Watching Eurasia and the New Silk Road / One Belt One Road (OBOR)

[Cara]

This is a thread to keep track of significant events, developments and changes in Eurasia and the New Silk Road / One Belt One Road (OBOR).

There are large scale and fairly significant shifts taking place. This thread is a place to get a sense of these.

For reference:
41324

And:
41325

[Cara]

Something is happening in the Kashmir region. There has been a lot of speculation in the last couple of days and now India has said they are revoking article 370 which grants two regions (Kashmir and Jammu) a special status.

https://cdn.britannica.com/s:1500x700,q:85/05/64605-004-1CB809FC.jpg


India announces plans to revoke Jammu and Kashmir’s special status

NEW DELHI, August 5. /TASS/. The Indian government has announced scrapping Article 370 of the Constitution, which grants a special status to the state of Jammu and Kashmir, Union Home Minister Amit Shah told the parliament on Monday.

"I am presenting the resolution to revoke Article 370 in Jammu and Kashmir except the first clause 370 (1)," Shah said, noting that Jammu and Kashmir would be "reorganized."

The order has been signed by President Ram Nath Kovind, Shah said, showing the document to the MPs.

The ruling Indian People's Party has majority of seats in the country’s lower house of parliament (Lok Sabha), thus ensuring that the government’s decisions are backed by the legislature.

Under India’s Constitution, Jammu and Kashmir - the only Indian state where Muslims constitute a majority - has special autonomy. All bills in this state passed by the central government (except for those related to defense and foreign relations) must be backed by a local assembly. Citizens of other Indian regions had no right to buy land in Kashmir. The state has its official flag.

Under the government’s proposal, Jammu and Kashmir will lose its status of a state and will become a union territory (that has fewer rights than a state). Its historic Ladakh region will be separated from it, also becoming a union territory. Other changes related to Kashmir’s status and rule will be also introduced. However, Jammu and Kashmir will keep its legislature.

The situation in Jammu and Kashmir has been tense for years. The territory of the ancient principality of Kashmir has been a matter of dispute between India and Pakistan since 1947, when the British Raj received independence and was split into two states based on religion. To date, there is no state border in Kashmir: its territory is divided by the Line of Control. Groups that favor departure from India are being active in the Indian part.
From: https://tass.com/world/1071879/amp?__twitter_impression=true

And:


India Decides to Revoke Article 370 on Kashmir's Special Status in Unprecedented Move

Article 370 of the Indian Constitution gives special status to the State of Jammu and Kashmir. India controls the southern portion of Kashmir, a region that has historically been hotly contested between India and Pakistan.

The Indian government has moved to scrap Article 370 of the national constitution, which grants special autonomy to the state of Jammu and Kashmir, the Muslim-majority Indian-controlled part of Kashmir.

Home Minister Amit Shah told the upper house of parliament on Monday that the government would abrogate the cause, prompting a massive uproar from opposition lawmakers.

Article 370 allows the state's local legislature, the Constituent Assembly of Jammu, to make its own laws and bans people from outside the state from buying property there as well as obtaining state government jobs and participating in state-sponsored scholarship programmes.

By rejecting the special status of Jammu and Kashmir, the national government is ensuring that the national constitution will now be applied throughout the Himalayan state.

Citing the threat of cross-border terrorism, Amit Shah announced that the state of Jammu and Kashmir will be divided into two union territories, governed directly by the central government – Jammu and Kashmir would be split from the mountainous region of Ladakh.

Ladakh will become a union territory without a legislature, while Jammu and Kashmir will have a legislative assembly like other Indian states instead of its own, more autonomous Constituent Assembly.

Pakistan's foreign minister, Mehmood Qureshi, claimed that the move violates a UN resolution on the status of Kashmir.

The measure, which will come into force "at once", comes hours after the government ordered restrictions and night curfews to be imposed on Jammu and Kashmir over fears that foreign terrorists were planning to target police officers there.

New Delhi has deployed thousands of additional troops to the Pakistan border to beef up security in Indian-ruled Kashmir, with mobile internet being shut down throughout the state. The authorities have told visiting pilgrims and tourists to leave the area, banning public meetings and advising regional schools to remain closed as a precautionary measure. Two former chief ministers of the territory have been placed under house arrest.

A Troubled Region

Kashmir has been divided between India and Pakistan since they gained independence in 1947. Both nations claim the entire region but control only parts of it. Over the past 70 years, the nuclear-armed foes have fought two wars and waged a limited conflict over the region.

An Islamist insurgency has engulfed Jammu and Kashmir in the past decades, with militants seeking secession from India. There have been reports of gunfights across the Line of Control – the de facto border with Pakistan – in recent days.

Peace talks between Pakistan and India have stalled, but speculation emerged last month that the United States could mediate a solution on Kashmir between the neighbouring nations.

Donald Trump told reporters that Indian Prime Minister Modi had asked him if he would like to broker a peace deal, but India denied that Modi had ever made such a request.

Although Pakistani Prime Minister Imran Khan, a Trump ally, has appeared to be willing to accept the US as a mediator, India responded that it would deal with Pakistan only bilaterally.
From: https://sputniknews.com/amp/asia/201908051076464599-indian-minister-introduces-legislation-to-revoke-constitution-article-370-on-kashmir-special-status/?__twitter_impression=true

More about Kashmir: https://www.britannica.com/place/Kashmir-region-Indian-subcontinent

[silvanelf]

https://www.suchtv.pk/media/k2/items/cache/84844ac88e74b5888ba9ded2e6e9823d_Generic.jpg
image source: https://www.suchtv.pk/pakistan/general/item/31261-government-plans-new-railway-tracks-under-cpec.html


A few days ago, RT reported that China, in addition to the expansion of the new port in Gwadar, Balochistan, has entered agreements with Pakistan to build a military/air base in Pakistan, a new Chinese city for some half a million people, as well as several road and railway improvement projects, including a highway connecting the cities of Karachi and Lahore, reconstruction of the Karakoram Highway, linking Hasan Abdal to the Chinese border, as well as upgrading the Karachi-Peshwar main railway to be completed by the end of 2019, for trains to travel up to 160km / hour.

This rehabilitation of dilapidated Pakistani transportation infrastructure is not only expected to contribute between 2% and 3% of Pakistan’s future GDP, but it offers also another outlet for Iranian gas / hydrocarbons, other than through the Strait of Hurmuz – for example, by rail to the new port of Gwadar which, by the way, is also a new Chinese naval base. From Gwadar Iranian hydrocarbon cargos can be shipped everywhere, including to China, Africa and India. With the new China-built transportation infrastructure Iranian gas can also be shipped overland to China.

https://www.globalresearch.ca/western-alliance-falling-apart/5685408

[Cardillac]

there has never been a 'new' "Silk Road" and the conquest for it has always been the same- nothing changes- changing labelings doesn't change an original agenda-

Larry

[Cara]

there has never been a 'new' "Silk Road" and the conquest for it has always been the same- nothing changes- changing labelings doesn't change an original agenda-

Larry

Larry, are you able to share some data, quotations, articles or other materials that help readers understand more about what you’re saying? This thread is intended to collect information about what is going on, so additional articles will be most welcome.

Thanks.

[Cara]

Some commentary and analysis from former Indian diplomat M.K. Bhadrakumar on the developments in Afghanistan:


US, Pakistan move in tandem to end Afghan war
July 28, 2019 by M. K. BHADRAKUMAR

The US State Department chose Friday to announce the decision to approve a $125 million aid package providing technical support to Pakistan’s fleet of F-16 fighter aircraft. Ironically, the news reached Delhi on the 20th anniversary of the Kargil Vijay Diwas, which symbolises, as Prime Minister Narendra Modi put it on Saturday, “India’s might, determination, capability, discipline and patience” to thwart Pakistan’s hostile acts.

Clearly, Washington has begun to “incentivise” Pakistan, in the downstream of the talks between President Trump and Prime Minister Imran Khan at the White House on July 22.

Meanwhile, the Pentagon also notified on Friday about a proposed $670 million follow-on support programme for the eleven C-17 Globemaster-III air-lift aircraft sold by the US to India in the recent years. By holding out the carrot to India, Washington hopes to create the hype that it is also favouring Delhi.

The intention here is to finesse Delhi’s criticism over the revival of US military aid to Pakistan. Of course, it will be a delusional thought that the US is balancing India and Pakistan. In reality, the Pentagon’s India proposal is a purely commercial transaction — “after-sales service”, which will generate good business for the US vendors — while the military aid to Pakistan providing technical and logistics support for its F-16 fighter jets is on concessional terms and signifies a major political decision.

Delhi will take note that the proposed US military aid may significantly enhance Pakistan’s offensive capability insofar as some of the F-16 jets are capable of delivering nuclear weapons.

Indeed, the “big picture” emerging out of all this is that the US and Pakistan are marching ahead in tandem to implement the decisions taken by Trump and Imran Khan to swiftly end the Afghan war.

No sooner than Imran Khan left Washington on July 23, the chairman of the US Joint Chiefs of Staff General Joe Dunford traveled to Afghanistan’s capital of Kabul for consultations with American, NATO and Afghan officials.

Dunford said he wants to ensure Gen. Austin S. Miller, the US commander in Afghanistan, has all he needs. He added that he wanted to take the pulse of US military operations in the country. Indeed, the pulse rate is rather high, as the US withdrawal from Afghanistan looms large.

Dunford insisted that the negotiations have not changed the military mission in the country. “Day to day, the mission hasn’t changed for General Miller and the team, and they are still taking the fight to the Taliban and supporting the Afghan military,” he said.

But that’s putting a brave face. Evidently, the US is pushing forward a “face-saving way out of Afghanistan,” as former CIA deputy director Michael Morell has told Axios. The message has gone down the line in the State Department and the Pentagon that Trump wants to move quickly toward a deal to end the war in Afghanistan. Morell is deeply sceptical whether a deal with the Taliban will secure peace.

He said, “I would bet that the US intelligence community and policymakers have a pretty good understanding of what the Taliban’s intentions are. So we’re making a deal that we know isn’t going to be kept just to save face, just to maintain honour.” Morell repeated his past warnings that the Taliban is “ideologically not disposed to sharing power.”

However, an apocalyptic scenario cannot deter Washington anymore. On a parallel mission, the US special representative on Afghanistan Zalmay Khalilzad also took off on July 23 from Washington to Kabul (where he is now speaking with members of the Afghan government as he works to encourage inter-Afghan conversations between the Taliban and the government.)

In immediate terms, Khalilzad expects Pakistan to deliver on the promise that Imran Khan made to Trump to the effect that he plans to meet with the Taliban to persuade them to hold negotiations with the government in Afghanistan. (Taliban has welcomed such a meeting.)

Imran Khan had said, “Now, when I go back after meeting President Trump … I will meet the Taliban and I will try my best to get them to talk to the Afghan government so that the elections in Afghanistan must be inclusive where the Taliban also participate in it.”

It may seem a tough call, but the news from Kabul on Saturday suggests that Pakistan may have made some headway already. The Afghan state minister for peace affairs Abdul Salam Rahimi announced on Saturday that “We (Afghan government) are preparing for direct talks (with the Taliban.) The government will be represented by a 15-member delegation. We are working will all sides and hope that in the next two weeks the first meeting will take place in a European country.”

The Norwegian capital Oslo is mentioned as the venue for the crucial meeting between the representatives of the Afghan government and the Taliban. The Taliban has not yet budged from its longstanding demand that a deal must be forged with the US first. Possibly, a deal may be announced after the 9th round of US-Taliban talks in Doha in the coming week.

Indeed, we are witnessing an utterly fascinating spectacle of diplomatic pirouette being played out between and amongst five main protagonists — Trump who is demanding an expeditious US withdrawal from Afghanistan, assuming Imran Khan will deliver on his promises; Imran Khan, in turn, going through the motions of persuading the Taliban to be reasonable while expecting generous US reciprocal moves to accommodate Pakistani interests; Ashraf Ghani, Afghan president, seeing the writing on the wall that US withdrawal is unstoppable, whilst still hoping to secure a second term in office; Khalilzad pushing the reluctant Afghan government to fall in line with a Taliban deal, while also negotiating with the Taliban for an orderly US withdrawal, albeit with a weak hand; and the Taliban on a roll, sensing victory. There are caveats galore. But the compass has been set.
From: https://indianpunchline.com/us-pakistan-move-in-tandem-to-end-afghan-war/

[Cara]

More on the Kashmir and Jammu issues with some useful history. Also includes comments on Hong Kong riots and the similarity of the two situations and western interference.


China reacts to J&K, India demands reciprocity
August 7, 2019 by M. K. BHADRAKUMAR

https://indianpunchline.com/wp-content/uploads/2019/08/JK-1.jpg
Srinagar, Jammu & Kashmir, on lockdown. File photo.

In the aftermath of the Modi government’s decision to remove ‘special status’ for J&K and bifurcate the state into two union territories, the most keenly awaited regional and international reaction — and a hugely consequential one — would be that of China’s, not the US’ or even of the other three P5 member states.

