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Butifldrm

China threatens the throne of the dollar through the exchange of oil in the golden yuan

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Butifldrm    5,693

China-IMF talks underway to endorse yuan as global reserve currency
March 12, 2015, 12:12 pm

 

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Including the yuan in the SDR basket would aid China’s attempts to diminish the dollar’s dominance in global trade and finance [Xinhua]

China is pushing for the International Monetary Fund to endorse the Chinese yuan as a global reserve currency alongside the dollar and euro.

 

 

 

A senior Chinese central bank official said Thursday that the country is “actively communicating” with the IMF on the possibility of including the yuan, or RMB, in the basket of the Special Drawing Rights (SDRs).

Including the yuan in the SDR system would allow the IMF to recognize the ascent of the world’s second-biggest economy while aiding China’s attempts to diminish the dollar’s dominance in global trade and finance.

“We hope the IMF can fully take into account the progress of RMB internationalization, to include RMB into the basket underlining the SDR in foreseeable, near future,” said Yi Gang, vice governor of the People’s Bank of China.

However, China will be patient until conditions are ripe, Yi said at a press conference on the sidelines of the ongoing annual parliamentary session.

In late 2015, the IMF will conduct its next twice-a-decade review of the basket of currencies its members can count toward their official reserves.

SDRs are international foreign exchange reserve assets. Allocated to nations by the IMF, an SDR represents a claim to foreign currencies for which it may be exchanged in times of need.

Although denominated in US dollars, the nominal value of an SDR is derived from a basket of currencies, with, specifically, a fixed amount of Japanese yen, US dollars, British pounds and euros, without RMB.

China would need to satisfy the Washington-based lender’s economic benchmarks and get the support of most of the other 187 member countries.

To become a currency included in the SDR basket, the trade volume of goods and services behind that currency will be evaluated, the Chinese Central Bank official explained on Thursday, stressing that RMB has no problem in this regard. But he said views are divided on whether the RMB is a freely usable currency.

“No matter whether and when the RMB will be included in the SDR basket, China will push on with its financial sector reform and opening-up,” Yi said.

The yuan became the world’s No. 2 currency for trade finance globally in 2013, and overtook the Canadian and Australian dollars to enter the top five world payment currencies in 2014, according to global transaction services organization SWIFT.

China said the yuan has also been used as a reserve currency in some countries and regions.

http://thebricspost.com/china-imf-talks-underway-to-endorse-yuan-as-global-reserve-currency/#.VQLS7_zF98F


UK snubs US to join China-led Asian bank
March 13, 2015, 5:25 am

 

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File photo of Chinese President Xi Jinping ® meeting with British Prime Minister David Cameron in The Hague, the Netherlands, March 25, 2014 [Xinhua]

Overlooking US censure, the UK has announced its decision to join China’s Asian Infrastructure Investment Bank, becoming the first “major western country” to apply for membership.

 

“I am delighted to announce today that the UK will be the first major Western country to become a prospective founder member of the Asian Infrastructure Investment Bank, which has already received significant support in the region,” said UK Finance Minister George Osborne on Thursday.

“Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together,” he added.

In a landmark achievement, 21 Asian nations including China and India in October last year signed on the creation of a new infrastructure investment bank which would rival the World Bank. The new Bank has a capital target of more than $100 billion.

The governments of Bangladesh, Brunei Darussalam, Cambodia, China, India, Kazakhstan, Kuwait, Lao PDR, Malaysia, Mongolia, Myanmar, Nepal, Oman, Pakistan, Philippines, Uzbekistan, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan, Vietnam signed on as founding members of the new Asia Infrastructure Investment Bank (AIIB) in Beijing.

“The UK will join discussions later this month with other founding members,” said a UK government statement on Thursday.

Washington reacted to UK’s announcement by saying it is circumspect about whether the AIIB would have sufficiently high standards on governance and environmental and social safeguards.

“We hope and expect that the U.K. will use its voice to push for adoption of high standards,” said Patrick Ventrell, spokesman for President Barack Obama’s National Security Council

The authorized capital of AIIB is $100 billion and the initial subscribed capital is expected to be around $50 billion. The paid-in ratio will be 20 per cent.

AIIB will be an inter-governmental regional development institution in Asia and Beijing will be the host city for AIIB’s headquarters.

The AIIB will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan.

China and other emerging economies, including BRICS, have long protested against their limited voice at other multilateral development banks, including the World Bank, International Monetary Fund and Asian Development Bank (ADB).

China is grouped in the ‘Category II’ voting bloc at the World Bank while at the Asian Development Bank, China with a 5.5 per cent share is far outdone by America’s 15.7 per cent and Japan’s 15.6 per cent share.

The ADB has estimated that in the next decade Asian countries will need $8 trillion in infrastructure investments to maintain the current economic growth rate.

China scholar Asit Biswas at the Lee Kuan Yew School of Public Policy, Singapore, says Washington’s criticism towards the China-led Bank is “childish”.

“Some critics argue that the AIIB will reduce the environmental, social and procurement standards in a race to the bottom. This is a childish criticism, especially because China has invited other governments to help with funding and governance,” he says.

“Reports indicate that the US is pressuring Australia and South Korea not to join the AIIB. But as Hedley Bull, eminent late Oxford professor, once said, “people have friends but countries have only interests”, he adds.

http://thebricspost.com/uk-snubs-us-to-join-china-led-asian-bank/#.VQLUSvzF98E

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SgtFuryUSCZ    26,054

***///

 

It has been told...

that the ChiComs have lots and lots and lots of IQD....

 

(they also have lots and lots and lots of Our real estate, national parks, the Panama Canal...etc.....

.............startin' to look like they own US along with everything else in the world...)  <_<

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Butifldrm    5,693
 
Britain’s membership in China-led World Bank rival of ‘UK national interest’ - spokesman
Published time: March 13, 2015 12:25 
Edited time: March 13, 2015 13:12
 
 
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A general view of the signing ceremony of the Asian Infrastructure Investment Bank at the Great Hall of the People in Beijing October 24, 2014. (Reuters/Takaki Yajima)

1722
 

Tags

AsiaBankingChinaUKUSA

The UK government considers membership of the China-led Asian Infrastructural Investment Bank (AIIB) of British national interest. However, the decision was given the cold shoulder by the US which sees the AIIB as rival to the Western financial system.

"There will be times when we take a different approach (to the United States)," as Reuters quotes a spokesman for Prime Minister David Cameron as saying Friday, referring to the decision to join the bank. "We think that it's in the UK's national interest."

On Thursday the UK applied to become the first Western founding member in the AIIB, with the UKChancellor of the Exchequer George Osborne assuring that its policy is transparent and it has an essential part in providing finance for Asian development.

"Joining the AIIB at the founding stage will create an unrivalled opportunity for the UK and Asia to invest and grow together," Osborne said.

The UK Treasury rejected the idea that Britain’s decision was spontaneous, adding that there had been“at least a month of extensive consultation” at the G7 level, and even that US Treasury Secretary Jack Lew participated in the negotiations.

 

 

However, the decision saw a prompt reaction from the US, said the FT on Thursday referring to an unnamed senior US official who expressed concern over the British decision being taken after "virtually no consultation with the US.”

"We are wary about a trend toward constant accommodation of China," the FT quoted the US official as saying.

AIIB was founded in October 2014 by China and 20 other Asian countries, including India, Singapore, Vietnam, and Kazakhstan. China expects to officially launch AIIB by the end of next year. The bank will allocate money for the development of roads system, telecommunication and other infrastructure projects in the poorer regions of Asia. At the initial stage AIIB will focus on creating a ‘New Silk Road’ that will include a number of trade routes to Europe.

Asia gaining momentum

The establishment of AIIB initially proposed by Chinese President Xi Jinping is a key tool in China's efforts to increase its influence in the region. In addition to the AIIB, China is the driving force behind last year’s creation of a BRICS New Development Bank and is promoting a $40 billion Silk Road Fund to finance economic integration with Central Asia.

 

 

The bank is aimed at creating an alternative for Western financial institutions and increase competition in the region, since Asia already has a major lender the Asian Development Bank. Japan, China’s major rival in the region, is the biggest shareholder in ADB along with the US.

The idea of creating a bank to rival the Asian Development Bank has caused resistance from the United States, which called for its allies to stay away from the AIIB.

Japan, Australia and South Korea haven’t announced their decisions, while the Australian media reports that Washington has put pressure on Canberra not to participate.

South Korean Vice Finance Minister Joo Hyung Hwan told reporters on Thursday that his country is still discussing the possibility of membership with China and other countries.

