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Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion

Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion

In 2018, the Chinese launched a gold-backed, yuan-denominated oil futures contract.  These contracts were priced in yuan, but convertible to gold, raising the prospect that “the rise of the petroyuan could be the death blow for the dollar.

Two weeks ago, The IMF reported that the global share of US-dollar-denominated exchange reserves dropped to 59.0% in the fourth quarter, according to the IMF’s COFER data released today. This matched the 25-year low of 1995.

Also last week, Peter Thiel warned “Bitcoin should also be thought [of] in part as a Chinese financial weapon against the US… It threatens fiat money, but it especially threatens the U.S. dollar.”

All of which sets the stage for the dramatic headlines that hit this morning, as Reuters reports that China has given domestic and international banks permission to import large amounts of gold into the country,

The People’s Bank of China (PBOC), the nation’s central bank, controls how much gold enters China through a system of quotas given to commercial banks.It usually allows enough metal in to satisfy local demand but sometimes restricts the flow.

In recent weeks it has given permission for large amounts of bullion to enter, the sources said.

“We had no quotas for a while. Now we are getting them … the most since 2019,”said a source at one of the banks moving gold into China.

…click on the above link to read the rest of the article…

What To Expect From Today’s OPEC+ Meeting: Another Saudi Surprise?

What To Expect From Today’s OPEC+ Meeting: Another Saudi Surprise?

After Wednesday’s JMMC meeting ended without reaching a recommendation (as is customary and expected), the key decision-making OPEC+ meeting – where ministers will hammer out May’s output quotas – begins at 1pm London Time. As Newsquawk notes, market expectations are skewed towards an extension of current cuts, but a clear stance from Saudi – who have a tendency to surprise in recent months – remains to be seen, namely on the decision regarding the extra 1MM barrels the Kingdom has kept offline since the start of the year.

Commenting on today’s key event, Bloomberg’s Jake Lloyd-Smith reminds us that Saudi Arabia has sprung some big surprises in the oil market already this year, and may do so again today as OPEC+ grapples with a thorny decision on supply. That could make for a volatile session before the long weekend, and already has with oil whipsawing from gains to losses in jittery trading, amid market rumors that OPEC+ is i) considering a return to phased monthly oil-output hikes and ii) is also considering maintaining current cuts, according to a delegate… which pretty much covers every base so is completely useless.

As such, while the consensus view is the grouping will stick with deep output curbs to safeguard crude’s recovery, there’s an outside chance of alternative outcomes. These span the twin extremes, from releasing barrels to tightening further.

At issue is the varied recovery across key regions. For every rosy demand metric from the U.S. or China, there’s a poor one from Europe as lockdowns make a comeback. In addition, Riyadh faces a headache from rival Iran, which has been pushing clandestine barrels into China despite U.S. sanctions…

…click on the above link to read the rest of the article…

opec+, oil and gas industry, zerohedge, saudi arabia, russia, iran, china, united states, economic sanctions, oil, oil price, bloomberg

The Iran-China Axis Is A Fast Growing Force In Oil Markets

The Iran-China Axis Is A Fast Growing Force In Oil Markets

One of the things that doesn’t get a lot of discussion in the press is the under-the-table relationship Iran and China have had when it comes to oil. At first glance, they wouldn’t seem to have a lot in common. One is a theocracy with a radical view of non-believers and the other is probably the only example of a successful communist dictatorship since this form of government was created. But, if you look a little deeper they have a couple of things that align their mutual interests strongly. The first is they are both absolute dictatorships, meaning the institutions of government and national policies can be changed at the whim of those at the top. The second thing they have in common, and this is the main takeaway, both countries have serious geopolitical issues with the United States.

Iran suffers from years of sanctions imposed primarily by the U.S. to compel them to comply with U.N. resolutions regarding their atomic program. China views this century as the one in which they displace America as the world’s dominant Super Power. The place where these two authoritarian government’s worldviews align is in their opposition to the U.S.

It’s worth noting China’s apparent success has been funded by western economies over the last 75-years, thanks to our desire to buy everything as cheaply as possible. In that time, China has become the manufacturing center for the world and amassed immense wealth in doing so. The pandemic has caused a rethinking of the wisdom of outsourcing strategic commodities to despotic regimes, but for now, if you buy something other than food odds are it was made in China.