This is for three reasons. First, China is the only P5 member country that is party to the Kashmir dispute by virtue of its Faustian deal with Pakistan in 1963 — Sino-Pakistan Frontier Agreement and Sino-Pak Boundary Agreement (http://people.unica.it/annamariabaldussi/files/2015/04/China-Pakistan-1963.pdf) — as well as due to Aksai Chin being a disputed territory.

https://indianpunchline.com/wp-content/uploads/2019/08/JK-2.jpg

Second, it is well-known that China has a larger-than-life influence over Pakistan, and therefore, indirectly, is in a position to leverage the next moves by Islamabad on the J&K situation in practical or political terms.

Third, of course, China is a veto-holding P5 member country. Although not involved in the making of the UN resolutions on Kashmir in 1948-1949 (which was an Anglo-American enterprise at a juncture when Nehru somehow deliberately refrained from seeking Soviet help to counter India’s isolation in the UN SC), nonetheless, China is a powerful protagonist today if the Kashmir file were to reopen in New York at Pakistan’s behest.

On Tuesday, the Chinese reaction to the announcement in Delhi on Monday relating to J&K has come in two parts in the nature of remarks by the Foreign Ministry spokesperson in Beijing (a relatively low-key reaction in diplomatic terms in comparison with a full-fledged statement, as Turkey, for instance, has done.) One part exclusively relates to Ladakh’s new status as union territory, while the other one relates to the ‘current situation’ in J&K. Both remarks are devoid of any stridency and on the whole India can live with them although western media, unsurprisingly, has hyped them. In fact, neither voices any overt backing to Pakistan. And, importantly, there are no new overtones as such in the well-known Chinese stance.

The remark on the change in Ladakh’s status (https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2535_665405/t1686549.shtml) begins by underscoring explicitly that China is voicing its ‘firm and consistent position’, which ‘remains unchanged’. That is to say, it regards part of Ladakh to be Chinese territory and India should not unilaterally create facts on the ground through domestic laws. If India does, China will consider that unacceptable and it ‘will not come into force.’ The remark rounds off stating the Chinese stance that India should speak and act with prudence on the boundary question, strictly abide by relevant agreements (on peace and tranquility) and avoid precipitate steps.

This is exactly what China has maintained and can be expected to state. No doubt, this is also what India would expect China to observe in regard of the unresolved border dispute. The Indian stance on CPEC is a fine example.

The grey area here is whether the administration of Ladakh as UT will entail administrative arrangements on the ground that tread on Chinese sensitivity. Prima facie, that is unlikely to happen, since the two militaries present in the vacant spaces observe ground rules.

On the other hand, the interesting aspect of the Chinese spokesperson’s remark on J&K situatio (https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2535_665405/t1686548.shtml)n is that there is no direct reference to the specific situation involving the abrogation of Article 370 of the constitution. The remark is of a generic nature. It repeats that the J&K situation is a matter of serious concern, but underscores categorically that ‘China’s position on the Kashmir issue as such is clear and consistent’.

Most important, it flags that China is in sync with the ‘international consensus’ that Kashmir issue is a historical conundrum that India and Pakistan have to grapple with by exercising restraint and prudence. This means, however, that the two countries ‘should refrain from taking actions that will unilaterally change the status quo and escalate tensions.’ China calls on the two countries to peacefully resolve their ‘relevant disputes’ through dialogue and consultation in the interest of regional peace and stability.

Indeed, the ‘known unknown’ here is to what extent, if any, the current upheaval in Hong Kong influenced Beijing to sidestep Modi government’s specific move to abolish Article 370 and abandon J&K’s ‘special status’. To be sure, a grave situation has arisen in Hong Kong, which has assumed anti-China overtones.

No analogy holds good cent percent in politics, but there are similarities in the public alienation in J&K and in Hong Kong which foreign powers are exploiting. In fact, China also has to contend with its equivalent of our Article 370 — the Sino-British Joint Declaration (https://en.wikisource.org/wiki/Sino-British_Joint_Declaration), which is as sacrosanct as an international bilateral treaty, signed between China and Britain on 19 December 1984 in Beijing.

Curiously, the Joint Declaration is also legally binding and like Article 370, it commits China to allow Hong Kong to ‘enjoy a high degree of autonomy, except for foreign and defence affairs’ even as the territory will be ‘directly under the authority’ of Beijing.

Most important, the Joint Declaration affirms, “The government of the HKSAR [Hong Kong] is responsible for the maintenance of public order. Military forces sent by the Central People’s Government, stationed in HKSAR, for the purpose of defence shall not interfere in the internal affairs in the HKSAR.”
From: https://indianpunchline.com/china-reacts-to-jk-india-demands-reciprocity/

[Cara]

Comment from Pepe Escobar on both Hong Kong and Kashmir and Jammu.


Hong Kong, Kashmir: a Tale of Two Occupations

Pepe Escobar
August 7, 2019

Readers from myriad latitudes have been asking me about Hong Kong. They know it’s one of my previous homes. I developed a complex, multi-faceted relationship with Hong Kong ever since the 1997 handover, which I covered extensively. Right now, if you allow me, I’d rather cut to the chase.

Much to the distress of neocons and humanitarian imperialists, there won’t be a bloody mainland China crackdown on protesters in Hong Kong – a Tiananmen 2.0. Why? Because it’s not worth it.

Beijing has clearly identified the color revolution provocation inbuilt in the protests – with the NED excelling as CIA soft, facilitating the sprawl of fifth columnists even in the civil service.

There are other components, of course. The fact that Hong Kongers are right to be angry about what is a de facto Tycoon Club oligarchy controlling every nook and cranny of the economy. The local backlash against “the invasion of the mainlanders”. And the relentless cultural war of Cantonese vs. Beijing, north vs. south, province vs. political center.

What these protests have accelerated is Beijing’s conviction that Hong Kong is not worth its trust as a key node in China’s massive integration/development project. Beijing invested no less than $18.8 billion to build the Hong Kong-Zhuhai-Macau bridge, as part of the Greater Bay Area, to integrate Hong Kong with the mainland, not to snub it.

Now a bunch of useful idiots at least has graphically proven they don’t deserve any sort of preferential treatment anymore.

The big story in Hong Kong is not even the savage, counter-productive protests (imagine if this was in France, where Macron’s army is actually maiming and even killing Gilets Jaunes/Yellow Vests). The big story is the rot consuming HSBC – which has all the makings of the new Deutsche Bank scandal.

HSBC holds $2.6 trillion in assets and an intergalactic horde of cockroaches in their basement – asking serious questions about money laundering and dodgy deals operated by global turbo-capitalist elites.

In the end, Hong Kong will be left to its own internally corroding devices – slowly degrading to its final tawdry status as a Chinese Disneyland with a Western veneer. Shanghai is already in the process of being boosted as China’s top financial center. And Shenzhen already is the top high-tech hub. Hong Kong will be just an afterthought.

Brace for blowback

While China identified “Occupy Hong Kong” as a mere Western-instilled and instrumentalized plot, India, for its part, decided to go for Full Occupy in Kashmir.

Curfew was imposed all across the Kashmir valley. Internet was cut off. All Kashmiri politicians were rounded up and arrested. In fact all Kashmiris – loyalists (to India), nationalists, secessionists, independentists, apolitical – were branded as The Enemy. Welcome to Indian “democracy” under the crypto-fascist Hindutva.

“Jammu and Kashmir”, as we know it, is no more. They are now two distinct entities. Geologically spectacular Ladakh will be administered directly by New Delhi. Blowback is guaranteed. Resistance committees are already springing up.

In Kashmir, blowback will be even bigger because there will be no elections anytime soon. New Delhi does not want that kind of nuisance – as in dealing with legitimate representatives. It wants full control, period.

Starting in the early 1990s, I’ve been to both sides of Kashmir a few times. The Pakistani side does feel like Azad (“Free”) Kashmir. The Indian side is unmistakably Occupied Kashmir. This analysis (https://thefunambulist.net/disobedient-bodies-defiant-objects-occupation-necropolitics-and-the-resistance-in-kashmir-by-mohamed-junaid?fbclid=IwAR0iA3bP4KjtHLREuduwn2ZXdbcqLDrJwEwiO-gwAgxKBj8P7NUkKGm-5OA) is as good as it gets portraying what it means to live in IOK (Indian-occupied Kashmir).

BJP minions in India scream that Pakistan “illegally” designated Gilgit-Baltistan – or the Northern Areas – as a federally administered area. There’s nothing illegal about it. I was reporting in Gilgit-Baltistan late last year, following the China-Pakistan Economic Corridor (CPEC). Nobody was complaining about any “illegality”.

Pakistan officially said it “will exercise all possible options to counter [India’s] illegal steps” in Kashmir. That’s extremely diplomatic. Imran Khan does not want confrontation – even as he knows full well Modi is pandering to Hindutva fanatics, aiming to turn a Muslim-majority province into a Hindu-majority province. In the long run though, something inevitable is bound to emerge – fragmented, as a guerrilla war or as a united front.

Welcome to the Kashmiri Intifada.
From: https://www.strategic-culture.org/news/2019/08/07/hong-kong-kashmir-a-tale-of-two-occupations/

[Cara]

With respect to China identifying western interference in Hong Kong, this is relevant:

41341

[Cara]

Iran steps in to comment on the situation in Kashmir and Jammu:


‘No hasty decisions or military moves’: Iran urges Pakistan & India to keep cool in Kashmir row
Published time: 11 Aug, 2019 04:32 Edited time: 11 Aug, 2019 05:10

Iran has urged Pakistan and India to avoid any reckless moves in the Kashmir dispute that could escalate into a direct military confrontation and be devastating for the entire region.

“Military approaches in this region will further complicate the situation,” Iran’s armed forces chief, Major General Mohammad Baqeri, told (https://en.mehrnews.com/news/148719/Recent-developments-in-Kashmir-worrying-for-Iran-Islamic-states) his Pakistani counterpart, Qamar Javed Bajwa, during a phone conversation on Saturday. The commander also urged the parties to maintain calm and avoid making any “hasty decisions.”

Tensions have been running high in Jammu and Kashmir since Monday, when New Delhi revoked a constitutional provision (Article 370) that allowed the territory to have its own flag, constitution, and autonomy over its internal administration.

Turning the Indian-administered Kashmir from a state to a federally controlled territory will help end decades of terrorism and separatism incited by Pakistan, Indian Prime Minister Narendra Modi stated earlier this week. To reinforce its sovereignty and to prevent potential acts of terrorism and violence, India sent some 35,000 troops to the region.

In response, Pakistan downgraded its diplomatic relations with New Delhi and suspended trade and train links with its neighbor.

Kashmir, with a predominantly Muslim population, has been the center point of contention between India and Pakistan ever since they gained independence from Britain in 1947. Three wars have been fought over the Himalayan region in the last 40 years, but they have failed to change the boundaries or control of the state.
From: https://www.rt.com/news/466250-iran-kashmir-no-military-solution/

[Cara]

There are challenge within China from local governments ‘rigging’ the system in the railway network component of One Belt One Road.

It certainly seems that China is no different to the West in this: people will gear larger systems to meet their particular needs.


Empty trains on the modern Silk Road: when Belt and Road interests don’t align
China’s provinces are sending empty freight trains to Europe. Chinese media explains why.

TJMa 2019年8月23日

China is sending empty freight trains to Europe through one of its key Belt and Road Initiative (BRI) projects: the China-Europe Railway Express. The bizarre phenomenon caught the attention of Depth Paper (https://cj.sina.com.cn/articles/view/5808591992/15a38147801900jum7) (等深线), a Chinese online news platform. In a rare move by a Chinese media outlet in today’s media environment, Depth Paper probed critically into one of the BRI’s most visible “connectivity” projects, uncovering the perverse incentives that are luring China’s local governments and companies to create huge “bubbles” of ostensibly flourishing rail routes that run tens of thousands of kilometers across the vast landmass of Eurasia.

The revelation partly confirms what some observers have suspected (https://foreignpolicy.com/2018/12/06/bri-china-belt-road-initiative-blunder/) all along: that China’s central government lacks the ability to keep BRI strategically tight and coordinated. Sub-national stakeholders, as they do in other policy areas, have the incentives to bend the initiative to their own narrowly defined interests and in the process undermine the overarching strategy, if such a strategy indeed exists at all. The curious case uncovers some important dynamics playing out among Belt and Road’s diverse stakeholders.

https://i0.wp.com/pandapawdragonclaw.blog/wp-content/uploads/2019/08/China-Railway-Express.jpg?w=640&ssl=1
Depth Paper uncovered the perverse incentives that are luring China’s local governments and companies to create huge “bubbles” of ostensibly flourishing rail routes that run tens of thousands of kilometers across the vast landmass of Eurasia.

