan at all to deal w/ such a scenario outside of the survival, metals and bitcoin types. The boobs' ignorance and bliss will become their terror.