China’s drive to restore its lost greatness

[Duufaan]

China’s drive to restore its lost greatness

China’s real goal is buttressing the rise to power of a new global order, where liberal democratic principles are eclipsed by Xi Jinping’s determined, authoritarian passion to restore his country’s lost greatness.

China's President Xi Jinping applauds after a vote on an amendment to the constitution during a session of the National People's Congress in Beijing.  (KEVIN FRAYER / GETTY IMAGES)

By CHARLES BURTONOpinion

Thu., March 29, 2018

Since the Asian Infrastructure Investment Bank tweeted last week that Canada is now officially a full member, it hasn’t exactly made headlines. This is ostensibly a prelude for trade talks with China in an increasingly protectionist global landscape. And admission wasn’t cheap: Chinese sources say Ottawa committed more than $1 billion to the Beijing-based bank.

But China-watchers are more fixated on the dramatic changes rolling out after the just-completed National People's Congress.

Among other moves, the annual Congress voted 2,970-to-0 to give President Xi Jinping a second five-year term, and repealed a regulation barring him from seeking a third.

They also rubber-stamped the creation of a National Supervision Commission, empowered to detain people for months at secret locations without access to lawyers or due process. This body ranks above even China’s judiciary in the newly amended Constitution. Its establishment would certainly make Chinese Congress members pause before entering a symbolic protest vote against Xi’s Machiavellian restructuring of institutions to consolidate his own power.

After last week, any charade that state institutions are somehow independent from China’s Communist Party (read: presidential) diktat is now abandoned. Whatever Xi says, goes. He chairs six top-level “leading small groups” and numerous other committees and commissions, covering every major area of policy, and has taken direct command of China’s security and intelligence apparatus. (The “authority” of Chinese State Council Premier Li Keqiang is so debased that there is little point in our Prime Minister meeting with him again.)

Xi’s closing address to the Congress, intended to be heard around the world, was a rousing paean to the greatness of China’s civilization across its dynastic history. The inventions of paper and printing, dynamite and the compass were cited, as were China’s contributions to literature and philosophy, and the building of the Great Wall. It all underscored the point that Xi will oversee the “great restoration of the Chinese nation” by 2050. The characters wei da — meaning “great” — were heard 35 times in the 38-minute speech.

For Canada, the implications became clear in Xi’s promise that “China will continue to actively engage in reconstruction and transformation of the systems of global governance by contributing more Chinese wisdom, Chinese re-designs and Chinese strength.” This is part and parcel of Beijing’s massive One Belt One Road global infrastructure program, which China expects will lead to its development of the Canadian north and polar waters in years ahead.

The bleak irony is that the same Asian Infrastructure Investment Bank that Canada has paid dearly to join would underwrite the One Belt One Road initiative that would reach into Canadian northern territory. China has already declared itself a “near-Arctic nation,” regardless of the strictures of geograph

[Duufaan]

China is reportedly taking the first steps to pay for oil in yuan: Sources

• Annual trade in oil worth an estimated $14 trillion
• Pilot could be launched as early as the second half of 2018
• Beijing could start with crude purchases from Russia, Angola

Published 11 Hours Ago  Updated 10 Hours AgoReuters

Stringer | Reuters

Employees close a valve of a pipe at a PetroChina refinery in Lanzhou, Gansu province.

China is taking its first steps towards paying for imported crude oil in yuan instead of the U.S. dollar, three people with knowledge of the matter told Reuters, a key development in Beijing's efforts to establish its currency internationally.

Shifting just part of global oil trade into the yuan is potentially huge. Oil is the world's most traded commodity, with an annual trade value of around $14 trillion, roughly equivalent to China's gross domestic product last year.

A pilot program for yuan payment could be launched as early as the second half of this year, two of the people said.

 

Regulators have informally asked a handful of financial institutions to prepare for pricing China's crude imports in the yuan, said the three sources at some of the financial firms.

"Being the biggest buyer of oil, it's only natural for China to push for the usage of yuan for payment settlement. This will also improve the yuan liquidity in the global market," said one of the people briefed on the matter by Chinese authorities.

China is the world's second-largest oil consumer and in 2017 overtook the United States as the biggest importer of crude oil. Its demand is a key determinant of global oil prices.

Under the plan being discussed, Beijing could possibly start with purchases from Russia and Angola, one of the people said, although the source had no details of anything in the works.

Both Russia and Angola, like China, are keen to break the dollar's global dominance. They are also two of the top suppliers of crude oil to China, along with Saudi Arabia.

The move would mark a major step in reviving usage of the currency of the world's second-largest economy for offshore payments after several years of on-again, off-again measures.