The China-Europe Railway Express

Transporting goods between China and Europe through railroads is not a common choice for traders. Up to now, it only makes up 4.8% of the total bilateral trade volume, far behind commodities moved by sea (68%) and air (19.4%). For many years, the China-Europe rail routes were interrupted by the fragmented customs, quarantine and taxation regimes of countries along the way. As a rail transport agent in west China told Depth Paper, sending cargo to Germany through rail was unimaginable as recently as 1997. “Central Asia was as far as we could go.”

But, according to the report, things changed about a decade ago. Years before the advent of the Belt and Road Initiative, the instigator of this change was in fact the American computer company Hewlett-Packard. In 2009, as the computer giant negotiated a major investment deal with Chongqing, the city on the upstream Yangtze River with no easy access to a sea port, it included a condition that it should be able to transport its products to the European market by train: westbound directly from the city, instead of first going east to the sea. The Chongqing government accepted the condition and after two years, the Chongqing to Duisburg rail route was made navigable, allowing HP to ship to Europe in a relatively low cost (compared to air transport) and speedy way (compared to shipping by sea).

Before 2013, the year when BRI was formally announced, a few other freight rail routes were made possible by such bottom-up commercial interests. The city of Wuhan in central China, a major base for car manufacturing, developed Wuhan to Europe routes upon which half of its car outputs now depend for transportation. Similarly, Yiwu, the light industry powerhouse of Zhejiang province, opened up its own rail route to ship large quantities of small commodities, from garments to needles, to Europe. Ironically, those early trials, mostly developed by landlocked Chinese municipalities, received little central government support around that time. According to Depth Paper, China’s railway administrators even charged a fee for the extra burden those freight lines created. Its attitude toward such initiatives would make a 180 turn after BRI came into being.

2013 saw the creation of BRI and the incorporation of China-Europe rail links under the umbrella of Xi’s signature initiative as a key connectivity component. As China’s 2015 Vision and Strategy document for the BRI declared the intention of building the rail routes into a “brand name service”, the number of routes began to explode. Dozens of Chinese cities, including those on the east coast with easy access to ports, joined the bandwagon of rail transportation.

41449
Planned train routes from China to Europe through Central Asia/Russia, source: NDRC

Growing bubble

In 2016, the National Development and Reform Commission (NDRC) laid out a five year plan (http://www.ndrc.gov.cn/zcfb/zcfbghwb/201610/P020161017547345656182.pdf) for the expansion of westbound rail routes. And China’s railway planner published a blueprint document on building up the brand reputation of China Railway Express. China State Railway Group Corporation, which used to be the railway ministry, began to highlight the growth of Europe-bound voyages as a major achievement.

The elevation of the freight service in political importance created powerful incentives for players to “rig the game”. Depth Paper reveals two groups of schemers in the game:

Provincial and local governments: As the number of freight trips to and from Europe become a measurable indicator, local governments, particularly those sitting at key railway hubs, saw a clear opportunity to boost their visibility under the BRI (and probably to the leadership). At their disposal were subsidies to lower the cost of freight services and make them competitive with cargo ships.

The Ministry of Finance provides a guiding subsidy ceiling of 0.8USD/container/kilometer. But ambitious local governments circumvent it by inventing all kinds of additional rewards to lure businesses to their train terminals, sometimes even compensating for the extra mileage of truck transportation to bring containers from thousands of kilometers away. According to a chart (http://www.sinotf.com/GB/Logistics/1113/2019-07-09/3NMDAwMDMzNTk3NA.html) collated by Sino Trade and Finance, many municipal government offer around 3000USD per container for a one-way Europe bound trip and a whole train could receive a total of 123,000USD worth of subsidies per trip. These local governments also use tax rebate and land use subsidies to sweeten the deal for freight service companies.

International railway service companies: Competition with each other and pressure from local governments eager for BRI visibility has incentivized the companies who actually run the numerous rail routes to Europe to increase the number of train trips. Every month these companies have to book planned trips from the railway regulators and get what is called a “route slip” that permits them to run those trains. The ratio of actual trips to the applied number is called “realization rate” that regulators use to monitor rail capacity utilization.

The interplay of these incentives drives both groups to boost indicators that make them look good in this game, creating scenes that are outright bizarre. The government of Xi’an is one of the most active players starting from 2018. The city, 1000 kilometers to the west of Beijing and the former capital of Tang Dynasty more than a millennium ago, considers itself the “starting point of the ancient Silk Road” and strives to restore its glory in the Belt and Road era. With full support from its provincial bosses, it is the most generous with subsidies, dwarfing other provinces by a wide margin. “Subsidized per container transportation price from Xi’an is constantly below RMB 8500, while it costs over 20000 RMB from Shandong,” a trade agent told Depth Paper.

The subsidies are of the scale that they bend the gravity of trade. In the most extreme cases, traders in the far west Xinjiang Autonomous Region, which already borders Central Asia and is itself a Belt and Road rail hub, would move their cargo thousands of kilometers to the east to capitalize on the Xi’an government’s free handouts before transporting west across the Eurasian continent. Similarly, traders in coastal Shandong provinces would truck their goods all the way to Xi’an and load them onto trains, as it is cheaper even after taking into account the 5000 RMB per container transportation cost by truck (for which the Xi’an government also partially remunerates). The result is that Europe-bound freight train trips from Xi’an grew by a whopping 536.6% in just one year from 2017 to 2018.

The railway service companies, on the other hand, blow up their trip numbers even when they have very little to ship. Before Xi’an arrived on the scene in 2018, the competition between Chongqing and Chengdu, two nearby cities, was so fierce that the two cities would refuse to merge cargo loads back from Germany despite neither being able to fill a whole train themselves. When the pressure (and reward) to be the top railway service company facilitating “Belt and Road” trips to Europe becomes huge, the companies simply start loading empty containers to their trains. They must ensure that each train meets the regulator’s 40-container minimum before it leaves the station, but there is no obligation and no ability (for lack of demand) to fill those containers.

In the most extreme case, one train carried 40 empty containers and just one full container all the way to Europe. This makes the China Railway Express’s impressive growth number highly dubious, and most certainly a “bubble”. Even with all their tricks, companies can barely fulfill their promise to regulators: they have overbooked railway resources. In Q2 of 2019, Chongqing’s “realization rate” dipped to as low as 64% for some routes.

BRI undermined

Artificially enabled transportation routes are more of a disruption to than facilitation of trade, as China’s policy makers are slowly but painfully beginning to realize. Subsidies are both unsustainable and capricious: “Sometimes a city changes a Party Secretary and the new boss has other priorities for his budget.” This makes it hard for businesses to make long term plans and build China Railway Express into their logistic strategies.

Heavy subsidies also encourage opportunistic behavior that runs against the original intention of the policy. “[Subsidies] are supposed to help first-time users overcome initial transition difficulties and cultivate user acceptance of freight rail as a reliable means of transportation”, says one anonymous Liaoning provincial official to Depth Paper. “ what Xi’an does can hardly nurture real needs. Traders will go back to sea and air as soon as subsidies disappear.” The official also warns that such unpredictability and fluctuation would hurt the China Railway Express’s reputation overseas and permanently scare clients away.

The [B]Ministry of Finance is reportedly determined to pierce the bubble by enforcing a schedule for phased subsidy reduction. Subsidies by local government are to be no more than 40% of a route’s total cost in 2019. The ceiling will be further lowered to 30% in 2020 and zero by 2022. The Ministry is hoping that by then the trains running up and down routes would be completely market driven and China Railway Express will stand on its own two feet.

The episode reveals the fundamental difficulties for China’s central leadership to implement its vision by reducing it to seemingly measurable indicators and supposedly workable incentives that mobilize local players to participate in a central government cause. Distortions and outright undermining of central government agenda happens with GDP numbers, air pollution targets, and other domestic issues. BRI is no exception.

It also calls into question a key underlying assumption of the BRI, that the power and “deep pocket” of the Chinese state can overcome problems that the market cannot solve when left alone. Trade flows, it turns out, are not easily bendable by the sheer will of the state. It is a rare occasion for a Chinese media outlet to so directly call out systemic problems in Xi Jinping’s signature initiative. As China embarks on other overseas adventures that premise on the ability of state capitalism to shift the center of gravity of global trade (through new ports and rail hubs), the troubles of China Railway Express should serve as a cautionary tale of the limits of state power.
From: https://pandapawdragonclaw.blog/2019/08/23/empty-trains-on-the-modern-silk-road-when-belt-and-road-interests-dont-align/

[Cara]

The Solomon Islands have switched diplomatic ties from Taiwan to China.


Taiwan terminates relations with Solomon Islands: foreign minister
16 September 2019 18:322 min read

Taiwan on Monday severed ties with the Solomon Islands after learning the Pacific nation had decided to switch diplomatic recognition to China, a decision it described as “extremely regrettable”.

“The cabinet of the Solomon Islands government decided to switch diplomatic relations to the People’s Republic of China,” foreign minister Joseph Wu announced at a press conference in Taipei on Monday.

“The government hereby declares the termination of diplomatic relations with the Solomon Islands with immediate effect,” he added.

The move is yet another diplomatic blow for Taiwan which has seen its few remaining allies steadily whittled down by Beijing.

Only 16 nations still diplomatically recognise the island over Beijing.

Taiwan has been a de facto sovereign nation since the end of a civil war in 1949, but China still views the island as its territory and has vowed to seize it — by force if necessary.

Over the decades, as China’s economic and military power has grown, dozens of countries, including the United States and most Western nations, have switched recognition to Beijing.

In the last few years only a handful of countries have remained loyal to Taiwan, largely in Latin America and the Pacific.

But Beijing stepped up its campaign to diplomatically isolate Taiwan after the 2016 election of President Tsai Ing-wen, who hails from a party that refused to recognise the idea that the island is part of “one China”.

Since her election, six of Taiwan’s allies have now defected.
From: https://www.hongkongfp.com/2019/09/16/breaking-solomon-islands-officially-switches-diplomatic-ties-taiwan-china/

[Cara]

Details of an extensive 2016 deal agreed between China and Iran have been released. The deal relates mostly to preferential pricing of, development of infrastructure for and access to Iranian oil. US Dollars are avoided. Russia get the option of participating to some degree.


China and Iran flesh out strategic partnership
Staggered 25-year deal could mark seismic shift in the global hydrocarbons sector

Simon Watkins

Iran's foreign minister Mohammad Zarif paid a visit to his Chinese counterpart Wang Li at the end of August to present a road map for the China-Iran comprehensive strategic partnership, signed in 2016.

The updated agreement echoes many of the points contained in previous China-Iran accords, and already in the public domain. However, many of the key specifics of this new understanding will not be released to the public, despite representing a potentially material shift to the global balance of the oil and gas sector, according to a senior source closely connected to Iran's petroleum ministry who spoke exclusively to Petroleum Economist in late August.

The central pillar of the new deal is that China will invest $280bn developing Iran's oil, gas and petrochemicals sectors. This amount may be front-loaded into the first five-year period of the deal but the understanding is that further amounts will be available in every subsequent five-year period, subject to both parties' agreement.

There will be another $120bn investment in upgrading Iran's transport and manufacturing infrastructure, which again can be front-loaded into the first five-year period and added to in each subsequent period should both parties agree.

Chinese presence

Among other benefits, Chinese companies will be given the first refusal to bid on any new, stalled or uncompleted oil and gasfield developments. Chinese firms will also have first refusal on opportunities to become involved with any and all petchems projects in Iran, including the provision of technology, systems, process ingredients and personnel required to complete such projects.

"This will include up to 5,000 Chinese security personnel on the ground in Iran to protect Chinese projects, and there will be additional personnel and material available to protect the eventual transit of oil, gas and petchems supply from Iran to China, where necessary, including through the Persian Gulf," says the Iranian source.

"China will also be able to buy any and all oil, gas and petchems products at a minimum guaranteed discount of 12pc to the six-month rolling mean price of comparable benchmark products, plus another 6pc to 8pc of that metric for risk-adjusted compensation."

Under the terms of the new agreement, Petroleum Economist understands, China will be granted the right to delay payment for Iranian production up to two years. China will also be able to pay in soft currencies that it has accrued from doing business in Africa and the Former Soviet Union (FSU) states, in addition to using renminbi should the need arise—meaning that no US dollars will be involved in these commodity transaction payments from China to Iran.

"Given the exchange rates involved in converting these soft currencies into hard currencies that Iran can obtain from its friendly Western banks—including Europäisch-Iranische Handelsbank [in Germany], Oberbank [in Austria] and Halkbank [in Turkey]—China is looking at another 8-12pc discount [relative to the dollar price of the average benchmarks], which means a total discount of up to 32pc for China on all oil, gas and petchems purchases," the source says.

Another positive factor for China is that its close involvement in the build-out of Iran's manufacturing infrastructure will be entirely in line with its One Belt, One Road initiative. China intends to utilise the low cost labour available in Iran to build factories, designed and overseen by large Chinese manufacturing companies, with identical specifications and operations to those in China, according to the Iranian source.

