By Godfree Roberts from his newsletter
This week we focus mainly on China’s development and business.
We still see signs of an unrestricted and type of unformed war on China that is described by many names, examples cold war or, hybrid war. The main characteristic of this war is where nothing that disrupts the enemy is off limits.
Despite an unprecedented downturn in US-China relations during a pandemic, US businesses are not leaving the China market. This was a major finding of an annual survey of members released today by the US-China Business Council (USCBC), a trade group representing more than 200 businesses, many of them global brands with decades of China experience. https://www.uschina.org/media/press/pandemic-and-politics-aside-us-china-trade-ties-continue
Extracts from Here Comes China
Excellent overview – How Did China Succeed? | Joseph E. Stiglitz on China’s Economic System
Although Stiglitz is a world banker, he holds different views from the trademark, neoliberal Washington consensus, specifically an economic ideology holding that while people should own the value they produce themselves, economic value derived from land (including all natural resources and natural opportunities) should belong equally to all members of society. His wide overview here on the growth of China makes sense and is easy listening.
China’s central bank has taken the lead in digital currencies. What does it mean for businesses? by Jemma Xu and Dan Prud’homme
Outside China, digital currencies are fraught with incredible risk. In this void, China’s Digital Currency Electronic Payments offers the public confidence unobtainable by private digital currencies. DCEP is itself a stablecoin, but one backed 1:1 by the PBoC with fiat Chinese yuan/renminbi. Its system follows a “two layer” approach. First, and critically, because it is a sovereign digital currency, the PBoC is the only issuing party. Second, to expeditiously diffuse the currency, the central bank issues DCEP to select retail banks and non-financial institutions (e.g., Alibaba, Tencent, and Union Pay) in China with strong pre-existing mobile payment networks, who then merely distribute the currency to the general public. Businesses across China will be required by law to accept DCEP as payment.
Besides the regulatory legitimacy, many factors position DCEP to become the world’s most widely used digital currency:
- the Chinese state’s track record of rapid institutional innovation;
- Chinese public support of institutional experimentation;
- Chinese firms’ strong competitiveness in digital ecosystems and
- capabilities to quickly adapt to changing technological paradigms and institutions;
- a massive Chinese population who quickly adopts new digital technologies, and
- lead the world in adopting mobile payment applications.
Although central banks in several other countries have also been studying digital currencies, none have taken the lead to actually develop and rollout a CBDC at the scale occurring in China. DCEP will be used for purchases in all sectors across the country. To start, as of mid-2020, DCEP has been piloted in the Chinese cities of Shenzhen, Chengdu, Suzhou and Xiong’an – potentially reaching over 42 million people, more than Canada’s entire population. Elsewhere in China, DCEP is already in the process of being piloted in the restaurant and hospitality sectors, with foreign multinationals such as McDonald’s, Starbucks, and Subway already signing up to participate. Further, DCEP trials are already being conducted around China to reimburse public sector employees’ travel costs. Yet other pilot initiatives, such as a commitment to use DCEP at venues for large-scale upcoming events in Beijing, are in place.
Meanwhile, the Chinese government recently proposed the creation of a regional digital currency backed by the Chinese RMB/yuan, Japanese yen, South Korean won, and Hong Kong dollar – with DCEP at the centre. And China’s multi-trillion dollar Belt and Road Initiative (BRI) offers a network to extend DCEP in countries around the globe.
Businesses should prepare for DCEP’s rollout in two main ways. First, they must ensure that they have appropriate infrastructure in place to accommodate DCEP, such as digital wallets. Contracts with third-party financial custodians can also be helpful. On the upside, to facilitate swift legal compliance with DCEP – considering that its acceptance is being required by law in China – the Chinese authorities may integrate DCEP with popular existing digital wallets already widely used by many businesses in China, namely Alipay and Wechat Pay.
Second, businesses may need to explore interoperability options when conducting cross-border trade. Such action may be needed in the longer term if DCEP leads to an alternative international payments system vis-à-vis the current US-led system, which is a probable prospect.
Meanwhile, firms who timely prepare for China’s DCEP rollout can seize several significant opportunities. First, as previously alluded to, the expansion of DCEP will facilitate the internationalisation of the yuan/renminbi. In doing so, the Chinese currency will provide a strong alternative institution to rival the current USD-dominated international payments system.