…click on the above link to read the rest of the article…

Escobar: Welcome To ‘Shocked & Awed’ 21st Century Geopolitics

Escobar: Welcome To ‘Shocked & Awed’ 21st Century Geopolitics

With a Russia-China-Iran triple bitch slap on the hegemon, we now have a brand new geopolitical chessboard…

It took 18 years after Shock and Awe unleashed on Iraq for the Hegemon to be mercilessly shocked and awed by a virtually simultaneous, diplomatic Russia-China one-two.

Russian Foreign Minister Sergey Lavrov (L) meets Chinese Foreign Minister Wang Yi (R) in Beijing, China on March 23, 2021. Photo: Russian Foreign Ministry/Handout/Anadolu Agency

How this is a real game-changing moment cannot be emphasized enough; 21st century geopolitics will never be the same again.

Yet it was the Hegemon who first crossed the diplomatic Rubicon. The handlers behind hologram Joe “I’ll do whatever you want me to do, Nance” Biden had whispered in his earpiece to brand Russian President Vladimir Putin as a soulless “killer” in the middle of a softball interview.

Not even at the height of the Cold War the superpowers resorted to ad hominem attacks. The result of such an astonishing blunder was to regiment virtually the whole Russian population behind Putin – because that was perceived as an attack against the Russian state.

Then came Putin’s cool, calm, collected – and quite diplomatic – response, which needs to be carefully pondered. These sharp as a dagger words are arguably the most devastatingly powerful five minutes in the history of post-truth international relations.

In For Leviathan, it’s so cold in Alaska, we forecasted what could take place in the US-China 2+2 summit at a shabby hotel in Anchorage, with cheap bowls of instant noodles thrown in as extra bonus.

China’s millennial diplomatic protocol establishes that discussions start around common ground – which are then extolled as being more important than disagreements between negotiating parties. That’s at the heart of the concept of “no loss of face”. Only afterwards the parties discuss their differences.

…click on the above link to read the rest of the article…

SkyNet is Here

 

US Warship “Expelled” From South China Sea By PLA Forces 

US Warship “Expelled” From South China Sea By PLA Forces 

The superpower clash between China and the U.S. continued on Friday as a U.S. Navy ship sailed near the Chinese-controlled Paracel Islands in the heavily disrupted South China Sea, only to get an stern rebuke (and what some would call, an appropriate response) from Beijing.

The USS John S. McCain, an Arleigh Burke-class destroyer, entered the waters near Paracel islands Friday without China’s permission on a “freedom of navigation operation,” the first known operation in the heavily disputed area under the new Biden administration. 

The heavily disputed waterway is one of the flashpoints in the U.S.-China relationship, including a trade war, technology war, U.S. sanctions, Hong Kong and Taiwan.

U.S. sailings of warships near the militarized islands in the South China Sea have angered Beijing in the past.

The U.S. Navy’s 7th Fleet said the destroyer USS John S. McCain “asserted navigational rights and freedoms in the vicinity of the Paracel Islands, consistent with international law”.

Meanwhile, according to the latest naval deployment map from Stratfor, other US naval ships located just off China’s coast include the carrier CVN 71 Roosevelt, and the LHA 6 America large Amphibious group.

…click on the above link to read the rest of the article…

China To Hold Military Drills In Gulf Of Tonkin As Warning To Nearby US Carrier Group

China To Hold Military Drills In Gulf Of Tonkin As Warning To Nearby US Carrier Group

China has announced plans to hold military exercises in the South China Sea this week, a mere days after the Pentagon confirmed a US aircraft carrier group led by the USS Theodore Roosevelt had entered the disputed waters in a “freedom of the seas” operation and after daily Chinese incursions of Taiwan’s airspace had been reported the prior week.

Beijing, indignant at the US muscle-flexing in its own backyard, will hold the drills in the Gulf of Tonkin also during a crucial week top Communist Party leaders of Vietnam are meeting for the once in five years National Congress to select a new leader for the country.

Reuters reports of the new Chinese military drills, “A notice issued by the country’s Maritime Safety Administration prohibited entry into a portion of waters in the Gulf of Tonkin to the west of the Leizhou peninsula in southwestern China from Jan. 27 to Jan. 30, but it did not offer details on when the drills would take place or at what scale.”

