In These New Times

A new paradigm for a post-imperial world

Posts Tagged ‘Chinese soft power’

The left on the horns of a Chinese dilemma

Posted by seumasach on October 4, 2015

Cailean Bochanan

4th October, 2015

I had the impression that Osborne’s recent and startling announcement of various deals with China, including the integration of our financial markets, no less, had been met by a stunned silence. But John McDonnell, the new Shadow Chancellor made this reference to them in his speech to the Labour Party Conference:

“I found the Conservatives’ rant against Jeremy’s proposal to bring rail back into public ownership ironic when George Osborne was touring China selling off to the Chinese state bank any British asset he could lay his hands on.”

“Ironic” is putting it mildly: The Chancellor has essentially admitted the failure of the Thatcher revolution and called in the state to rescue Britain. Only it’s not the British state, which no longer knows how to run anything unless it’s into the ground. You might have thought the left would be enjoying this “irony” a bit more than they appear to be. More, for example, than William Keegan writing in the Guardian who is dismayed that Osborne is “kowtowing to a communist Chinese government” and denounces his “cloying approach to a regime notorious for its abuse of human rights”. Keegan is something of a soft left neo-keynesian and , therefore, those criticisms could be largely expected. What about the hard left?
In an article in Socialist Worker Alex Callinicos gives us the line. He is, of course, scrupulously politically correct:

“The problem here isn’t that the companies are foreign-owned.”

Why shouldn’t foreign companies take the place over? Don’t they have rights too? The problem lies elsewhere. Callinicos points out that Chinese companies are “still subject to considerable state control” and that capital “is still not allowed to flow freely in and out of the country” However, Callinicos insinuates this is changing and China is embracing the free movement of capital.
So we have two major threads in this leftist discourse: on the one hand, dealing with China is wrong because China is communist and , on the other , it is wrong because China is no longer communist.
Callinicos goes on to denounce the fact that Chinese investment will be centered on the the City of London at the expense of the “national base of companies operating in Britain.” Callinicos’ thinking in all this is particularly fuzzy. Capital exported from China can still be and is controlled by the Chinese leadership for all their rhetoric about free markets. This is particularly true of the banks. As Dend Xaoping himself used to say:”Whatever you do keep control of the financial system!” In addition, I don’t believe the behavior of Chinese banks will merely replicate that of our own: riding high on bubbles and carry trades, manipulating rates and prices and laundering funds of dubious origin. If they did China certainly wouldn’t be in the position it is today. Anyway, as Osborne announced, there is already large scale Chinese investment in the real economy, largely in infrastructure and housing. There is every reason to believe that this would increase with funding available from Chinese banks operating in the City. The principles of Chinese finance contradict completely those the City of London. We are, therefore, looking at systemic change in the British financial system.
The British left desperately need to get to grips with this issue and quickly. This is because they have essentially abandoned their neo-Keynesian perspectives and accepted the need to balance budgets. But how can they reconcile this with their claim to be anti-austerity. Balanced budgets imply genocidal austerity unless there is some countervailing tendency. That tendency is incoming investment something which, seemingly unbeknown to the left, we have been beneficiaries of for decades. All that is happening,as Osborne’s policy shows, is that the form this investment takes is changing.
For a long time China was obliged to accept fiat pounds to cover its massive trade surplus with Britain and reinvest these pounds in UK government bonds. This was win/win for Britain and largely explains the surprising prosperity of post-Thatcherite Britain. The bankruptcy of the City and its subsequent bailout changed all that. China ceased to buy new UK government bonds (note that, in addition to its massive trade deficit, Britain no longer has a current account surplus not including trade) although they agreed not to divest from existing bonds, sinking sterling. Instead, they wanted to reinvest the surplus funds in the UK. So, on the one hand, we can no longer fund our deficit with Chinese bond purchases and on the other we have the prospect of hundreds of billions worth of inward investment. So balanced budgets and Osborne’s policy are two sides of the same coin. It would be truly reckless to embrace balanced budgets without wholeheartedly welcoming the incoming investment which will render the outcome far less austere. The left are caught in a dilemma which they must resolve if they don’t want to be outflanked by the Tories.

Posted in British economy | Tagged: , , , | Leave a Comment »

Osborne blazes the Deng Xiaoping trail

Posted by seumasach on September 28, 2015

Cailean Bochanan

28th September, 2015

Once again I have been proved to be wrong. I had interpreted the decentralization of the British state as the key development linked to inward, especially Chinese, investment and predicted that a Tory/SNP duopoly would dominate Britain in the coming years. But Osborne’s barnstorming performance in China, following on from Corbyn’s election as Labour leader, opens up completely different perspectives. His idea of integrating our financial markets with those of China suggests nothing less than a Chinese takeover of the City of London rather than piecemeal investment in Britain’s devolved regions/nations. This chimes in too with Corbyn’s plan for a National Development Bank which is tantamount to central planning, hitherto an absolute taboo. It is not difficult to see that the kind of infrastructure overhaul that Britain requires cannot be done merely through devolved assemblies and combined councils but must be Britain wide and centrally planned. It also makes much more sense for China to finance the whole thing through the banks which can issue credits for projects as required just as they would do in China. And so we go from the Panarin-type post-imperial scenario of fragmentation to one of systemic transformation of Britain as a whole.