Transport infrastructure

The resulting products will be able to enter Western markets via routes built or enhanced by China's increasing involvement in Iran's transport infrastructure. When the draft deal was presented in late August to Iran's Supreme Leader Ali Khamenei by Iran's vice president, Eshaq Jahangiri—and senior figures from the Economic and Finance Ministry, the Petroleum Ministry and the Islamic Revolutionary Guard Corps—he announced that Iran had signed a contract with China to implement a project to electrify the main 900km railway connecting Tehran to the north-eastern city of Mashhad. Jahangiri added that there are also plans to establish a Tehran-Qom-Isfahan high-speed train line and to extend this upgraded network up to the north-west through Tabriz.

Tabriz, home to a number of key oil, gas and petchems sites, and the starting point for the Tabriz-Ankara gas pipeline, will be a pivot point of the 2,300km New Silk Road that links Urumqi (the capital of China's western Xinjiang Province) to Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way, and then via Turkey into Europe, says the Iranian source.

The pipeline plan will require the co-operation of Russia, as it regards the FSU states as its backyard. And, because, until recently, Russia was weighing a similarly all-encompassing standalone deal with Iran. So, according to the source, the agreement includes a clause allowing at least one Russian company to have the option of being involved, also on discounted terms, alongside a Chinese operator.

Benefits for Iran

The Iranians expect three key positives from the 25-year deal, according to the source. The first flows from China being one of just five countries to hold permanent member status on the United Nations Security Council (UNSC). Russia, tangentially included in the new deal, also holds a seat, alongside the US, the UK and France.

"In order to circumvent any further ramping up of sanctions—and over time encourage the US to come back to the negotiating table—Iran now has two out of five UNSC votes on its side. The fact that [Iran foreign minister Mohammad] Zarif showed up unexpectedly at the G7 summit in August at the invitation of France may imply it has another permanent member on side," he adds.

A second Iranian positive is that the deal will allow it to finally expedite increases in oil and gas production from three of its key fields. China has agreed to up the pace on its development of one of Iran's flagship gas field project, Phase 11 of the giant South Pars gas field (SP11). China National Petroleum Corporation (CNPC), one of China's 'big three' producers, added to its 30pc holding in the field when it took over Total's 50.1pc stake, following the French major's withdrawal in response to US sanctions. CNPC had since made little progress developing SP11—a 30pc+ discount to the global market price on potential condensate and LNG exports could change that.

China has also agreed to increase production from Iran's West Karoun oil fields—including North Azadegan, operated by CNPC, and Yadavaran, operated by fellow 'big three' firm Sinopec—by an additional 500,000bl/d by the end of 2020. Iran hopes to increase projected recovery rates from these West Karoun fields, which it shares with neighbour Iraq, from a current 5pc of reserves in place to at least 25pc by the end of 2021 at the very latest. "For every percentage point increase, the recoverable reserves figure would increase by 670mn bl, or around $34bn in revenues even with oil at $50/bl," the Iranian source says.

A final Iranian benefit is that China has agreed to increase imports of Iranian oil, in defiance of a US decision not to extend China's waiver on imports from Iran in May. China's General Administration of Customs (GAC) figures released in late August show that, far from reducing its Iranian imports, China imported over 925,000bl/d from the country in July, up by 4.7pc month-on-month, from an already high base.

The actual figure is still higher, according to the Iranian source, with excess barrels being kept in floating storage in and around China; without having gone through customs they do not show up on customs data, but are effectively part of China's Strategic Petroleum Reserve.
From: https://www.petroleum-economist.com/articles/politics-economics/middle-east/2019/china-and-iran-flesh-out-strategic-partnership

[Cara]

There is some media narrative about getting China’s status at the WTO changed or about challenging the WTO itself. I have read elsewhere that there are ongoing US moves against the WTO. It could be an attempt to address both.


Australia PM joins Trump calling for China to drop 'developing economy' status

(Reuters) - Global trade rules are "no longer fit for purpose" and must be changed to accommodate China's new status as a developed economy, Australian Prime Minister Scott Morrison said in a major foreign policy speech in the United States.

The global community had engaged with China to help it grow but now must demand the world's second-largest economy bring more transparency to its trade relationships and take a greater share of the responsibility for addressing climate change, Morrison said.

"The world's global institutions must adjust their settings for China, in recognition of this new status," said Morrison in a speech to the Chicago Council on Global Affairs, referring to China as a "newly developed economy".

"That means more will be expected of course, as has always been the case for nations like the United States who've always had this standing," Morrison said in the speech, according to transcript provided to Reuters.

Global trade rules were "no longer fit for purpose" and in some cases were "designed for a completely different economy in another era, one that simply doesn't exist any more", he added.

Referring to China as a newly developed economy marks a change from Beijing's self-declared status as a developing economy, which affords it concessions such as longer times to implement agreed commitments, according to the World Trade Organization (WTO).

It also puts Australia into line with a campaign led by U.S. President Donald Trump to remove China's developing nation status. In an April 7, 2018 tweet, Trump wrote that China was a "great economic power" but received "tremendous perks and advantages, especially over the U.S."

Morrison has previously urged China to reform its economy and end a trade war with the United States but has until now stopped short of taking a public position on its WTO status.
...
More and from: https://mobile-reuters-com.cdn.ampproject.org/c/s/mobile.reuters.com/article/amp/idUSKBN1W9010

This may all be media noise because here is what is said on the WTO website. I guess it depends on how costly the agreements are to implement and what is the value of having extra time to implement agreements.


Definition of a “developing country” in the WTO

How is the selection made?
There are no WTO definitions of “developed” and “developing” countries. Members announce for themselves whether they are “developed” or “developing” countries. However, other members can challenge the decision of a member to make use of provisions available to developing countries.

What are the advantages of “developing country” status?
Developing country status in the WTO brings certain rights. There are for example provisions in some WTO Agreements which provide developing countries with longer transition periods (https://www.wto.org/english/tratop_e/devel_e/dev_special_differential_provisions_e.htm#legal_provisions) before they are required to fully implement the agreement and developing countries can receive technical assistance.

That a WTO member announces itself as a developing country does not automatically mean that it will benefit from the unilateral preference schemes of some of the developed country members such as the Generalized System of Preferences (GSP). In practice, it is the preference giving country which decides the list of developing countries that will benefit from the preferences. For more information about the GSP, see the United Nations Conference on Trade and Development (UNCTAD)’s website (http://www.unctad.org/Templates/Page.asp?intItemID=1418&lang=1), (opens in a new window).
From: https://www.wto.org/english/tratop_e/devel_e/d1who_e.htm

[silvanelf]

(Reuters) - Global trade rules are "no longer fit for purpose" and must be changed to accommodate China's new status as a developed economy, Australian Prime Minister Scott Morrison said in a major foreign policy speech in the United States.

[...]

Global trade rules were "no longer fit for purpose" and in some cases were "designed for a completely different economy in another era, one that simply doesn't exist any more", he added.


On one hand a statement like "Global trade rules are no longer fit for purpose" sounds pretty innocent -- on the other hand it is somewhat similar to all that talk about the "rules-based order."

It seems to me that this debate about China’s status at the WTO is just one aspect of an expanding trade war between the US and China.

[Cara]

...On one hand a statement like "Global trade rules are no longer fit for purpose" sounds pretty innocent -- on the other hand it is somewhat similar to all that talk about the "rules-based order."

It seems to me that this debate about China’s status at the WTO is just one aspect of an expanding trade war between the US and China.

Thanks!

Yes, indeed, this does seem to be more of the “rules based international order” narrative.

[Lakeofmarch]

pKVQDUQR8I4
I would much recommend you see this analyst's talk (he gives the same talk many times over, with small tweaks by audience), or read one of his books. His point is that China has a lot of loose capital looking for any safe harbor, and thus funds a lot of projects at the very edge of unprofitability, or far beyond it, like most things in the Belt and Road. However, there is a second possibility.. that the financial system will, in short order, change in a way that makes the rules completely different, and with that would go the definition of who wins and of who loses. Everyone can agree the U.S. has a great geographical advantage because of the two oceans and the vast Mississippi river basin, largest and most agricultural one on the planet, but might not a few select floods, which have already happened, change that power at a crucial moment? Looking around at Chinese history, and having read up on Mao, it is equally possible that the CCP has lost control of the situation and is patching up holes, or that they have a surprising grand strategy and will see the Anglo system to its grave. Never sure with them.

[Cara]

Thank you LakeofMarch. He has some interesting statistics on demographics and their impact on economic models and the nature of competition as perceived by the USA.

I do not agree with his version of 20th century history and I am wary of his association with Stratfor (not an organisation without an agenda).

~~~

For anyone interested in demographics, this site has figures charted for the world and individual countries and continents:
https://www.populationpyramid.net/

[Cara]

Japan and the European Union have signed an infrastructure deal.

It’s pitched as being a counter to the One Belt One Road but I think that maybe just be the media narrative spin.

More significant to me is the build out of capacity across Eurasia and the question:
where is the financing coming from for all this?

If the world is in this precarious economic situation of overblown debt, the need for “austerity programmes”, cuts in social welfare etc., what is the source of the funding?


In counterweight to China, EU, Japan sign deal to link Asia

BRUSSELS (Reuters) - The European Union and Japan signed an infrastructure deal on Friday to coordinate transport, energy and digital projects linking Europe and Asia, seeking an alternative to Chinese largesse that has raised suspicion in Brussels and Tokyo.

https://www.businesstimes.com.sg/sites/default/files/styles/475x316/public/articles/2019/09/27/doc77adt6zkm1yvfrin1fy_doc77acwh18cn61496ygav4.jpg?itok=1tIpXfKQ
European Commission President Jean-Claude Juncker and Japan's Prime Minister Shinzo Abe gesture during the conference Communication Connecting Europe and Asia, in Brussels, Belgium September 27, 2019. REUTERS/Francois Lenoir

The accord, signed by Japanese Prime Minister Shinzo Abe and European Commission President Jean-Claude Juncker, formalizes Japan’s involvement in a new EU-Asia “connectivity” plan that is set to be backed by a 60 billion euro ($65.48 billion) EU guarantee fund, development banks and private investors.

“Whether it be a single road or a single port, when the EU and Japan undertake something, we are able to build sustainable, rules-based connectivity from the Indo-Pacific to the Western Balkans and Africa,” Abe told an EU-Asia forum in Brussels.

Since 2013, China has launched construction projects across more than 60 countries, known as the Belt and Road Initiative, seeking a network of land and sea links with Southeast Asia, Central Asia, the Middle East, Europe and Africa.

“The sea route that leads to the Mediterranean and the Atlantic must be open,” he added, referring to the need to prevent projects funded by Beijing and its vast foreign exchange reserves dominating transport routes.

Juncker also vowed to help build infrastructure “without mountains of debt” or a reliance “on a single country”.

That was a veiled reference to Chinese-financed projects that have sent debts in some central Asian and Balkan countries soaring after they embarked on building bridges, roads and tunnels they could ill-afford.

The EU and Japan also want stricter environmental standards.

EU officials said they are concerned about what they see as a Chinese investment model which lends to countries for projects they may not need, making them reliant on China once under way. Poor countries across Asia and Africa have seized on the attractive Chinese loans.

A Chinese-funded highway to link Montenegro’s Adriatic coast to landlocked neighbor Serbia has so indebted Montenegro that the International Monetary Fund has told the country it cannot afford to finish the project.

Although not all European and Japanese money will be spent in Asia, the Commission’s strategy makes spending on infrastructure links with Asia official EU policy involving the EU’s common budget.

In their 10-point accord, the EU and Japan promised to pay “utmost attention” to countries’ “fiscal capacity and debt-sustainability”.
From: https://www.reuters.com/article/us-eu-japan-idUSKBN1WC0U3

And here’s that so-called “rules-based” international order again:

we are able to build sustainable, rules-based connectivity from the Indo-Pacific to the Western Balkans and Africa

[Cara]

This last week there was a meeting of the EAEU (Eurasian Economic Union) in Yerevan, Armenia. Iran seems now to have formally joined and Singapore has signed a free trade agreement with the organisation.

~~~

First Iran:

Joining Eurasian Economic Union good opportunity for Iran's economy: Rouhani

https://cdn.presstv.com//photo/20190930/3e878ace-c841-4655-8a1f-ce01f7c22248.jpg
Iran's President Hassan Rouhani (C) speaks to reporters in Tehran on September 30, 2019 before leaving for the Armenian capital to attend the Eurasian Economic Union’s summit in Yerevan. (Photo by president.ir)

Iran's President Hassan Rouhani says joining the Eurasian Economic Union (EAEU) provides the country’s public and private economic sectors with a very good opportunity to develop their foreign trade activities.

Rouhani made the remarks in an interview in Tehran on Monday before leaving for the Armenian capital to attend the EAEU’s summit in Yerevan.

He said Iran's joining the EAEU would be a very good opportunity for the private-sector businesspeople as well as the public economic sector to expand trade ties with the five member states of the union and to connect to the economy of other regions.