Changing attitude to China

In 2013 during a visit to Beijing George Osborne said he wanted to “change Britain’s attitude to China.”

The issue of bonds in yuan by the UK government in October 2014 was the first by a Western government. The desire to establish the City of London as a platform for overseas business in the yuan also proves Britain’s willingness to foster stronger commercial relations with China.

 

 

However, the pursuit of broader cooperation has seen a negative reaction coming from US, as it fears the rapidly developing Asian economies, primarily China, could challenge Washington-based global institutions.

The relationship between the US and UK have been at the core of Western policy for decades, although they’ve recently become tense over the UK’s cut in defense spending that could soon drop below the 2 percent of GDP target set by NATO.

 
1722

http://rt.com/business/240341-uk-usa-asia-bank/

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Butifldrm    5,693
 
​Moscow Exchange to start ruble-yuan futures trading next week
Published time: March 12, 2015 15:11 
Edited time: March 13, 2015 08:08
 
 
yuan-ruble.si.jpg

RIA Novosti / Alexandr Demyanchuk

3.4K419
 

Moscow trading in ruble-yuan futures will begin on March 17 with the currency pair expected to become the third most popular by volume, says Moscow Exchange (MOEX) Deputy Chairman Andrey Shemetov.

The number of tools that allow bidders to hedge their currency risks is currently not enough, that’s why Moscow Exchange offered to introduce a new hedging instrument as quickly as possible - futures on the yuan-ruble currency pair, Shemetov said Thursday as quoted by TASS.

“We hope that in the near future this tool will take the third position on the futures market and will allow producers to hedge their currency risks and increase the trade turnover between Russia and China,” he said, adding that in the spot market the ruble-yuan currency pair is already the third most popular terms of volume. The circulation of the Chinese currency has recently increased tenfold, according to Shemetov.

The Moscow Exchange hopes the futures will be liquid enough so manufacturers and suppliers can increase trade turnover between Russia and China.

 

 

Despite a huge trade turnover between the two countries [$95.3 billion in 2014 - Ed.], settlements in national currencies account for just 10 percent, said Shemetov adding that operating with such a low volume of money is difficult.

In October 2014, the Moscow Exchange and the Bank of China signed a cooperation agreement to expand mutual settlements in national currencies. The step was made to reduce dependence on the US dollar in bilateral trade and move away from Western financial dominance.

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SgtFuryUSCZ    26,054

***///

 

.. will this be Pootin's saving grace... <_<

 

Everybody's gonna owe the ChiComs -- hard.  Just how they like it..... just where they want us.....

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Butifldrm    5,693
IMF Managing Director Christine Lagarde to Visit India and ChinaPress Release No. 15/112
March 12, 2015

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), will visit India on March 16-17 and China on March 19-23, to meet with policymakers and senior officials, as well as with representatives of other sectors of society including business, women leaders, academics and students.

Ms. Lagarde will start her trip by visiting India, where she will meet with Prime Minister Narendra Modi and senior officials including Finance Minister Arun Jaitley, and Reserve Bank of India (RBI) Governor Raghuram Rajan. In addition, she will give a speech at Lady Sri Ram College in Delhi, and participate in a public event hosted by RBI in Mumbai.  The visit presents an opportunity to exchange views on recent economic developments, India’s prospects and its role in the global economy.

In China, Ms. Lagarde will meet with the top Chinese leadership and senior officials, including People’s Bank of China Governor ZHOU Xiaochuan and Finance Minister LOU Jiwei, to discuss the latest developments in the global economy, China’s ongoing reform efforts, and collaboration between the IMF and China. She will have a townhall meeting with students at Fudan University in Shanghai and speak at the opening ceremony of the 2015 China Development Forum (CDF), as well as on a CDF panel on “Sound Monetary Policy in the New Normal” in Beijing.

Media contacts:
India -- Gita Bhatt (gbhatt@imf.org)
China --  Dezhi Ma (dma@imf.org)
Washington, D.C. – Keiko Utsunomiya (kutsunomiya@imf.org)

 

https://www.imf.org/external/np/sec/pr/2015/pr15112.htm


The West's Plan To Drop Russia From SWIFT Hilariously Backfires
 
picture-5.jpg
Submitted by Tyler Durden on 03/12/2015 22:29 -0400

  • Submitted by Simon Black via Sovereign Man blog,
    • If Vladimir Putin is remotely capable of laughter (the jury is out on that one…) then he’s probably doing so right now.

      Russia is once again Arch-Enemy of the United States. It’s like living through a really bad James Bond movie, complete with cartoonish villains.

      And for the last several months, the US government has been doing everything it can to torpedo the Russian economy, as well as Vladimir Putin’s standing within his own country.

      The economic nuclear option is to kick Russia out of the international banking system. And the US government has been vociferously pushing for this.

      Specifically, the US government wants to kick Russia out of SWIFT, short for the Society of Worldwide Interbank Financial Telecommunications.

      That’s a mouthful. But SWIFT is an important component in the global banking system because it lays the foundation for banks to communicate and transfer funds with one another.

      It’s a network protocol of sorts. Whenever a bank in Pakistan does business with a bank in Portugal, the funds will clear through the SWIFT network.

      According to the SWIFT itself, they link over 9,000 financial institutions worldwide in over 200 countries, which transact 15 million times per day.

      Bottom line, being part of SWIFT is critical to conducting business with the rest of the world. And if Russia gets kicked out of SWIFT, it would be a disaster.

      Now, SWIFT is technically organized as a ‘Cooperative Society’ and governed by a board of directors.

      There are 25 available board seats, and each seat is allocated for a three-year term to a specific country.

      The United States, Belgium, France, Germany, UK, and Switzerland each hold two seats. A handful of other countries hold just one seat. And of course, most countries don’t hold any seats at all.

      Here’s what’s utterly hilarious—

      This is basically the exact opposite of what the US government was pushing for.

       
       

      On Monday afternoon, not only did SWIFT NOT kick Russia out… but they announced that they were actually giving a BOARD SEAT to Russia.

      Awkward…

      But this story is even bigger than that.

      Because at the same time that the US government isn’t getting its way with SWIFT, the Chinese are busy putting together their own version of it called CIPS.

      CIPS stands for the China International Payment System; it’s intended to be a direct competitor to SWIFT, and a brand new way for global banks to communicate and transact with one another in a way that does NOT depend on the United States.

      We’ll talk about CIPS in more details in a future letter. But in brief, it addresses some serious weaknesses, inefficiencies, and technological challenges of SWIFT.

      And it should be ready to go later this year.

      Make no mistake, this is the beginning of the end of the US dollar’s global hegemony. It’s time to stop hoping that it won’t happen and time to start preparing for it.

      Average:
      4.64835
       
       
       
       

http://www.zerohedge.com/news/2015-03-12/wests-plan-drop-russia-swift-hilariously-backfires

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Butifldrm    5,693
Swift’s Russian board director is not a political decision
By Brian Caplen Published: 09 March, 2015 Comment on this article

 

The addition of a Russian seat on the Society for Worldwide Interbank Financial Telecommunication's board of directors should not be interpreted as a political move by the organisation.

With the Society for Worldwide Interbank Financial Telecommunication (Swift) under pressure to throw Russia off the system as part of western sanctions against the country, the news that Russia has been given a seat on the Swift board is open to misinterpretation.

But, the promotion of Russia from being represented under one of three amalgamated seats on the 25-seat board to having its own director has nothing to do with politics and nothing to do with the tensions over Russia’s involvement in Ukraine. Board seat allocation is a purely mechanical process based on traffic volumes.

Swift, as every banker knows, is a non-political utility, which connects up 10,500 banks in more than 200 countries and territories. It provides the messaging that makes trillions of dollars of international payments possible. It literally makes the world of global trade and payments go round.

The whole system could be blown up, however, if politicians from the US and Europe start to drag Swift into their sanction armoury against this or that country with which they are currently having problems. Regrettably this has already happened in respect of Iran. Back in March 2012, the EU passed a regulation prohibiting Swift from providing services to EU-sanctioned Iranian banks. As Swift is headquartered in Belgium, it was obliged to comply with Belgian law.

Since the Swift cut-off measure almost certainly played a part in pushing Iran to the negotiating table over its nuclear programme, the temptation is to use the same means against other countries at odds with the west, such as Russia.

Poland’s foreign minister, Grzegorz Schetyna, has described this as the nuclear option, which hopefully means that he understands the risks of such an approach. For, while the immediate outcome is to cause chaos in Russian finance and disrupt trade, the long-term result is for major powers, such as Russia, China and India, to build their own messaging systems. The advantages of having a global politically neutral system would be lost and would be replaced by competing systems all with their own political agenda.

