EU and Japan’s infrastructure agreement on infrastructure connections to Asia in fact supplements China’s Belt and Road initiative (BRI). However, as its strategy differs from China’s in stressing the returns to investment in their projects, they would not make their projects parts of China’s BRI.
China, however, is satisfied if it is able to get back the principal of its loans to BRI projects, which is quite different from EU and Japan’s ones. As a result, EU and Japan are simply unable to compete with China in investment in infrastructure connections.
However, both China’s and EU’s projects facilitate connections in Asia and each wants to use the connections built by the other. In order to use China’s, the EU could certainly insist its push on infrastructure connections to Asia is not intended as a rival to Belt and Road.
However, China can use the infrastructures built by EU and Japan just as EU and Abe can use China’s
Western media, however, are fond of demonizing China so that they have been demonizing China’s BRI as China’s efforts to enhance its geopolitical influence. Therefore, in spite of EU insisting its connections being no rival to China’s, Western media have beein trying hard to pit EU and Japan against China. Japan Today’s article “EU, Japan sign agreement to bypass China’s ‘new Silk Road’” proves precisely that. In order to make readers believe EU and Japan’s opposition to BRI, it quotes two unidentified EU senior officials’ words.
However, its inability to give the identities of the officials prove those officials’ words are not EU’s official position.
In fact, the report reflects EU and Japan’s keen interest in infrastructure connections in pointing out that according to China China’s “trade with Belt and Road countries has exceeded $5 trillion”.
EU and Japan also want to build infrastructure connection to facilitate increase in their shares in the market of Belt and Road countries.
Comment by Chan Kai Yee on Japan Today’s report, full text of which can be viewed at https://japantoday.com/category/politics/eu-and-japan-ink-plan-to-bypass-china%27s-new-silk-road
Popularresistance.org’s article “U.S. imperialism views the One Belt One Road as an existential threat to the domination and monopoly of the dollar” points out the reason of US attacks at China’s BRI initiatives though I do not agree with its orthodox socialist views.
The article says,“U.S. imperialism views the One Belt One Road as an existential threat to the domination and monopoly of the dollar. China is becoming deeply connected to Asia, Europe, and Africa and this spells doom for U.S. imperial hegemony.”
The article has the vision to point out the threat of BRI to the dominance of US dollars.
According to the article BRI has promoted economic growth of participating countries so that trade between China and BRI countries has grown fast to a quarther of China’s entire trade. It says, “The more that China dominates trade and investment worldwide, the less likely that these nations will continue to use the U.S. dollar to conduct its economic affairs.” No wonder the US has been attacking BRI so fiercely.
The article’s orthodox socialist view regards EU as US ally in attacking BRI. No, EU has been fighting against dominance of US dollar for a long time as proved by its development of a unified European currency the Euro.
Moreover, EU has becoming interest in BRI since Chinese President Xi Jinping’s visit to Italy and France. It is certainly interested in the expansion of the market in developing countries cause by BRI.
So is Japan and South Korea as proved by their desire for the establishment of Regional Comprehensive Economic Partnership (RCEP).
I have to point out that China pursues harmony and cooperation instead of conflicts as advocated by the article. It is the US that is used to create conflicts and resort to force when it is able to. US trade war with China is a typical example. China is forced to fight back, but it is still sincere in seeking win-win cooperation with the US. However, the US is fond of conflicts. It always refuses win-win cooperation in the world.
Comment by Chan Kai Yee on popularresistance.org’s article, full text of which can be viewed at https://popularresistance.org/u-s-imperial-decline-and-the-belt-and-road-initiative-the-most-important-global-struggle-of-the-century/
Stratfor says in its article “Why Europe Won’t Shut the Door on Huawei” that though due to US warning on security in using Huawei, EU will only pressure member states to “update their security requirements for 5G partners to mitigate the potential risks”. It will let its members decide whether to use Huawei.
However, the article concludes: “(M)any countries that already use Huawei’s equipment for 4G may ultimately decide that the easiest, cheapest and fastest route is to continue using the Chinese company for their 5G networks. But even then, they’ll probably still introduce some restrictions, or at least additional controls, on the company — both to appease the United States, and to address domestic concerns about the security implications of such a crucial technology.”