“This is a very important step under the circumstances that the Americans cruelly seek to apply pressure and sanctions on the Iranian nation and Iran's foreign trade," the Iranian president said.

He noted that the five member countries of the union have a population of some 180 million while Iran is a nation of 83 million, and therefore relations between Iran and these countries can be of high significance.

Rouhani said an agreement between Iran and the five EAEU states would become operational and implemented on October 27.

As the first step, some 502 Iranian goods can be exported to EAEU countries by receiving preferential tariffs as a nearly zero tariff will be applied to them, Rouhani said, adding that further steps would be taken in this regard in the future.

He noted that Kyrgyzstan, Kazakhstan, Russia, Belarus and Armenia are the five members of the union while Iran, Singapore, Moldava and Vietnam plan to join it.

The Iranian chief executive said he is scheduled to hold bilateral talks with senior officials attending the meeting, including the Armenian president and prime minister as well as presidents of Kazakhstan and Russia and Singapore's prime minister.

The Eurasian Economic Union is an international organization for regional economic integration. It has international legal personality and is established by the Treaty on the Eurasian Economic Union (http://www.eaeunion.org/files/history/2014/2014_2.pdf).

The EAEU provides for free movement of goods, services, capital and labor, pursues coordinated, harmonized and single policy in the sectors determined by the treaty and international agreements within the union.

The Iranian government in June cleared a last hurdle to its bid to launch a free trade zone with the Eurasian Economic Union, a major regional organization which could help Tehran increase its revenues from non-oil export at the time of increased US sanctions.