One can imagine a situation, a few decades hence, in which US financial institutions are thrown off a new Chinese system amidst a dispute between the two countries. US banks then find their requirements cannot be met by the truncated Swift system that has resulted from its repeated use as a sanctions tool and which now only serves a proportion of the world. The US’s trade would suffer as a consequence.

That is why it is important that there is no misunderstanding about why Russia has been given a board seat. Swift’s board is reconfigured about every three years with shares, and subsequently, seats allocated on the basis of network usage. On this basis, in 2015, Russia gains a seat and Hong Kong loses one; Belgium gains an additional seat giving it two and the Netherlands loses a seat giving it one.

Changes in traffic volumes could be due to a change of business hub by an international bank or the location of infrastructure, such as Euroclear in Belgium. But mostly, it reflects changes in economic growth and trade. Unsurprisingly, China gained a board seat in the last reallocation back in 2012.

As economic power shifts to the east, more such changes can be expected. As long as institutions such as Swift can continue to provide a framework with open access and even treatment, all parties will benefit. The alternative is to misuse the global financial architecture as a sanctions tool and end up with a more factional and divided world economy.  

Swift’s board with effect from June 2015

Belgium – 2 seats

France – 2 seats

Germany – 2 seats

Switzerland – 2 seats

UK – 2 seats

US – 2 seats

Australia –1 seat

Canada –1 seat

China – 1 seat

Italy – 1 seat

Japan – 1 seat

Luxembourg – 1 seat

Netherlands – 1 seat

Russia – 1 seat

Spain – 1 seat

Sweden – 1 seat

Amalgamated seats –3

http://www.thebanker.com/Editor-s-Blog/Swift-s-Russian-board-director-is-not-a-political-decision?ct=true

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SgtFuryUSCZ    26,054

***///

 

...if hobummer thinks 'sanctions' will ever work again, he's delusional.

 

..... leaving US powerless.

 

They've accomplished their mission. <_<

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Butifldrm    5,693

Chinese Premier backs Russia on Crimea

March 15, 2015, 8:59 am

 

134067633_14264052155881n.jpg

Chinese Premier Li Keqiang gives a press conference after the closing meeting of the third session of China’s 12th National People’s Congress (NPC) at the Great Hall of the People in Beijing, capital of China, March 15, 2015 [Xinhua]

China’s premier reiterated Beijing’s backing for Russian interests in Crimea, saying China hopes the Ukraine issue will be settled through dialogue.

 

“We hope there will be a negotiated settlement of this issue through dialogue,” Premier Li Keqiang told an annual press conference after the conclusion of China’s annual parliamentary session.

Speaking for two hours before foreign and domestic media, Li said there were complex causes behind the issue of Crimea, and China hopes to see a political settlement through dialogue.

“We hope there will be harmonious coexistence between neighbors, and what we hope to see is that there will be the pursuit of common development and win-win outcomes between European countries and between all countries in the world,” he said.

“The Ukraine issue has added to the complexity of the geopolitical situation and has affected the process of the global economic recovery. We still hope that this issue can be resolved via dialogue, negotiations and consultations,” Li added.

“As for Crimea, there are complicated contributing factors. We also hope that it can be resolved politically via dialogue and hope that neighbors can peacefully coexist,” the Chinese Premier said in comments that were a strong public show of understanding from China for the Russian position.

Beijing has earlier stated its position on the crisis stating categorically that Western powers should take into consideration Russia’s legitimate security concerns over Ukraine.

Ukraine and Russia now share a land border of about 2,295 kilometers.

The Ukraine crisis is being fueled by games played by the US and the European Union, a Chinese diplomat said last month.

“The United States is unwilling to see its presence in any part of the world being weakened, but the fact is its resources are limited, and it will be to some extent a hard work to sustain its influence in external affairs, ” said Chinese envoy to Belgium Qu Xing.

China has, earlier, criticized Western sanctions on Russia over the Ukraine crisis.

The US is considering arming the Ukrainian military.

http://thebricspost.com/chinese-premier-backs-russia-on-crimea/#.VQWGf47F98E

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Butifldrm    5,693

March 16 2015, 9.00pm EDT Australia has little to lose from joining Asian infrastructure bank

 

image-20150316-9208-371io0.jpg

 

Since the founding members signed on to the the Asian Infrastructure Investment Bank in China last October, more Western powers have agreed to join. Takaki Yajima/EPA/AAP

 

At the end of this month, a new development bank will have arrived, the Asian Infrastructure Investment Bank, with close to 30 founding members. It will be housed in Beijing, predominantly financed by China, and will have a governance structure that reflects the GDP of each participating country.

Now that the UK and New Zealand have joined as founding members, there is no real political impediment left to Australia joining up. Our treasurer, Joe Hockey is warming up to the idea, with no conspicuous dissenters. The prospect of being able to influence how US$50-100 billion of mainly Chinese money gets spent in the region will probably entice Australia to sign up as a founding country before the deadline at the end of this month.

We of course shouldn’t expect to have much say in this bank. Since voting rights will be according to the GDP of each participating country, and Australia representing roughly 2% of world GDP, we won’t have much influence and will mainly have to watch others decide on things. Since we seem unlikely to put in substantial amounts of money, given the large deficit the government now runs, we will have very little skin in the game to lose.

An embryonic bank

We don’t really know what the new development bank will do. The Chinese have been pushing this bank as an alternative to the US-EU dominated World Bank and IMF, as well as the Japan-dominated Asian Development Bank, which the Chinese see as doing the bidding of those powers. They have promised to put up 50% of the US$50 billion initial capital of the new bank, with an option to increase the “authorised” amount of capital to $US100 billion.

The intention seems to be to fund large infrastructure projects in the Asian region, including the new Silk Road through Central Asia and new ports and (rail)roads throughout the Asian region. Yet, $50 billion is only a drop in the ocean compared to national government budgets and infrastructure needs, so the bank would have to become much bigger to deliver a lasting impression on the region.

We also don’t know how funds will be allocated: those “details” are yet to be decided. The Chinese have promised a lean and fast lending process, hence without the checks-and-balances that make the World Bank and the Asian Development Bank notoriously slow and difficult. The flip-side of that coin is that they are not going to look too closely at whether the money is spent wisely or whether dictators will pocket some of it themselves. It is hoped that a large board of governors will steer things in a good direction, but there’s no guarantee.

One main reason for China to set up a new development bank is that they were kept from the decision-making tables at the other development banks: despite being of roughly equal size now to the US, their voting rights in the IMF are about one third of that of the US, and their say in the Asian Development Bank is similarly paltry. Probably believing that the ability to lend helps with political influence over countries, they decided to put up their own bank, in which the voting rights would reflect economic size more directly.

The decision by China to put GDP up as the measure of influence in this new institution was somewhat surprising. This will favour China for some time but may come back to haunt it when India (which is also a founding member) really becomes big. It will certainly lead to additional pressure on the “proper” measurement of GDP.

How influential will the bank be?

In terms of size, this is a small bank to begin with. Compared to the size of big commercial banks, the new bank will be puny: the top four banks in China have combined assets of around US$11 trillion, compared to which the new bank is a non-entity. It will also be small compared with other development banks. The International Bank for Reconstruction and Development, which is part of the World Bank Group, has an asset base of US$360 billion, with around US$230 billion of “subscribed” capital, lending out up to US$20 billion a year. The Asian Development Bank lends out some US$13 billion a year. Unless the new bank increases dramatically in size, it will be smaller than either.

Its effect on the region will be to make loans cheaper, particularly if the bank is ramped up in size. This will have overspill effects on loans in the whole world, much like cheap Chinese loans helped fund the spending bubble in the US before the global financial crisis. There is an inevitability about this though: the Chinese now have trillions of dollars in surplus money earned via a huge trade surplus, and they are going to lend it out cheaply one way or another. World interest rates will be low for some time to come.

Why join?

All in all, I think it is a good idea for Australia to join: we have little reason to stay out, and getting a seat at the table early on means we, potentially together with the other Anglo-Saxon countries involved, will have some say in how it operates. We won’t get any money out of it ourselves, since the bank is expressly oriented towards infrastructure in Asia, but perhaps our involvement might persuade the Chinese government that it can do business with the Australian government and that we are a place to give cheap loans to in the future.

What is an unknown is how this will fit in with the vaunted G20 plan to have a global infrastructure fund, potentially based in Australia. For one, the G20 talked about trillions, orders of magnitude bigger than the AIIB. Also, the new bank will only invest in Asia. So by the looks of it, this new bank has little to do with the G20 pronouncement.

http://theconversation.com/australia-has-little-to-lose-from-joining-asian-infrastructure-bank-38858


Major American Allies Ignore U.S. Pleas and Join China’s Alternative Bank

UK, Australia, New Zealand, Singapore and India All Sign On … South Korea Next?

 

This week, 2 major U.S. allies – 2 of the “Five Eyes” – have disregarded American please and joined China’s new development bank … alternative to the US-dominated

 

IMF and World Bank lending order. (A third member of the Five Eyes – New Zealand – previously signed onto the Chinese bank.)

Specifically, the UK and Australia signed on this week.

 

The Financial Times reports, quoting a senior US Official:

[The decision of the UK to join the Chinese development bank was made with] virtually no consultation with the US.

We are wary about a trend toward constant accommodation of China, which is not the best way to engage a rising power.

The New York Times reported last week:

Fundamentally, Washington views the Chinese venture as a deliberate challenge to those postwar institutions, which are led by the United States and, to a lesser extent, Japan, and the Obama administration has put pressure on allies not to participate…

***

South Korea and Australia, both of which count China as their largest trading partner, have seriously considered membership but have held back, largely because of forceful warnings from Washington, including a specific appeal to Australia by President Obama.

Zero Hedge predicted last week:

In short order Australia and South Korea will likely be on board and at that point, the stigma the US has created around membership will have completely disappeared (if it hasn’t already), opening the door for other US “allies” to join ….

An Op-Ed in The Australian argues:

The decision by the Abbott government to sign on for negotiations to join China’s regional bank … represents another defeat for Barack Obama’s diplomacy in Asia.

***

Canberra’s move follows similar decisions by Britain, Singapore, India and New Zealand.

Make no mistake — all this represents a colossal defeat for the Obama administration’s incompetent, distracted, ham-fisted dip­lomacy in Asia.

***

Since then, the Abbott government has felt absolutely zero subjective good will for Obama.

This is an outlook shared by many American allies.

***

The Obama administration has neither the continuous presence, nor the tactical wherewithal nor the store of goodwill or personal relationships to carry Canberra, or other allies, on non-essential matters.

***

Such prestige as the US enjoys in Asia these days rests disproportionately on the shoulders of the US military.

Obama has neglected and mistreated allies and as a result Washington has much less influence than previously.

The saga of the China Bank is almost a textbook case of the failure of Obama’s foreign policy.

***

Obama treats allies shabbily and as a result he loses influence with them and then seems perpetually surprised at this outcome.

***

The consensus is that the Obama White House is insular, isolated, inward-looking, focused on the President’s personal image and ineffective in foreign policy.

http://www.washingtonsblog.com/2015/03/week-2-major-american-allies-ignored-u-s-pleas-joined-chinas-alternative-bank.html

Edited by Butifldrm
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TBomb    4,642

3 European Powers Say They Will Join China-Led Bank

germany-china-bank-videoSixteenByNine540

BRUSSELS — Ignoring direct pleas from the Obama administration, Europe’s biggest economies have declared their desire to become founding members of a new Chinese-led Asian investment bank that the United States views as a rival to the World Bank and other institutions set up at the height of American power after World War II.

The announcement on Tuesday by Germany, France and Italy that they would follow Britain and join the Chinese-led venture delivered a stinging rebuke to Washington from some of its closest allies. It also called into question whether the World Bank and the International Monetary Fund, which grew out of a multination conference in Bretton Woods, N.H., in 1944 and established an economic pecking order that lasted 70 years, will find their influence diminished.

The announcement by Germany, Europe’s largest economy, came only six days after Secretary of State John Kerry asked his German counterpart, Frank Walter-Steinmeier, to resist the Chinese overtures until the Chinese agreed to a number of conditions about transparency and governing of the new entity. But Germany came to the same conclusion that Britain did: China is such a large export and investment market for it that it cannot afford to stay on the sidelines.

American officials have fumed that China never approached the Group of 7 — the consortium of economic powers that the United States has led — but rather decided to pick off individual members, setting a deadline of the end of March for them to decide whether to join the new organization, the Asian Infrastructure Investment Bank, which many refer to by its initials, the A.I.I.B.

China, in turn, has long chafed at the idea that the World Bank’s president is traditionally an American, and that France appoints the head of the I.M.F.

“This has been a power struggle,” one senior European official said. “And we have moved from the world of 1945.”

In Washington, Jen Psaki, the State Department spokeswoman, declined to criticize the countries that announced they would seek to participate, but expressed reservations. “It will be important for prospective members of the A.I.I.B. to push for the adoption of those same high standards that other international institutions abide by, including strong board oversight and safeguards,” she said.

The European decision is bound to help efforts by Xi Jinping, China’s president and Communist Party chief, to reshape the global balance of power, starting with the institutions that underpin it.

Mr. Xi’s predecessors chose to join some of those institutions, including the World Trade Organization, and work from within to amend some of their rules more to China’s liking. But with the new bank, China appears to be stepping up previously halting efforts to also build new, Sino-centric institutions from scratch. China’s control of the bank, however, will face constraints. Britain has insisted on a senior post on its board, and Germany will do the same.

China has worked for years to break what it regards as an unfair grip by the United States on global political and financial institutions and to set up rival structures more responsive to Chinese demands for a voice in international affairs commensurate with its status as the world’s second-biggest economy.

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“China is shaping an alternative universe and getting America’s European allies to support it,” said Theresa Fallon, a China expert at the European Institute for Asian Studies, a Brussels research group.

The United States lobbied its allies not to join the new China-based bank. The United States has argued that the bank at best duplicates, and at worst undermines, the role of the Washington-based World Bank and the Asian Development Bank, which has its headquarters in the Philippines, a close American ally at odds with Beijing over the South China Sea. The I.M.F., which manages financial crises, is less directly affected.

Ms. Fallon said she expected that South Korea, another close American ally, would also sign up for the new bank and that “in the end, only Japan won’t say yes.” China, she said, is offering a “whole economic and political package that provides an alternative to the creaking international structures shaped by the U.S. in the postwar period.”

Western officials and anticorruption groups have long criticized China’s lending practices, particularly for infrastructure projects in Africa involving Chinese companies, saying they foster corruption and undercut efforts by the World Bank and I.M.F. to link loans to demands for good governing. China rejects such complaints, pointing to its success in building roads and railway lines quickly in countries bereft of Western capital.

In an apparent reference to such concerns, France, Germany and Italy, in a statement declaring their eagerness to join the Asian Infrastructure Investment Bank, said they were “keen to work with the A.I.I.B. founding members to establish an institution that follows the best standards and practices in terms of governance, safeguards, debt and procurement policies.”

Snubbing the bank would have angered Beijing, but aside from earning Chinese good will, it was not immediately clear what European countries would gain by joining other than the right to endorse and help finance infrastructure projects that, in many case, are likely to be dominated by Chinese, not European, construction companies.

Europe’s defiance of pressure from Washington over the bank does not signal a major rupture, analysts said. But, they say, it does add friction at a time when the marquee project of trans-Atlantic solidarity, a proposed free trade deal, has lost much of its momentum in the face of fierce hostility from European politicians and activists opposed to American-style capitalism.

While heavily dependent on the United States for security, especially since the crisis in Ukraine erupted last year, European countries, Ms. Fallon said, “tend to take the U.S. for granted,” while “China is very good at lobbying them and promising them things.” But she said Washington had been unwise to expend diplomatic and political capital over the bank when it was clear that even staunch allies like Britain wanted to join it.

The bank was first proposed by Mr. Xi to help fund infrastructure projects in poor Asian countries, something the World Bank and the Asian Development Bank already do. China has pledged a large part of the initial $50 billion of capital, and Beijing hopes the institution will contribute to the expansion of its Asian power base, even as its growing might, economic and military, reshapes the political dynamics of the region and beyond.

Continue reading the main storyContinue reading the main storyContinue reading the main story
Since taking over leadership of the Chinese Communist Party in 2012, Mr. Xi has steadily expanded a longstanding Chinese policy of seeking political influence through lending and investment, putting his weight behind an ambitious plan to build maritime and land links between China and Europe that span the Eurasian continent. China began the plan after a 2011 call by Hillarious Rodham Clinton, who was then secretary of state, for a “new silk road” to help Afghanistan’s economy.

Miffed that Washington had appropriated a term China considers an inseparable part of its own heritage, Mr. Xi in 2013 put forward his own “silk road” plan. This was initially called the Silk Road Economic Belt but, since expanded and shorn of any echoes of the American proposal, is now known in China as the “Belt and Road” scheme, said Ms. Fallon, who has studied the evolution of China’s minutely calibrated nomenclature.

China first signaled its desire to set up its own alternative structures as its economy took off in the 1990s. In 1996, in Shanghai, it established a security grouping comprising China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan.

The body, since joined by Uzbekistan and known as the Shanghai Cooperation Council, has Chinese and Russian as its working languages instead of English, the lingua franca of most international organizations set up under the auspices of the United States.

Under Mr. Xi, Beijing has also put itself at the center of a four-year-old grouping of 16 Eastern and Central European countries, promising investment to the region in a push for economic and political influence that has raised eyebrows in Brussels, the headquarters of the European Union.

Some see the venture as an attempt to divide the European Union and circumvent the bloc’s rigid rules and standards. Eleven of the nations courted by China in Eastern and Central Europe belong to the union.

But China has voiced annoyance at what it derides as “Cold War thinking” that divides the world into fixed camps, promoting its efforts to win friends and also contracts in formerly Communist Eastern Europe and elsewhere as part of a “win-win strategy” beneficial to all.

Commenting in Beijing on the decision by European countries to join the new investment bank, a Foreign Ministry spokesman, Hong Lei, said China “wants to work together with all parties to set up a mutually beneficial, professional infrastructure investment and financing platform to contribute to regional infrastructure and economic development.”

While China has risen over the last decades to become the second-largest economy — or even the largest, by some measures — it is still sidelined at the international level by the reluctance of developed nations to relinquish their privileged places.

In one such case, the United States and its partners at the International Monetary Fund agreed in 2010 to give emerging nations an expanded role in the institution. Congress has so far refused to sign on.

Speaking on Tuesday in Washington, Treasury Secretary Jacob J. Lew said it was “urgent that we address prior unmet commitments, which have grown to levels that raise significant questions about U.S. credibility and leadership in the multilateral system.”

Failure to do so, he added, could “result in a loss of U.S. shareholding at a time when new players are challenging U.S. leadership in the multilateral system.”


http://www.nytimes.com/2015/03/18/bu...bank.html?_r=0

 

Washington fears obstruct reform IMF
 
3/19/2015 0:00
 
WASHINGTON - A. P. B.
 
The United States confirmed the words of Treasury Secretary Jacob Lu, blocking the US Congress to reform the International Monetary Fund threatens «credibility and influence» United States in the world.
 
Lu said in a hearing before Congress that «our sincerity and international influence are at stake». Apply the fix Monetary Fund, which gives emerging nations a bigger role and doubles permanent resources remains, commenting two years ago waiting to be ratified by the US Congress, which is dominated by the Democratic administration Algmehurion.ouholt move this file in recent months, but to no avail, sparking resentment emerging economies At the forefront of Chin.oadav if the «repeated failures (...) pay other countries, including some of our allies, to question our commitment within the International Monetary Fund and other organizations».
 
He explained that this disruption also pay emerging countries to establish a «parallel financial institutions» excluded from the United States. In this context, established Brix Group, which includes Brazil, Russia, India, China and South Africa's monetary fund last year. He believed that if the ratification of the reform of the IMF will allow the preservation of «Leadership».
 
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Jim1cor13    1,815

Thank you for the great articles Butifldrm and Tbomb.

 

Indeed, a lot going on behind the scenes. Countries will

do what benefits them the most in their trade and commerce.

There is also much change going on globally, the structure

is being changed, economically and politically, and part of the

current change is the US of A is in many ways being 'worked

around', meaning many countries are growing weary of the

manner in which we conduct our influence. I have listened to

several leaders from Belgium to Denmark who stated point

blank they will no longer be supporting our endless wars, nor

or they willing to sacrifice any more of their citizens to the schemes

of those who violate sovereign countries.

 

Step by step, the US hegemony is being rejected as well as step by step,

countries are aligning themselves with those who are offering an alternative

to the current paradigm. some changes will be good, some will not be good,

and the risk is always that any system can be corrupt with the wrong hands

involved. It is human nature to desire control, and that often leads to corruption.

 

Corruption is what we see that has been rewarded globally, with central banks

bailing out big banks, with no regard for private sector. Debts continue to climb

and many can never be paid back. If you reward criminal behavior, it only leads to

a much worse condition, hence we have a current system that is quickly reaching

the end of its usefulness due to corruption that has tainted it for 100's of years.

 

Bail outs were completely insane, and how they were constructed is beyond criminal.

The decision to bail out any of these frauds that started in 2008 will be looked at

in the future as one of the most destructive financial cons in recorded history, all

due to that ugly thing called greed.

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yota691    84,951

Why We’re Drifting Towards World War 3

Financial Experts:  World War Looms … Unless We Stop It

The Economist argues that there are ominous parallels between the conditions which led to the first world war and today:

The New Republic points out that global downturns can lead to war:

The United States is Britain, the superpower on the wane, unable to guarantee global security. Its main trading partner, China, plays the part of Germany, a new economic power bristling with nationalist indignation and building up its armed forces rapidly. Modern Japan is France, an ally of the retreating hegemon and a declining regional power. The parallels are not exact—China lacks the Kaiser’s territorial ambitions and America’s defence budget is far more impressive than imperial Britain’s—but they are close enough for the world to be on its guard.

Which, by and large, it is not. The most troubling similarity between 1914 and now is complacency. Businesspeople today are like businesspeople then: too busy making money to notice the serpents flickering at the bottom of their trading screens. Politicians are playing with nationalism just as they did 100 years ago. China’s leaders whip up Japanophobia, using it as cover for economic reforms, while Shinzo Abe stirs Japanese nationalism for similar reasons.

The Telegraph notes that the economic crisis in Europe is increasing tensions:

As the experience of the 1930s testified, a prolonged global downturn can have profound political and geopolitical repercussions. In the U.S. and Europe, the downturn has already inspired unsavory, right-wing populist movements. It could also bring abouttrade wars and intense competition over natural resources, and the eventual breakdown of important institutions like European Union and the World Trade Organization. Even a shooting war is possible.

(Indeed, Europe is stuck in a downturn worse than the Great Depression.)

Tensions between European countries unseen in decades are emerging.

Well-known economist Nouriel Roubini tweeted from the gathering of the rich and powerful at the World Economic Forum in Davos last year:

Many speakers compare 2014 to 1914 when WWI broke out & no one expected it. A black swan in the form of a 
war between China & Japan
?

And:

Paul Craig Roberts – former Assistant Secretary of the Treasury under President Reagan, former editor of the Wall Street Journal, listed by Who’s Who in America as one of the 1,000 most influential political thinkers in the world, PhD economist – wrote an article about the build up of hostilities between the U.S. and Russia titled, simply: “War Is Coming”.

Both Abe and an influential Chinese analyst don’t rule out a military confrontation between China and Japan. Memories of 1914?

Similarly, Ronald Reagan’s head of the Office of Management and Budget – David Stockman – is posting pieces warning of the dispute between the U.S. and Russia leading to World War 3.

Investment adviser Larry Edelson – who has long studied the “cycles of war” – wrote last month:

Former Goldman Sachs technical analyst Charles Nenner – who has made some big accurate calls, and counts major hedge funds, banks, brokerage houses, and high net worth individuals as clients – saysthere will be “a major war”, which will drive the Dow to 5,000.

This year … we will also be hit by another ramping up of the related war cycles.

***

All part and parcel of the rising war cycles that I’ve been warning you about, conditions that will not abate until at least the year 2020.

Veteran investor adviser James Dines forecast a war as epochal as World Wars I and II, starting in the Middle East.

Armstrong wrote pieces recently entitled, “Why We will Go to War with Russia“, and another one saying, “Prepare for World War III“.

Bad Economic Theories

What’s causing the slide towards war? We discuss several causes below.

Initially, believe it or not, one cause is that many influential economists and talking heads hold thediscredited belief that war is good for the economy.

Therefore, many are overtly or more subtly pushing for war.

Challengers Give Declining Empires “Itchy Fingers”

Moreover, historians say that declining empires tend to attack their rising rivals … so the risk of world war is rising because the U.S. feels threatened by the rising empire of China.

The U.S. government considers economic rivalry to be a basis for war. Therefore, the U.S. is systematically using the military to contain China’s growing economic influence.

Competition for Resources Is Heating Up

In addition, it is well-established that competition for scarce resources often leads to war. For example, Oxford University’s Quarterly Journal of Economics notes:

Former Federal Reserve chairman Alan Greenspan (and many world leadersadmitted that the Iraq war was really about oil, and former Treasury Secretary Paul O’Neill says that Bush planned the Iraq war before 9/11. And see this and this. Libya, Syria, Iran and Russia are all oil-producing countries as well …

In his classic, A Study of War, Wright (1942) devotes a chapter to the relationship between war and resources. Another classic reference, Statistics of Deadly Quarrels by Richardson (1960),extensively discusses economic causes of war, including the control of “sources of essential commodities.”A large literature pioneered by Homer-Dixon (1991, 1999) argues that scarcity of various environmental resources is a major cause of conflict and resource wars (see Toset, Gleditsch, and Hegre 2000, for empirical evidence).

***

In the War of the Pacific (1879–1884), Chile fought against a defensive alliance of Bolivia and Peru for the control of guano [i.e. bird poop] mineral deposits. The war was precipitated by the rise in the value of the deposits due to their extensive use in agriculture.

***

Westing (1986) argues that many of the wars in the twentieth century had an important resource dimension. As examples he cites the Algerian War of Independence (1954–1962), the Six Day War (1967), and the Chaco War (1932–1935). More recently, Saddam Hussein’s invasion of Kuwait in 1990 was a result of the dispute over the Rumaila oil field. In Resource Wars (2001), Klare argues that following the end of the Cold War, control of valuable natural resources has become increasingly important, and these resources will become a primary motivation for wars in the future.

Indeed, we’ve extensively documented that the wars in the Middle East and North Africa are largely about oil and gas. The war in Gaza may be no exception. And see this. And Ukraine may largely be aboutgas as well.

And James Quinn and Charles Hugh Smith say we’re running out of all sorts of resources … which will lead to war.

Central Banking and Currency Wars

We’re in the middle of a global currency war – i.e. a situation where nations all compete to devalue their currencies the most in order to boost exports. Brazilian president Rousseff said in 2010:

The last time there was a series of competitive devaluations … it 
ended in world war
two.

Jim Rickards agrees:

As does billionaire investor Jim Rogers:

Currency wars lead to trade wars, which often lead to hot wars. In 2009, Rickards participated in the Pentagon’s first-ever “financial” war games. While expressing confidence in America’s ability to defeat any other nation-state in battle, Rickards says the U.S. could get dragged into “asymmetric warfare,” if currency wars lead to rising inflation and global economic uncertainty.

Given that China, Russia, India, Brazil and South Africa have joined together to create a $100 billion bank based in China, and that more and more trades are being settled in Yuan or Rubles – instead of dollars – the currency war is quickly heating up.

Trade wars always lead to wars.

Indeed, many of America’s closest allies are joining China’s effort … which is challenging America and the Dollar’s hegemony.

Multi-billionaire investor Hugo Salinas Price says:

Indeed, senior CNBC editor John Carney noted:

What happened to [Libya’s] Mr. Gaddafi, many speculate the real reason he was ousted was that he was planning an all-African currency for conducting trade. The same thing happened to him that happened to Saddam because the US doesn’t want any solid competing currency out there vs the dollar. You know Gaddafi was talking about a golddinar.

Is this the first time a revolutionary group has created a central bank while it is still in the midst of fighting the entrenched political power? It certainly seems to indicate how extraordinarily powerful central bankers have become in our era.

Robert Wenzel of 
 the central 
 initiative reveals that foreign powers may have a strong influence over the rebels.

This suggests we have a bit more than a ragtag bunch of rebels running around and that there are some pretty sophisticated influences. “I have never before heard of a central bank being created in just a matter of weeks out of a popular uprising,” Wenzel writes.

Indeed, some say that recent wars have really been about bringing all countries into the fold of Western central banking.

Finally, trend forecaster Gerald Celente – who has been making some accurate financial and geopolitical predictions for decades – says WW3 will start soon.

Debt

Martin Armstrong argued that war plans against Syria are really about debt and spending:

The same logic applies to Ukraine and other countries.

The Syrian mess seems to have people lining up on Capital Hill when sources there say the phone calls coming in are overwhelmingly against any action. The politicians are ignoring the people entirely. This suggests there is indeed a secret agenda to achieve a goal outside the discussion box. That is most like the debt problem and a war is necessary to relief the pressure to curtail spending.

Billionaire hedge fund manager Kyle Bass writes:

 

Trillions of dollars of debts will be restructured and millions of financially prudent savers will lose large percentages of their real purchasing power at exactly the wrong time in their lives. Again, the world will not end, but the social fabric of the profligate nations will be stretched and in some cases torn. Sadly, looking back through economic history,all too often war is the manifestation of simple economic entropy played to its logical conclusionWe believe that war is an inevitable consequence of the current global economic situation.

Runaway Inequality

Paul Tudor Jones – founder of the Tudor Investment Corporation and the Tudor Group, which trade in the fixed-income, equity, currency and commodity markets – said this week:

This gap between the 1 percent and the rest of America, and between the US and the rest of the world, cannot and will not persist.

Historically, these kinds of gaps get closed in one of three ways: by revolution, higher taxes or wars.

And see this.

Distraction

Billionaire investor Jim Rogers notes:

A continuation of bailouts in Europe could ultimately 
 another world war, says international investor Jim Rogers.

***

“Add debt, the situation gets worse, and eventually it just collapses. 
Then everybody is looking for scapegoats. Politicians blame foreigners, and we’re in World War II or World War whatever
.”

Economist and investment manager Marc Faber says that the American government will start new wars in response to the economic crisis:

Martin Armstrong – who has managed multi-billion dollar sovereign investment funds – wrote in August:

Our greatest problem is 
the bureaucracy wants a war
. This will distract everyone from the NSA and justify what they have been doing. 
They need a distraction for the economic decline that is coming
.

War Is Destroying Our National Security, Our Democracy and Our Economy

We spent trillions in Iraq and Afghanistan.

Yet a top Pentagon official say we’re no safer – and perhaps less safe – after 13 years of war. Indeed, war only PROMOTED the dramatic expansion of even worse terrorists.

Never-ending wars are also destroying our democratic republic. The Founding Fathers warned against standing armies, saying that they destroy freedom. (Update). Perversely, our government  treats anti-war sentiment as terrorism.

The Founding Fathers – and the father of free market capitalism – also warned against financing wars with debt. But according to Nobel prize winning economist Joseph Stiglitz, the U.S. debt for the Iraq war could be as high as $5 trillion dollars (or $6 trillion dollars according to a study by Brown University.)

Indeed, top economists say that war is destroying our economy.

But war is great for the bankers and the defense contractors. And – as discussed above – governments are desperate for war.

So it’s up to us – the people – to stop wider war.

 
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ladyGrace'sDaddy    19,308

Treasury Secretary Paul O’Neill says that Bush planned the Iraq war before 9/11

Read more: http://dinarvets.com/forums/index.php?/topic/198912-china-imf-talks-underway-to-endorse-yuan-as-global-reserve-currency/#ixzz3UxBcTcBk

 

The similarities between the world economic situation and world events today 

 

and those of the late 1930s early 40s is astounding. And, yes, it does look as if the

 

world is heading at breakneck speed towards WW3.

 

But the second someone makes a blatantly ignorant statement like the one I quoted above 

 

you show your political agenda. It doesn't take allot of brains to figure out that

 

the President doesn't run the country. Bush was a moron and Obama can't even 

 

speak without his teleprompter. Are we seriously supposed to believe that these men

 

are capable of conjuring up some of the most complicated events the world has ever seen?

 

Please, that just doesn't hold water. 

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Butifldrm    5,693
 
U.S. Looks to Work With China-Led Infrastructure Fund Obama administration proposes co-financing projects with new Asian Infrastructure Investment Bank
AI-CO675_USCHIN_J_20150322162831.jpgENLARGE
World Bank Group President Jim Yong Kim and his lieutenants are in ‘deep discussions’ with the new Asian Infrastructure Investment Bank ‘on how we can closely work together.’ PHOTO: ZUMA PRESS
By 
IAN TALLEY
Updated March 22, 2015 7:18 p.m. ET

WASHINGTON—The Obama administration, facing defiance by allies that have signed up to support a new Chinese-led infrastructure fund, is proposing that the bank work in a partnership with Washington-backed development institutions, such as the World Bank.

The collaborative approach is designed to steer the new bank toward economic aims of the world’s leading economies and away from becoming an instrument of Beijing’s foreign policy. The bank’s potential to promote new alliances and sidestep existing institutions has been one of the Obama administration’s chief concerns as key allies including the U.K., Germany and France lined up in recent days to become founding members of the new Asian Infrastructure Investment Bank.

The Obama administration wants to use existing development banks to co-finance projects with Beijing’s new organization. Indirect support would help the U.S. address another long-standing goal: ensuring the new institution’s standards are designed to prevent unhealthy debt buildups, human-rights abuses and environmental risks. U.S. support could also pave the way for American companies to bid on the new bank’s projects.

“The U.S. would welcome new multilateral institutions that strengthen the international financial architecture,” said Nathan Sheets, U.S. Treasury Under Secretary for International Affairs. “Co-financing projects with existing institutions like the World Bank or the Asian Development Bank will help ensure that high quality, time-tested standards are maintained.”

Mr. Sheets argues that co-financed projects would ensure the bank complements rather than competes with existing institutions. If the new bank were to adopt the same governance and operational standards, he said, it could both bolster the international financial system and help meet major infrastructure-investment gaps.

No decision has been made by the new Chinese-led bank about whether it will partner with existing multilateral development banks, as the facility is still being formed, though co-financing is unlikely to face opposition from U.S. allies.

Zhu Haiquan, a spokesman at China’s embassy in Washington, said Beijing is open to collaboration with the existing institutions and that the new bank “is built in the spirit of openness and inclusiveness and will follow high standards.”

“It will effectively cooperate with and complement the existing multilateral development banks such as the World Bank and the Asian Development Bank to provide investment and financing for the infrastructure building in Asia,” he said.

World Bank President Jim Yong Kim said through a spokesman that he and his lieutenants are already in “deep discussions” with the new Asian Infrastructure Investment Bank “on how we can closely work together.”

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.

Backing the new bank through co-financing could also help the U.S. move past the diplomatic mess, reunite with its trans-Atlantic allies on this issue and counter any perceptions that the U.S. is wholly opposed to the institution as part of a China-containment strategy.

“Our concern has always been…will it adhere to the kinds of high standards that the international financial institutions have developed?” U.S. Treasury Secretary Jacob Lewtold U.S. lawmakers last week.

WO-AV862_USCHIN_9U_20150322173608.jpgENLARGE
 

Co-financing, combined with European membership, “will make it more likely this institution largely conforms to the international standards,” said Matthew Goodman, an Asia expert at the Center for Strategic and International Studies adviser and former economics director at the U.S. National Security Council.

The World Bank, forged out of World War II, remains the leading international development institution with 188 nations as members. But others have emerged amid concerns about drawing more investment and attention to fast-growing regions. Those include the Asian Development Bank, the African Development Bank, European Investment Bank and the Inter-American Development Bank.

The banks’ loans are designed to foster infrastructure and development projects that are often high-risk and long-term, helping to lower the costs for governments that couldn’t afford borrowing from the private sector. For the most powerful lending countries, they cultivate regional growth prospects and can provide a political tool for influencing smaller countries.

Beijing has struggled to increase its influence within the World Bank, the Asian Development Bank and the world’s emergency lender, the International Monetary Fund. But as the founder and one of the new bank’s largest shareholders, it will have the greatest say in which projects to pick.

Infrastructure needs around the world are enormous. Emerging countries need new ports, railways, bridges, airports and roads to support faster growth. Developed economies, meanwhile, must replace aging infrastructure. The Asian Development Bank estimates its region alone faces an annual financing shortfall of $800 billion a year. The consulting firm McKinsey & Company estimates global infrastructure-investment needs through 2030 total $57 trillion.

By comparison, the Asian Development Bank has just $160 billion in capital and the World Bank-which has co-financed with other regional institutions for years—has around $500 billion. The China-led bank plans to have a $50 billion fund to start.

“We have every intention of sharing knowledge and co-investing in projects throughout Asia,” said Mr. Kim, who was picked by President Barack Obama in 2012 as the U.S. nominee to lead the World Bank.

“From the perspective simply of the need for more infrastructure spending, there’s no doubt that we welcome the entry of the Asian Infrastructure Investment Bank,” Mr. Kim said.

The brouhaha over the new bank highlights the growing complexity of the West’s relationship with China’s emerging power.

“In the European countries, there were often divides between the finance ministries that saw commercial opportunities and the foreign ministries that have some of the same concerns we do,” a senior U.S. administration official said.

Beijing has set up more than a dozen parallel structures that challenge the established international order, from the Chiang Mai Initiative, a regional currency swap facility designed to mimic the International Monetary Fund, to the Brics bank, an infrastructure bank named after the world’s largest emerging market economies.

But without the standards that the World Bank and other U.S.-influenced lending facilities have developed over decades, China’s new bank risks fomenting distrust with the U.S. and creating a host of social and economic issues. It could also help subsidize Chinese corporate interests.Lack of transparency in the new bank’s governance could nurture suspicion, for instance, about whether Beijing would use its financing to develop deep-water ports in strategic harbors that could accommodate China’s growing navy. Lending to countries without consideration of whether governments can pay back the loans could sow the seeds for future financial crises. Investment in dams that required massive population relocation could, without adequate safeguards, fuel human-rights abuses. As China’s economy slows faster than expected, the country faces growing spare-production capacity. Infrastructure investment could help sop some of that excess capacity up, as well as offer higher returns on its trillion-dollar holdings of low-interest U.S. Treasurys.

But while wary of China, Washington has at the same time been trying to pull the country into the global political and economic architecture based on the theory that Beijing’s participation cultivates greater responsibility. Co-financing could become a steppingstone for the U.S. to join in a few years.

That’s why economists such as Fred Bergsten, a senior fellow at the Peterson Institute and a former senior U.S. Treasury official, pushed for the U.S. to join the China-led bank.

“If this does meet high standards, then that would be a good thing and we’d take a look at it,” the senior administration official said. “But we’re still a few steps away from that.”

http://www.wsj.com/articles/u-s-to-seek-collaboration-with-china-led-asian-infrastructure-investment-bank-1427057486

 

IMF Managing Director Meets Senior Chinese officials, Speaks at 2015 China Development Forum

Press Release No. 15/131
March 23, 2015

Ms. Christine Lagarde, Managing Director of the International Monetary Fund (IMF), today concluded a five-day visit to China and issued the following statement:

“It has been a great pleasure to be back in China once again and to witness the vibrancy of its economy and society, and the dedication of its people to a more open, confident and prosperous China.

“In Beijing, I had the privilege of meeting with Premier Li Keqiang, Vice Premier Ma Kai, and People’s Bank of China Governor Zhou Xiaochuan. In Shanghai, I met with Party Secretary Han Zheng and his colleagues.

“In my meetings with the authorities, we exchanged views on recent developments in the global economy, China’s ongoing reform efforts, strengthening the partnership between the IMF and China, and China’s upcoming presidency of the G20 in 2016.

The implementation of structural reforms as outlined in the 3rd Plenum Blueprint is underway. This should lead to slower, safer, and more sustainable growth--with a focus on innovation and entrepreneurship--which will be good for China and its people – and good for the world.

I noted the impressive efforts made by the Chinese government to reform in three key areas in particular: cleaning up the house, by promoting good governance through strengthening the legal framework and the anti-corruption campaign; cleaning up the air, by curbing pollution and preserving the environment; and clearing the path to even more engagement with the world, through China’s further participation in the multilateral dialogue and through more international investment and trade. I welcomed China’s various initiatives in this area, including through the newly established Asian Infrastructure Investment Bank (AIIB).

I am very impressed by the rapid internationalization of Renminbi (RMB) in recent years. The authorities’ commitment to accelerate reforms, particularly in the financial and external sectors, should further facilitate the international use of the RMB. The authorities have also expressed interest in having the RMB included in the SDR basket. We welcome and share this objective, and we will work closely with the Chinese authorities in this regard.

“During our meetings, we also discussed the delays in implementing the IMF’s 2010 quota and governance reform. I share the authorities’ view that every effort should continue to be undertaken to ensure that these reforms can be made effective as soon as possible.

“During my visit, I was honored to speak at the 2015 China Development Forum where I met with Vice Premier Zhang Gaoli and other senior policymakers, business executives and thought leaders on pressing issues facing the world and China in the “New Normal”. Topics of discussion included monetary policy, fiscal reforms, and enhancing international cooperation.

“I had also a series of very interesting meetings in Beijing and Shanghai with a broad section of Chinese society, including young entrepreneurs, financial sector practitioners, accomplished Chinese women, and students at Fudan University--where I had the opportunity to engage with them in a conversation on creating new ingredients for growth and success.

“I would like to express my deep gratitude to the Chinese government and people for their wonderful hospitality. I look forward to visiting China again soon.”

 

https://www.imf.org/external/np/sec/pr/2015/pr15131.htm

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yota691    84,951

Russia To Join New Chinese Development Bank

  •  

March 28, 2015



Russia has become the latest country to announce it will join the China-led Asian Infrastructure Investment Bank (AIIB), to be based in Beijing.
Russian Deputy Prime Minister Igor Shuvalov made the announcement on March 28 at an international forum in China.
The Russian news agency RIA Novosti quotes Shuvalov as saying President Vladimir Putin had made the decision in favor of participating.
Russia is the latest in a string of countries, including many of the U.S.'s closest allies in Europe and Asia, to announce plans to join the bank ahead of a March 31 deadline to become a charter member. 
The $50 billion bank would be used to fund infrastructure improvements, like new roads and rail lines, in Asia.
The United States has voiced only lukewarm support for the bank, saying it has concerns the AIIB may not meet international standards on transparency, the environment, and labor conditions.

Based on reporting by AFP and RIA Novosti


14:28, 28 March 2015 Saturday

 

Australia, China, Netherlands join China bank
c-china-economy.jpg
file photo


The AIIB has been seen as a significant setback to U.S. efforts to extend its influence in the Asia Pacific region to balance China's growing financial clout and assertiveness. 

World Bulletin / News Desk
RussiaAustralia and the Netherlands on Saturday became the latest three countries to say they plan to join the China-led Asian Infrastructure Investment Bank (AIIB), adding clout to an institution seen as enhancing China's regional and global influence.
The AIIB, seen as a challenge to existing institutions the World Bank and Asian Development Bank, has drawn a cool response from the United States, despite which European U.S. allies including Britain, FranceGermanyand Italy have already announced they would join the bank.
Other countries such as Turkey and South Korea have also said they would join. BrazilChina's top trading partner, said on Friday it would sign up and that there were no conditions set. "Brazil is very interested in participating in this initiative," the office of President Dilma Rousseff said in a statement.
Russian First Deputy Prime Minister Igor Shuvalov, speaking on Saturday at a forum in Boao on the southern Chinese island of Hainan, said the country plans to join the AIIB, according to the official Xinhua news agency.
Speaking at the same forum, Australian Finance Minister Mathias Cormann said the country was planning to apply to become a founding member, according to Xinhua.
And the Netherlands also plans to join, Dutch Prime Minister Mark Rutte said on his official Facebook page after a meeting with Chinese President Xi Jinping.
China's Finance Ministry said earlier on Saturday Britain and Switzerland had been formally accepted as founding members of the AIIB, a day after Brazil accepted China's invitation to join.
China's Finance Ministry said Austria had also applied to join and had submitted its documents to China.
"We should push forward with the creation of a regional hub for financial co-operation," Xi said at the forum, adding China should "strengthen pragmatic cooperation in monetary stability, investment, financing, credit rating and other fields."

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yota691    84,951

GMT 8:19 ​​2015 Sunday, March 29 : Latest Update

 

Australia plans to join the Asian Investment Bank

 



Australia announced Sunday she intends to join the ADB to invest in infrastructure promoted by Beijing at the same time stressing the need that this bank is not administered unilaterally.
 
China has signed and about twenty other country last October on the agreement aims to establish ADB to invest in infrastructure, which will be initially capitalized at $ 50 billion (46 billion euros) and will be based in Beijing.
 
Britain, France, Germany, Italy, also announced its intention to join this organization that criticized Washington. The United States, which has historically been dominated by the international financial institutions by surprise Chinese initiative has been taken.
 
South Korea, Thursday became the last country maintains close relations with Washington to announce his intention to join this project.
 
He said the Prime Minister and Finance Minister and Foreign Minister Tony Abbott and Joe Hockey and Julie Bishop in a joint statement that "the great progress accomplished in terms of the structure of the bank and its governance and transparency in recent months, but there are still outstanding issues we will discuss in the negotiations."
 
He added that the text "The main problems to be solved before considering Australia to join the ADB to invest in infrastructure related to the validity of the Board of Directors on key decisions to invest and the necessity that does not control any country on the bank."
 
The government said it will sign an agreement to Canberra allowed to participate in the negotiations as a possible founder of the ADB to invest in infrastructure, which is his goal in the financing of infrastructure works in Asia by protocol.
 
The statement added that the Asian Investment Bank "has the ability to play an important role in the face of the needs in infrastructure and accelerate regional economic growth, with potential benefits for Australia."
 
In the scenes of President Barack Obama's administration exerted intense pressure to block the advance of China accused of trying to blow up a project of international standards on development.
 

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yota691    84,951

Amid growing support it receives «Asian investment» The World Bank has been under pressure for reform

History:  March 30, 2015

753280832.jpg

"Asian" threatens the status of the IMF and the World Bank to finance "development" globally Bloomberg

  •  

World Bank official admitted yesterday that the bank has been under pressure for reform at a time when more countries join the ADB investment infrastructure, backed by China, while Brazil announced its intention to join the bank also intends to Australia to join as well.

Said Cyril Muller, vice president of the bank in «the annual Boao Forum for Asia» «We have a strong impetus for change quickly».

Mueller also expressed support for the idea of ​​implicit establish a new investment bank completely.

He told delegates «all of the major financial institutions in the world to learn from the other and I support the argument that the beginning of nothing good idea». But Mueller opposed the rumors about the existence of tension at the World Bank between the United States, Japan and Europe by the emerging countries such as China on the other. Beijing initiative was to establish a new bank by the end of the year to finance the construction of railways, roads and energy projects and other economic focus of the conference.

Potential rival

Some argue that the Asian Bank for investment in infrastructure will serve as a potential rival to the International Monetary Fund and the World Bank, which are dominated by the United States and the Asian Development Bank which is dominated by Japan. It is noteworthy that both Britain and Germany, France and Italy decided to join the bank, while Russia signed the accession of the first plan yesterday. It is noteworthy that China will host the annual conference in Boao, Hainan resort since 2002.

The founders of the conference hopes to develop into a vision of the Asian World Economic Forum's annual Davos, Switzerland.

Brazilian Post

Brazil said last Friday that it has accepted an invitation from China to join as a founding member to the Asian Bank for investment in infrastructure (Oah.aa.aa. me), which is chaired by Beijing.

He said President Dilma Rousseff's office in a short statement that «Brazil is very keen to participate in this initiative».

He said he was not setting conditions for participation.

Seen Bank (Oah.aa.aa. me) that it is a challenge to the World Bank and the Asian Development Bank and an important step for the global influence of China. China is the largest trading partner of Brazil.

Assess attitudes

The United States has warned that the new bank, but Britain, France, Germany, Italy, and Washington's allies in Europe, announced this month that it will join the bank, prompting President Barack Obama's administration to re-evaluate its position.

For its part, Australia announced Sunday that it intends to join the Asian Investment Bank, while stressing that it should not be this bank managed unilaterally.

China has signed and about twenty other state last October on a deal aimed at the establishment of the Asian Bank for investment in infrastructure, which will be initially capitalized at $ 50 billion (46 billion euros) and will be based in Beijing.

Britain, France, Germany, Italy, and has also announced its intention to join this organization that criticized Washington.

The United States, which has historically been dominated by the international financial institutions by surprise Chinese initiative has been taken.

South Korea, Thursday became the latest country maintains close relations with Washington to announce his intention to join the project.

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markb57    1,001

BO was right. He fundamentally changed the US to the point that no one wants anything to do with us except maybe the middle east. We are so screwed.....

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yota691    84,951

Egypt wants to join the Asian Investment Bank

Cairo: spokesman for the Egyptian Foreign Ministry announced Monday that his country wants to join the ADB to invest in infrastructure, which Beijing launched.

 
Twenty China signed other country in the October agreement aims to establish the said bank, which will be capitalized in the first stage of fifty billion dollars (46 billion euros) to be based in Beijing.
 
He said Badr Abdel Ati told AFP that "Egypt has asked to join the ADB to invest in infrastructure."
 
In turn, Britain, France, Germany, Italy, Russia announced its intention to join this institution which has been criticized by Washington.
 
The United States has historically dominated the international financial institutions.
  • Upvote 1

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The Machine    12,088

I've been calling the Yuan for the past 5 years (maybe more) ......I've been holding it for a while now .....  I bought quite a lot more (on info I was given)  in early 2013 (posted about it) and sold early 2014 made quite a lot of money out of that one.

 

Right now were back at the position where I was informed about in 2013, buy more or not is the question.

 

I'm pretty sure I still have 100,000 Yuan in the safe that I bought back in 2008 for 13.16 Yuan to £1 ..... today its at 9.19 to £1  ...... thats a £3,283 ($4,861)profit in 7years, better than a bank account, all good in my book.

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