Third, by facilitating direct transactions between digital wallets, DCEP will eliminate sizeable banking clearing and settlements costs. In other words, ‘payment is settlement’ with no need for separate clearing and settlement processes.
Fourth, DCEP will offer firms new ways of raising capital and secondary trading via the issuance of digital securities and disintermediated trading on exchanges. Digital securities are regulated financial instruments such as equities or bonds where the transaction and shareholder details are recorded on the blockchain ledger. As a stable currency, DCEP will be used to reduce or eliminate the clearing and settlement processes associated with trading digital securities on secondary exchanges. In turn, this will provide firms and investors easier access to digital financial instruments.
Fifth, DCEP’s development will catalyse fintech innovation, giving rise to hybrid products that draw on both traditional markets and digital currencies. Greater numbers of innovative structured products are appearing in the digital currencies market, where the underlying asset is a native digital currency, such as Bitcoin, but the payoffs are based on traditional structured products. DCEP will serve as a reliable alternative underlying-asset in the future, stimulating the creation of more hybrid financial products.
Fifth, and not least, aggregate demand may rise as a result of DCEP’s rollout. DCEP adoption will allow governments to rapidly deploy “helicopter money” to the public without requiring bank accounts. This will empower the previously unbanked to form a new group of consumers.[MORE]
Debt – People criticizing China’s debt see only the debit side of the ledger. If they look at the credit side, they would see offsetting assets. One of those assets is the $20 billion Three Gorges Dam, which generates 100 billion KWh which it sells for US$0.084/KwH, bringing in $8.4 billion every year. Three Gorges tours earn another $3 billion, and flood mitigation and irrigation enhancement save another $3 billion, as the current flooding demonstrates. That’s valuable debt!
China pledged to invest $5.8 billion in the construction of the Moscow-Kazan High Speed Railway. The railway will be extended to China through Kazakhstan. The total cost of the Moscow-Kazan high speed railroad project is $21.4 billion. [MORE]
The Caspian Sea is becoming an alternative to the Suez for shipping between Europe and China, and a great deal of activity is taking place there. Four major Belt & Road routes and one significant Indian route make up the five East-West intersections that the Caspian is shortly to provide, with the potential for a sixth should plans to create a canal between the Caspian and Black Seas come to fruition. [Download Chris Devonshire-Ellis’ Report]
The Port of Beirut poses the biggest geostrategic threat to American power projection because China’s Silk Road is fast creeping towards the docks at Beirut Port. The US, having recently forced Israel to cancel its Haifa rail contract with China, has dampened the Chinese advance in the eastern Mediterranean, and what remains now in the path of the US is the Beirut Port. The US must either invade it to block the Chinese geostrategic mission creep, or else destroy it.[MORE]
See everyone next week for the regular Here Comes China newsletter. It is a pleasure to work with Godfree and to collate the main points for The Saker Blog.
amarynth
Both Israel and Lebanon put a bid in for the OBR Initiative port to cater to the eastern Mediterranean.
It promises to be one of the world’s largest maritime ports.
However, due to Israel’s infamous arrogance towards the world ( 70 U.N. Resolutions against it ignored ) , and it’s terrible stances, terror and all-out relations with its Arab neighbors, who effectively stand for 340 million people. And then there is Iran, a major central Asian power and major hub for the Southern China-CPEC ( China Pakistan Economic Corridor ) -Iran-Iraq-Syria and termination point in Beirut, Lebanon, or Haifa, Israel, Lebanon easily won out.
This was a no-brainer for the Chinese, who don’t have much faith in the Zionist state and along with much of the non-Western world’s people, probably also wonder how in the hell it came to be that Khazars Ashkenazi Eastern European-Steppe Russians settled down by brute force and by way of fiat, rushed, and pushed through U.N. Resolution and terror of the Semitic Arab Palestinian natives. The Chinese saw the writing on the walk and most likely agree along the lines of Sayed Ayatollah Khamenei that the usurper state will not last another 25 years due to its policies.
As soon as the Chinese made it clear on their decision on building the port in Beirut, not long after the Trump administration announced trade tariffs on China and the U.S. led Western world + India and an assortment of other dysfunctionals started with rhetoric, hostile and not, arms build-ups and other fruitless attempts to please Zion lest International Jews put sanctions on them instead of China and her allies like Russia, Iran, Venezuela, Cuba, Syria, somewhat Iraq ( was threatened with major, debilitating sanctions, and now the idiot savant of Israel and these highly organized International Jews, the U.S. is going to try to sabotage the Southern OBR route in Iraq ).
Yes, the U.S. has baeen since Reagan been an idiot savant to throw her incredible weight upon the world like a sledgehammer of hegemony and one driven by the all but we’ll known arrogance and supremacist of the Rabbinical Talmudic syndicates of international Jewry who control the dollar, the dollar that will most likely, if not surely be offset and retired by the illustrious, hard working, honest nation China.
China’ s approach of ‘ win – win ‘ has much more appeal to the world, and the Yuan will be the world’s reserve currency by mid-century barring world war.
What is happening today to China happened last century when something ominous took place against Germany in 1933.
The New York Times, among other major papers headlined ‘ World Judea declares War on Germany ‘.
As soon as Beirut was chosen, it happened to China.
As Salaam WA Alekum ( Peace Be Upon You All ).
You are aware of the huge investments china has made in Haifa Israel? As for Beirut port, the likelihood it would be chosen is nil. Lebanon is a balkanized basket case and now with the deliberate detonation of the ammonium nitrate that rendered 300,000 residents homeless, Beirut is finished as a contender. The logical choice would be tartus or Haifa.
However all of this is moot point now: unlike this rose tinted article’s views, the reality is that multinationals are moving our of China and at a faster pace than anyone imagined: Foxconn, Samsung, most Japanese multinationals, etc are either ceasing further expansion of manufacturing or building new plants outside of China such as in ASEAN, India, Mexico, etc. Of course US brands don’t want to leave China: for access to the Chinese consumer, but that doesn’t mean that manufacturing by those same multinationals are not being moved out; in fact they are being moved out.
And there is no Alliance between Russia and China, there’s a strategic relationship on economic matters but now even this is strainede. The deal china cut with Iran, undercuts Russia and is seen as a betrayal in certain Russian quarters. If china truly wanted a secure supply of oil and natural gas that is immune to Western bombing or sanctions pressure then China should have awarded this deal to Russia.
China’s exports are down a whopping 25%. Their cities are flooded, they’re suffering unprecedented levels of hostility from the United States, Japan, Korea, India and now France, Australia. and African nations as well. They are tied down on their western border and the US is getting in their face in the South China Sea as well as the Taiwan straits. And Russia is dragging their feet to deliver the S400 tô them (in fact Russia had stopped shipment of any interceptoe missiles).
And the number of trade transactions where renminbi is accepted instead of USD is only 5% of China’s trade, the 95% being done in USD.
Beirut port ?
Something does not make sense.
There’s Tartus (Syria) port, a better alternative for Chinese and Russia
Tartus is where the Russian naval base is.
After seeing the bombing of Beirut, would you want to put all your eggs into the same basket (port)?
Beirut is also a financial center. It was an important port for centuries, even before the Roman empire. There are lots of qualified traders, bankers, insurers and other related professions to support trade around the Mediterranean.
How did China succeed?
The Chinese decided to play the game and beat the Americans at their own game.
They appear to be winning.
They offered to partner with the Americans when they asked for an increased role in the IMF and WB, commensurate with their economic size. This was denied and so the Chinese decided to go their own way. Hence OBOR, BRI, Asian Infrastructure bank etc.
The US rejected the Chinese joining their system. Now the US will have to decide whether to join the Chinese model or go for broke and blow up everything (literally) so that it can all be started all over again with the US at the top.
Which option will they take?
“People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. ” – John Kenneth Galbraith
My guess it’s going to be the later option instead of the former.
I regret to inform many readers the Chinese build New Haifa Port terminal has NOT BEEN cancelled, the super modern Chinese automatic cranes are already up, container operations should start in early 2021.
Of course to please the US, and their dim wit domestic audience, Telaviv and Haifa politicians and media are maintaining strict silence and secrecy on the almost completed Chino-Ziono Haifa container port. The same silence/denial technique has been applied to the Zionist nuke program since 1960s..it is seemingly most effective!!!
