BRIC+ News & comments

[Billy T]

Carnival (NYSE:CCL) has signed a memorandum of understanding with China Merchants Group to explore the creation China’s first domestic line, and will also collaborate on port development in the country.

Considered the biggest growth market for the industry, cruise line operators are rushing to China.

Carnival alone expects to run four ships carrying 500,000 passengers annually in the region this year, more than doubling capacity since 2013

Richer Chinese are traveling more than ever - Why China is fastest growing tourist market.

 

[Billy T]

... the yuan passed the euro in 2013 to become the second-most used currency in global trade finance. The nation is promoting greater usage of its currency by appointing clearing banks in the world’s financial centers and expanding a program that allows yuan held offshore to be invested in its domestic capital markets.*

The People’s Bank of China will promote yuan internationalization in an orderly way this year, according to a Jan. 20 statement published on its website. More than 50 global central banks and monetary authorities already hold yuan as part of their reserves, DBS’s Chow said.

“If the euro continues weakening and involves a cost to hold, other central banks will be looking for alternatives,” Davis Hall, global head of foreign exchange and precious metals advisory at Credit Agricole SA’s private-banking unit, said in a Jan. 28 phone interview. The yuan emerges as “a more and more viable” option as the PBOC is likely to keep a liquid trading environment for the currency ...

* In addition to that, holders of Pounds or Euros can walk in and exchange them for Yuan in official centers in London & Frankfort, for more than a year now.

Some were earlier in this thread are photos of these two centers.

 

[Billy T]

China now first in FDI; US is third. In addition to making non-speculative* demand for the local currency, FDI creates a lot of new jobs.

China became the world’s top destination for foreign direct investment in 2014, edging the U.S. out of that position for the first time since 2003, according to figures released Thursday by the United Nations Conference on Trade and Development.

Foreign businesses invested $127.6 billion in China, up from $123.9 billion in 2013, while their investments in the U.S. fell to $86 billion from $230.8 billion, Unctad said. The decline contributed to the U.S. slipping to third among all recipients of such investment, behind also Hong Kong.

China’s elevation is part of a longer-term trend in foreign investment away from developed and toward developing economies, which last year attracted 56% of all overseas investments by businesses, up from 52% in 2013 and double their share before the financial crisis of 2008.

*US is the least ugly western currency now - Hot money is flowing to the dollar, but speculative flows can reverse in a week. What US needs is job creation, not Treasury bond buying.

 

[Billy T]

China plays "economic hard ball" well. Several years ago Vale, with purest iron ore in world, took delivery on at least four supper ore carrier (400,000 tons capacity) as way to deliver more Fe in ore per dollar than to China than closer competitors could. China said "too much danger - they are too big. Not allowed to dock in Chinese port. So Vale reloads their ore into smaller ship in some other Asian port for final leg of the deliver - losing all the cost advantage those huge ships had. Now that Vale has partnered with Chinese there is no longer a "safety problem."

China is likely to import more iron ore from Companhia Vale do Rio Doce, the Brazilian mining giant, to bolster its raw material reserves, after the Ministry of Transport issued a new rule permitting construction of wharves that can berth bulk carriers with a capacity of 400,000 deadweight tons.

The new rule, announced last month, said it is necessary for Chinese ports to keep up to date with the trend of ships getting larger and maintaining safe operations. ... Dong Liwan, a professor at Shanghai Maritime University, said the designed limit for larger bulk carriers is 403,944 DWT under the new rule, which is quite close to the mega ore carriers operated by Vale, indicating China is willing to deepen cooperation with the Brazilian company in mining commodity trade, as well as in increasing its iron ore reserves.

Due to opposition from Chinese shipping companies and associations, the Ministry of Transport had barred mega-bulk carriers from the nation's ports since 2011, on security concerns and on grounds that such vessels can lead to monopoly and unfair market competition after the first 400,000 DWT bulk vessel docked at the Dalian port in December 2011.

"With the prices of commodities such as iron ore, coal and cotton remaining sluggish in the global market, it is reasonable for China to import more mining materials as strategic reserves to support the country's ongoing industrial boom," said Dong. Li Xinchuang, executive deputy secretary-general at the Beijing-based China Iron and Steel Association, said China's iron ore imports are set to pierce the 1 billion-metric-ton mark for the first time this year.