The new drill notification came after on Monday Chinese Foreign Ministry Spokesperson Zhao Lijian slammed the nearby US military movements:

“It does no good to regional peace and stability for the United States to frequently send military vessels and aircraft to the South China Sea to show off muscles,” Zhao said.

He further said, “We urge the US side to earnestly abide by the one-China principle and the three China-US joint communiques, prudently and properly handle Taiwan-related issues, and refrain from sending any wrong signals to the ‘Taiwan independence’ forces so as to avoid damaging China-US relations and peace and refrain from sending any wrong signals to the “Taiwan independence” forces so as to avoid damaging China-US relations and peace and stability across the Taiwan Strait.”

…click on the above link to read the rest of the article…

America Keeps Claiming Governments It Hates Are Paying Bounties On US Troops In Afghanistan

America Keeps Claiming Governments It Hates Are Paying Bounties On US Troops In Afghanistan

We’re now getting mass media reports that yet another country the US government doesn’t like has been trying to kill American troops in Afghanistan, with the accusation this time being leveled at China. This brings the total number of governments against which this exact accusation has been made to three: China, Iran, and Russia.

“The U.S. has evidence that the PRC [People’s Republic of China] attempted to finance attacks on American servicemen by Afghan non-state actors by offering financial incentives or ‘bounties’,” reads a new “scoop” from Axios, quoting anonymous officials who refused to name their sources.

“The Trump administration is declassifying as-yet uncorroborated intelligence, recently briefed to President Trump, that indicates China offered to pay non-state actors in Afghanistan to attack American soldiers, two senior administration officials tell Axios,” the evidence-free report claims.

The Axios report is already being circulated into public consciousness by mass media outlets like CNN. It is co-authored by Bethany Allen-Ebrahimian, whose career lately has been focused on churning out extremely aggressive narrative management about China for a liberal audience, including a ridiculous hit piece on The Grayzone and its coverage of Xinjiang which failed to list a single piece of false or inaccurate reporting by that outlet. This eagerness to help manipulate public perception of America’s number one geopolitical rival has seen Allen-Ebrahimian rewarded with plenty of attention from “sources” who provide her with endless career-amplifying “scoops”.

A few months ago, it was Iran we were being told is trying to use proxies to kill US troops in Afghanistan.

…click on the above link to read the rest of the article…

Financial Warfare Is Real

In my 2011 book, Currency Wars, I gave a detailed description of the first-ever financial war game sponsored by the Department of Defense. This financial war game took place in 2009 at the top-secret Applied Physics Laboratory located about twenty miles north of Washington, D.C., in the Maryland countryside.

Unlike typical war games, the “rules of engagement” for this financial exercise did not permit the use of any kinetic weapons such as bombs, missiles or drones. The only weapons allowed were financial instruments including stocks, bonds, currencies, commodities and derivatives.

The game was played out over two days in the main War Room of the laboratory using six teams divided into the U.S., China, Russia, Europe, East Asia, and Banks & Hedge Funds. The contestants included about 40 players on the six teams and another 60 participants including: uniformed military, civilian defense officials, observers from the Treasury, Federal Reserve, CIA and other government agencies, think tanks, universities, and financial industry professionals.

In that original financial war game, a scenario involving Russia, China, gold and the destruction of the U.S. dollar was played out against a backdrop of geopolitical events, including the collapse of North Korea and a threatened Chinese invasion of Taiwan.

In May 2015, the Pentagon sponsored a new financial warfare session, which I was also invited to attend. This time the financial war took place inside a secure meeting facility at the Pentagon itself.

This new financial war game exercise was smaller and more focused than the one in 2009. We had about 20 participants. Our group included representatives from the diplomatic corps, military, think tanks, universities, CIA and the National Security Council. I was one of three individuals from the investment management community.

Our scenario this time was not global but was instead limited to a confrontation between China and the U.S. involving disputed jurisdiction in the South China Sea.

…click on the above link to read the rest of the article…

China Restricts Electricity Use Amid Coal Shortage

China Restricts Electricity Use Amid Coal Shortage

Despite the swift industrial recovery from the pandemic, factories in areas in China are working only part-time, and residents in several provinces are asked to save electricity, while authorities are turning off street lights and billboards, warning of coal shortages this winter.

In at least three provinces in China, authorities have ordered limits on electricity use, saying there could be shortages of coal, The New York Times reports.