The spokesman of Iran’s Guardian Council, which oversees government’s accession to regional and international treaties, said that the body had approved an agreement signed on May 17, 2018 between Iran and the EAEU that was meant to facilitate trade between the two sides.
From: https://www.presstv.com/Detail/2019/09/30/607531/Rouhani-Armenia-Eurasian-Economic-Union-trade

~~~

And Singapore:


EAEU trade deal shows resolve to resist protectionism: PM Lee Hsien Loong

https://www.straitstimes.com/sites/default/files/styles/article_pictrure_780x520_/public/articles/2019/10/02/20191001_1569939843801_4460222991182053_0_an1g_zuann.jpg?itok=NiOdGlPf&timestamp=1569946168
Prime Minister Lee Hsien Loong; Armenia Prome Minister Nikol Pashinyan; and Eurasian Economic Commission Board Chairman Tigran Sargsyan, attend a joint press conference at the Governmental Residence in Yerevan, Armenia, on Oct 1, 2019.ST PHOTO: JASON QUAH

YEREVAN, ARMENIA - A new free trade agreement signed between Singapore and the Eurasian Economic Union (EAEU) will deepen ties, and catalyse greater trade and investments between the two sides, Prime Minister Lee Hsien Loong said on Tuesday (Oct 1).

But the FTA is also "significant because it shows our resolve to resist the tide of protectionism".

Mr Lee said he was glad Singapore has found in the members of the EAEU - comprising Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia - "like-minded partners committed to multilateralism and free trade".

"We are convinced that free trade will foster competition and innovation, allow our businesses access to new technologies and global networks, increase our productivity and grow our economies."

PM Lee was speaking at a joint press conference with Armenian Prime Minister Nikol Pashinyan and Eurasian Economic Commission chairman Tigran Sargsyan, following the signing of two deals under the EAEU-Singapore FTA.

The Framework and Non-Services and Investment Agreements were inked at the Governmental Residence in Yerevan, Armenia, at the session of the Supreme Eurasian Economic Council, a meeting of the EAEU leaders

PM Lee, who witnessed the signing, was in New York last week to attend the United Nations General Assembly. He noted on Tuesday that many leaders there, particularly of small states, had expressed concern "at the instinct to turn inwards, harden borders and hinder the free flow of trade and commerce".

Mr Lee said he hopes the FTA will lead to a broader trade agreement between the EAEU and Asean.

"We have 800 million people between us, so it would be a substantial FTA. Such an FTA will help us unlock many more opportunities and realise our full potential," said the Prime Minister.

On the benefits of the FTA, he noted trade between EAEU and Singapore now stands at US$6.5 billion (S$9 billion), which is "not insignificant, but still quite modest".

When the FTA comes into force, Singapore companies can enjoy lower tariffs and non-tariff barriers, he added.

"These are tangible benefits that can immediately and meaningfully boost our trade. In the longer term, regulatory cooperation, enhanced business linkages and greater familiarity with each other will enable our companies to operate across our regions with more ease and efficiency," he said.

After the press conference, Singapore and Armenia signed the bilateral Services and Investment Agreement, which is part of the EAEU-Singapore FTA.

PM Lee said he was looking forward to a swift conclusion of the remaining agreements with other EAEU members.

Discussing the approach to negotiating FTAs with other countries, he said in an interview with Singapore media that the Republic is at a "disadvantage" because it is small, its economy is open, and tariffs are nearly zero.

"Therefore, people say what is the point of negotiating an FTA with Singapore. So our answer to them has been, because there are other non-tariff aspects which we can work together on and liberalise, particularly in the services sector like financial services.

"Also, if you have an FTA with Singapore, that is a pathfinder which encourages other countries also to enter into FTAs with you," he added, citing trade deals Singapore has with countries such as China, New Zealand, Japan and Australia.

Mr Sargsyan said the EAEU-Singapore FTA is a good example of how the union can structure trade deals with other countries.

He also said the union has received an application from Israel to initiate negotiations for a comprehensive agreement covering goods, and services and investment.

"We hope to continue this practice further," he added.
From: https://www.straitstimes.com/politics/eaeu-trade-deal-shows-resolve-to-resist-protectionism-pm-lee-hsien-loong

[Mashika]

I may not be fully correct on this but surely it seems like a lot of countries are building a complete framework or system around the current US and allies based one

It feels totally like that's what's happening, right?

[Baby Steps]

I may not be fully correct on this but surely it seems like a lot of countries are building a complete framework or system around the current US and allies based one

It feels totally like that's what's happening, right?

That is part of it.

You can imagine the fury and cconsternation amongst the geostrategic wonks of the Council for Foreign relations etc:

Trumps policies of neo-isolationalism are indirectly contributing to the birthing of this new multi polar world order.

From the tyrants perspective he is achieving the following, which does not fit with their control agenda

- encouraging brexit will empower a less atlanticist Europe, it will hopefully become a bloc that deals with China on an equal basis as the USA

- withdrawing militarily from Europe will push the Europeans to deal honestly with Russia, as well as stand on its own two feet militarily

- Sanctions, meddling and impediments with regard to dollar based transactions is hastening the emergence of a financial system in the east that functions beyond US, and potentially all current central banking systems control

- being an honest peacenik, accepting that the Afghanistan tragedy must end, and withdrawing western power from there will bring in huge Iranian, Pakistani, and Russian influence into that country. Effectively the Chinese miners will come in wholesale for the rare earth minerals there(china already controls most of the worlds rare earth mineral supply)

- the cessation of western drone strikes and general destabilisation of Pakistan will assist Chinese policy of stabilising the whole Afghan/Pakistan area. This will facilitate Pakistans integration with china which is already very strong.

- eventually, an oil pipeline will be achievable between Iran and China.

-As the eurasian land mass integrates economically, the illusion that US sanctions against Iran and Russia have any international recognition or standing will become clearer.

It is through this lense that we should be viewing the manufactured flash point in Kashmir, together with the burgeoning special relationship between India and Israel. Isreal is no stranger to false flag terror, and conflict creation. I have heard this from Pakistani sources.

[Cara]

I may not be fully correct on this but surely it seems like a lot of countries are building a complete framework or system around the current US and allies based one

It feels totally like that's what's happening, right?


... That is part of it.

You can imagine the fury and cconsternation amongst the geostrategic wonks of the Council for Foreign relations etc:

Trumps policies of neo-isolationalism are indirectly contributing to the birthing of this new multi polar world order.

From the tyrants perspective he is achieving the following, which does not fit with their control agenda

- encouraging brexit will empower a less atlanticist Europe, it will hopefully become a bloc that deals with China on an equal basis as the USA

- withdrawing militarily from Europe will push the Europeans to deal honestly with Russia, as well as stand on its own two feet militarily

- Sanctions, meddling and impediments with regard to dollar based transactions is hastening the emergence of a financial system in the east that functions beyond US, and potentially all current central banking systems control

- being an honest peacenik, accepting that the Afghanistan tragedy must end, and withdrawing western power from there will bring in huge Iranian, Pakistani, and Russian influence into that country. Effectively the Chinese miners will come in wholesale for the rare earth minerals there(china already controls most of the worlds rare earth mineral supply)

- the cessation of western drone strikes and general destabilisation of Pakistan will assist Chinese policy of stabilising the whole Afghan/Pakistan area. This will facilitate Pakistans integration with china which is already very strong.

- eventually, an oil pipeline will be achievable between Iran and China.

-As the eurasian land mass integrates economically, the illusion that US sanctions against Iran and Russia have any international recognition or standing will become clearer.

It is through this lense that we should be viewing the manufactured flash point in Kashmir, together with the burgeoning special relationship between India and Israel. Isreal is no stranger to false flag terror, and conflict creation. I have heard this from Pakistani sources.

Thanks Mashika and Baby Steps.

It’s an interesting question: just what is it that’s going on?

There seem to be quite a few different views and explanations, depending on the point of perspective. The huge amount of media spin and narrative doesn’t help in making sense of it either.

Here’s a view from James Corbett where he essentially says that there’s an emerging Cold War 2.0 coming into being, and that its development has been underway for quite some time.


Interview 1482 – The China Deception on This Week in Money
Corbett 10/01/2019

The mainstream are framing the rise of China as a competitor to the US in the same terms as they did the Cold War with the Soviet Union. And, just as the Cold War was a charade facilitated by lend lease and technology transfers, so, too, is the New Cold War facilitated by technology transfers to China that are framed as “IP theft.” James Corbett joins Jim Goddard on This Week in Money to set the record straight on how the Clash of Civilizations 2.0 is being used to justify domestic clampdowns, social credit surveillance, and military build up.

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From: https://www.corbettreport.com/interview-1482-the-china-deception-on-this-week-in-money/

[Haujean Contactee]

Hey Cara, I'm a member of LarouchPac and we've been very instrumental in the BRICS, Belt and Road, etc. That baby eating woman stuff was us as well. That was a Manhattan Project LarouchPac volunteer who pulled that one off. I noticed that you checked my profile. Feel free to ask me any questions if you have any. I look forward to getting to know you and making some significant contributions to the forum. I've got a big task on my hands and I look forward to discussing it with the members and getting their feedback.
Best regards,
Nathan

[Mashika]

etc.


Sorry to interrupt but, could you expand on that?



That baby eating woman stuff was us as well. That was a Manhattan Project LarouchPac volunteer who pulled that one off.


I just would like to ask how you present that as good credentials, and how that fits with the Eurasia situation?

Did you meant to say "LaRouchePAC" ?

[Haujean Contactee]

Yes, it was Larouchepac who was behind that stunt. I have a contact named Gerry in the Baltimore Maryland office who validated it a couple of days ago. How it fits in is because if you go to their website the BRICS, The Belt and Road, etc, are all in opposition to the Trans Atlantic program of depopulation. So you have two sides of the planet in opposition to each others agenda. If you do research you will find that it was Larouchepac that was behind these initiatives in the first place. They have people active in Russia, China, etc, who have worked with their representatives to adopt these polices to counter the IMF and it's refusal to offer affordable credit to developing nations. The Manhattan project is an activist program that they run in NYC which is where that woman came from.

[Mashika]

Yes, it was Larouchepac who was behind that stunt. I have a contact named Gerry in the Baltimore Maryland office who validated it a couple of days ago. How it fits in is because if you go to their website the BRICS, The Belt and Road, etc, are all in opposition to the Trans Atlantic program of depopulation. So you have two sides of the planet in opposition to each others agenda. If you do research you will find that it was Larouchepac that was behind these initiatives in the first place. They have people active in Russia, China, etc, who have worked with their representatives to adopt these polices to counter the IMF and it's refusal to offer affordable credit to developing nations. The Manhattan project is an activist program that they run in NYC which is where that woman came from.

http://infobrics.org/
This is the BRICS official website, i could not find any reference to the Trans Atlantic program of depopulation, so you may be reading that from the info on that site or in another site? I just can't find it so i think it would be best if you link to it

Yes i know i'm difficult, i'm sorry :/


LaRouchePAC was behind the eating baby stuff. But... How what that woman said affects in any way the Belt and Road initiative? or BRICS? Can you expand on that, please :)


They have people active in Russia, China, etc, who have worked with their representatives to adopt these polices to counter the IMF and it's refusal to offer affordable credit to developing nations.

LaRouchePAC does? Can you describe what policies you are referencing here?

I find it odd that you say "they" when you previously said you are with them :)

[Cara]

This is a very interesting economic analysis from a Marxist perspective (the economic school of thought, not necessarily the ideological translation of it) of China's economy.

It touches on geopolitical issues and provides some views on the intellectual property debate. Also discussed is the structure of economies and how the accessibility of technology can determine broader issues including "left behind" regions and "brain drains".

-t6kO3iE7cE

Prof. Harvey continues his discussion of rate and mass of surplus value. He argues that the emergence of the Equalization of the Rate of Profit (ERP) in the 1980s has been responsible for the transfer of value from labor-intensive to capital-intensive modes of production. Knowledge has become a valuable commodity that can be bought and sold in the market.

Read the full episode transcript here: https://www.democracyatwork.info/acc_state_of_us_chinese_economies

[Cara]

Also relevant here:


Does Trump have it backwards? This economist points out that if you count services and profitability, the Chinese are probably running a trade deficit with the US.

irMmR9SzPDY

And that's why they can't cave into Trump's demands.


Thanks TomKat.

This is a useful (and not mentioned) part of the story to know. Trade in services is not typically included in the trade war media narrative.

[Cara]

Here’s political economist David Harvey with an interesting economic analysis of the factors influencing Trump’s anti-China stance followed by a review of the economic situation and changes taking place in China.

9XntjW8JXss

At the recent UN summit, Trump berates China and vehemently declares it to be an enemy of the US. China’s predatory tactics according to Trump have destroyed the International order and are a clear attack on intellectual property rights. These words have serious implications warns Harvey.

[Mashika]

The one child policy thing, i have seen/read about that going on in other countries, under different policy names. All those countries are now facing an older population and very few younger citizens who care or want to do anything about it :)

So weird, but i can remember reading about it from the UK, Japan, China, Mexico, South Korea and others. And it's like a common thing because of those choices so many years back

Manual labor is not possible, if there's no one capable to do it

Also like in Mexico, it happened more than 20 years ago right? Werent they exporters? And somehow they found themselves depending on imports, internal markets died because of wrong choices so now they can't produce anything but also don't have enough money to import so people got very poor. Inevitable and desperate young people turned into drug dealing and so on.

Labor intensive stuff seems like a nice thing to happen right away, pretty sure politicians sell it as that, jobs for everyone and a better future and so on. Except it ends up killing the country over time and then no one will be there to handle the misery that comes with it :)

[Cara]

This may be significant: India and the US have apparently suspended their Defense Cooperation. From the article, it seems the disagreement is about jet engine technology which General Electric developed. Other problems and disagreements that have occurred between India and the US are added to the article to “fill out the picture”.

The article was submitted by GreatGameIndia to ZeroHedge. Both publications have some kind of agenda (which I’m not clear about) - so reader beware.


India, US Officially Suspend Defense Cooperation
Sun, 10/27/2019 - 00:00
Submitted by GreatGameIndia, a journal on Geopolitics and International Relations.

In a major development brewing for sometime now, India and US have officially suspended Defense Cooperation after Americans refused to give India high-end jet-engine technology. At the heart of the Indo-US Strategic Partnership is what is known as the Defense Technology and Trade Initiative or DTTI. Under the 2012 DTTI, India and the US set up joint working groups (JWGs) for cooperation on aircraft carriers and jet engine technology, all of the 4 pathfinder projects have now been shutdown. The move comes days after former US Secretary of State and National Security Adviser Henry Kissinger’s visit to India.

India and the United States have suspended cooperation on jet engine technology under the Defense Technology and Trade Initiative (DTTI) that seeks to deepen bilateral cooperation and identify opportunities for sharing of high-end defence technologies, a senior Pentagon official revealed on Thursday. The US export controls is one of the reasons for dropping the cooperation on jet engine technology, she said.

“The original project (jet engine technology) we have is suspended right now but we are talking about other potential engine working groups. We could not come to an understanding of what exportable technologies will be useful to India and we did run into a challenge in terms of US export controls,” said Ellen Lord, the US under secretary of defense for acquisition and sustainment.

She was interacting with a small group of reporters after holding talks with secretary (defence production) Subhash Chandra at the 9th DTTI group meeting held in New Delhi. She said there was an enormous amount of aircraft technology that India and the US could work on together. “I know that in the past, there have been frustrations with progress under DTTI, but I can assure you that we are making considerable progress.”

1178932411683495936

She said the two sides had come a long way since the JWG format began in 2015. “The JWG co-chairs are working hard to show progress on current projects and identify new ones. The technologies that they are discussing are significant…”

Air Vice Marshal Manmohan Bahadur (retd), additional director general, Centre for Air Power Studies, said, “It would have been over optimistic to expect the Americans to give us high-end engine technology — no one parts with such strategic know-how. We must go for realistic technologies that we lack — and there are many such techs which the US can give.”

Defense Technology and Trade Initiative

At the heart of the Indo-US Strategic Partnership is what is known as the Defense Technology and Trade Initiative. DTTI was launched in 2012 with Secretary Leon Panetta appointing the then Deputy Secretary of Defense Ashton Carter to lead the ambitious initiative “to pursue four pathfinder DTTI projects for possible co-development and/or co-production, as well as cooperation on aircraft carriers and jet engine technology”.

1147016881372426241

Seven joint working groups were also launched with the yearly meetings to take place alternatively in the two countries

Load Bearing Pillar

By all accounts, the defence partnership is the engine of bilateral ties — the “load-bearing pillar”, to quote Joshua White, a former administration official. But how solid is that load-bearing pillar in reality? Insiders say that contradictions, confusion, a mismatch of supply and demand and a lack of clearly defined objectives have restricted progress.

Jet-engine Working Group Shutdown

At its last meeting in July (2018), DTTI’s jet engine working group was shut down for lack of progress. They chose to call it a “strategic pause”. Apparently, the divergence between what India wanted and what the US and General Electric were willing to offer was too wide.

It’s obvious that GE will not part with its crown jewel having spent billions in R&D. As someone said, “it’s the one thing the company has”. GE executives saw it as a compromise of their intellectual property to even suggest improvements in an indigenous Indian engine (Kaveri). Differences also emerged because the US wanted a measure of where India was in terms of indigenous engine technology. India was not keen on open access and benchmarking.

1177310693344731136

Four Pathfinder Projects

The four ‘pathfinder’ projects envisioned by DTTI were:

Next-generation Raven Mini UAVs (rejected by Indian Army as being low-tech)
Roll-on and roll-off kits for C-130 (not moved forward)
Mobile electric hybrid power source (closed)
Protector kit against chemical/bio/nuclear fallout (closed)

To add to the gloom, the India Rapid Reaction Cell set up by Pentagon to fast-track DTTI projects has been downsized.

Moreover, according to leaked information of a high-level meeting, the United States and India’s failure to reach a long-expected trade deal on Sept. 24 has sparked fears of a full-fledged India US trade war.

India US Trade War

On Sept. 24, U.S. Trade Representative Robert Lighthizer and Indian Commerce Minister Piyush Goyal met on the sidelines of the U.N. General Assembly, raising expectations that the two sides were poised to reveal a new trade deal following months of talks. But according to information leaked from the meeting as reported by Stratfor, the negotiators failed to agree on Indian concessions on information and communication technology, dairy, pharmaceuticals, agriculture, e-commerce, and data localization — in short, every bone of contention that have stymied an agreement for months. Still, U.S. President Donald Trump told visiting Indian Prime Minister Narendra Modi the same day that they would be able to announce a trade deal soon.

Bilateral trade, which totaled $142.1 billion last year, remains the major friction point in the U.S.-India relationship. India exported $83.2 billion worth of goods and services to the United States and imported $58.9 billion, resulting in a $24.3 billion surplus. Trump, pointing to the imbalance, has singled Modi out in the past as the “tariff king,” demanding that New Delhi reduce its trade surplus with Washington and lower tariff barriers for American commerce in India.

1175712969721663489

The US imposed on India an additional tariff of 25% and 10% on import of steel and aluminum products in March last year. In April, a Congressional Research Service brief on US-India trade relations noted, “Bilateral tensions have increased over each side’s tariff policies.” Then, on May 31 – the day after the inauguration of NDA government to start its second term – the Trump administration announced that it was terminating India’s participation in the Generalized System of Preferences (GSP) which allows eligible developing countries to import to the United States duty free. Last year, the GSP accounted for approximately $5 billion of the $83.2 billion in imports India sent to the US.

In response, the government of India imposed retaliatory tariffs on 28 products originating or exported from the US with effect from 16th June this year. India is expected to get an additional $217 million of revenue from the retaliatory tariffs. This tit-for-tat created substantial tension in the India-US relationship going into the G20 Summit.
From: https://www.zerohedge.com/geopolitical/india-us-officially-suspend-defense-cooperation

[Cara]

China is preparing for a manned moon landing.


China drawing up plan for manned lunar exploration

XIAMEN, Oct. 28 (Xinhua) -- China is carrying out in-depth demonstration and long-term planning for its manned lunar exploration, and has formed an overall consensus and a preliminary plan, according to a senior space engineer.

At the 1st China Space Science Assembly held in Xiamen, east China's Fujian Province, from Oct. 25 to Oct. 28, Chen Shanguang, deputy chief designer of China's manned space program, said the future trend of manned space cause is to explore the moon, and establish a lunar base to carry out scientific research, and accumulate technology and experience for going deeper into space. "The long-term goal is to send people to Mars."

The manned lunar exploration will help improve human's understanding of the formation and evolution of the moon, as astronauts may set up facilities on the moon to obtain scientific data and samples, Chen said.

The astronauts may carry out multi-disciplinary research involving fields such as physics, chemistry, astronomy and geology, and in-situ resource utilization by taking advantage of the characteristics of the moon, such as low gravity, weak magnetic field and high vacuum. The research could promote innovation and development of basic science, he said.

Solving the scientific problems involving human survival on the moon could lay a foundation for human beings to go further into deep space, Chen added.
From: http://www.xinhuanet.com/english/2019-10/28/c_138509382.htm

[Cara]

Also relevant here:


China’s Hidden Economic Time Bomb
By F. William Engdahl
Source: williamengdahl.com (http://williamengdahl.com)
22 October 2019


The China government statistical agency just released economic data showing the poorest GDP growth in almost 30 years for China. The problem goes far deeper than recent effects of the US-China trade war or the impact of calamities such as African Swine Fever that have decimated the nation’s pig herds. The underlying far more serious problem is an emerging disaster that few are willing to discuss openly.


Since about 2017 China’s population has begun to feel the real impact of the ill-conceived One Child Policy imposed by the Communist Party in 1979, some 40 years ago. This slow-growing problem, once seen as benefit, is undermining the entire basis of the China Economic Miracle. The question is whether Beijing can make the transition to an ageing population without major social and economic dislocation.

On October 18 the China State Statistics bureau released Third Quarter GDP which came in at 6.0% compared with 6.2% the previous quarter. While there is great skepticism as to how honest the reporting is, the fact the government must announce a slowing growth at all suggests the situation in reality could be far worse.

The true data on China’s economy remain opaque. In December 2018 the Shanghai University of Finance and Economics published its annual transparency survey on the 31 provincial-level regions. The average score was just above 53%. The study concluded, “[Unfortunately,] the general level of transparency in China’s local governments remains poor.”

A more direct indicator of the health of the economy comes from actual trade data. Bloomberg reports that auto sales in China have fallen for the 15th month out of 16 months in September. It’s the “worst slump in a generation”, according to Bloomberg. As well, sales of new homes and apartments in Beijing, Shanghai and other major cities fell dramatically to lows of 2014.

The deeper issue is not the transparency of official economic data. The deeper issue is whether the China Miracle, the remarkable rise from a Third World level backwardness in less than three decades, is entering a structural crisis that will impact not only China’s economy. The recent data on new car sales and new home buying could be an ominous indicator that the China boom years are coming into a drastic slowing with huge consequences not only for China but also for the world.


Golden Era Peaks

Like no other economy in modern history, China’s remarkable economic rise has been facilitated by an extraordinary short-term demographic blessing. That blessing has begun to turn into a curse.

In the 1980’s as China officially opened its economy to Western factories and investment, China had what seemed to be an endless pool of low wage labor power from the countryside to build its roads, new cities and assemble its goods in factories of the likes of Nike or VW or Apple to be shipped to the world. In 1987, the early days of China’s economic miracle, 64 percent of the population were of working age, and only 4 percent were aged above 65. That meant a huge surplus of workers to feed China’s low-cost manufacturing boom. This drove the average 10-11 percent annual GDP growth (https://thediplomat.com/2017/06/chinas-struggle-with-demographic-change/) seen between 1987 and 2007.

So long as globalization with the rules of the newly-created World Trade Organization encouraged the outsourcing of manufacture to China with its huge work force and ultra-low wages, China was booming like no other.

In 1979, alarmed at a population that had been increasing from 1950 to 1978, at a 20 percent annual natural population growth rate, the Communist Party imposed a draconian One Child Policy. Deng Xiaoping as part of the Four Modernizations, set a goal to keep the population at 1.2 billion by 2000 as part of the formula for quadrupling China’s GDP within the same period (https://nationalinterest.org/blog/the-buzz/china-now-has-the-lowest-fertility-rate-the-world-18570).

The longer term economic consequences of that policy were not to emerge until some three decades, roughly a generation later, around the time, significantly, of the 2008-9 world economic crisis. A case can be made that the rising wages in China’s manufacturing sector, occasioned by the first shortages of manpower beginning around 2007-10, were more a factor for the severity of the world financial crisis at that time than was merely the US real estate market.

China’s turn to what Deng Xiaoping called “Socialism with Chinese Characteristics” after 1979 was in fact a state-controlled turn to western companies and investment to take advantage of China’s seemingly unlimited low cost labor. That labor mostly came from those born prior to 1979, before the One Child Policy. A worker in his mid-20s in 1980 was in his 50s by the time of the 2008-9 crisis in the West. Demographic change is a slow process and could be overlooked in the boom years before 2008. Now, in the past decade, manufacturing wages across China are rising and the population born under the One Child era are notably fewer, adding to recent rising wage pressures.

As China’s manufacturing has moved up the value-added chain as part of its development strategy of Made in China, wages have risen significantly. The Economist Intelligence Unit estimates that from 2013-2020 average manufacturing labor costs have risen on average 12% a year. Today average factory wage costs in China are some three times that of India and far higher than in Indonesia or Vietnam.

At the same time as higher skilled labor is needed for China’s fast-developing manufacturing base, especially under the mandates of the Made in China2025 transformation to a world high-tech economy, the size of the overall workforce, once considered nearly limitless, has begun to decline. China’s labor force peaked in 2015 and has begun shrinking, albeit slowly at first. That decline now is pre-programmed to accelerate as the pre-1979 workforce reaches retirement age and is not replaced in equal numbers after 1979 due to the drastic decline in births. According to Deutsche Bank estimates, the work force will shrink from 911 million in 2015, to 849 million in 2020, and to 782 million in 2030. Barring a dramatic change in birth rates, beginning about 2025 China’s overall population will begin a slow but accelerating decline as well.

In 2017 China had a fertility rate well below population replacement levels of 2.1 needed to sustain population size. Slowly realizing the long-term implications, in 2013 the Communist Party moved to slightly lift the limit to two children for some families, and by 2016 to 2 children for all. Even if the result had been as hoped, it would take at least a generation to change the dynamics. However, the policy has yet to produce any major increase in birth rates for a complex of reasons.


Ageing Shift

Not only is China’s labor force declining and wages rising, China’s overall population is ageing faster than any comparable country, owing to the combination of rapid economic growth and the limits on children over the past four decades. With improving living standards in rural areas the longevity of the population has improved significantly. Life expectancy in China increased increased from 43 years in 1960 to 75 years in 2013.

China is ageing faster than almost any other country because the number of new births has been blocked while those born are living far longer. By 2016 China had the lowest fertility rate in the world—1.05 according to China’s 2016 State Statistical Bureau data. Social changes encourage young women to postpone marriage and pursue careers, while rural practice encourages male over female births, all of which drive fertility rates lower.

China’s elderly population (over sixty), 14 percent in 2016, will grow to 24 percent of the population by 2030, and will reach 39 percent of the population by 2050. At that time, China’s dependency ratio–the number of people below 15 and above 65 divided by the total working population–is projected to increase to 70 percent, up from 37 percent in 2015. This means a dramatically smaller working-age population with the responsibility of providing for both the young and old. In other words a shrinking relative number of working age taxpayers is facing the growing number of elderly retirees. To avert social unrest the government must somehow undertake huge costs to provide for the elderly.

Traditionally, younger Chinese have taken care of their elderly parents but now, with significantly fewer working children to care for the older retirees, the government will be forced to secure some improved form of social benefits, health care and income support at a time trade surpluses are declining and state debt soaring. At the same time young families are under pressure to increase family size which increases family costs as well. An estimated 23 percent of the elderly in China today cannot take care of themselves, while in 2010 only 43 percent of elderly males and 13 percent of elderly females received any financial pension. While Japan became rich before its population aged, China will not. Ageing of China is a social ticking time bomb.

While all this might sound similar to problems faced by many countries such as Italy or Germany, given the scale of China’s role in the world economy and the dramatic shift in just a few years from what was called a “demographic dividend” —acceleration of economic growth following a decline in birth and death rates—to what might be now called a “demographic disaster,” China is unique.

It becomes clear that the urgency with which Xi Jinping and the Party leadership is promoting its Belt, Road Initiative, as well as Made in China 2025, as an attempt to achieve a near impossible economic feat. Yet the demographic shift is here, while the hoped-for dividends from the BRI and Made in China2025 look far remote at this point. The sharp declines in recent months in domestic consumption for cars and housing could in fact be far more alarming than a mere cyclical downturn. It could well be the first signs of the negative global economics of the huge China demographic shift now unfolding.

F. William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, exclusively for the online magazine “New Eastern Outlook”

¤=[Post Update]=¤

Also relevant here:


The “Great Green Wall of China”?

In an effort to clean up air pollution, China have been utilising 60,000 soldiers to plant 12 Billion trees a year.
This is huge if it turns out to be true and the NASA satellite images can be verified. Greening the Mongolian desert!

lECxeRzJ2sY

[Cara]

This article is also relevant here. Does the New Silk Road extend to the moon?


Economic development in space as seen by the Chinese:


Space economy: China wants to set up $10 trillion Earth-Moon economic zone

https://cdni.rt.com/files/2019.11/xxl/5dbfe48420302748a208a00e.jpg
4 Nov, 2019 09:03

As Earth is apparently too small for China’s economic ambitions, the country is considering developing commerce beyond our planet and wants to create an economic zone in cislunar space by 2050.

The new zone will cover areas of space near Earth, the Moon, and in between, Bao Weimin, the head of the science and technology commission at the China Aerospace Science and Technology Corporation (CAST), revealed last week, as cited by state media. The agency is the main contractor for the national space program.

The project could bring in around $10 trillion for China, state-linked Science and Technology Daily newspaper reported, citing industry experts.

In a report on the development of Earth and Moon space, Bao said that the field has huge economic potential and thus the country should study reliable, low-cost aerospace transport systems between our planet and its satellite.

The basic technology is set to be finished by 2030, while the key transport technology is expected to be created by 2040. By the middle of the century, China could successfully establish the space economic zone, according to the official.

China has been rapidly developing its space sector and studying the Moon in recent years. In July, private company i-Space (also known as Beijing Interstellar Glory Space Technology) launched a carrier rocket in the first successful orbital mission by the Chinese commercial space industry. Last year, China launched its Chang’e 4 probe, successfully landing its lunar rover on the far side of the Moon on January 3.
From: https://www.rt.com/business/472554-china-space-economic-zone/amp/?__twitter_impression=true

[TomKat]

I may not be fully correct on this but surely it seems like a lot of countries are building a complete framework or system around the current US and allies based one

It feels totally like that's what's happening, right?

The US seems to be intentionally forcing Russia and China to unite against the West. I don't know what the ultimate goal is, other than the familiar formula of building up an enemy to defeat.

[Cara]

China’s TenCent extends WeChatPay to foreigners:

1192295095988473856

[silvanelf]

This may be significant: India and the US have apparently suspended their Defense Cooperation. From the article, it seems the disagreement is about jet engine technology which General Electric developed. Other problems and disagreements that have occurred between India and the US are added to the article to “fill out the picture”.

[...]

Jet-engine Working Group Shutdown

At its last meeting in July (2018), DTTI’s jet engine working group was shut down for lack of progress. They chose to call it a “strategic pause”. Apparently, the divergence between what India wanted and what the US and General Electric were willing to offer was too wide.