Comment by Chan Kai Yee on Stratfor’s article, full text of which can be viewed at https://worldview.stratfor.com/article/why-europe-wont-shut-door-huawei
By Clint Siegner – June 3, 2019
US leaders are demanding the rest of the world recognize economic sanctions and stop buying Iranian oil. The U.K., Germany, France, Russia, China, and India are among the nations who don’t fully support the sanctions and would rather not pay higher prices for oil elsewhere.
American officials more and more often resort to delivering ultimatums, both to adversaries and allies alike. Nations that do not follow orders stand to lose access to the US financial system and could face trade sanctions of their own. That is a serious threat.
The huge majority of international trading is underpinned by US. banks and the dollar. Other currencies and banking systems cannot offer the same level of liquidity and convenience.
Nevertheless, sovereign nations don’t like having trade policy dictated to them. The US is wielding its fiat dollar like a weapon and, predictably, countries around the world are busy developing alternatives.
US Alarmed by European Non-Dollar Payment System
The Europeans are launching a system call Instex. It works by coordinating local importers with local exporters on each side of the border.
For example, a German company can export cars to Iran. The Iranian car importer sells the cars locally for rials, then makes payment in rials to an Iranian exporter of oil headed for Germany. The German oil importer receives the oil and makes payment in euros to the local car exporter – closing the loop.
The system was designed specifically to end-run US sanctions. Since rials never leave Iran and euros never leave Germany, US banks and dollars are never involved. American officials cannot claim restrictions have been violated.
But that hasn’t stopped US financial powers from trying to impose their will.
Sigal Mendelker, Undersecretary for Terrorism and Financial Intelligence at the US Treasury Department, sent a sternly worded letter to the EU on May 7th…
Anyone, from business owners to government officials and their staff, who participate in Instex could be subject to US sanctions.
The Treasury Department issued this statement: “entities that transact in trade with the Iranian regime through any means may expose themselves to considerable sanctions risk, and Treasury intends to aggressively enforce our authorities.”
The US posture is that Europeans aren’t allowed to use dollars for trade with Iran. And the US is now prepared to punish countries for trading without dollars.
It remains to be seen whether or not Europeans will buckle to US money masters, but we rather doubt it. Rising trade tensions with Europe were back in the headlines last week. President Trump’s decision to withdraw from the nuclear treaty with Iran and reimpose sanctions did not get European support.
The EU may be ready to call America’s bluff.
Malaysia Proposes Gold-Backed Currency
Nations will be increasingly leery of conducting business using America’s Federal Reserve Note dollar system.
Last week, the Malaysian Prime Minister, Mahathir Mohamad, proposed a new common trading currency for use in East Asia that is backed by gold. Backing with gold is a way of inspiring confidence.
Russia and China began some trading in yuan and rubles a few years back.
Both nations have been building gold reserves to counteract US dollar hegemony in international commerce. Many other nations now publicly share the same sentiment.
The US is increasingly alone when it comes to foreign and trade policy. Assuming disobedient nations can be brought to heel with threats is dangerous.
The dollar’s status as world reserve currency is a privilege, not a right. If there aren’t already some alternatives that can supplant the dollar in trade, there soon will be.
What happens when threats of financial sanctions don’t work? Will Washington be arrogant enough to start threatening military action to enforce the dollar’s hegemony in global trade?
We may get an answer to those questions soon. Nations seem less and less intimidated by threats from leaders here who may be overplaying their hand.
Source: Gold-Eagle “New US Sanctions Spark Blowback Against Federal Reserve Note Dollar System”
Note: This is Gold-Eagle’s article I post here for readers’ information. It does not mean that I agree or disagree with the article’s views.
In the trade war between the US and China, China has been making great efforts to form a united front with EU and Japan. Chinese President Xi Jinping’s recent visits to Italy and France were very successful. At the same time, he will have a summit meeting with Japanese Prime Minister Shinzo Abe, which, Abe hopes to be very successful,
So does Xi for including Japan in the united front he has formed with EU through the above-mentioned visits.
In its report “Abe looking to accelerate improvements in Japan-China ties after Xi attends G20 summit” on May 17, Japan Times quotes Abe as saying to China’s top diplomat Yang Jiechi, “With President Xi’s visit, I want to further develop bilateral ties that have returned to a normal track and jointly create a new era for Japan and China,”
Yang responded by saying he sees “new momentum” for bilateral relations.