At the same time, Chinese authorities vehemently deny that the potential shortages have had anything to do with the diplomatic spat with Australia, which has turned into a true energy trade war, with China banning imports of coal from one of its major suppliers.

Still, China has admitted there is a problem with electricity supply in parts of the country, just ahead of the winter season when Chinese industrial activity has been recovering very well from the COVID-related economic slump earlier this year.

“At the moment, some provinces temporarily do not have enough electricity. This is an objective fact,” the NYT quoted the Chinese authority overseeing state-held firms as saying during the weekend.

As a result of the power shortages with a reduced supply of thermal coal, some factories are cutting working hours and are operational only two or three days a week, while office workers in some cities have had to climb 20 flights of stairs to reach their workplaces because elevators have been shut down to save electricity.

“We are not living a normal life when our factory can only work two days a week and the streets are dark at night,” Mike Li, who owns a plastic flower factory in the city of Yiwu, eastern China, told the Financial Times.

…click on the above link to read the rest of the article…

China Endures Worsening Electricity Shortages In Name Of Punishing Australia

China Endures Worsening Electricity Shortages In Name Of Punishing Australia

Coal is among the latest in a growing list of major Australian exports hit by severe restrictions in China, also including commodities like cotton, timber wine, lobster, and barley. While Chinese citizens might be able to forgo luxuries for a while like Aussie wine as well as lobster, coal is quite another thing especially given the country is currently facing a broad coal shortage.

Here’s how Chinese state media publication Sixth Tone described it:

Several cities in at least three provinces in central and southern China are experiencing a power crunch, with some local governments beginning to ration power use during peak timesaccording to multiple domestic media reports.

Entire provinces are taking the surprise step of limiting industrial power and even cutting heating in government offices, expected to take effect Dec.11, according to the publication. This also includes limits imposed on entertainment and shopping venues like malls and move theaters, which is impacting their hours of operation.

So ultimately this shows Beijing is so intent and devoted to punishing Australia that it will make its own citizens suffer in the downward spiraling spat that began last Spring when Canberra joined US calls for an independent probe into China’s handling of COVID-19 as the place of origin for the pandemic.

As it stands coal is Australia’s third-largest export to China and is the latest to face severe and opaque import regulations, as Reuters revealed early this week: “Chinese media outlets including The Global Times and Caixin on Monday reported China’s top economic planner had granted approval to power plants to import coal without clearance restrictions, except for Australia,” according to the report.

The restrictions have reportedly left dozens of coal-laden ships idling off China’s ports:

…click on the above link to read the rest of the article…

PATRICK LAWRENCE: Empire with a Human Face

PATRICK LAWRENCE: Empire with a Human Face

The Biden people are unlikely to speak of a new cold war with China, but they appear likely to wage one all dressed up as a sophisticated trans–Pacific strategy.

A portion of China’s Great Wall at dawn. (Hao Wei, Flickr, CC BY 2.0)

Those boneheaded Trump people explained their hostile, xenophobic, fated-to-fail policy toward China by telling  the rest of Asia that America stood for “a free and open Indo–Pacific.”

No, no and no, say the big shots President-elect Joe Biden has named to shape and execute his foreign policy. Instead, they mean to tell Asians to line up behind their hostile, xenophobic, fated-to-fail policy toward China in the name of “a secure and prosperous Indo–Pacific.”

Way different.

It is simply remarkable to watch as the party that howled in response to everything the Trump regime attempted on the foreign-policy side adopts one Trump-era strategy after another more or less intact but for the cosmetics.

The sin of those egregious hawks who commandeered the outgoing regime was to conduct the business of empire imperially. This new crew offers what we had better recognize now as nothing more than empire with a human face.

Of all the Biden regime’s failures in the making one can already see in prospect that none will be greater than its insistence that the U.S. must continue to treat China as a predatory competitor and strategic adversary.

As Mike Pompeo failed to enlist Asians in his crusade against the mainland — and our baboon secretary of state has flopped spectacularly, if you have not noticed — so will Antony Blinken, his successor at State, and Jake Sullivan, Biden’s nominee for national security adviser.

…click on the above link to read the rest of the article…

Food Shortages Hit China: There Is “not…enough fresh food to go around”

Food Shortages Hit China: There Is “not…enough fresh food to go around”

Over the past few weeks, I have been writing articles regarding a coming food shortage. I’ve been pointing out that the food shortage is going to hit the United States hard but that it is also going to hit the rest of the world.

A worldwide fit of hysteria over COVID, resulting in the shutdown of the world’s economy, interruption of the supply chain, and the destruction of food products, as well as international trade wars and natural disasters, are going to collide with one another and make this winter one of the toughest on record.

China is publicly acknowledging a coming food shortage.

But while many have dismissed my claims, I’d like to draw your attention to the fact that China is now publicly acknowledging a coming food shortage. (And as noted in this article, when they admit there’s a problem, it’s a BIG problem. ) In fact, China even has an anti-food-wasting campaign going on across the country right this minute encouraging people to eat half portions or at least make sure to finish their plates.

In an October 5, article for the New York Times entitled “China’s mealtime appeal amid food supply worries: Don’t take more than you can eat,” Eva Dou writes,

On the surface, China’s campaign to encourage mealtime thrift has been a cheerful affair, with soldiers, factory workers and schoolchildren shown polishing their plates clean of food.

But behind the drive is a harsh reality. China does not have enough fresh food to go around — and neither does much of the world.

The pandemic and extreme weather have disrupted agricultural supply chains, leaving food prices sharply higher in countries as diverse as YemenSudanMexico and South Korea. The United Nations warned in June that the world is on the brink of its worst food crisis in 50 years.

…click on the above link to read the rest of the article…

Oil and the Changing World Order

U.S. oil inventories have fallen every week for two months yet WTI has averaged less than $40 per barrel since the end of August. That is because oil has been re-priced and markets are unwilling to pay more for it.

Those who expect a return to 2019 price levels acknowledge that the oil-demand recovery has stalled. They believe that this is because of Covid-19 and that things will return to normal once there is a vaccine.

Perspective

“I don’t think the severity of this downturn has been well understood yet.”

Sophia Koropeckyj, Moody’s Analytics

What is happening to oil markets and to the global economy is not because of a virus. The virus greatly accelerated what was already happening. Things won’t go back to normal when the virus ends. I wrote that a month ago and nothing has happened since then to change my mind.

The world is in a debt cycle that began fifty years ago. World orders change when debt cycles approach their end. Ray Dalio has studied how and why world orders have changed over the last 1500 years. These are the requisites that changing world orders have in common:

  • High levels of indebtedness.
  • Low interest rates that limit the ability of central banks to stimulate the economy.
  • Large wealth gaps and political divisions that lead to social an political conflicts.
  • A rising world power that challenges the over-extended leading power.

These criteria have clear relevance to the present world order as China challenges U.S. hegemony. Discord created by debt, interest rates and income inequality have been aggravated by the Covid-19 pandemic but will not be resolved when the virus is controlled.

…click on the above link to read the rest of the article…

Is War With China Becoming Inevitable?

Is War With China Becoming Inevitable?

Tensions are rising between the U.S. and China, as the list of ideological, political and economic clashes continues to lengthen. And there is a transparent new reality: China seems in no mood to back down.

“The Indians are seeing 60,000 Chinese soldiers on their northern border,” Secretary of State Michael Pompeo ominously warned on Friday.

He spelled out what he meant to commentator Larry O’Connor:

“The Chinese have now begun to amass huge forces against India in the north. … They absolutely need the United States to be their ally and partner in this fight.”

Pompeo had just returned from a Tokyo gathering of foreign ministers from the Quadrilateral Security Dialogue, or “Quad,” the group of four democracies — U.S., Japan, Australia, India — whose purpose is to discuss major Indo-Pacific geostrategic issues.

Exactly what kind of “ally and partner” the U.S. is to be “in the fight” between India and China over disputed terrain in the Himalayan Mountains was left unexplained. We have no vital interest in where the Line of Control between the most populous nations on earth should lie that would justify U.S. military involvement with a world power like China.

And the idea that Japan, whose territorial quarrel with China is over the tiny Senkaku Islands in the East China Sea, thousands of miles away, would take sides in a Himalayan India-China conflict also seems ludicrous.

Yet, tensions are rising between the U.S. and China, as the list of ideological, political and economic clashes continues to lengthen.

And there is a transparent new reality: China seems in no mood to back down.

…click on the above link to read the rest of the article…

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