Li said China's iron ore imports are expected to grow 7.1 percent this year, thanks to domestic supplies falling by around 70 million tons.* ... Vale signed strategic and freight agreements with China's State-owned COSCO Group and with China Merchants Group in September, in a push to increase its presence in China. Vale also signed a strategic agreement with Shandong Shipping Corp in 2013 to hand over four 400,000 DWT bulk vessels to its Chinese counterpart, indicating the Brazilian company eventually found the dock to call in Chinese ports through this deal. ... Vale also signed a $500 million iron ore freight agreement with Shandong Shipping to diversify its business in China.

"Besides Dalian and Lianyungang, the ports of Qingdao, Tianjin, Ningbo-Zhoushan, Zhanjiang and Caofeidian all have the infrastructure in place to accept mega bulk carriers straight away,* " said Chen Yingming, executive vice-president of Shanghai-based China Port and Harbors Association.

"Strange" the old facilities no longer have a safety problem, is it not? No, it not. China is just "one tough cookie" to deal with.

 

[Billy T]

Europeans defy US to join China-led development bank

France, Germany and Italy have all agreed to follow Britain’s lead and join a China-led international development bank, according to European officials, delivering a blow to US efforts to keep leading western countries out of the new institution.

 

[joepistole]

Europeans defy US to join China-led development bank

And do you have any proofs to back up your assertion Europeans defied the US or is this more demagoguery?

 

[Billy T]

And do you have any proofs to back up your assertion Europeans defied the US or is this more demagoguery?

Yes, I have proof & already gave some. Read again the end of my quote in post 785. But here too, in the up date of more joining China's AIIB:

Six Western countries have applied to become founding members of the China-led Asian Infrastructure Investment Bank, the Ministry of Finance confirmed on Friday. Britain, Germany, France, Italy, Luxembourg and Switzerland have officially sought founder membership of the bank, the ministry said. The bank, which already has 27 such members, will be established formally by the end of the year, Finance Minister Lou Jiwei said on Friday.

The United States considers the AIIB to be a rival to the Western-dominated World Bank, ... "It is good news that many developed countries outside Asia want to join the founders' group and we are not surprised about this. We respect any decisions made by countries inside and outside Asia on whether to join or not," Lou added. Luxembourg Finance Minister Pierre Gramegna confirmed on Wednesday that his country has applied to join the bank.

Australia appears to be the latest major nation showing an interest in becoming a founder member of the bank, with Canberra reportedly set to pledge about $2.3 billion to the project, the Sydney Morning Herald reported on Friday. Britain became the first Western economy to apply for membership of the bank this week, with France and Germany expressing their interest soon after.

The US issued what was seen by many observers as a warning to Britain over its public support for the AIIB. As Australia is one of the key US military and political allies in the Asia-Pacific region, its move is also likely to raise tensions in Washington. Applicants do not want to miss the chance to share the results of China's fast economic growth, and expect more participation in Asia's development, although their actions may meet disapproval from the US, Wang said.

America's AIIB Disaster: Are There Lessons to be Learned?*

The U.S. needs a better response to Chinese-led initiatives than attempting to lead a boycott. The U.S. insured this would be global news by its stark opposition to the AIIB, and by its shocking sharp response to London’s decision to join — effectively accusing the U.K. of appeasing China. It’s been clear from the beginning that Washington was opposed to the creation of the bank and trying to keep its friends and partners from joining. But the stark criticisms leveled at London when it joined underlined just how badly Washington wanted to keep its allies away from the bank – and how powerless it ultimately is to convince them to stay away.

Many more if you search, but this drawing is worth 10,000 words:

Drawing's original caption was: "The story of the Asian Infrastructure Investment Bank is turning into a diplomatic debacle for the US. By setting up and then losing a power struggle with China,
Washington has sent an unintended signal about the drift of power and influence in the 21st century. "

But this is the "tip of the iceberg" - Wait until China backs it bonds with gold and petrodollar is less than half of central bank's reserves as not needed for buying oil.
Then China, and no longer the US, gets to pay for imports with printed paper.

* This bold part is the title of the article.

 

[joepistole]

Yes. Read again the end of my quote in post 785. But here too, in the up date of more joining:and more if I can relocated article I read earlier today about US's now failed efforts to stop EU nations from joining.

That doesn't mean those countries defied the US.

 

[Billy T]

That doesn't mean those countries defied the US.

You must have low reading comprehension - I thought at least the drawing, if not the various texts of post 787 would get thru to you. Perhaps you suffer from low vision too? Here is the latest from the IMF's president:

Lagarde praised Beijing for its work to build a legal system and address pollution. She said she welcomed Beijing's efforts to boost investment outside China, referring to the new Beijing-led Asian Infrastructure Investment Bank. She said China is "clearing the path to further engagement with the world through investment, trade and more participation in the multilateral dialogue." China established the regional lending institution last year and put up most of its initial $50 billion in capital with the goal to finance construction of roads and other infrastructure.

 

[joepistole]

You must have low reading comprehension - I thought at least the drawing, if not the various texts of post 787 would get thru to you. Perhaps you suffer from low vision too? Here is the latest from the IMF's president:

LOL, ok, aside from your ad hominem, again, where is your evidence the countries you referenced defied the United States as you have claimed? Just because some countries have agreed to accept the board positions offered by China, it doesn't mean they "defied" the US. You do understand the meaning of the word "defy" dont' you? Here, I'll help you BillyT. Below is the Webster's Dictionary definition of the word "defy".

": to refuse to obey (something or someone)
: to make (something) very difficult or impossible
: to resist or fight (something)"

http://www.merriam-webster.com/dictionary/defy

Again, were is your evidence the countries you referenced and claim have "defied" the US by accepting China's offer of board seats and influence over this newly created entity? I'm very sure the heads of the countries claim have defied the US would not share your belief. I am sure the US would not share your belief. You have assumed the US doesn't want countries to participate in this newly created entity or is somehow threatened by China's new financing organization. I don't see a threat to the US from China's newly minted organization.

 

[Billy T]

Joe: What is it about "according to European officials, delivering a blow to US efforts to keep leading western countries out of the new institution." from my quote in post 785, that you don't understand?
Or
" The US issued what was seen by many observers as a warning to Britain over its public support for the AIIB." that you don't understand?
And: "although their actions may meet disapproval from the US" Both from first quote of post 787 that you don't understand?
Or
" The U.S. needs a better response to Chinese-led initiatives than attempting to lead a boycott." that you don't understand?
And:
" the stark criticisms leveled at London when it joined underlined just how badly Washington wanted to keep its allies away from the bank " both from my 2nd quote in post 787 that you don't understand?
Or this drawing from yet a fourth source showing an "unhappy or mad Obama" watching US's friends rushing to leave the US controlled world bank to join up with China's AIIB alternative? that you don't understand?

What about this drawing is it you don't understand? with it caption of:
" a diplomatic debacle for the US. By setting up and then losing a power struggle with China."
And then noting: "Washington has sent an unintended signal about the drift of power and influence in the 21st century." that you don't understand?

I also note that I am only quoting from sources, not making any comment of my own. (but I do agree with them and more than a dozen others, that Obama/ US tried hard to block this drift to China's AIIB from the US controlled world bank) US even got a little "un-diplomatically angry" at the UK, US's oldest friend, for leading the parade to the AIIB, as shown in the drawing - note the British flag the leader is carrying.

 

[joepistole]

Joe: What is it about "according to European officials, delivering a blow to US efforts to keep leading western countries out of the new institution." from my quote in post 785, that you don't understand?
Or
" The US issued what was seen by many observers as a warning to Britain over its public support for the AIIB." that you don't understand?
And: "although their actions may meet disapproval from the US" Both from first quote of post 787 that you don't understand?
Or
" The U.S. needs a better response to Chinese-led initiatives than attempting to lead a boycott." that you don't understand?
And:
" the stark criticisms leveled at London when it joined underlined just how badly Washington wanted to keep its allies away from the bank " both from my 2nd quote in post 787 that you don't understand?
Or this drawing from yet a fourth source showing an "unhappy or mad Obama" watching US's friends rushing to leave the US controlled world bank to join up with China's AIIB alternative? that you don't understand?

What about this drawing is it you don't understand? with it caption of:
" a diplomatic debacle for the US. By setting up and then losing a power struggle with China."
And then noting: "Washington has sent an unintended signal about the drift of power and influence in the 21st century." that you don't understand?

I also note that I am only quoting from sources, not making any comment of my own. (but I do agree with them and more than a dozen others, that Obama/ US tried hard to block this drift to China's AIIB from the US controlled world bank) US even got a little "un-diplomatically angry" at the UK, US's oldest friend, for leading the parade to the AIIB, as shown in the drawing - note the British flag the leader is carrying.

Yeah, you are quoting from SPECIOUS sources again. The China Daily isn't a credible journal given it is published by the Chinese state. Like Russia, China doesn't have a free press.

 

[Billy T]

Yeah, you are quoting from SPECIOUS sources again. The China Daily isn't a credible journal ...

I told you there were dozens of sources telling same facts:

From: NY Times, for example:

The United States Treasury Department has criticized the bank as a deliberate effort to undercut the World Bank and the Asian Development Bank, international financial institutions established after World War II that are dominated by the United States and Japan,

From: The Wall Street Journal:

The U.S. suffered a diplomatic embarrassment last week after several of its key European allies publicly rebuffed Washington’s pleas to snub Beijing’s invitations to join the bank and instead said they would be founding members.

Form the Financial Times of London*:

As soon as China made clear, back in 2013, that it intended to establish the bank, the US set about persuading its allies to boycott the new institution. The Americans argued that the new Beijing-backed bank might follow less scrupulous lending standards than the World Bank on issues such as clean government and environmental standards.

Are these "SPECIOUS sources" too. I have now give seven, all saying the same thing. I gave the first four because they said it very clearly and bluntly. Thought that would get thru your biases to you; but it did not so I asked in post 791's red text 8 times what it was about my quotes you did not understand?

Simple fact is that every reputable source, big or small, is telling the same story: US tried hard to prevent its "friends" from joining China's AIIB and they ignored the US. So as usually when you are exposed by quotes as showing you are either ignorant or blindly biased against the truth; You first attack the person telling the truth. But that failed this time (as I said I was only quoting) so your "Plan B" is to attack the credibility of their source. - That is your standard operating procedure when you don't like the truth.

*Some what related, Financial Times of India said that too. BTW, the ChinaDaily is much more reliable than you are but does avoid all but very subtle critical comment on the CCP and its policies. I read them daily as they are an excellent source of global news, which if biased is at least not the same bias as Western press.

For example, current issue has front page article with this Lead-in Line:
"Seven airports on the Chinese mainland are at the bottom of a list of 61 world airports for punctuality, air travel information service FlightStats says."
And this is front page lead-in too:
"Although the global battle against tuberculosis has largely been successful, the disease still poses a serious threat in China, especially for poor people."

But China Daily is all just "SPECIOUS" CCP propaganda, isn't It? Not honest and bias free like Joepistole is.

 

[Billy T]

Australi, Brazil, Russia, + others have applied to join AIIB.

US badly beaten in effort to block other countries from joining the AIIB as wanted them to stay in the World Bank, where US alone has veto power over all loans, is now in Beijing telling US will "cooperate" with the AIIB. I think U.S. Treasury Secretary Jacob Lew has been invited to a formal dinner - main disk is to be crow.

 

[Billy T]

If round one {All joining China's AIIB} was a defeat for America, round two hangs in the balance. Washington is trying to convince 11 Pacific nations to join a “next generation” trade agreement called the Trans-Pacific Partnership. Billed as the most important trade initiative since the collapse of the 2001 launch of the World Trade Organisation’s Doha round, it would bind two of the biggest economies — the US and Japan — into a bloc covering 40 per cent of global output.

The stakes are high. If the TPP disappoints — or worse still, if it is not concluded — it will be another embarrassing setback for US regional diplomacy.

The omens are mixed at best. The TPP excludes China. The region’s most important trading nation has not been invited to join on the grounds that its economy is too centrally planned and too rigged to be part of such a highfalutin arrangement. Yet in a peculiar display of diplomatic contortion, Vietnam — a country whose economy is as centrally planned and as rigged as the best of them — is somehow considered fit for entry.

Foreign policy is about self interest and regional influence - need not be logically consistent.
Watch this 5 minute video here: http://www.ft.com/intl/cms/s/0/fabf...siness/product&siteedition=intl#axzz3W9cpmZQj

 

[Billy T]

Japan's ownership of Treasuries fell by $14.2 billion to $1.2244 trillion in February, according to Treasury Department data released on Wednesday in Washington. China's holdings were $1.2237 trillion as of February, $15.4 billion lower than a month earlier.

Both are now getting dollars out of their reserves, but China faster than Japan. Now Japan is biggest holder of Treasury paper promises (Except for the FED, of course which hold 3 or 4 times more than either country does). Last time Japan held more than China was back in 2008.

Fact that China has be able to cut its holding compared to a year ago by 49.2 billion despite its huge and chronic dollar trade surplus is impressive. China really does not want to hold more green paper pictures of George Washington. - More indication that they may soon back their bonds with gold, but I think it is a year or two yet, before it is to China's long term economic advantage to have central banks hold more RMB bonds in their bank reserves than they hold dollars.

China needs to get its exports sales to the US to be no more than 10% of the total - It is making good progress towards that goal: About a decade ago, US bought 25% of China's exports, now is only in second place compared to even weak EU buying. The rapid (double digits) growth in China's exports is to ASEAN and a few others, where China now buys the low-valued added components in builds into its high value added exports. I. e. The funds China sends those suppliers turn rapidly around and come back to China as their population buy Chinese made items to improve their living conditions. (iPods, TVs, motor bikes, pharmaseudicals and vaccines, computers and cameras, etc.)

 

[Billy T]

China is rapidly building an airstrip on an artificial island in disputed South China Sea waters recent satellite pictures show ... Fiery Cross in the Spratly Islands was little more than a reef when China began land reclamation works.

More discussion here: http://news.yahoo.com/china-defends-land-reclamation-disputed-islands-143446330.html
And here, with full island photo showing the change made in only 45 days:
http://news.yahoo.com/report-says-china-building-airstrip-reclaimed-island-085019293.html

The construction area is probably partly residential (some distance from airport noise. China has announced plans to populate many of the currently un-inhabited S. China Sea islands it claims as Chinese territory (as well build surveillance radars, communication facilities* and defensive military instillations.

* Probably, a few ground based precision clocks for its "GPS" which is much cheaper than the US's as it has no high precision clock in every satellite. I.e. is purely defensive - can not guide a cruse missile thru selected window on the other side of the world as US's global GPS can. It must have "line-of-sight" to a land based clock, but even already it works in ocean not far off shore, East of Japan and both Koreas plus part of the Indian Ocean.

 

[Billy T]

Chinese President Xi Jinping, bearing promises of more than $45bn in infrastructure investment, began a visit to Pakistan on Monday that will strengthen ties between Beijing and its nuclear-armed south Asian ally.
His visit will also launch a new Chinese diplomatic drive in Asia and underline the waning influence of the US in Islamabad.

China continues to win WWIII economically, not with drones and bombs.

 

[Billy T]

China will draw on its massive foreign exchange reserves to inject $62bn of capital into state-owned “policy banks” in support of its ambitious “New Silk Road” plans to build infrastructure links to foreign markets.

Must be nice to have 0.107 trillion dollars of "pocket change." - Result of US loading China's "economic canon" * for more than two decades, buying mainly plastic junk, like hula hoops. This 0.062 + post798's 0.045 billion = 0.107 Trillion dollars.

* The only weapon nuclear nations, with more than enough ICBMs, submerged launch from submarines to destroy the other, can actually use in WWIII. China's air defenses are good and they now have at least 4, probably 6 or 7, Jin-94 sub marines with 12 launch tubes for the new mirved SBM ICBM which has a range of 8,700 miles - I.e. only one surviving a US first strike can hit NYC and 119 other US cities from more than half of the Pacific Ocean and all of the Artic Ocean. (And each of those 120 independently targetable nuclear bombs is 2.5 times more powerful than the one used on Hiroshima!)

Jin 94 sub

at least one very likely is in N. Atlantic all the time.

 

[Billy T]

Expect "more of the same" from China:

BEIJING, May 8 (Xinhua) -- The National Development and Reform Commission (NDRC), China's top economic planning department, laid out six priorities for 2015 in a statement on Friday:
-- stick to proactive fiscal policy and prudent monetary policy
-- work to expand domestic demand
-- try to foster new growth engines
-- encourage mass entrepreneurship and innovation
-- upgrade industrial structure
-- deepen reform and boost market vitality
The NDRC said in the statement that the Chinese economy operated in a reasonable range in the first quarter, and favorable conditions and new growth engines are emerging.

Sad, perhaps ominous, that there is no: "reduce corruption" unless that is under "deepen reform" Is that drive/ goal being forgotten?