If successful, it could also trigger shifting other product payments to the yuan, including metals and mining raw materials.

All three sources, who spoke to Reuters on the condition that they not be named, said the plans were at early stages. Officials at some of China's state oil companies said they had not heard of such plans.

Crude futures

The plans coincide with this week's launch of the first Chinese crude oil futures in Shanghai, which many expect to become a third global price benchmark alongside Brent and West Texas Intermediate crude.

Shanghai's new crude contract is traded in yuan.

Besides the potential of giving China more power over global oil prices, "this will help the Chinese government in its efforts to internationalize renminbi (yuan)," said Sushant Gupta, research director at energy consultancy Wood Mackenzie.

Unipec, trading arm of Asia's largest refiner Sinopec , has already inked a first deal to import Middle East crude priced against the newly-launched Shanghai crude futures contract.

U.S. bank Goldman Sachs said in a note to clients this week that the success of Shanghai's crude futures was "indirectly promoting the use of the Chinese currency."

People's Bank of China (PBOC), the country's central bank, did not respond to a Reuters request for comment on the plan. The Ministry of Commerce (MOFCOM) also declined to comment.

Internationalization

China's plan to use yuan to pay for oil comes amid a more than year-long gradual strengthening of the currency, which looks set to post a fifth straight quarterly gain, its longest winning streak since 2013.

The yuan retained its No.5 ranking as a domestic and global payment currency in January this year, unmoved from a year ago, but its share among other currencies fell to 1.7 percent from 2.5 percent, according to industry tracker SWIFT.

A slew of measures put in place in the last 1-1/2 years to rein in capital flowing out of the country amid a slide in yuan value has taken off some its shine as a global payment currency.

But the yuan has now appreciated 3.4 percent against the dollar so far this year, with solid gains in recent sessions.

"For PBOC and other regulators, internationalization of the yuan is clearly one of the priorities now, and if this plan goes off smoothly then they can start thinking about replicating this model for other commodities purchases," said the person briefed on the matter.

It would not be easy, however, for China to shift the bulk of its commodity purchases to the yuan because of the currency's illiquidity in forex markets.

Nearly 90 percent of all transactions in the $5 trillion-a-day currency markets involve the dollar on one side of a trade, while only 4 percent use the yuan, as per a triennial forex survey by the Bank for International Settlements.

[Che -Guevara]

They are reshaping the world before our eyes. The question is what does this mean for the Horn and Somalia, in particular. The only company that showed any interest is CCECC which build Bosaso airport and was suppose to build roads and Galkayo in exchange for oil exploration licenses. The prospect of large investment will remain distance as long as the government in Mogadishu is just government in name.

[Old_Observer]

Once you have achieved greatness, its very easy to become great again, if you can survive the down times.

China is coming back into being a superpower for 4th time in last 3000 years.

Long way to go, not worth risking the house/hat on it for a decade or so.

Che,

Everything needs diversification, not running head on into this tag of war between different powers.

 This crypto currency shenanigan was supposed to protect the west and slow the East, but seems went the opposite and Anglo-American banks now have to join and destroy it, afraid the russians are way ahead on it.

[galbeedi]

Well, good for Canada for diversifying its trade around the world. Now we have to rely more 75% of our trade toward America. Unlike China , we have trade deficit with America  yet Trump is complaining. 

I think TRump already fired the first shot to weaken China. In order to pressure North Korea, he initiated  steel and Aluminum tariffs against  China , plus another $60 billion targeted Chinese tariffs. The Chinese understood the game and called KimJong to slow down and accept denuclearization.  The Chinese probably want to byt time during negotiations and hope that the impeachment of Trump in the spring of 2019 might close the whole chapter. 

This idea of using the Chinese Yuan for oil might destroy the dollar because the petrodollar is one of the ways to keep the Dollar as a reserve currency. If this is true, America will back down very quickly and stop the tariff against China or lose the dollar.

The great geopolitical games of the century have begun. I think the cold war is good for the developing countries. The American hegemony for the last twenty seven years was disaster for many countries in the middle east. WE need someone to balance the ruthless Americans in the world stage.

[Old_Observer]

On 3/30/2018 at 10:51 PM, galbeedi said:

Well, good for Canada for diversifying its trade around the world. Now we have to rely more 75% of our trade toward America. Unlike China , we have trade deficit with America  yet Trump is complaining. 

Trump is trying to consolidate the home front. Britain, Canada, Australia and New Zealand. That does not have to do much with deficit. What ever Trump does against Canada is collateral damage with Mexico, not directed on Canada.

He knows America can only rely on the British origins not only trade, but if it comes to Military.