Such a radical revolution is inconceivable without opposition. It is striking that as Osborne blazes the trail down China way, the knives are out for Cameron back home. Cameron has been until recently vociferous in his claim that Assad must go. He obviously had an intuition that someone must go: but it has turned out to be himself. He has called it a stab in the back but the blows are coming from all sides, decisively from Michael Ancram, et tu Ancram, who has raised the specter of Libya, hitherto the politically correct war, ominously drawing the parallel between Cameron and Libya and Blair and Iraq. This is deadly and given the reality of what was done to that once thriving country and its catastrophic consequences for Africa and Europe this just won’t go away. Of course, just about all of us were implicated, but all the more need for a scapegoat.

An excellent analysis of recent events in Australia by WSWS focuses on a conflict between the ardently pro-Chinese Malcolm Turnbull and “powerful sections of the Australian military and intelligence apparatus as well as the media and political establishment, not least within the Liberal-National Coalition”This presumably parallels tensions here and it looks like Cameron has found himself on the wrong side of this argument. In other words, the proposed financial merger with China will go ahead over the dead bodies of assorted dead-enders, security state and MIC interests and neocons. In these historic September days the Blairites and the Cameronites have commenced their exit from the British political scene.

Is this another Glorious Revolution? In 1688 certain Dutch financial interests were invited to take over Britain to establish a financial system orientated towards war and empire. This time we have invited a foreign power in the to rebuild an economy gutted by a failed hegemonic project. We have come a full circle since this marks decisively the end of empire and a new historical époque in which war will no longer be the normal state of affairs

Posted in British economy, Multipolar world | Tagged: , , , | Leave a Comment »

Foreign policy dilemmas over China confront new Australian PM

Posted by seumasach on September 20, 2015

“above all in our darkest hour, when our foes were literally on our doorstep, when our cities were under direct military attack—then at that tipping point in our history, China was our staunch, indefatigable ally.”

Malcolm Turnbull, Australia’s new PM affectionally known in China as “sweetie pie”, a homonym of Turnbull in Mandarin.

Interestingly Turnbull’s son is married to the daughter of a top Chinese Communist Party official and used to work for- needless to say- Goldman.



18th September, 2015

Newly-installed Australian Prime Minister Malcolm Turnbull has signalled the importance he attaches to economic relations with China by fast-tracking legislation on the China-Australia Free Trade Agreement.

Read more

Posted in Multipolar world | Tagged: , , , | Leave a Comment »

George Osborne: We should embrace China, not fear its rise

Posted by seumasach on September 20, 2015

“The Chinese Communist Party, the biggest communist party in the world and , in my opinion, one of the best.”

Father Ted Crilly

“Recent volatility should not and will not put us off. It should drive us forward, so that we integrate China’s new financial markets with our own so they are deeper and better able to absorb shocks.”

George Osborne

This must be the most neglected and most surprising aspect of this Tory government’s policy. Not only have they signed a Comprehensive Strategic Partnership with China, begun to issue UK government bonds in Yuan and broken ranks with the USA in becoming the first Western country to sign up for the AIIB: they are now also about to “integrate our financial markets” with those of China (completely mind-boggling!). Since the nature of China’s financial system, with its orientation to productive imvestment, is the complete opposite of our own this can only be seen as a totally revolutionary step: something which chimes in with Corbyn’s proposal for a National Investment Bank. But while Corbyn comes across as an unreconstructed Bennite, Osborne is more a born again follower of Deng Xaoping. The left are now taking control of both major parties in Britain! Watch out for a wave of interest in things Chinese and a politically-correct campaign against Chinaphobes.


19th September, 2015

The United Kingdom must strive to become China’s “best partner in the west” by forging ever closer economic ties that will bring benefits to all parts of the country, George Osborne has said.

Read more

Posted in British economy | Tagged: , , , | Leave a Comment »

Santiago de Chile: the yuan’s financial stronghold in Latin America

Posted by seumasach on September 15, 2015


15th August, 2015

Economic relations between China and Latin America are living increasing tensions. As a result of deflation (fall in prices) on a global scale, the South American region is suffering the consequences of concentrating the bulk of its exports to China on commodities. However, the opening of the first yuan financial center in Latin America, in Santiago de Chile, agreed during Prime Minister, Li Keqiang’s visit, is bound to attract a number of technological investments which could drive peripheral industrialization and decrease the dollar’s dominance in Southern Cone countries.


Posted in Multipolar world | Tagged: | Leave a Comment »

China’s `new normal’ growth model Is starting to get expensive

Posted by seumasach on September 12, 2015

“Airports, subways, bridges, railways and water projects are among the approved projects by authorities since May, according to Mizuho. Provincial efforts include Shandong’s announcement it will buy small and medium-sized residential properties and convert them into public rental homes.”

The above quote illustrates how different the Chinese system is. They may be propping up the stock market to keep their middle class afloat but the pattern is the extension of credit to develop the real economy following Deng Xiao Ping’s dictum that whatever you do never lose control of the credit system. If only we in the West could do the same thing, renewing our creaking infrastructure and turning empty homes into council houses. Perhaps Jeremy Corbyn has something of the like in mind?

See also: Let’s build a strategic partnership with China


10th September, 2015

When Premier Li Keqiang took the stage Thursday at the World Economic Forum’s “Summer Davos” meeting in Dalian, he told business leaders that although China faces challenges, growth is on track and fundamentals remain sound.

The upbeat message is all part of a ‘New Normal’ narrative from China’s leadership as the economy transitions from relying on heavy industry and debt to one driven by consumption and services. What Li didn’t mention was the spiraling bill associated with keeping the economy on course to hit the Communist Party’s growth target of about 7 percent for this year.

Read more

Posted in Multipolar world | Tagged: | Leave a Comment »

The Petroyuan cometh

Posted by seumasach on September 12, 2015

Launch Of Renminbi-Denominated Oil Futures Contract Imminent

Zero Hedge

11th September, 2015

Whenever one talks about the death of the petrodollar, the unspoken question lurking just beneath the surface is this: is the rise of the petroyuan just around the corner?

Read more

Posted in Currency Wars, Multipolar world | Tagged: , , | Leave a Comment »

Chinese build factories in U.S., creating jobs and tensions

Posted by seumasach on September 7, 2015

Japan Times

6th September, 2015

When Chen Mingxu was a boy, U.S. businessmen poured into rural China, welcomed with tax breaks and steamed turtle. Thirty years later, in a kind of reverse migration, Chen finds himself in southwestern Alabama smiling wanly over bacon-wrapped meatloaf and banana pudding.

Read more

Posted in Multipolar world | Tagged: , | Leave a Comment »

Why the ‘One Belt One Road’ Initiative matters for the EU

Posted by seumasach on July 28, 2015

The Diplomat

9th April, 2015

Since their announcement in 2013 during Chinese President Xi Jinping’s visit to Kazakhstan and Indonesia, the New Silk Road Economic Belt and 21st Century Maritime Silk Road (termed together the “One Belt One Road” initiative) have been extensively discussed among China’s academia and policymaking circles. Chinese Foreign Minister Wang Yi, at a press conference accompanying China’s recent parliamentary session, called the initiative a “central focus” of China’s foreign policy in the year 2015. As a key part of the narrative of the new Chinese leadership, the One Belt One Road (OBOR) initiative has not only become one of the top priorities of the Chinese government, it has also attracted considerable interest from abroad, and particularly from neighboring Asian countries. A case in point is that more than 30 countries have joined the Asian Infrastructure Investment Bank (AIIB).

Posted in Battle for Europe | Tagged: , , | Leave a Comment »

What Chinese premier pledges when EU at a crossroad

Posted by seumasach on July 2, 2015

People’s Daily

2nd July, 2015

China promised the European Union on Monday it would hold on to its euro zone debt, saying the Greek debt crisis was Beijing’s problem headache too.

Chinese Premier Li Keqiang made his remarks following a stressful weekend for Greeceand the eurozone, in which Greece broke off talks with its creditors, announced areferendum, and introduced capital controls.

Read more

Posted in Battle for Europe | Tagged: | Leave a Comment »

China to invest billions in EU investment fund

Posted by seumasach on June 24, 2015

Investment fund, Greece in focus as Chinese Premier readies for EU trip


23rd June, 2015

Chinese Premier Li Keqiang will attend the 17th China-EU leaders’ meeting later this month in Brussels, the first since the change of EU leadership.

Li will, during the summit, announce plans to inject billions of dollars into a much-touted EU investment fund. The new European Fund for Strategic Investment (EFSI) plans to invest 315 billion euros into the EU’s ailing economy.

Read more

Posted in Battle for Europe | Tagged: | Leave a Comment »


Get every new post delivered to your Inbox.

Join 1,017 other followers

%d bloggers like this: