• Saturday, October 19, 2019

Europe, Japan, China and Russia line up against US

Discussion in 'China & Far East' started by Raphael, Aug 23, 2018.

  1. Raphael

    Raphael SENIOR MEMBER

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    http://www.atimes.com/article/europe-japan-china-and-russia-line-up-against-us/

    By DAVID P. GOLDMAN
    The United States starts a tariff war with China. Japan and Germany jump at the chance to gain market share in China’s booming auto industry and boost their capacity in China, the world’s fastest-growing passenger car market.

    The United States imposes sanctions on Turkey. Germany announces that it will offer economic aid to Turkey, Qatar pledges $15 billion in new investment and a $3 billion foreign exchange swap line, and Chinese banks provide billions of dollars in new loans to the cash-strapped Turks. Chinese commentators declare that crisis is a great opportunity to integrate Turkey into China’s “One Belt, One Road” strategy.

    US President Donald Trump chides German Chancellor Angela Merkel for buying Russian natural gas through the Nord Stream II pipeline. Merkel summits with Russian President Vladimir Putin and confirms the pipeline arrangement, and also strikes a deal to aid the reconstruction of Syria in cooperation with Russia.

    The United States imposes economic sanctions on Iran, and Western insurance companies stop insuring Iranian oil cargoes. China responds by accepting Iranian insurance on oil imports, increasing oil imports from Iran, and shipping the oil in Iranian tankers, Reuters reported August 20. India was offered Iranian insurance on oil shipments as well, but Indian refiners reportedly will reject the offer. Western insurance companies have told them that if they import Iranian oil, they will cancel insurance on refinery operations.

    And German Foreign Minister Heiko Maas proposes a new international payments system independent of the dollar sphere, a new interbank transfer system, and a European Monetary Fund, to “protect European businesses from [American] sanctions. He also proposed a digital tax on American Internet firms. Writing in the German daily Handelsblatt on August 21, Maas declared, “We will not let the United States go over our heads.” No representative of a major Western European government has suggested anything remotely like this in public before.

    Maas’s Handelsblatt manifesto is only talk for the time being. European companies do not want to test America’s resolve when it comes to sanctions against Iran or Russia. The threat of secondary sanctions against the US operations of international firms who do business with Iran has led European firms to stop buying Iranian oil and to pull out of prospective investments. Even if European governments created a payments system entirely independent of the purview of the American government, secondary sanctions remain a formidable enforcement tool.

    In the longer term, though, important shifts in investment patterns in response to America’s new assertiveness are likely to buttress China’s Eurasian ambitions.

    Opportunism rather than strategic vision appears to motivate these subtle and sometimes not-so-subtle shifts in European and Japanese policy towards China. China evidently is willing to open its markets to America’s competitors in return for help during a brewing trade war.

    Chinese premier Li Keqiang’s Berlin visit in early July appears to have set a precedent. Germany’s big three automakers announced groundbreaking joint ventures with Chinese firms as well as major expansion plans. Siemens, Germany’s top capital goods provider, and chemical giant BASF also announced major projects in China, while BMW warned that the Trump tariffs might cause it to shift capacity from its South Carolina plants to China.

    This week, Japan’s largest automakers followed the German example. Toyota announced plans to increase Chinese capacity by 20% and Nissan slated a $900 million investment to raise capacity by 30%. Japan’s decision to expand into the Chinese market is an important gauge of America’s isolation. Japan has a much smaller share of China’s auto market than Germany, in large part due to historic tensions between the two Asian powers. Nonetheless, the Japanese automakers smell an opportunity to profit at the expense of the United States. General Motors is the likely loser. It produces a Buick sport utility vehicle in China which will be subject to a 25% US tariff. GM sold 4 million vehicles in China last year with a 5% market share, and is vulnerable to Chinese retaliation.

    The European and Chinese response to the Turkish financial crisis—long in the making but exacerbated by American sanctions – shows how fast economic alliances are shifting. I have warned of Turkey’s descent into near-bankruptcy since 2014, and reiterated this warning on several occasions prior to the collapse of Turkey’s lira this summer. On August 10, when the crisis struck with full force, I argued in this newspaper that China would buy up Turkey on the cheap.

    On August 21 the Chinese financial news outlet The Asset wrote: “Economic crisis in Turkey is forcing the embattled President Recep Tayyip Erdogan to reach out for financial support, leaving the door open for China to grasp a not-to-be-missed opportunity to accelerate its Belt & Road ambitions in the region.”

    Rather than go to the International Monetary Fund and accept its policy dictates in return for cash, The Asset reports, Erdogan is looking for new friends. “First Qatar was embraced, with a US$15 billion package announced on August 15, after Qatari Emir Tamim bin Hamad Al Thani met with Erdogan in Ankara. Qatari state media said the money would go toward economic projects and investments. But China is also likely to feature heavily in the Turkish government’s recovery plans. Back in February, Turkey said that it was planning its debut Panda Bonds in China’s domestic RMB market, and mandated Bank of China, ICBC and HSBC to prepare the way for an offering.”

    None of this is surprising: the gas-bubble emirate of Qatar pays Turkey for political protection, and China has long viewed Turkey as the Western terminus of its Eurasian logistics. The surprise came from Berlin, where Merkel’s government is flirting with the idea of financial support to Turkey, in return for Turkish cooperation on the management of the Syrian refugee crisis and other matters. The head of German’s Social-Democratic Party, Andrea Nahles, proposed financial aid. Although the Social Democrats are members of the governing coalition, Nahles is not a cabinet member. Government spokesmen have indicated that financial support for Turkey is possible under specific conditions.

    German government sources say that Germany sees an opportunity to buy Erdogan’s cooperation on refugee issues cheaply. Germany notionally is an American ally, and Washington is in full confrontation with Turkey over the detention of an American citizen, among other matters. Nonetheless, Berlin decided to exploit Turkey’s urgent economic needs to push its own agenda at the expense of the United States.

    Central to European thinking is the belief that Asia will continue to provide the greatest margin of growth to the world economy. Asia delivers about three-fifths of world economic growth. As living standards among China’s 1.4 billion people and the 600 million people of Southeast Asia continue to converge on those of the Western industrial countries, non-Japan Asia will remain the world’s most important growth market by far.

    For European and Japanese manufacturers, the Sino-American trade war offers a chance to obtain a privileged position in this growth market, most obviously in the automobile market. The Chinese will buy perhaps half a billion automobiles in the next 20 to 25 years, and the chance to gain market share in the country’s huge but highly competitive automotive market convinced the big German and Japanese automakers to double down on their Chinese commitments.

    The world’s great opportunity for growth lies in the Sinification of the rest of Asia – above all Southeast Asia, which has the preponderance of population. I wrote in a 2017 essay in The Journal of American Affairs:

    “Aging countries seek to invest in countries with young populations, but the only countries with young populations are inaccessible to the world market and likely to remain so for the foreseeable future. There is enormous room for productivity to grow in emerging markets, however, and that can more than compensate for demographics. The good news is that productivity growth – the mobilization of energy and talent now wasted in the backwaters of the world economy – can bring a billion people into the world market who until now have languished on its fringes. The bad news is that China is far ahead of the United States in learning to transform this boost in human capital into economic alliances and export markets. That is where we need to catch up and overtake China.

    “The steam engine powered the first great revolution in economics, and the smartphone will catalyze the next one. Talent is the scarcest resource in the global economy, and the spread of broadband through the backwaters of the world opens the global market to the talented few. Men and women who till subsistence plots or wait for passersby in market stalls suddenly can sell to the whole world through e-commerce. Capital will find its way into the capillaries of the world economy through e-finance.

    “The backward economies in which most of the world’s people live waste time and grind down the spirit. In so-called emerging markets, between one-third and two-thirds of the workforce spend most of their time doing little or nothing. “

    Turkey is of special interest to China because it already has one of the world’s highest rates of smartphone penetration, at 50%. Turkey’s finance ministry wants to turn the country into a cashless society by 2023. Roughly a third of Turks now work in the so-called informal economy, the off-the-books activities of family businesses and small, capital-starved entrepreneurs. Sinification of Turkey means expanding the productive (and taxable) workforce by a third to a half, and making all commercial transactions transparent to tax authorities.

    It is far from clear that Turkey will transform itself on the Chinese model. The Erdogan regime is a kleptocracy on the grand scale; one of Erdogan’s sons has a net worth of $80 million and Erdogan’s personal net worth was recently estimated at $58 million. The Turks may be reluctant to turn large portions of their economy over to China and thus diminish the capacity to enrich themselves. Whatever Turkey decides, though, China and its Southeast Asian neighbors will continue to form a bloc of 2 billion people with the world’s highest growth potential.
     
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  2. khansaheeb

    khansaheeb SENIOR MEMBER

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    All the one Belt countries should be interlinked by standardised railway lines connecting them for trade with all the other one belt nations.
     
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  3. Super Falcon

    Super Falcon ELITE MEMBER

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    Trump will bring usa dollar and economy on its knees
     
  4. Dil Pakistan

    Dil Pakistan SENIOR MEMBER

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    This was prophesized to be done by a "Black" American President (He has come and gone) :partay:
     
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  5. KAL-EL

    KAL-EL PDF THINK TANK: ANALYST

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    The dollar and the economy will collapse in approximately one month, two weeks and 3 days.
     
  6. ZeEa5KPul

    ZeEa5KPul FULL MEMBER

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    I wouldn't mock him if I were you. The kind of apocalyptic, end-of-the-world magical thinking you're scoffing at is rife in the US - hell, it was invented by the US.
     
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  7. KAL-EL

    KAL-EL PDF THINK TANK: ANALYST

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    Ok, I get it.. The u.s. is no good.

    FYI there was no mocking him specifically, but feel free to continue on with your hyper nationalism.

    That's not my scene
     
    Last edited: Aug 23, 2018
  8. qwerrty

    qwerrty SENIOR MEMBER

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    worldbulletin.net
    Germany calls for end to US dominance in global finance | Europe
    2 minutes
    World Bulletin / News Desk

    Foreign Minister Heiko Maas on Wednesday proposed measures against U.S. dominance in global finance amid a growing row between Washington and Berlin over the Iran nuclear deal.

