Category Archives: Eurasian Axis

US-China: the hardcore is yet to come, by Pepe Escobar

Try as it might, the US will not stop China’s emergence as a super power. From Pepe Escobar at atimes.com:

US-China: the hardcore is yet to come

A container ship unloads cargo at the port terminal in Long Beach, California on May 10, as talks to resolve the US-China trade battle ended Friday with no deal, but no breakdown. Photo: Mark Ralston / AFP

The Trump administration’s response to China’s emergence has been to throw all sorts of spanners in the works, but tariffs won’t bring back manufacturing jobs

Let’s start with the “long” 16th Century – which, as with the 21st, also saw a turbulent process of marketization. At that time, the Jesuits and the Counter-Reformation were trying to rebound across Asia – but within a context where the rivalry between the Iberian superpowers of the age, Spain and Portugal, still lingered.

The Reformation first attached itself to the Dutch trade thalassocracy – a seaborne empire, under which commerce was paramount – over strict propaganda of religious dogma. Britain’s maritime realm was still biding its time. The emergence of Protestantism proceeded in parallel to the emergence of neo-Confucianism in East Asia.

Fast forward to our turbulent times. Marketization – renamed as globalization – seems to be in crisis. But not in the Middle Kingdom, which is now investing in globalization 2.0 amid increasing rivalry with the other superpower, the US.

The American thalassocracy is being superseded by the Revenge of the Heartland, in the form of the Russia-China strategic partnership – for whom Eurasian trade integration, as expressed by the New Silk Roads, or Belt and Road Initiative (BRI), is paramount over the Make America Great Again (MAGA) dogma.

Meanwhile, the re-emergence of Right populism in the West mirrors the re-emergence of pragmatic neo-Confucianism across Asia.

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Is China’s Belt & Road a Decade Too Late? by Charles Hugh Smith

Maybe the Belt and Road Initiative is just another government-sponsored white elephant in a world that’s littered with them. From Charles Hugh Smith at oftwominds.com:

The world appears to be tiring of globalization and hegemons, and that trend may doom the Belt & Road to irrelevancy.

The conventional narrative holds that China’s Belt & Road Initiative is cementing China’s global superpower status. There’s an alternative narrative, however: it’s a decade too late. From this perspective, global trade has reached the top of the S-Curve and is in the stagnation phase, which will be followed by decline or collapse.

Global trade growth loses momentum as trade tensions persist (WTO)

Why could global trade decline as a secular trend? The answer of the moment–trade wars– is more a symptom than the disease itself, which is the benefits of globalization have declined and the negative consequences are becoming unavoidable.

Trade is never “free;” there are always losers to any trade, and if the benefits accrue to the few at the expense of the many, the gains no longer offset the losses. Resistance to globalization is rising, and national interests are gaining political ground.

Then there are the strategic considerations of trade. Do you really want your nation overly dependent on other nations for energy, food, semiconductors and capital? Food security makes little sense by itself; the spectrum of autarchy / self-sufficiency must also include energy, critical technologies and capital–human, institutional and financial.

Going forward, the last thing nations will want is increasing dependence on China–or any other hegemon.

China’s debt diplomacy–pressuring “partners” to borrow immense sums from China, backed by collateral like harbors and ports–is already drawing resistance. If global trade has indeed topped out and shifted to secular decline, all the strategic reasons to limit dependency on other nations will start becoming more important than private-sector profits reaped by politically powerful corporations.

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Iran Squeezed Between Imperial Psychos and European Cowards, by Pepe Escobar

The pathological haters of Iran in the US government hate for three dishonorable reasons. Iran kicked out the US’s puppet in 1979, Iran is conducting the oil trade in currencies other than the dollar, and Iran is a linchpin of the Belt and Road Initiative. From Pepe Escobar at consortiumnews.com:

Berlin, Paris and London assumed Tehran could not afford to leave the JCPOA even if it was not receiving any of the promised economic rewards.  Now the EU3 are facing the hour of truth, writes Pepe Escobar.

The Trump administration unilaterally cheated on the 2015 multinational, UN-endorsed JCPOA, or Iran nuclear deal. It has imposed an illegal, worldwide financial and energy blockade on all forms of trade with Iran — from oil and gas to exports of iron, steel, aluminum and copper. For all practical purposes, and in any geopolitical scenario, this is a declaration of war.

Successive U.S. governments have ripped international law to shreds; ditching the Joint Comprehensive Plan of Action is only the latest instance. It doesn’t matter that Tehran has fulfilled all its commitments to the deal — according to UN inspectors. Once the leadership in Tehran concluded that the U.S. sanctions tsunami is fiercer than ever, it decided to begin partially withdrawing from the deal.

President Hassan Rouhani was adamant: Iran has not left the JCPOA — yet. Tehran’s measures are legal under the framework of articles 26 and 36 of the JCPOA — and European officials were informed in advance. But it’s clear the EU3 (Germany, France, Britain), who have always insisted on their vocal support for the JCPOA, must work seriously to alleviate the U.S.-provoked economic disaster to Iran if Tehran has any incentive to continue to abide by the agreement.

Protests in front of former U.S. embassy in Tehran after U.S. decision to withdraw from JCPOA, May 8, 2018. (Hossein Mersadi via Wikimedia Commons)

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Nuclear War vs. Belt and Road Initiative: Why China Will Prevail, by Federico Pieraccini

Sometimes carrots work better than sticks. Who knew? From Federico Pieraccini at strategic-culture.org:

The global trend in international relations is often difficult to discern. But one can be helped in this task by looking at two events, organized in Washington and Beijing, comparing the different themes, participants, objectives, and broached for discussion. After all, we are talking about the two largest economies in the world, two colossi directing and shaping global culture, behavior and world opinion.

The last few weeks have offered the international community an opportunity to reflect. Two events took place in Washington and Beijing that, in terms of impact, depth, participation and issues discussed, are striking contrasts.

In Beijing at the Belt and Road Forum over 40 world leaders discussed the Belt and Road Initiative (BRI), a project that will transform the entire Eurasian continent, improving free trade between dozens of countries by investing in transport infrastructure as well as in energy and technological cooperation. The leader of this silent industrial revolution is China’s Xi Jinping, casting ancient ambitions and perspectives into the new millennium, anxious to once again acquire the leading role in global civilization.

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Economic Warfare Man Strikes Again, by Tom Luongo

Economies and trade work best when governments stay out, anything else is a step down. From Tom Luongo at Tom Luongo.me:

It’s getting tiresome watching Donald Trump’s bipolar presidency. It seems he can’t let a day go by without making some massive announcement to raise tariffs, threaten sanctions or overthrow a government.

Every 24 hours is another exercise in chasing the Trump Reality Show around. Every lull in the perpetual news cycle has to be seized upon to create more chaos so he can validate his insanity.

Trump has so many plates spinning there’s no way he’s actually thinking anything through. Take the latest fiasco, Chinese trade talks.

One day “Talks are going well,” the next “We’re raising tariffs to 25%.”

That’s where we are today. Because Trump thinks he’s winning the trade war and China won’t give him what he wants so he’ll disrupt global trade until he does.

It doesn’t matter how many times he’s told. Tariffs don’t work. The costs are not paid by the exporter. They are paid by the consumer. Tariffs don’t shift manufacturing of the goods imported onshore, they are supplied by other countries or substituted for lesser goods.

The consumer pays higher prices for end-user goods. The domestic members of the supply chain pay higher input prices while sclerotic domestic producers are subsidized to stay non-competitive.

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China and Russia: Whoopin’ Uncle Sam at His Own Game, by Mike Whitney

China and Russia are building alliances that span the Eurasian land mass, and there’s very little the US can do about it. From Mike Whitney at unz.com:

Your Geopolitical Quiz for the Day:

Two countries are embroiled in a ferocious rivalry. One country’s meteoric growth has put it on a path to become the world’s biggest economic superpower while the other country appears to be slipping into irreversible decline. Which country will lead the world into the future?

Country A builds factories and plants, it employees zillions of people who manufacture things, it launches massive infrastructure programs, paves millions of miles of highways and roads, opens new sea lanes, vastly expands its high-speed rail network, and pumps profits back into productive operations that turbo-charge its economy and bolster its stature among the nations of the world.

Country B has the finest military in the world, it has more than 800 bases scattered across the planet, and spends more on weapons systems and war-making than all the other nations combined. Country B has gutted its industrial core, hollowed out its factory base, allowed its vital infrastructure to crumble, outsourced millions of jobs, off-shored thousands of businesses, plunged the center of the country into permanent recession, delivered control of its economy to the Central Bank, and recycled 96 percent of its corporate and financial profits into a stock buyback scam that sucks critical capital out of the economy and into the pockets of corrupt Wall Street plutocrats whose voracious greed is pushing the world towards another catastrophic meltdown.

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Interpreting President Putin’s Speech At The 2019 BRI Forum, by Andrew Korybko

Vladimir Putin and Xi Jingping’s approach to international relations certainly seems to be winning the Russians and Chinese more friends than the US approach. From Andrew Korybko at orientalreview.org:

President Putin left nothing to doubt when he proudly proclaimed that Russia and the Eurasian Economic Union regional integration organization that it leads are strategically merging with China and its Belt & Road Initiative, with this process having unprecedentedly far-reaching strategic consequences for the supercontinent and 21st-century geopolitics as a whole.

This year’s Belt & Road Initiative (BRI) Forum is a monumental event bringing together several dozen heads of state and providing a platform for the international community to better understand this world-changing vision. President Putin gave an important speech during this event that can be summarized as his proud proclamation that Russia and the Eurasian Economic Union (EAU) regional integration organization that it leads are strategically merging with China and its BRI. There’s no doubt that this process will have unprecedentedly far-reaching strategic consequences for the supercontinent and 21st-century geopolitics as a whole, which is why his entire address deserves to be analyzed in full. What therefore follows is the transcript of his speech interspersed with brief interpretations of the text in order to help the reader appreciate just how significant of an event this was and what his words might mean for the future of Russian grand strategy:

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