Xi is afraid that EU and Japan as US allies may join US trade war to attack China; therefore, he is anxious to make both EU and Japan neutral in the trade war between the US and China. He is happy on his success in EU and will make great efforts to make Japan neutral too when he holds a summit with Abe in late June.
However, the situation has turned out even better for him. Reuters says in its report “Trump declares some auto imports pose national security threat” on Friday May 17, “U.S. President Donald Trump on Friday declared that some imported vehicles and parts pose a national security threat but delayed a decision for as long as six months on whether to impose tariffs to allow for more time for trade talks with the European Union and Japan.”
Trump will extend his trade war with China to US allies EU and Japan. He will thus turn US allies into China’s allies in his trade war.
Comment by Chan Kai Yee on Japan Times and Reuters’ reports, full text of which can respectively be viewed at https://www.japantimes.co.jp/news/2019/05/17/national/politics-diplomacy/abe-looking-japan-china-ties-warm-faster-xi-attends-g20-summit/#.XODApuQUnVA and https://uk.reuters.com/article/us-autos-tariffs-usa/trump-declares-some-auto-imports-pose-national-security-threat-idUKKCN1SN1FY.
China has been conducting BRI win-win cooperation with over 100 nations and international organizations including quite a few European countries. Chinese president Xi Jinping’s recent Europe tour and his speech at 2nd Belt and Road Forum that promises further opening to the outside world attract EU. EU certainly want to be benefited by the connections and other infrastructures such as power plants built by BRI in developing countries and the expansion of the market there brought about by the development of infrastructure there. It now wants to join China’s BRI as a group instead of separately by specific members one by one.
That was what German Economy Minister Peter Altmaier said on April 26 according to Reuters’ report “Europe wants to deal with China as a group: German minister” the same day.
It is Xi’s success in forming a United Front with EU to counter the US as EU is also under US trade war threat.
Now, according to Reuters’ report “Trump pressed Japan’s Abe to build more vehicles in the U.S”, the US is pressuring Japan too. Japan has already been making efforts to improve ties with China though it does not join China’s united front against the US. However, US demand for considerable concessions from Japan may well push Japan into China’s united front.
China is winning over US allies with win-win cooperation while the US is pushing its allies away to China with zero-sum demands. The two countries are now joining efforts to enable China to form a united front against the US.
Comment by Chan Kai Yee on Reuters’ reports, full text of which can be viewed at https://www.reuters.com/article/us-china-silkroad-germany/europe-wants-to-deal-with-china-as-a-group-german-minister-idUSKCN1S20R3 and https://mobile.reuters.com/article/amp/idUSKCN1S30KO.
Tom Daly April 26, 2019
BEIJING (Reuters) – Major European Union countries want to deal with China as a group rather than sign bilateral agreements as individual states, German Economy Minister Peter Altmaier said on Friday, attending a summit in Beijing on China’s Belt and Road plan.
European countries have generally signaled their willingness to participate in China’s program to re-create the old Silk Road joining China with Asia and Europe.
But key states like France and Germany have said China must in turn improve access and fair competition for foreign firms.
Italy in March became the first major Western government to back China’s initiative, even as some EU leaders cautioned Rome against rushing into the arms of Beijing.
Nonetheless, Altmaier said Germany, France, Spain and the United Kingdom had shown at the Belt and Road Forum in Beijing on Friday that the EU was “in its great majority” united in its belief that “we can only implement our positions together.”
“In the big EU states we have agreed that we don’t want to sign any bilateral memorandums but together make necessary arrangements between the greater European Economic Area and the economic area of Greater China,” Altmaier said when asked if he could see Germany signing a similar bilateral agreement to Italy.
A spokesman for Altmaier’s office later said he was talking about general arrangements and not specifically the Belt and Road.
The minister said he was encouraged by Chinese President Xi Jinping’s pledge to pursue free trade, multilateralism and sustainability as part of Belt and Road.
“We will take this promise seriously” and make suggestions on how to achieve these goals in both Asia and Europe, he said.
China is a partner and a competitor at the same time and the EU must define its interests, Altmaier said.
“And for that we need an industry strategy. For that we need our own connectivity strategy,” he added.
Reporting by Tom Daly; writing by Beijing Monitoring Desk; editing by Darren Schuettler
Source: Reuters “Europe wants to deal with China as a group: German minister”
Note: This is Reuters’ report I post here for readers’ information. It does not mean that I agree or disagree with the report’ views.