    In an article he wrote for daily Handelsblatt, Maas slammed American President Donald Trump for imposing unilateral sanctions on Iran, without consulting European allies.

    “It is essential that we strengthen European autonomy by establishing payment channels independent of the U.S., a European monetary fund and an independent SWIFT [payment] system,” he said.

    Maas also called on EU partners to maintain their unity and pursue a common policy towards the U.S. in the ongoing row over sanctions.

    “In this situation, it is of strategic importance that we make it clear to Washington that we want to work together.

    "But also: That we will not allow you to go over our heads, and at our expense. That is why it was right to protect European companies legally from sanctions,” he said.
     
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  9. rambro

    rambro FULL MEMBER

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    US influence diminishes rapidly is their own doing for being such a big warmonger.

    Others just had a better option available
     
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  10. TaiShang

    TaiShang ELITE MEMBER

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    Germany Calls For Global Payment System Independent Of The US


    Wed, 08/22/2018 - 05:33


    In a stunning vote of "no confidence" in the US monopoly over global payment infrastructure, Germany’s foreign minister Heiko Maas called for the creation of a new payments system independent of the US that would allow Brussels to be independent in its financial operations from Washington and as a means of rescuing the nuclear deal between Iran and the west.

    Writing in the German daily Handelsblatt, Maas said "Europe should not allow the US to act over our heads and at our expense. For that reason it’s essential that we strengthen European autonomy by establishing payment channels that are independent of the US, creating a European Monetary Fund and building up an independent Swift system," he wrote, cited by the FT.

    Maas said it was vital for Europe to stick with the Iran deal. "Every day the agreement continues to exist is better than the highly explosive crisis that otherwise threatens the Middle East," he said, with the unspoken message was even clearer: Europe no longer wants to be a vassal state to US monopoly over global payments, and will now aggressively pursue its own "Swift" network that is not subservient to Washington's every whim.

    Swift, a Belgium-based global payment network, enables financial institutions worldwide to send and receive information about financial transactions. The system’s management claims Swift is politically neutral and independent, although it has previously been used to block transactions and enforce US sanctions against various countries, most notably Iran. In 2012, the Danish newspaper Berlingske wrote that US authorities managed to seize money being transferred from a Danish businessman to a German bank for a batch of US-sanctioned Cuban cigars. The transaction was made in US dollars, which allowed Washington to block it.

    According to Thorsten Benner, director of the Global Public Policy Institute, a Berlin-based think-tank, Maas’s intervention was the “strongest call yet for EU financial and monetary autonomy vis-à-vis US."

    The German foreign minister’s article highlights the depth of the dilemma facing European politicians as they struggle to keep the Iran deal alive while coping with the fallout of US sanctions imposed by Mr Trump against companies doing business with Tehran.

    Maas also called for the creation of a “balanced partnership” with the US in which the Europeans filled the gaps left where the US withdrew from the world. Europe must, he said, “form a counterweight when the US crosses red lines”.

    As the FT adds, the EU has vowed to protect European businesses from punitive measures adopted by Washington, but that has failed to convince EU companies, who are more concerned about maintaining their access to the lucrative US market than in the more modest opportunities presented by Iran.

    Last month Washington rebuffed a high-level European plea to exempt crucial industries from sanctions. Mike Pompeo, US secretary of state, and Steven Mnuchin, Treasury secretary, formally rejected an appeal for carve-outs in finance, energy and healthcare made by ministers from Germany, France, the UK and the EU.

    Swift is also affected: unless it wins an exemption from sanctions, it will be required by the US to cut off targeted Iranian banks from its network by early November or face possible countermeasures against both its board members and the financial institutions that employ them. These could include asset freezes and US travel bans for the individuals, and restrictions on banks’ ability to do business in the US.

    Maas’s stark warning against US domination of global payments comes with relations between Germany and the US in their worst state for decades. Mr Trump has chastised Berlin over its large trade surplus, its relatively low military spending and its support for Nord Stream 2, a new gas pipeline that will bring Russian gas directly to Germany.

    Meanwhile, Berlin has looked on in dismay as Mr Trump has withdrawn the US from the Iran deal and the Paris climate treaty, imposed import tariffs on EU steel and aluminium and appeared to question America’s commitment to Nato.

    In short: Europe has finally had enough and it plans on hitting back at Trump where it truly hurts: the money.

    https://www.zerohedge.com/news/2018-08-21/germany-calls-global-payment-system-independent-us
     
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  11. qwerrty

    qwerrty SENIOR MEMBER

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    he should be careful or will have car accident or put in jail for having 1tb of child prawn on his computer :D
     
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  12. TaiShang

    TaiShang ELITE MEMBER

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    Then, before going down, he also better talk about the US industrial espionage on German companies.

    The US has been actively stealing IPs from Germany's industrial behemoths.

    @Götterdämmerung
     
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  13. oprih

    oprih BANNED

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    Nice, a lot of countries have strong hate against america nowadays.
     
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