It’s obvious that GE will not part with its crown jewel having spent billions in R&D. As someone said, “it’s the one thing the company has”. GE executives saw it as a compromise of their intellectual property to even suggest improvements in an indigenous Indian engine (Kaveri). Differences also emerged because the US wanted a measure of where India was in terms of indigenous engine technology. India was not keen on open access and benchmarking.

[...]



That snippet says it all. Advanced jet engines belong to the realm of ultimate hi-tech -- very few nations have the know-how to build them: US and Russia -- maybe Germany/Britain/France and maybe China. For whatever reason Modi (India) hoped to get that advanced tech for free ... but the US said "nope."


There is a reason why only wealthy countries are able to make jet engines. For China, it took us 50 years at least. We started accumulating knowledge before we can even test or make it. Rocket engines last only a few minutes, they are not turbo fan engines. They have to last thousands of hours. The US has a century of experience. When building an engine, the hard part is…you are not just building an engine…you are trying to build one of the best engines the world has ever known, for it to qualify to be on a 5th gen jet. A single part like the turbo fan takes a whole ecosystem of matured industry. A fighter jet is the combined science and industry of an entire country. An engine, takes at least 10 years to test, even if you are Rolls Royce or General electric.

https://www.quora.com/Why-is-India-unable-to-design-a-jet-engine-for-fighters

[Cara]

Some weeks ago China and Iran announced a set of new strategic agreements - “China and Iran flesh out strategic partnership” (posted here: http://projectavalon.net/forum4/showthread.php?108235-Watching-Eurasia-and-the-New-Silk-Road-One-Belt-One-Road--OBOR-&p=1314924&viewfull=1#post1314924).

Now the Iranians announce a vast new oil field.

I suspect the Chinese knew all about this one.


Iran discovers new oil field
Iran's president has described a massive find in the oil-rich Khuzestan province. But sanctions against Iranian oil could make it difficult for the oil to find its way to international markets.

21 hours ago

https://m.dw.com/image/51188370_101.jpg

Iranian President Hassan Rouhani on Sunday said a new oil field was discovered in the Khuzestan province.

He said the new field has more than 50 billion barrels of crude oil, which would boost the country's proven reserves by a third.

"I am telling the White House that in the days when you sanctioned the sale of Iranian oil, the country's workers and engineers were able to discover 53 billion barrels of oil," Rouhani said. "This is a small gift by the government to the people of Iran."

The field could become Iran's second-largest oil field, behind Ahvaz with 65 billion barrels of crude.

Iranian President Hassan Rouhani described it as a major find.

Searching for solutions

The announcement comes days after Iran announced it would begin enriching uranium (https://m.dw.com/en/iran-resumes-enrichment-at-fordo-again-breaking-nuclear-pact/a-51144721), marking another breach of the 2015 nuclear deal.

The Islamic Republic is under crushing US sanctions (https://m.dw.com/en/irans-economy-plummets-under-weight-of-sanctions/a-50950471) targeting its energy sector, and more specifically preventing Iranian oil from reaching international markets.

In the wake of the 2015 nuclear deal (https://m.dw.com/en/what-is-the-iran-nuclear-deal/a-40848713), Iranian oil had once again become a major source of revenue for the country. US President Donald Trump's decision to withdraw from the deal and later sanction Iranian oil (https://m.dw.com/en/us-reimposes-sanctions-on-iran-what-does-that-mean/a-44967074) has put Tehran under pressure to find new solutions.

European signatories to the deal have been trying to save it from collapsing (https://m.dw.com/en/is-germany-moving-toward-trumps-stance-on-iran/a-50567740), but Iran's decision to move forward with uranium enrichment last week has further undermined those efforts.
From: https://amp.dw.com/en/iran-discovers-new-oil-field-with-50-billion-barrels-of-crude/a-51188348?__twitter_impression=true

[Cara]

Also relevant here:


This may well be very significant. China and South Korea have signed a defense agreement.


China signs defence agreement with South Korea as US angers Seoul with demand for $5bn troop payment

Julian Ryall
18 NOVEMBER 2019 • 2:05 PM

The defence ministers of South Korea and China have agreed to develop their security ties to ensure stability in north-east Asia, the latest indication that Washington’s long-standing alliances in the region are fraying.

On the sidelines of regional security talks in Bangkok on Sunday, Jeong Kyeong-doo, the South Korean minister of defence, and his Chinese counterpart, Wei Fenghe, agreed to set up more military hotlines and to push ahead with a visit by Mr Jeong to China next year to “foster bilateral exchanges and cooperation in defence”, South Korea’s defence ministry said.

Seoul’s announcement coincided with growing resentment at the $5 billion (£3.9bn) annual fee that Washington is demanding to keep 28,500 US troops in South Korea.

That figure is a sharp increase from the $923 million that Seoul paid this year, which was an 8 per cent increase on the previous year.

https://www.telegraph.co.uk/content/dam/news/2019/11/18/TELEMMGLPICT000216010945_trans%2B%2BejMVNjZ2Bv6EA7I5e4mELy5twttbUiN55rbZOKJP4mY.jpeg
Seoul's decision to terminate the intelligence sharing pact with Japan risks sending the "wrong message", said General Robert B. Abrams, commander of United States Forces Korea Credit: STAFF SGT. MARCUS BUTLER/UNITED STATES FORCES KOREA/AFP via Getty Images

An editorial in Monday’s edition of The Korea Times warned that the security alliance between the two countries “may fall apart due to Washington’s blatantly excessive demands”.

Mr Trump has previously threatened to withdraw US troops if his demands are not met, with the editorial accusing the president of regarding the Korea-US mutual defence treaty “as a property deal to make money”.

The vast majority of Koreans agree, with a recent survey by the Korea Institute for National Reunification showing that 96 per cent of people are opposed to Seoul paying more for the US military presence.

There is also irritation at the pressure that Washington is applying to the South to make Seoul sign an extension to a three-way agreement on sharing military information with the US and Japan.

The General Security of Military Information Agreement is due to expire at midnight on November 23 and South Korea insists that it will only agree to an extension if Japan cancels restrictions on exports of chemicals critical to the South’s microchip industry.

Japan is widely believed to have imposed the restrictions as the latest incident in its troubled relationship with South Korea, which includes the issue of compensation for labourers put to work during Japan’s colonial rule of the Korean Peninsula.

The two nations' defence ministers held discussions with Mark Esper, the US defence secretary, at the weekend but hopes that a breakthrough might materialise came to nothing.

Just days before an agreement designed to protect the allies from North Korean belligerence runs out, Tokyo and Seoul merely reiterated their long-held positions.

The US demanded in July that Japan pay $8 billion a year to keep 54,000 US military personnel in the country, Foreign Policy reported late last week.

Tokyo currently contributes $2 billion a year to US military costs in Japan.

“This kind of demand, not only the exorbitant number, but the way it is being done, could trigger anti-Americanism”, Bruce Klinger, an analyst at the Heritage Foundation think tank, told Foreign Policy.

“If you weaken alliances, and potentially decrease deterrence and US troop presence, that benefits North Korea, China and Russia, who see the potential for reduced US influence and support for our allies”.

Daniel Pinkston, a professor of international relations at the Seoul campus of Troy University, was more blunt in his assessment.

“It’s just extortion”, he told The Telegraph. “It’s little more than a mob boss going around and demanding protection money. The numbers that the US is demanding are politically impossible for Seoul and Tokyo to swallow and that is just fuelling resentment."
From: https://www.telegraph.co.uk/news/2019/11/18/china-signs-defence-agreement-south-korea-us-angers-seoul-demand/amp/

[Cara]

Well, this is a very interesting development: joint Chinese- Saudi Arabian naval exercises!


China, Saudi embark on joint naval exercise
November 20, 2019 3:38 PM

https://s3media.freemalaysiatoday.com/wp-content/uploads/2019/07/China-navy-warship-290719-AFP-Getty.jpg
Chinese media report the exercise will last 3 weeks. (AFP pic)

BEIJING: China and Saudi Arabia have begun a three-week joint naval exercise, Chinese state media said on Tuesday evening.

The joint exercise at a Saudi Arabian naval base comes as tensions in the Gulf have risen over recent attacks on oil tankers and a major assault on Saudi energy facilities.

Beijing maintains close ties with Saudi Arabia, which is China’s top oil supplier to date, but it has also sought to strengthen ties with rival Iran in a delicate balancing act.

Chinese state media reports said the joint exercise was designed to build trust between the two sides to combat maritime terrorism and piracy.
https://www.freemalaysiatoday.com/category/world/2019/11/20/china-saudi-embark-on-joint-naval-exercise/

[Cara]

History and projections about Chinese-US relations, as viewed by Henry Kissinger:

1197478539374649346

(28 minute video)

[Cara]

The first freight train on a rail route of the new Silk Road has arrived in Ankara, Turkey (and departed onwards for its destination in Prague, Czech Republic):


First train from China to Europe makes ‘Silk Railway’ dream come true in Turkey
November 7, 2019

DAILY SABAH

https://www.yerepouni-news.com/wp-content/uploads/2019/11/China-6Express-Railway.jpg
China Express Railway freight train was hailed and sent off to its final destination to Prague, Ankara, Nov. 6, 2019. (AA Photo)

The countries in the Middle Corridor of China’s Belt and Road project celebrated a milestone in global trade on Wednesday as they hailed the arrival of a Chinese freight train in Turkey, signaling the full integration of the ‘Silk Railway’ dream

Turkey and the world witnessed a historic moment on Wednesday as Ankara welcomed and sent off the first train that departed China and for Europe passing below the Bosphorus via Istanbul’s Marmaray tunnel for the first time, marking the realization of the “Silk Railway” dream.

China’s Railway Express will directly connect Czech Republic’s Prague to Xian, the capital city of Shaanxi Province in central China, via Turkey.

The real Silk Road was an active trade route used between the 2 B.C. and the 18th century that connected China and Europe through Anatolia and the Mediterranean region.

Within the scope of the Belt and Road Initiative (BRI), which aims to connect Asia, Africa and Europe via roads and sea lanes, the railway will reduce freight transportation time between China and Turkey from one month to 12 days thanks to the Baku-Tbilisi-Kars (BTK) railway line, while the whole route between the Far East and Western Europe will take 18 days with the integration of the Marmaray tunnel, said Transportation and Infrastructure Minister Cahit Turhan at the welcoming and sendoff ceremony at the historic Ankara Train Station on Wednesday.

“Considering the $21-trillion trade volume between Asia and Europe, the importance of the issue will be easily understood. The Iron Silk Road line, which benefits a population of nearly 5 billion and 60 countries, has become a new and a very important alternative for the global commercial network,” Turhan stressed.

The minister pointed to the geostrategic and geopolitical importance of Turkey, which connects three continents to each other. Turkey, which is an Asian, European, Balkan, Caucasus, Middle East, Mediterranean and Black Sea country with its geographic location and historical and cultural continuity, holds an important role in the economic and social development of the geographies, Turhan stressed.

The first freight train from China entered Turkey via the eastern province of Kars on Sunday, Nov. 3 after traveled through Kazakhstan, Azerbaijan and Georgia. It then passed through the Turkish towns and cities of Ahılkelek, Kars, Erzurum, Erzincan, Sivas, Kayseri, Kırıkkale, Ankara, Eskişehir, Kocaeli, Istanbul’s Marmaray tunnel and Kapıkule in Edirne.

Turhan emphasized that the country established uninterrupted and high-quality transportation infrastructures between continents by establishing a wide variety of transport links as well as corridors in recent years to further strengthen Turkey’s current position.

“With an investment of nearly $754 billion, we have strengthened our transportation and communication infrastructure and completion of the missing links on international transportation routes was among our priorities,” the minister underscored.

On the basis of cooperation between Turkey, Azerbaijan and Georgia within the scope of the Belt and Road Initiative, the Baku-Tbilisi-Kars (BTK) railway line established a freight and passenger link between Europe and China and was launched in October 2017.

Providing the shortest rail link between Europe and Asia, the BTK plays an important role in the implementation of the initiative.

Turhan said China Railway Express, which made its first trip via the BTK line has given new direction to the global rail transportation.

With the said line, the minister stressed Turkey has become the most important connecting point of the Middle Corridor stretching from Beijing to London and the Iron Silk Road that extends from Kazakhstan to Turkey.

The minister said that the China Railway Express, carrying a freight of electronic goods equal to the load of 42 trucks, will make 11,483 kilometers in 12 days, starting from Xian in China and passing through two continents and seas and 10 countries with 820-meter-long 42 containers.

Carrying the freight through Baku-Tbilisi-Kars railway and Marmaray saves time and energy compared to other corridors. “This is a historic moment for global and regional trade. This train symbolizes the beginning of a new era in railway transportation,” Turhan remarked.

NEW COOPERATION ON HORIZON

Kazakhstan National Railway Head Sauat Mynbaev also remarked that the project reinforces the connection between Asia and Europe and stressed that the “One Belt, One Road” project will result in further development of freight transportation.

Azerbaijan’s Deputy Economy Minister Niyazi Seferov also pointed out that the China Railway Express is the first train to cross under the Istanbul strait. “The train will contribute to the friendly dialogue among the countries through which it passes,” Seferov said.

Shaanxi Regional Party Committee Secretary Hu Heping also emphasized that the Chinese freight train contributes to enhancing the economic and commercial dialogue among Eurasian countries. “I believe that the train will expand cooperation among the regional countries,” he remarked.

Turkish State Railways Transportation, ADY Konteyner, Georgia Railways Logistics Terminals, KTZ Express Pacific Eurasia, Xian International Trade and Logistics Park and Xian Intercontinental Bridge International Logistics, signed a protocol on the quality development of the Trans-Caspian route of the China Railways Express.
From: https://www.yerepouni-news.com/2019/11/07/first-train-from-china-to-europe-makes-silk-railway-dream-come-true-in-turkey/

[silvanelf]

First train from China to Europe makes ‘Silk Railway’ dream come true in Turkey
November 7, 2019

DAILY SABAH

--- snip ---

Within the scope of the Belt and Road Initiative (BRI), which aims to connect Asia, Africa and Europe via roads and sea lanes, the railway will reduce freight transportation time between China and Turkey from one month to 12 days thanks to the Baku-Tbilisi-Kars (BTK) railway line, while the whole route between the Far East and Western Europe will take 18 days with the integration of the Marmaray tunnel, said Transportation and Infrastructure Minister Cahit Turhan at the welcoming and sendoff ceremony at the historic Ankara Train Station on Wednesday.

--- snip ---

From: https://www.yerepouni-news.com/2019/11/07/first-train-from-china-to-europe-makes-silk-railway-dream-come-true-in-turkey/

Here is a map, depicting the Baku-Tbilisi-Kars (BTK) railway line:


Turkey opens rail link for new Silk Road

October 31 2017, 12:01 am, The Times

A railway line connecting Turkey and Azerbaijan opened yesterday, a key stage on a new trade route between Europe and Asia.

The 525-mile Baku-Tbilisi-Kars project will halve the time it takes to move goods from China to Turkey and is a crucial part of China’s One Belt One Road infrastructure initiative to modernise Eurasian transport routes and thus reshape global trade. The line will bypass Russia.


https://www.thetimes.co.uk/imageserver/image/methode%2Ftimes%2Fprod%2Fweb%2Fbin%2F364b51fc-bdb6-11e7-a565-faa13785ed96.png?crop=2000%2C2000%2C0%2C0&resize=332

--- snip ---


https://www.thetimes.co.uk/article/turkey-hails-link-in-new-silk-road-baku-tbilisi-kars-turkey-azerbaijan-asia-dghzslks8

[Cara]

A neat summary of China’s export footprint which has unseated the US dominance in less than a decade:

1198862204876931072


Zeeshan Mhaskar
@MhaskarChief
2000 vs 2019

US and China sphere of influence. This is what the trade war is all about
https://pbs.twimg.com/media/EKM2y4LUYAAzXdW?format=jpg&name=900x900
https://pbs.twimg.com/media/EKM20D5UwAEk8X6?format=jpg&name=900x900

[Cara]

The new pipeline between Russia and China, the Power of Siberia, has begun gas deliveries

1201448329294467072


Russia starts deliveries of gas to China via Power of Siberia pipeline

The official opening ceremony was attended by Russian President Vladimir Putin and Chinese President Xi Jinping via a TV link-up

https://phototass1.cdnvideo.ru/width/1020_b9261fa1/tass/m2/en/uploads/i/20191202/1240793.jpg
© REUTERS/Maxim Shemetov

MOSCOW, December 2. /TASS/. Russia has started gas supplies to China via the Power of Siberia pipeline on Monday. The official opening ceremony was held on Monday and was attended by Russian President Vladimir Putin and Chinese President Xi Jinping via a TV link-up.

Gazprom CEO Alexei Miller welcomed the two leaders from the Atamanskaya compressor station on the border with China.

"Dear Vladimir Vladimirovich, allow me to give a command to open the pipeline valve," Miller said addressing to President Putin.

On receiving Putin’s permission, the head of Gazprom said: "Dear Vladimir Vladimirovich, dear Xi Jinping, the valve has been open. Gas is flowing to the gas transmission system of the People’s Republic of China."

Initially, the opening of the pipeline was planned for December 20 but the construction was completed ahead of schedule.

Power of Siberia

The gas pipeline’s total length is about 3,000 km. Its capacity is 61 bln cubic meters of gas per year, including 38 billion cubic meters for export. The route of the gas transmission system is along the operating East Siberia - Pacific Ocean main oil pipeline, making possible to optimize infrastructure and power supply costs.

Chayanda and Kovykta gas fields with reserves of 1.2 trillion and 2.7 trillion cubic meters of gas respectively are the resource base for the Power of Siberia gas pipeline. Development of the Chayanda’s gas pool started in 2015. The design production on the field is planned as 25 bln cubic meters of gas annually. Production on the Kovykta field will start after 2022. Its production will also be 25 bln cubic meters of gas per year.

The ‘eastern route’ agreement (from Blagoveshchensk to China) was signed with CNPC on May 21, 2014. The total price of the contract on annual supplies of 38 billion cubic meters of gas to China amounted to $400 bln.
From: https://tass.com/economy/1094685