politics

Australia, U.S., India and Japan in talks to establish Belt and Road alternative

10 Comments

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© (c) Copyright Thomson Reuters 2018.

©2024 GPlusMedia Inc.

10 Comments
Login to comment

Petty and opportunistic. Not surprised.

-11 ( +2 / -13 )

Great to hear! India and SE Asia offer magnitudes more opportunity than Central Asia and Russia so it’s important to get this moving quickly. No one trusts Chinese investment so this initiative is a no brainer. I suspect India and America will be lining up for the TPP too then

8 ( +10 / -2 )

None of the countries above has enough funds to build a viable alternative to what China wants to build. Besides, Australia, US and India are too far away from each other to benefit from this project. India is 100 years behind China in infrastructure and working skills and attitude and most corrupt and inefficient among those countries.

-4 ( +1 / -5 )

Its a pity that things are just starting to come together again after a decade since the original proposal for the Quad was formed. Should be well down the track by now. You can blame the Labor party in Australia for that. Kevin 747, Kevin Rudd the former PM and traitor imo. I would strongly encourage the Japanese government to be deeply suspicious of the Australian Labor party and their connections to the CCP. Labor are playing with fire. The distinction has been made. Australians are happy to work alongside and have friendly relations with Chinese people but they absolutely do not want Chinese government influence in our country at any level.

This is a positive development although it will be interesting to see the sort of funds invested. India will be the most important diplomatic and economic partner of Australia in a few decades, particularly so if the full breadth of partnership between the U.S and India can be realized.

3 ( +3 / -0 )

This article must be a mistake, since Trump's America is an isolationist country that seeks to terminate existing FTAs, much less sign new ones.

-3 ( +0 / -3 )

Just face the fact that China is the winner and we are all losers so if you can't beat them join them

-6 ( +0 / -6 )

I am neither a Trump hater or a supporter. I'm a dual citizen as an American as well as Canadian who did not vote for either Trump nor Trudeau in Canada as I do not care for either of them personally.

Whether people around the world like POTUS or not, I, as private institutional trader and investor have to be objective in analyzing his policies towards economy, financial, regulations, trade, commerce, etc.

As someone who moves sizable amount of money on daily, weekly, monthly, quarterly and annual basis in different markets through various asset classes, one must be able to navigate through the emotional, chaotic noise regarding Trump's presidential term.

To understand the China ‘One-Belt / ‘One-World’ economic trade forum it becomes necessary to understand how structurally weak the Chinese economy was created. People often talk about the ‘strength’ of China’s economic model; and indeed within a specific part of their economy -manufacturing- they do have economic strength. However, the underlying critical architecture of the Chinese economic model is structurally flawed and President Trump with his current economic team understand the weakness better than all international adversaries.

China is a central planning economy. Meaning it never was an outcropping of natural economic conditions. China was/is controlled as a communist style central-planning government; As such, it is important to reference the basic structural reality that China’s economy was created from the top down.

This construct of government creation is a key big picture distinction that sets the backdrop to understand how weak the economy really is. Any nations’ economic model is only as stable (or strong) as the underlying architecture or infrastructure of the actual country.

Think about economic strength and stability this way: If a nation was economically walled off from all other nations, can it survive? …can it sustain itself? In the big picture – economic strength is an outcome of the ability of a nation, any nation, to support itself first and foremost.  If a nations’ economy is dependent on other nations’ for it to inherently survive it is less strong than a nation whose economy is more independent. You might not realize it, but China is an extremely dependent nation.

When the central planning for the 21st century Chinese Economy was constructed, there were several critical cultural flaws, dynamics exclusive to China, that needed to be overcome in order to build their economic model. It took China several decades to map out a way to economic growth that could overcome the inherent critical flaws. I will go in more detail of this critical flaws that can be exploited on my next post.

3 ( +3 / -0 )

Here is my follow up post on critical flaws to exploit. Because of the oppressive nature of the Chinese compliant culture, the citizens within China do not innovate or create. The “Compliance Mindset” is part of the intellectual DNA strain of a Chinese citizen. Broadly speaking, the modern era Chinese are not able to think outside the box per se’ because the reference of all civil activity has been a history of box control by government, and compliance to stay (think) only within the approved box. The lack of intellectual thought mapping needed for innovation is why China relies on intellectual theft of innovation created by others.

