By Amarynth for the Saker Blog and collaborating with Godfree Roberts’ Newsletter, Here Comes China
Biden / Xi Summit.
In perfect Chinese diplomatic terms, it looks like business as usual. Taken outside of the perfect diplomatic terms, it is a true spanking.
Let’s take one paragraph only and remember a few things first:
Washington, as usual, threatened and danced something like the haka and warned Xi not to support Russia in any way or the consequences would be dire for China. Washington threatened with equally applied sanctions and other dire unmentionables. Apparently, Washington can support who it wants, but China is in some form prohibited from exactly that. Hypocritically they want it both ways. That era is over.
A few hours before the ‘summit’, China had a perfectly normal sail-by through the Taiwan Straits of their aircraft carrier Shandong. Yes, this is ‘likely routine’ says their spox. Sure, it was highly likely just routine. It must have been a wonderful day for the Shandong to take a little sail through the Taiwan Straits.
A few hours before the ‘summit’ Global times had an interview with an unnamed official. (Is China playing the US game here by not naming the official?). This is the take-away: “The international community can fairly judge who is frank and open and who is up to something, who is easing the situation and who is aggravating tension, who is promoting peace talks and who is pouring fuel on the fire, and who is maintaining peace and stability and who is provoking confrontations between blocs.”
Xi Jinping made a pre-summit statement: Countries should not come to the point of meeting on the battlefield. Conflict and confrontation are not in anyone’s interest. Peace and security are what the international community should treasure the most.
So, this is the milieu that Biden walked into at the online summit. We must know by now what this is all about. None of the boring line-up of US representatives could bend China to their will to support sanctions against Russia, so, time for a Presidential Summit to yet again attempt to split China and Russia. This is how perfectly ridiculous this attempt is: Can you help me fight your friend so that I can concentrate on fighting you later?
Here is how it went:
President Biden expounded on the US position and expressed readiness for communication with China to prevent the situation from exacerbating.
Simply said: How can we make a deal so that the US/Nato alliance remains a unipolar world and all others must be subservient.
President Xi pointed out that China does not want to see the situation in Ukraine to come to this. China stands for peace and opposes war. This is embedded in China’s history and culture.
Simply said: Hey Biden, mistake number one! You do not know who you are talking to, but now I’m going to tell you
- China makes a conclusion independently based on the merits of each matter.
- China advocates upholding international law and universally recognized norms governing international relations.
- China adheres to the UN Charter and promotes the vision of common, comprehensive, cooperative and sustainable security. These are the major principles that underpin China’s approach to the Ukraine crisis.
- China has put forward a six-point initiative on the humanitarian situation in Ukraine, and is ready to provide further humanitarian assistance to Ukraine and other affected countries.
- All sides need to jointly support Russia and Ukraine in having dialogue and negotiation that will produce results and lead to peace.
Simply stated: This is the crux of the matter and seemingly you are unable to grasp it!
- The US and NATO should also have dialogue with Russia to address the crux of the Ukraine crisis and ease the security concerns of both Russia and Ukraine.
Message: Go away and take your position and money with you! You had your opportunity and you became a warmaker, coercing others to your will. Enough is enough! We have principles, law and morals and ethical standards. You hold on to ‘positions’ favorable to you only.
China is active in the EU as well and the discussion does not remain dry and diplomatically correct.
China is playing into its strengths, saying what is correct in terms of its own national interest and it happens to co-incide with that of the non-insane world. The spokespeople are highly educated, clear, exceptionally well-spoken, and smart. They also mercilessly dig in the knife when opportunity shows. In a recent press conference:
CCTV: US State Department Spokesperson Ned Price said that the US is concerned about Russian attacks on Ukrainian infrastructure which caused civilian casualties. However, China has yet to state its position explicitly. How does the foreign ministry view such criticism from other countries on China?
Zhao Lijian: Human lives are precious. Civilian casualties under all circumstances are heart-rending and lamentable. China has all along called for every effort to avoid civilian casualties. We still remember that in March 1999, the US-led NATO, without the Security Council’s mandate, flagrantly unleashed a ruthless bombing campaign against the Federal Republic of Yugoslavia for 78 days, killing at least 2,500 innocent civilians and injuring around 10,000 people, most of them civilians. Over the past two decades or so, the US conducted tens of thousands of air strikes in places like Syria, Iraq, Afghanistan and Somalia. The number of innocent civilians killed can be anywhere between 22,000 and 48,000. When professing its concern for the welfare of the Ukrainian people, shouldn’t the US first express concern over the civilian casualties caused by all these military operations?
I particularly enjoyed this vignette:
NATO Secretary General Jens Stoltenberg said that any support to Russia, military or any other type of support, would actually help Russia conduct a brutal war against an independent sovereign nation, Ukraine, and help them to continue to wage war which is causing death, suffering and an enormous amount of destruction.
This was the comment of the Chinese spokesperson:
Chinese people can fully relate to the pains and sufferings of other countries because we will never forget who bombed our embassy in the Federal Republic of Yugoslavia. China does not need a lecture on justice from the abuser of international law. As a Cold War remnant and the world’s largest military alliance, NATO continues to expand its geographical scope and range of operations. What kind of role has it played in world peace and stability? NATO needs to have a good reflection.
Against this backdrop, the news filtered out about The Eurasia Economic Union (EAEU) and China designing a new monetary and financial system bypassing the U.S. dollar, supervised by Sergei Glazyev and intended to compete with the Bretton Woods system which is now less than 50% of the currency flow in the world. While news is still very scarce on this front, it fulfilled the purpose of telling Biden once again to go away if US/NATO cannot be a serious contender to building a peaceful and prosperous world.
Godfree Roberts, in his last newsletter, did an overview of the major historical milestones. I am not sure if the concept of a special drawing rights fiat currency revaluated regularly against a basket of currencies will be the way this rolls out. Stand by! Much more incoming! We will see.
DOLLAR’S END – Farewell, Inordinate Privilege
- Credit Suisse analyst Zoltan Pozsar says Ukraine triggered a perfect storm in commodities that could weaken the Eurodollar system, contribute to inflation in Western economies, and threaten their financial stability. Pozsar said China’s central bank is uniquely placed to backstop such crisis, paving the way for a much stronger yuan. Reuters, Mar. 13, 2022.
- Saudi Arabia Considers Accepting Yuan Instead of Dollars for Chinese Oil Sales: Talks between Riyadh and Beijing have accelerated as the Saudi unhappiness grows with Washington. WSJ, Mar. 14, 2022
In 2009, after helping to rescue the US from the GFC, Zhou Xiaochuan, Governor of the Peoples Bank of China, said, “The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies.”
After helping rescue America from the GFC, PBOC Governor Zhou Xiaochuan observed, “The world needs an international reserve currency that is disconnected from individual nations and able to remain stable in the long run, removing the inherent deficiencies caused by using credit-based national currencies.”
Zhou proposed SDRs, Special Drawing Rights, a synthetic reserve currency dynamically revalued against a basket of trading currencies and commodities. Broad, deep, stable, and impossible to manipulate. Nobelists Fred Bergsten, Robert Mundell, and Joseph Stieglitz approved: “The creation of a global currency would restore a needed coherence to the international monetary system, give the IMF a function that would help it to promote stability and be a catalyst for international harmony”. Here’s what’s happened since:
2012: Beijing began valuing the yuan against a currency/commodity basket
2014: The IMF issued the first SDR loan
2016: The World Bank issued the first SDR bond
2017: Standard Chartered Bank issued the first commercial SDR notes.
2019: All central banks began stating currency reserves in SDRs
Mar. 14, 2022: “In two weeks, China and the Eurasian Economic Union – Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan – will reveal an independent international monetary and financial system. It will be based on a new international currency, calculated from an index of national currencies of the participating countries and international commodity prices”.
The currency resembles Keynes’ invention Special Drawing Rights.SDRs are a synthetic currency which derives its value from a global, publicly traded basket of currencies and commodities. Immense beyond imaging, and stable as the Pyramids. Everyone gets a seat at the table and a vote. It may eventually be administered by an arm of the UN.
SDRs pose a serious alternative to the US dollar, both for the EAEU, the BRI’s 145 member states, the Shanghai Cooperation Organization (SCO), ASEAN, and the RCEP. Middle East countries, including Egypt, Iran, Iraq, Syria, Lebanon, are keenly interested.
Less well known is that the EAEU, the BRI, the SCO, ASEAN, and the RCEP were discussing a merger before the currency news hit.
It is reasonable to expect them to join this new, cooperatively managed, stable reserve currency regime in which they can settle their trades in stable, neutral, predictable SDRs.
China is not losing any opportunity to bring this front and center. This is their last list of questions:
- If the concerns are “disinformation”, why doesn’t the U.S. release detailed materials to prove its innocence? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
- What did the U.S. spend the $200 million on? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
- What kind of research has the U.S. conducted on which pathogens? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
- What is it trying to hide when the U.S. Embassy in Ukraine deleted all relevant documents on its website? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
- Why does the U.S. insist on being the only country in the world to oppose the establishment of a multilateral verification mechanism though it claims to abide by the Biological Weapons Convention? – Question by Chinese Foreign Ministry Spokesperson Zhao Lijian on U.S.-funded biolabs in Ukraine.
- This is quite an amazing poster detailing the biolab web, which is too large to load here. But take a look at the depiction of these US biolabs. https://www.globaltimes.cn/page/202203/1255055.shtml
Economic goals in a nutshell
What is happening with Belt and Road? About the data: On January 21, 2022, the Chinese Ministry of Commerce (MOFCOM) released its data for “China’s investments and cooperation in countries along the Belt and Road” covering the period of January to December 2021. According to these data, Chinese enterprises invested about US$20.3 billion in non-financial direct investments in countries “along the Belt and Road”. Furthermore, there were 560 newly signed projects with a contract value of over US$100 million. The MOFCOM data focus on 55 countries that are “along the Belt and Road” – meaning on a corridor from China to Europe including South Asia. For this report, the definition of BRI countries includes 142 countries that had signed a cooperation agreement with China to work under the framework of the Belt and Road Initiative by the end of 2021. To analyze investments in these countries, we base our data on the China Global Investment Tracker and our own data research at the Green Finance & Development Center affiliated with Fudan University, Shanghai. As with most data, they tend to be imperfect.
On a somewhat of a lighter note: The Chinese Netizens are in the majority siding with Russia so completely and so enthusiastically, that China’s WeChat and Douyin had to crack down on vulgar jokes and netizens were told in no uncertain terms that they cannot make fun of international news events. The very high support for Russia is becoming a clear talking point despite the somewhat muted and correct Chinese diplomatic statements.
So, here is a joke for you.
Bear and Dragon take a walk in the gardens. Bear is a little overcome with his serious responsibilities in the world and presents emotionally somewhat tired and despondent. As the walk proceeds, Dragon says to Bear .. Out with it! What has you so despondent? Bear thinks a moment and says: We’ve been friends for a long time. So, if I need a very large amount of money very quickly, will you give it to me?
Dragon, known for taking time to ponder the imponderables, walks on for a while and then comes to a firm stop. NO, says Dragon, I will not give it to you!
Bear’s shoulders fall .. but Dragon continues: I will lend it to you. 1.5 trillion the moment you ask for it, no interest, no repayment terms, pay me back when you can.