Tag Archives: Belt and Road Initiative

A blue dot barely visible from New Silk Roads, by Pepe Escobar

The US’s Johnny-come-lately effort in Eurasia won’t put a dent in the Belt and Road Initiative. From Pepe Escobar at thesaker.is:

US-Australia-Japan alternative to Belt and Road helps explain why the US sent a junior delegation to Thailand and why India opted out of RCEP

China’s President Xi Jinping waves during the opening ceremony of the China International Import Expo in Shanghai on November 5. Photo: AFP/Hector Retamal

Chinese President Xi Jinping six years ago launched New Silk Roads, now better known as the Belt and Road Initiative, the largest, most ambitious, pan-Eurasian infrastructure project of the 21st century.

Under the Trump administration, Belt and Road has been utterly demonized 24/7: a toxic cocktail of fear and doubt, with Beijing blamed for everything from plunging poor nations into a “debt trap” to evil designs of world domination.

Now finally comes what might be described as the institutional American response to Belt and Road: the Blue Dot Network.

Blue Dot is described, officially, as promoting global, multi-stakeholder “sustainable infrastructure development in the Indo-Pacific region and around the world.”

It is a joint project of the US Overseas Private Investment Corporation, in partnership with Australia’s Department of Foreign Affairs and Trade and the Japan Bank for International Cooperation.

Now compare it with what just happened this same week at the inauguration of the China International Import Expo in Shanghai.

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Brothers in Arms, by Jeff Thomas

China’s development funding and loans are winning it a lot more friends around the world than the US’s bullets and bombs. From Jeff Thomas at internationalman.com:

Xi Jinping China

Mayer Amschel Rothschild died in 1812, so he could hardly be referred to as a pal of Xi Jinping, but the two have a great deal in common.

In the late eighteenth and early nineteenth centuries, Mr. Rothschild discovered that, as a major banker in Germany, he could control the country to a greater degree than its political leaders if he could find a way to control it economically. This he did through a series of loans, for which he wished never to be repaid. He instead presented his chits for collection at times when the German government was strapped for cash. By doing so, he was able to extend the loans, renegotiated to his advantage, and increase his control over both the political leaders and the government as a whole.

As he said at the time, “Let me issue and control a nation’s money and I care not who writes its laws.”

This was not a passing comment, but a basic principal through which he expanded his power. He sent each of his sons forth – to Naples, Paris, Vienna, Frankfurt, and most notably, London, where his son Nathan repeated his father’s postulate, saying, “I care not what puppet is placed upon the throne of England to rule the empire on which the sun never sets. The man who controls Britain’s money supply controls the British Empire and I control the British money supply.”

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America Loses Asia-Pacific as Full Spectrum Dominance Continues to Fail, by Matthew Ehret

“Full Spectrum Dominance” is essentially the US playing global cop. It’s not working out too well. From Matthew Ehret at strategic-culture.org:

Always working a little harder than most to stay a step below reality, US Secretary of Defense Mark Esper made especially candid remarks this week that America’s INF pullout was timed for a targeting of forces against China.

Speaking to Fox on August 21st, Esper said: “We want to make sure that we, as we need to, have the capability to deter Chinese bad behavior… China is the number one priority for this department. It’s outlined in the national defense strategy, why we think it’s a long term strategic competitor and one that is pursuing a maximization campaign, if you will, throughout the indo-Pacific theater, whether its politically, economically or militarily…”

Echoing a little Dr. Strangelove, Esper stated that there is “a coming shift” from “low intensity conflict that lasts 18 years to high intensity conflicts against competitors such as Russia and China.”

While American military exercises in the Pacific have played out on China’s doorstep at an accelerating rate since the Pivot to Asia was announced in 2011 with the most recent US-Australia Talisman Sabre bi-annual exercise and US-South Korea Ulchi Freedom war games this month, China has not remained idle.

In response to America’s vast array of military infrastructure built up on China’s border, China has responded by the unveiling of cutting edge anti-ballistic missile technologies, including hypersonic weaponry to counteract the American threat. A large part of China’s defensive response includes the Russian S400 anti-missile system which is also being adopted by India, Turkey, Syria and the United Arab Emirates as a unified system which renders the American THAAD and ABM systems impotent and obsolete. Although unconfirmed, American generals have freaked out that China is building a joint China-Cambodia naval base in Preah Sihanouk Province that gives China easy access to coastal waters on the Gulf of Thailand and ready access to the South China Sea.

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Will China Retreat Into Itself? by Raúl Ilargi Meijer

China has a debt problem that may be as severe as the US’s. The two are interrelated and intractable. From Raúl Ilargi Meijer at theautomaticearth.com:

It’s never easy to gauge what exactly is happening in China, or why the CCP Politburo takes the decisions it does. Today, or overnight, is no exception to that. However, one thing that appears certain, but which I don’t see reflected in all the analyses, is that Beijing pushing the value of the renminbi (yuan) down below 7 to the USD in one fell swoop, is a major setback for Xi Jinping and his government.

Yes, China may have given up hope of reaching positive conclusions in its trade talks with the US. And yes, some may think, even in China itself, that devaluing the currency is a tool that can be useful in a potential currency war. But there’s another side to this coin. It’s not even about the value itself, or the change in it, it’s the heavy-handed way it’s executed.

China wants, and desperately needs too, for the yuan to be a force in global financial markets. In very simple terms this is true because if it then wants to buy something, it can simply print the money for it. But only about 1% of global trade today is executed in yuan. That is not nearly enough. It means China needs dollars and euros, all the time. And devaluing the yuan means the country needs even more of those.

You’d almost think: why would you want to do that? What are the long-term prospects for a move like this? You’re telling forex markets that the value of the yuan is not trustworthy, because if Xi or the PBOC decides in the next five minutes that it should go up or down by 10% or 20%, they can do it. The Fed and ECB also have tools to manipulate their currencies (re: interest rates), but none of that magnitude.

The crux of the dilemma probably lies in the Belt and Road Initiative (BRI), which I’ve been saying for years is just China’s way to sell its overcapacity and overproduction abroad. Sure, there may be loftier goals, and surely in the glitzy brochures, but the fact remains that China has tried to be an economic miracle, doing in 10 years what took the US a century, and it never slowed down its growth, at least not voluntarily, even if that might have been a wise move.

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‘Hidden debts’ reveal risks of China’s lending spree, by Gordon Watts

China’s exact debt position is unknown, due to the opacity of the Chinese financial system, but in the aggregate it’s huge. From Gordon Watt at asiatimes.com:

Dangers of BRI project and other foreign funding programs are highlighted in a comprehensive report

For many poor nations, it is a long and winding road to ‘debt’ and ‘corruption.’ A journey littered with economic potholes in the shape of China’s signature foreign policy project which was unveiled by President Xi Jinping six years ago.

In short, the US$1 trillion Belt and Road Initiative, along with other foreign funding, has become a magical mystery tour, baffling the World Bank and the International Monetary Fund. Or, according to critics, a diplomatic car crash waiting to happen.

“Compared with China’s dominance in world trade, its expanding role in global finance is poorly documented and understood,” a report released last week by the Kiel Institute for the World Economy stated.

“Over the past decades, China has exported record amounts of capital to the rest of the world. Many of these financial flows are not reported to the IMF, the BIS [the Bank for International Settlements] or the World Bank,” authors Sebastian Horn, of Munich’s Ludwig Maximilian University,  Carmen M Reinhart, of the Harvard Kennedy School in the United States, and Christoph Trebesch, of the Kiel Institute for the World Economy in Germany, wrote.

“‘Hidden debts’ to China are especially significant for about three dozen developing countries, and distort the risk assessment in both policy surveillance and the market pricing of sovereign debt,” the working paper added.

The study then went on to highlight that China is now the world’s largest creditor.

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Bombs VS Bridges – How Two Empires Are Competing For Their Version Of The New World Order, by Brandon Turbeville

You can bludgeon other countries into doing what you want them to do or you can offer cheap financing and turn them into debt slaves. The US does the former, China the latter. From Brandon Turbeville at theorganicprepper.com:

There is a crisis in the Western world. Both in terms of domestic affairs and foreign policy, Western nations are showing all signs of impending collapse. This is despite the fact that the flagship of the Western world, the United States, continues to expand its empire across the globe. At the same time, the world is witnessing the “rise of China,” an empire in its own right though no one seems to have any interest in calling it what it is.

The American empire has come to terms with itself to some extent. Through all the claims of support for “democracy” and “freedom,” the United States has transitioned to an authoritarian state at home and a rampaging military of conquest abroad. Afghanistan, Iraq, Libya, Sudan, Syria, Ukraine, Egypt, Somalia, Niger, Cameroon, Nigeria, Venezuela, Chad and Mali all serve as hot battles for the American military (in cooperation with other Western militaries, including Australia) in service of forcing governments into accepting the rule of private central banks, big biotechnology firms, pharmaceutical and industrial corporations and forcing those nations into providing raw materials for major industry centered in the Western world.

This says nothing of the American military bases in place across the globe. The US military posture of aggression coupled with threats of invasion against sovereign nations who are not compliant is well-known the world over and only the willfully blind do not see it.

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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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