American culture specifically is based around freedom of thought and severe disdain of government telling us what to do; THAT freedom is necessary for innovation. That freedom actually creates innovation. Again, broadly speaking Chinese are better students in American schools and universities because the Chinese are culturally compliant. They work well with academics and established formulas, and within established systems, but they cannot create the formula or system themselves.

The Chinese Planning Authority skipped the economic cornerstone. When China planned out their economic entry, they did so from a top-down perspective. They immediately wanted to be manufacturers of stuff. They saw their worker population as a strategic advantage, but they never put the source origination infrastructure into place in order to supply their manufacturing needs.  China has no infrastructure for raw material extraction or exploitation. China relies on: importing raw material, applying their economic skillset (manufacturing), and then exporting finished goods. This is the basic economic structure of the Chinese economy.

See the flaw? Think about that for a moment...

Cut off the raw material, and the China economy slows, contracts, and if nations react severely enough with export material boycotts the entire Chinese economy implodes. Again, I reference the earlier point: Economic strength is the ability of a nation to sustain itself. [Think about an economy during conflict or war] China cannot independently sustain itself, therefore China is necessarily vulnerable. China is dependent on Imports (raw materials) AND Exports (finished goods).

The 800lb Panda in the room is that China is arguably the least balanced economy in the modern world. Hence, China has to take extraordinary measures to secure their supply chain. This economic dependency is also why China has recently spent so much on military expansion etc., they must protect their vulnerable interests. Everything important to the Chinese Economy surrounds their critical need to secure a strong global supply chain of raw material to import, and leveraged trade agreements for export. China’s economy is deep (manufacturing), but China’s economy is also narrow.

China could have spent the time to create a broad-based economy, but the lack of early 1900’s foresight, in conjunction with their communist top-down totalitarian system and a massive population, led to central government decisions to subvert the bottom-up building-out and take short-cuts. Their population controls only worsened their long term ability to ever broaden their economic model. It takes a population of young avg-skilled workers to do the hard work of building a raw material infrastructure. Mine workers, dredge builders, roads and railways, bridges and tunnels etc. All of these require young strong bodies.  The Chinese cultural/population decisions amid the economic builders precluded this proactive outlook; now they have an aging population and are incapable of doing it.

This is why China has now positioned their economic system as dependent on them being an economic bully. They must retain their supply chain: import raw materials – export finished goods, at all costs. This inherent economic structure is a weakness China must continually address through policies toward other nations. Hence, “One-Belt / One-Road” is essentially their ‘bully plan’ to ensure their supply chain and long-term economic viability. This economic structure, and the reality of China as a dependent economic model, also puts China at risk from the effects of global economic contraction.

Nuance and subtlety is everything in China. Culturally harsh tones are seen as a sign of weakness and considered intensely impolite in public displays between officials; especially within approved and released statements by officials representing the government. Historic Chinese cultural policy, the totalitarian control over expressed political sentiment and diplomacy through silence, is evident in the strategic use of the space between carefully chosen words, not just the words themselves.

China has no cultural or political space between peace and war; they are a historic nation based on two points of polarity. They see peace and war as coexisting with each other. China accepts and believes opposite or contrary forces may actually be complementary, interconnected, and interdependent in the natural world, and they may give rise to each other as they interrelate to one another. Flowing between these polar states is a natural dynamic to be used -with serious contemplation- in advancing objectives as needed.

The Chinese objective is to win, to dominate, using economic power.

Peace or war. Win or lose. Yin and Yang. Culturally there is no middle position in dealings with China; they are not constitutionally capable of understanding or valuing the western philosophy of mutual benefit where concession of terms gains a larger outcome. If it does not benefit China, it is not done. The outlook is simply, a polarity of peace or war. In politics or economics the same perspective is true. It is a zero-sum outlook.

Therefore, when you see China publicly use strong language – it indicates a level of internal disposition within Beijing beyond the defined western angst. Big Panda becomes Red Dragon; there is no mid-status or evolutionary phase.