Please refer to::
http://www.zpmc.com/news/cont.aspx?id=172
ZPMC shipped the first batch of 4 STSs and 2 RMGs of Israel Haifa Automatic Terminal to HaifaPort, the largest one on May 5th 2020. These cranes have now been erected.!!
also Shanghai port website http://www.portshanghai.com.cn/en/
Also refer to::
https://en.globes.co.il/en/article-yesterday-beirut-tomorrow-haifa-bay-1001338416
“The residents of Haifa Bay are living on a barrel of explosives´´.The Beirut attack could be heard in Haifa…..
https://en.globes.co.il/en/article-for-sale-one-old-haifa-port-1001336520
Jul 20, 2020 – The familiar view of Haifa Bay is changing beyond recognition. The construction of the new Bay Port by Chinese company SIPG is well underway … In spite of loud protests from many Zionists and the overpaid dock works at the older Haifa Port.
Finally, another sore point for Trumpy and Pompy with the inevitable flatulent threats and squawks, the North Stream gas pipeline from Russia to still occupied Germany (25000 US grunts left) will also be completed by mid 2021.
Business is business… just follow the Jelly Beans (quote the demised and even despised b-movie start Ronnie Regan!!)
I have a question which I’ve been too busy of late to pursue. In a certain sector of the alt-right media, who I don’t pay much attention to anymore, there is a story circulating that the Three Gorges Dam is about to collapse. Is there any truth to this?
Keep in mind, these are the same ‘sources’ who have harped on several times that the Orville Dam in northern California was only hours away from collapse. I’m still waiting. These are the same sources who whip up hysteria and hate, insisting that the U.S. is going to be invaded by Russia, China, and the U.N. in a red dawn invasion! Last time I checked, the Russian troops given as peacekeepers were about 98 with 12 of those being women. As I said, I don’t pay attention to these people anymore.
One cannot pay attention to the alt media from the west any longer Craig – just a few are still reliable. About the dam, there was massive flooding and massive farmlands were flooded. Dams upstream were opened and then the Three Gorges was opened and reached a historically high level. The Chinese say they have it under control. Many people around upstream damns were evacuated. But, I’ve heard now for many years that the Three Gorges Dam was going to collapse imminently. That seems to be a favorite trope of the ‘hate China’ brigade – the basis of that is that the Chinese are generally so bad, that the footings of the dam could not possibly have been built to spec because China Lies.
I don’t know how serious the actual flooding is – looked pretty serious to me. But the dam is still standing and I’ve not heard of any evacuations downstream. China has excellent engineers and they may just have done their work and investigated the structural strength. I don’t know. All I know is that the ‘hate China’ crowd will say anything.
China is a competent and viable alternative to the the US.
China must pitch a port building proposal for Beirut that Lebanon “cannot refuse” and ensure that Lebanon reject any US deal that will only be designed to keep Lebanon divided and weak – as demanded by Israel.
Whatever plans the US have for Lebanon will always be filtered through the question:
” Is this good for Israel”?
Lebanon must detach itself from the neo-colonial aspirations of France and the Israeli-centered designs of the US and become a solid part of China’s Belt and Road Initiative.
Look East, therein lies Lebanon’s salvation…
Selah
I have a glance to the Stiglitz speech some time ago and I am amazed about the following:
Could/Would you call democracy a system where 1% stole for 42 year wealth to the other 99% not to speak about real wages for 60?
Surely an intelligent person such as Stiglitz see this argument but he still continues to use the concept “western democracy”.
What do you think, how this is possible?
Well, he is a product of his generation and his training. Yet, I believe that his relaying of the events or the trajectory for China’s rise is perhaps as close to accurate as possible. For the rest, I’m not a fan or a groupie for sure in terms of his views.
Isn’t this the same Stiglitz who was one of the architects of the looting of Russia in the 90s ?
No, that would be Jeffrey Sachs and the other Harvard types. See The Harvard Boys Do Russia (an article written 1998).
Ok thank you Cyril
Yes he was, Stiglitz did take part in the the loot of Russia, along with Sachs. don’t whitewash him just because of his current corrupt views that sound pleasing to your ears. That’s standard practice by neo criminals like Stiglitz and Jeffrey Sachs.