Trump the Orange Dotard and the U.S. economic team fully understand this dynamic and fully understand the inherent needs of China. When you are economically dependent, the ‘bully plan’ only works until you encounter a ‘stronger opponent’.  A stronger opponent is an economic opponent with a more broad-based stable economy, that’s US. Trump, Commerce Secretary Ross, Treasury Secretary Mnuchin and U.S. Trade Representative Lighthizer, represent the first broad-based national team of economic negotiators who know how to leverage the inherent Chinese economic vulnerability.

On my third and last post of this subject, I will layout some potential economic squeeze that can hurt China in order for Dotard to gain negotiating leverage. The funny part of this is that Xi is very aware of this since he is a president with economic background. People say we are heading towards trade war but a lot do not realize that US has been in a trade war with China for decades. Past administrations just had differing policies that China was laughing at. Honestly, the overall markets will not get affected too much and there is ample of liquidity in the interbank even if there's a trade war. Central bank will not let it happen anyways. Black swans and crisis can still be traded and profited through multiple different asset classes that have adequate liquidity.

3 ( +3 / -0 )

Every American associated with investment, economics and China would be well advised to put their interconnected business affairs in order according to their exposure. The narcissist dotard will not back down from his position; the U.S. holds all of the leverage and the geopolitical economics must be addressed. Trump and his team are entirely prepared for this. The lying crook Trumpy Dumpy (as his haters say) has been discussing this for more than two decades. We are going into economic combat with China!

China’s objective is conquest. China’s tool for conquest is economics. POTUS entire geopolitical strategy, using economics in a similar way, is an existential threat to China’s endeavor. Communist Beijing calls the proverbial DPRK shots.

Trump is putting on a MASSIVE economic squeeze.

- Squeeze #1. Trump and Mnuchin just sanctioned Venezuela and cut off their access to expanded state owned oil revenue. Venezuela now needs more money. China and Russia are already leveraged to the gills in Venezuela and hold 49% of Citgo as collateral for loans outstanding. Now China and Russia will need to loan more, directly.

- Squeeze #2. China’s geopolitical ally, Russia, is already squeezed with losses in energy revenue because of President Trump’s approach toward oil, LNG and coal. Trump, through allies including Saudi Arabia, EU, France (North Africa energy), and domestic production has driven down energy prices. Meanwhile Russia is bleeding out financially in Syria. Iran is the financial reserve, but they too are energy price dependent.

- Squeeze #3. Trump and Tillerson just put Pakistan on notice they need to get involved in bringing their enabled tribal “extremists” (Taliban) to the table in Afghanistan. Pakistan’s primary investor and economic partner is China. If U.S. pulls or reduces financial support to pressure Pakistan toward a political solution in Afghanistan, China has to fill void.

- Squeeze #4. China’s primary economic threat (competition) is next door in India. President Trump has just embraced India as leverage over China in trade and pledged ongoing favorable trade deals. The play is MFN (Most Favored Nation) trade status might flip from China to India. That’s a big play.

- Squeeze #5. Trump has launched a USTR Section 301 Trade Investigation into China’s theft of intellectual property. This encompasses every U.S. entity that does manufacturing business with China, particularly aeronautics and technology, and also reaches into the financial services sector.

- Squeeze #6. Trump, Secretary Ross, Secretary Mnuchin and USTR Robert Lighthizer are renegotiating NAFTA. One of the primary objectives of team U.S.A. is to close the 3rd party loopholes, including dumping and origination, that China uses to gain backdoor access to the U.S. market and avoid trade/tariff restrictions. [China sends parts to Mexico and Canada for assembly and then back-door entry into the U.S. via NAFTA.]

- Squeeze #7. Trump has been open, visible and vocal about his intention to shift to bilateral trade renegotiation with China and Southeast Asia immediately after Team U.S.A. conclude with NAFTA renegotiation.

- Squeeze #8. Trump has positioned ASEAN (Association of Southeast Asian Nations) as trade benefactors for assistance with North Korea. The relationship between ASEAN nations and the Trump administration is very strong, and getting stronger. Which leads to…

- Squeeze #9. Trump has formed an economic and national security alliance with Shinzo Abe of Japan.  It is not accidental that North Korea’s Kim Jong-un fired his missile over the Northern part of Japan. Quite simply, Beijing told him to.

Add all of this up and you can see the cumulative impact of the dotard’s geopolitical economic strategy toward China.

3 ( +3 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites