#Chinese economics

[jovialbasementbouquetblr]

2023: The Past, Present and Future of Chinese Economics 

This article by Peking University Professor Yao Yang, calling for a greater focus on understanding Chinese domestic economic issues rather than theoretical issues reminds just slightly of the July 2023 article by Su Changhe, Dean of the School of International Relations and Public Affairs, Fudan University “China’s Autonomous Political Science Paradigm and Sharing it with the…

[wezgworld]

Chatham House: How Effective Are The United States' Sanctions? 19.06.2023

Chatham House is the Royal Institute ofInternational Affairs. It is based in St. James’ Square, Mayfair, London, a short walk from Piccadilly Circus and Leicester Square. I have been a member of Chatham House for several months but with me being based in Wales all of my interactions thus far have been on Zoom. I had to spend a few days in London for Infosecurity Europe conference for my…

[truth4ourfreedom]

OPERATION HAMMER: THE END MAY BE NEAR FOR THE PEDOPHILES AND THE CORRUPT LEFT!!!!

WikiLeaks founder Julian Assange is publishing information that we freedom loving Americans must repost and share! Here is one of his latest:

------------------------------------------

Operation Hammer

In a world shadowed by secrecy, where power struggles and hidden agendas shape our reality, the storm is finally upon us. Operation Hammer, an unprecedented global initiative, has brought to light the underbelly of corruption, foreign interference, and crimes against humanity. With 450,000 sealed indictments leading to thousands of JAG tribunals, the stage is set for a seismic shift in the fight for justice and transparency.

The critical executive orders—13818, 13848, and 13959—are the backbone of this monumental operation, targeting human rights violators, foreign election meddling, and Chinese military companies. This is not just a battle; it is a war for the soul of humanity.

The Unfolding of Operation Hammer. Operation Hammer is a codename that has sent shockwaves through the corridors of power worldwide. This initiative, spearheaded by the White Hats military, is a coordinated effort to dismantle deeply entrenched networks of corruption and criminality. The sheer scale of this operation is staggering: 450,000 sealed indictments, thousands of JAG (Judge Advocate General) tribunals, and a litany of trials, sentencings, and, in some cases, executions. This is not merely a legal battle; it is a global reckoning.

The Genesis of Operation Hammer. The genesis of Operation Hammer can be traced back to the alarming rise of crimes against humanity and foreign election interference. As global citizens, we have witnessed the erosion of democratic principles, the manipulation of electoral processes, and the gross violation of human rights. The executive orders 13818, 13848, and 13959 are not just legal instruments; they are the swords of justice designed to cut through the web of deceit and bring the perpetrators to account.

Executive Order 13818: Targeting Human Rights Abusers Executive Order 13818, signed on December 20, 2017, is a powerful weapon in the fight against human rights abuses. This order enables the U.S. government to impose sanctions on individuals and entities involved in serious human rights abuses and corruption. The global reach of this order means that no tyrant or corrupt official is beyond the grasp of justice.

Executive Order 13848: Combating Foreign Election Interference Foreign election interference is a dagger aimed at the heart of democracy. Executive Order 13848, signed on September 12, 2018, addresses this critical threat. This order declares a national emergency to deal with the threat of foreign interference in U.S. elections. It allows for the imposition of sanctions on individuals and entities that have engaged in or assisted foreign interference in elections, ensuring the sanctity of the democratic process.

Executive Order 13959: Restricting Chinese Military Companies The global influence of Chinese military companies has raised alarms about national security and economic stability. Executive Order 13959, signed on November 12, 2020, seeks to address this issue by prohibiting U.S. investments in Chinese companies that support the Chinese military. This order is a decisive step in curbing the expansion of China’s military-industrial complex and protecting American interests.

The Mechanics of Operation Hammer. The execution of Operation Hammer is a meticulous and coordinated effort involving various branches of the military and intelligence agencies. The sealed indictments are a testament to the thorough investigations and the gathering of irrefutable evidence against the accused. These indictments cover a wide range of crimes, including human trafficking, corruption, election fraud, and more.

The JAG tribunals are at the heart of this operation. These military courts are tasked with ensuring that justice is served swiftly and fairly. The trials are conducted with the utmost transparency, providing the world with a front-row seat to the administration of justice. The sentences handed down by these tribunals range from imprisonment to execution, depending on the severity of the crimes committed.

Join and share my channel immediately: https://t.me/JulianAssangeWiki

PLEASE REBLOG AND SHARE!! MAY GOD BLESS OPERATION HAMMER!!

[welcometoteyvat]

as a chinese person yall need to stop blaming the ccp for everything (read: hoyo is capable of making colorist design decisions and not everything is a result of censorship pls)

[chiropteracupola]

william laurence forever in a state of numb astonishment at the fact that other people are experiencing success in life...

[elbiotipo]

this is more of a musing rather than a take, but this whole US vs. TikTok thing is rather revealing to me as of why all the major social media and tech companies are US based. Because if competitors arise elsewhere, they do their best to choke them.

It's interesting that in a supposed global and decentralized internet, we are all beholden to US companies and laws.

[dadsinsuits]

Paul Chan Mo-po

[zvaigzdelasas]

Progressive Liberalism is a very nice idea but is simply missing the huevos to call for the constitutionally uncontested single-party rule that would be necessary to actually implement it's advertised goals

[insightfultake]

India and China: The Economic Tug of War

China and India are two titans poised on the great field of the world economy. Being the two most populated countries in the world, they both have a different story of development, invention, and promise. Many of us are wondering with an eye toward the future: how long until India catches up to its neighbour if it continues on its current trajectory of economy?

China's GDP, estimated to be valued at $17 trillion as of 2023, is far larger than India's remarkable $3.5 trillion. China, with its enormous labor force and infrastructure, has been the unchallenged leader in manufacturing, establishing itself as the "world's factory." Contrarily, India has made a name for itself in the services industry by demonstrating its expertise in software and IT services at the forefront of the development and growth. Nevertheless, things are improving. India has been increasing its GDP faster than China, often by a significant margin. While China is experiencing a slowdown in its economy due to an aging population and an imminent debt crisis, India is benefiting from a demographic dividend. Its youthful population has a unique opportunity for economic growth, accounting for over 65% of the total....expand more to read.

[head-post]

Turkey, China, India have fastest 10-year climbing economies, WIPO says

Switzerland, Sweden, the US, Singapore and the UK are the world’s most innovative economies, while China, Turkey, India, Vietnam and the Philippines are the fastest “decadal climbers,” the World Intellectual Property Organisation (WIPO) said on Thursday.

Daren Tang, the group’s head, told reporters at an online press conference that its Global Innovation Index 2024 “shows a softening in venture capital activity, R&D financing and other investment indicators.” Tang said:

“In 2023, we saw a decline in R&D expenditures, a reduction in scientific publications, and a scaling back of venture capital investments to pre-pandemic levels. However, technological progress remained strong in 2023, particularly in health-related fields like genome sequencing, as well as in computing power and electric batteries.”

On Turkey, the report said it “continues to make progress, climbing two places” in the innovation index. It also added:

“It also takes the 3rd position among the upper middle-income group. Türkiye stands out in various areas: it ranks 1st globally in trademarks and industrial designs, and 9th in intangible asset intensity – all showing an improvement this year.”

The 17th edition of the index, according to WIPO, is a global benchmarking resource that reflects global innovation trends and guides governments, business leaders and other organisations in unleashing human ingenuity to improve lives and tackle challenges such as climate change.

According to the organisation, the 2024 index shows a significant softening of leading indicators of future innovation activity, including a pullback from the explosive growth in innovation investment between 2020 and 2022.

There is a rise in interest rates, a fall in venture capital funding of around 40 per cent in 2023, lower growth in research and development spending, and a fall in international patent applications and scientific publications.

Read more HERE

[gudaho]

Incredibly annoying that twitter and tumblr "leftists" are trying to paint China as "anti-colonial" just because US propaganda is displaying the PRC as enemy no. 1

The US political economy hates China because it is competition. Any moral argument is grandstanding to coverup the fact that the US feels threatened. This doesnt mean that China is the ethical alternative to the US. China continues to use child labor, african slave labor, fund overseas war, colonize, and suppress their ethnic minorities JUST LIKE the states.

The enemy of your enemy is not always your friend.

[centrally-unplanned]

Related to the VOR discussion of Deng Xiaoping, a new paper came out (h/t Pseudoerasmus) looking at early gains in agricultural output in post-Mao China. Specifically, it addresses the fact that Chinese output statistics are pretty spotty by using historical satellite data to measure crop yields in differing provinces after the 1978 end of collectivized farming, which rolled out at different times in different provinces. And it found no results! You have broad-based increases in output, sure, but the specific reform law doesn't seem to have much impact in the early years

That is different from no impact ever, of course - and as they note the 1979 price liberalization probably did have some impact from the data. But, while just a little piece, it aligns with a broader trend in research IMO of China's growth miracle being more mysterious then the Dengist narrative often puts out.

[arugulaeater]

You guys do know that those posts that go like "I just found out about this awesome lamp that unfolds into a dragon! Check this out!" or "I wish I had this adorable cat-shaped beanbag... OMG I FOUND THE LINK!!" are ads by dropshippers, right? You do know that's not a regular user organically sharing a neat find but a seller trying to promote their product, right? You do know they're mass-produced Chinese products, likely bought and resold at a markup from Taobao shops, with inconsistent quality and opaque manufacturing practices, and not some small business artist's craft? Right? If you just don't care, that's another thing, but sometimes I see people acting like they genuinely believe the "hey guys I just found cool thing :)" veneer on those posts. Just want you to know what you're getting yourself into.

[kemetic-dreams]

The writer, O. Dave Allen is a community activist and political commentator

MONTEGO BAY, Jamaica, January 25, 2022 - We the Jamaican people are at risk of becoming slaves again. We are a country with   95% African people. It’s a fact that the majority of the African population is at the bottom of the economic pyramid while the 5% at the apex are the minorities who control the economy. We all know that the economy is the superstructure that determines everything else, we also know that those who control the economy rules the country. It is time for majority rule.

When the Chinese were commandeering the local retail and distributive business, it was of little concern to the traditional moneyed class.  Their long held sense of security is now threatened by the fact that the Chinese have cornered the retail business and have accumulated untold millions, buttressed by unaccountable billions of dollars of dubious origin with an insatiable and avaricious appetite of the tiger spreading their tentacles devouring  all that is in its path.

There is an insidious war that is being waged by the Chinese business interest that will undermine all and every local Jamaican business. We are not here dealing with the compliant Chinese shopkeepers of yesteryears; but a contrived network, led by the Chinese State to dominate and control the Jamaica economy with Montego Bay as the entry point, bolstered by the powerful Association of Chinese Enterprises in Jamaica (ACEJ), a non-profit organization. 

This mega conglomerate is akin to the Dutch East India Company (The Dutch East India Company historically a military-political-economic complex rather than a pure trading or shipping company).

Can you imagine the consequences when the Chinese would have established their own bank and  formal financial intermediaries?

Recently China Harbour Engineering Company (CHEC), was awarded the Government of Jamaica funded US$274.5-million Montego Bay Perimeter Road Project, which includes the rehabilitation of Barnett Street and West Green Avenue, as well as the construction of the Long Hill bypass and a drainage study of the Montego Bay bypass area is also to be conducted under the project.

This catalysis project strengthens the presence of the Chinese in Jamaica and serves as beachhead in Montego Bay to supplant the hegemony of the United States of America in Jamaica and make a mockery of the Monroe Doctrine as they pursue endless war at distant shores.

The Montego Bay perimeter road is funded by the Jamaican taxpayers and as such there is no justifiable reason why this contract should have been awarded to any overseas contractors.

The government has a duty not only to provide physical infrastructure but also to effectively use our taxpayer’s money to build our social capital and to strengthen the capacity of our human resource. 

We have developers, engineers, contractors and consultants with more than adequate competencies to develop the Montego Bay Development Road.  Our local professionals have demonstrated the capacity to execute and manage major projects as exemplified by the work carried out by Jamaican professionals on the Northern Coastal Highway. 

In the recent Andrew Holness cabinet reshuffle the Hon. Homer Davis was appointed to head the Office of the Prime Minister West. This is no accident, but a strategic move to ensure the orderly integration of the Chinese into western Jamaica.

Minister Davis and Former Mayor of the City of Montego Bay enjoys more than cordial relationship with the Montego Bay Chinese community with numerous visits to China during his tenure in office.  With the support of the Chinese Dr. Horace Chang remains the most powerful member of the Holness’ Cabinet.  

While Bishop O’Neil Russell, and others may be disappointed in the reappointment of Dr. Horace Chang as Minister of National Security, they missed the bigger picture that Chang has consolidated his power base with the appointment of his Deputy General Secretary and his protégé Homer Davis as head of OPM West and the ostensible Emissary of the Chinese community, the new power base in Montego Bay.

To those who sing praises of Homer’s appointment, are living in a fool’s paradise. It is not about you, it is about the Chinese work permits and citizenship, building approvals, the clearance of their goods at the wharf and importantly their security. Homer Davis as a conduit who will ensure that the JLP is fully funded to win the next elections.

There will be a seismic shift in business activities back to the old city of Montego Bay. This regeneration started with Harmony Park, the building out of the downtown Montego Bay Waterfront District and soon the regentrification of the urban centre. 

Finally, Who gave the Chinese the permit to dump the wetland and mangrove swamp at Reading to construct the multi story, multi family, high end, Chinese enclave. According to the Ministry of Economic Growth and Job Creation the “project will open new areas to the south of Montego Bay for development and expansion, giving access to lands for housing development.”

But will our local developers; Gore, Moe, Azan, WICHON be beneficiaries of the development opportunities.

odamaxef@yahoo.com

China's Silk Road to Montego Bay, “Turn Them Back” ! says O Dave Allen (wiredja.com)

[theculturedmarxist]

In their February paper, “US Dollar Primacy in an Age of Economic Warfare,” presented at the West Point Symposium on “Order, Counter-Order, Disorder” Michael Kao and Michael St. Pierre argue for using a stronger US dollar as geopolitical leverage:

Not only are the effects of interest rates hikes magnified in other countries due to a myriad of structural and idiosyncratic economic fragilities previously discussed, the confluence of wide USD adoption with cyclical USD strength … make the USD a potent geopolitical lever masquerading as a domestic fight against inflation. National Power lends the USD dominance in adoption, while an opportunistic fight against inflation lends the USD cyclical strength for geopolitical leverage.

The US and US-led institutions are already trying to sideline China in countries struggling to make debt payments. And these efforts are likely to continue as interest rates rise and more countries in the Global South are unable to repay loans. A recent UNDP paper stated that 52 developing countries are suffering from severe debt problems.

China is the world’s largest bilateral creditor, and this is especially true for countries that are part of Beijing’s Belt and Road Initiative and/or for countries that possess strategically important natural resources. Washington estimates that Chinese lending ranges from $350 billion to a trillion dollars.

In recent years, western officials and media have ratcheted up criticism of China’s lending practices, claiming Beijing is putting its boot on the neck of countries, holding back their development, and is seizing assets offered as collateral.

Deborah Bräutigam, the Director of the China Africa Research Initiative at the Paul H. Nitze School of Advanced International Studies, has written that this is “ a lie, and a powerful one.” She wrote, “our research shows that Chinese banks are willing to restructure the terms of existing loans and have never actually seized an asset from any country.”

Even researchers at Chatham House admit there’s nothing nefarious about China’s lending, explaining that it has instead created a debt trap for China. That is becoming more evident as nations are unable to repay, largely due to the economic fallout from the pandemic, the Nato proxy war against Russia in Ukraine, inflation, and rising interest rates.

These confluence of events hitting developing countries are entangling China  in multilateral talks that include US-backed institutions like the IMF. Beijing’s preference has always been to try and tackle debt repayment issues at a bilateral level, typically by extending maturities rather than accepting write-downs on loans.

But US Treasury Secretary Janet Yellen and company continue to parrot the talking point that China’s lending is harming countries, and in countries unable to repay their international debts, the West and China are increasingly at odds.

Back in 2020, the G-20 countries created the Common Framework for Debt Treatments to provide relief to indebted countries, which included “fair burden sharing” among all creditors. Beijing’s reluctance to agree to such burden sharing is illustrated by the case of Zambia.

Zambia became the first African country to default on some of its dollar-denominated bonds during the Covid-19 pandemic when it failed to make a $42.5 million bond payment in November 2020.

More than a third of the country’s $17 billion in debt is owed to Chinese lenders. Zambia worked out a deal with the IMF for a $1.3 billion bailout package but can’t access the relief until its underlying debt is restructured – including Chinese debts. But the IMF prescription for Zambia is a blow to Beijing. Here are some details of the arrangement from The Diplomat:

Zambia will shift its spending priorities from investment in public infrastructure – typically financed by Chinese stakeholders – to recurrent expenditures. Specifically, Zambia has announced it will totally cancel 12 planned projects, half of which were due to be financed by China EXIM Bank, alongside one by ICBC for a university and another by Jiangxi Corporation for a dual highway from the capital. The government has also canceled 20 undistributed loan balances – some of which were for the new projects but others for existing projects. While such cancellations are not unusual on Zambia’s part, Chinese partners account for the main bulk of these loans…

While some of these cancellations may have been initiated by Chinese lenders themselves, especially those in arrears, Zambia may not have needed to cancel so many projects. Since 2000, China has canceled more of Zambia’s bilateral debt than any sovereign creditor, standing at $259 million to date.

Nevertheless, the IMF team justified the shift because they – and presumably Zambia’s government – believe that spending on public infrastructure in Zambia has not returned sufficient economic growth or fiscal revenues. However, no evidence is presented for this in the IMF’s report.

Zambia will also cut fuel and agriculture subsidies. So instead of infrastructure investment and social spending, the country gets austerity. The IMF deal also relegates China to the backseat, as it allows for 62 concessional loan projects to continue, only two of which will involve China. The vast majority of the projects will be administered by multilateral institutions and involve recurrent expenditure rather than infrastructure-focused projects.

Despite all the evidence to the contrary, Yellen on a trip to Zambia in February warned that Chinese lending “can leave countries with a legacy of debt, diverted resources, and environmental destruction” and called out Beijing for being a “barrier” to ending the major copper producer’s debt crisis and noted that it had “taken far too long already to resolve.”

The US effort to sideline China in Zambia comes at the same time that Washington is trying to tighten control over resources in the region. Note that back in December the US signed deals with the Democratic Republic of Congo and Zambia (the world’s sixth-largest copper producer and second-largest cobalt producer in Africa) that will see the US support the two countries in developing an electric vehicle value chain.

Beijing is insisting that multilateral lenders also accept haircuts on loans rather than just China being expected to do so. This is a position that most debtor nations agree with. On the other side, the IMF and its partners are worried that its bailout money would merely go to Chinese creditors – many of which are state banks that are increasingly troubled by bad debts.

Gong Chen, founder of Beijing-based think tank Anbound, says that if countries are unwilling or unable to repay their debts to China, it would be devastating:

Widespread debt evasion and avoidance would have a significant impact on China’s financial stability,” he said, “and we are concerned that some countries may try to avoid paying back their debt by utilizing geopolitics and the ideological competition between East and West.

Yellen and company tried to apply more pressure on Beijing at the recent G20 meeting of finance officials in India, but that fell flat on its face much like the West’s efforts to hijack the meeting and turn it into a roundtable on Russian sanctions.

Meanwhile, Zambia has halted work on several Chinese-funded infrastructure projects, including the Lusaka-Ndola road, and canceled undisbursed loans in line with the IMF prescription for its debt problem.

Chinese companies are now attempting to work around these roadblocks by shifting more toward public-private partnerships. For example, a Chinese consortium is now planning to build a $650 million toll road from the Zambian capital to the mineral-rich Copperbelt province and the border with the Democratic Republic of the Congo.

The situation in Zambia does not bode well for other nations needing debt relief, as the delays while the West and China clash mean more pressure on government finances, companies and populations.

And if the West’s primary goal in offering debt relief is to sideline Beijing, as it appeared in Zambia, then that will mean a drastic scaling back of infrastructure projects replaced by austerity. From Sovdebt Oddities:

More broadly, as noted by Mark Sobel, the current international financial architecture is ill-equiped to deal with a major recalcitrant creditor benefiting from outsized (geo)political leverage. While it remains illusional to insulate sovereign restructurings from geopolitical considerations, there is a risk that they would turn into a game of chicken between China on the one hand and the IMF and Paris Club on the other hand. The problem being that if none of the players yields, it will just mean more economic and social hardship for the debtor country stuck in the middle.

Sure enough, the same situation is playing out in two nations that are key points on China’s Belt and Road project: Pakistan and Sri Lanka.

Here is Islamabad’s debt situation, courtesy of Pakistani economist Murtaza Syed at The International News:

For each of the next five years, Pakistan owes the world $25 billion in principal repayments. It will also need at least $10 billion to finance the current account deficit, bringing total external financing needs to $35 billion a year between now and 2027. We have foreign exchange reserves of just $3 billion. For each of the next five years, the government needs to pay 5 percent of GDP to service the debt it owes to residents and foreigners. Our total tax take is only 10 percent of GDP.

Around fourth-fifths of this external debt is owed to the official sector, split roughly evenly between multilaterals (like the IMF, World Bank and ADB) and bilaterals (countries like China, Saudi Arabia and the United States). The remaining one-fifth is commercial, again roughly evenly split between Eurobond/Sukuk issuances and borrowing from Chinese and Middle Eastern banks. By region, we owe roughly one-third of our external debt to China and 10 percent to the old-boys network of the Paris Club, which includes Europe and the US.

Additionally, last year, the Pakistan rupee plunged nearly 30 percent compared to the US dollar. All indications are that the IMF is using bailout negotiations to pressure Pakistan to move away from China and revive its partnership with the US. Some background from WSWS:

Former prime minister Imran Khan’s government was promptly removed in April 2022 after he reversed IMF-demanded subsidy cuts in the face of country-wide protests. Khan had previously implemented two rounds of some of the toughest austerity in the country’s history. In the final year of his government, Khan shifted the country’s foreign policy towards a closer alliance with Russia and deepened ties with China, prompting concern and anger in Washington.

Sharif’s Muslim League (PML-N) and the People’s Party (PPP) assumed power in a coalition with the approval of the military, long the most powerful political actor in the country and the linchpin of the alliance between the Pakistani bourgeoisie and US imperialism. The express aim of the new government was to implement IMF austerity, which it has done.

The IMF-prescribed austerity imposed by Pakistani elites also targets Beijing.  China is Pakistan’s largest single creditor as the country is perhaps the most important country in China’s Belt and Road plans because it would provide China with a potential corridor to the seaport at Gwadar on the Indian Ocean. The supply line would reduce the distance between China and the Middle East by thousands of miles via insecure sea lanes to a shorter and more secure distance by land. Beijing’s spending in Pakistan reflects this, as the $53 billion China has spent on the Belt and Road Initiative (BRI) in the country is tops of all BRI countries.

Yet many of the BRI plans are unrealized, and Pakistan’s current economic situation makes it unlikely they’ll be finished anytime soon. China has dramatically scaled back investment, which fits with its more cautious approach to BRI projects. Meanwhile, decades-high inflation, economic mismanagement, and last year’s biblical floods have led to Islamabad burning through its foreign exchange reserves in order to make debt payments. The US blames China.

“We have been very clear about our concerns not just here in Pakistan, but elsewhere all around the world about Chinese debt, or debt owed to China,” US State Department Counselor Derek Chollet told journalists at the US Embassy in Islamabad after he met with Pakistani officials in February.

Additionally, Cholett said Washington is warning Islamabad about the “perils” of a closer relationship with Beijing.

According to the Times of India, many Pakistani officials have come around to the US way of thinking and are also blaming the China-Pakistan Economic Corridor Project (CPEC), a $65 billion network of roads, railways, pipelines, and ports connecting China to the Arabian Sea,  for worsening the country’s debt crisis. From Indian Express:

Pakistan expanded its electricity generation capacity under the China-Pakistan Economic Corridor Programme (CPEC) but the expansion came at a high cost both in terms of high returns guaranteed to the Chinese independent power producers (IPPs) and the expensive foreign currency debt. Pakistan has been unable to make the capacity payments to IPPs under the long-term power purchase agreements with the electricity sector debt rising to a staggering $ 8.5 billion.

Last December, the government agreed to repay this debt in installments. However, this may have displeased the IMF, which had expected the government, in August 2022, to renegotiate the purchase power agreements. Pakistan tried to renegotiate but the Chinese refused.

The IMF extended the current program on the condition that it would not go to the Chinese IPPs. More from Nikkei Asia:

Observers say Pakistan’s handling of the electricity issue is likely to irk China, noting that Sharif’s government committed to the IMF to reopen power contracts without taking the Chinese companies into confidence. Pakistan has also reneged on a promise to set up an escrow account to ensure smooth payments to Chinese IPPs.

The IMF is demanding that Pakistan rationalize payments to the Chinese IPPs in line with earlier concessions extracted from local private power producers…

The IMF now wants Pakistan to negotiate an increase in the duration of bank loans from 10 years to 20 years, or to reduce the markup on arrears owed to Chinese IPPs from 4.5% to 2%.

Notably, the IMF appears to have been less willing to make concessions than the previous 22 times Pakistan has sought its support since 1959. Oddly enough Beijing is pushing for a deal between Islamabad and the IMF, and China recently extended a $2 billion loan to Pakistan. From the Middle East Institute:

It is interesting to note, for example, that Chinese officials reportedly urged Islamabad to repair ties with the IMF — if true, an indication that Beijing regards resumption of the Fund’s lending program as key to mitigating Pakistan’s risk of default.

It is also revealing that Pakistan seems keener to take on new financing from China than China may be to furnish it. Even as the economy wobbles under a heavy debt burden and other acute challenges, Pakistani officials have sought support from China to upgrade the Main Line 1 (ML-1) railroad, a project which, if not undertaken, they claim could result in the breakdown of the entire railway system.Yet, the IMF wants Pakistan to rein in CPEC activity. And China’s own domestic economic challenges and priorities might make it hesitant to respond to Islamabad’s appeals. On the other hand, the ML-1 project might meet Beijing’s more exacting standards and increasing emphasis on “high quality” BRI infrastructure projects.

The recent rapprochement between Iran and Saudi Arabia could leave Pakistan out in the cold and even more reliant upon the US. From Andrew Korybko:

With the Kingdom likely to focus more on mutually beneficial Iranian investments than on dumping billions into seemingly never-ending Pakistani bailouts that haven’t ever brought it anything in return, Islamabad will predictably become more dependent on the US-controlled IMF. China will always provide the bare minimum required to keep Pakistan afloat in the worst-case scenario, but even it seems to be getting cold feet nowadays for a variety of reasons, thus meaning that US influence might further grow.

About that, last year’s post-modern coup restored American suzerainty over Pakistan to a large degree, which now makes that country a regional anomaly in the geopolitical sense considering the broader region’s drift away from that declining unipolar hegemon. The very fact that previously US-aligned Saudi Arabia patched up its seemingly irreconcilable problems with Iran as a result of Chinese mediation reinforces this factual observation. Pakistan now stands alone as the broader region’s only US vassal.

Pakistan is not only the most highly indebted to China of its BRI partners, but along with Sri Lanka, is also among the largest recipients of Chinese rescue lending. The ruling elite Pakistan is increasingly concerned that the social crisis could spiral out of control and result in something similar to what happened in Sri Lanka last year when a popular uprising toppled the government.

Due to haggling between the West and China, Sri Lanka has been waiting since September to finalize a bailout after a $2.9 billion September staff level IMF deal. And yet many of the recommendations in the agreement have already been implemented—to disastrous effect.

The country is dealing with its worst economic crisis since independence in 1948, including a shortage of reserves and essential items. In February, the IMF said Sri Lanka’s bailout package was set to be approved as soon as the country obtained adequate assurances from bilateral creditors, i.e., China.

Beijing now appears ready to meet more of the IMF’s demands, although details have yet to be released. In a letter in January, the Export-Import Bank of China offered a two-year debt moratorium, but the IMF said that wasn’t enough. According to Reuters, total Sri Lankan debt to Chinese lenders totals roughly 20 percent of the country’s total debt.

Sri Lanka is another focal point of the BRI due to its geographical position in the middle of the Indian Ocean. China’s goal was to transform the country into a transportation hub as much of its energy imports from the Middle East and mineral imports from Africa pass through Sri Lanka. Beijing has already achieved much of these goals. For example, in 2017 a 70 percent stake of the Hambantota port was leased to China Merchants Port Holdings Company Limited for 99 years for $1.12 billion.

The West blames China’s BRI initiative in Sri Lanka for saddling the country with unsustainable debt, but is that really the case? Political economists Devaka Gunawardena , Niyanthini Kadirgamar, and Ahilan Kadirgamar write at Phenomenal World:

The problems associated with the IMF’s policy package have been caught in geopolitical rhetoric. The US alleges that Sri Lanka is the victim of a Chinese debt trap. In fact, Sri Lanka is in an IMF trap. The structural consequences of over four decades of neoliberal policies have exploded into view with the receding welfare state, a ballooning import bill, and investment in infrastructure without returns, all of which relied on inflows of speculative capital. Framing Sri Lanka’s crisis within a narrative of geopolitical competition obscures the core dilemmas of the global economy. Will the evident breakdown force a reckoning with the present order, or will it be used as an excuse to inflict more suffering?

Thus far, it looks like the latter.

[workersolidarity]

🇷🇺🇨🇳 🚨

RUSSIA, CHINA AND BRICS PREPARE MASSIVE BLOW TO US DOLLAR DOMINANCE WITH LATEST CURRENCY MOVES

The BRICS trade organization, with the backing of the Russian Federation and the People's Republic of China, is preparing a major blow to U.S. dollar dominance in the global economy with an expanded payments system for trade between nations that will not be pegged to the U.S. dollar, according to reports in the Russian media.

The report, published in Russian news outlet Ria Novosti, stated that a new decentralized, blockchain-based international payment system, known as BRICS Pay, will make it possible to bypass Western sanctions while boosting the economic influence of BRICS, BRICS member states, as well as developing countries that trade with BRICS nations, while accelerating efforts to create a new international trade currency.

The United States sees these developments as a direct threat the U.S. dollar and its status as the World's reserve currency, according to the news outlet, with one of the main goals of the BRICS organization being the avoidance of International dependency on the U.S. dollar for trade outside the Western sphere of influence.

Already, 95% of trade between the Russian Federation and the People's Republic of China is conducted in Yuan and Rubles.

This kind of trade, conducted outside the U.S. dollar, "increases solvency and economic resilience to uncertainties and external shocks," says Shen Yi, the Chief of the BRICS Research Center at the Development Research Institute of Fudon University, as quoted by Ria Novosti.

“Objectively speaking, the diversified development of the international monetary and payment systems is consistent with the changing trends in the distribution of power and the general direction of evolution of the global system,” Yi noted in an interview with the Russian news outlet.

The news agency says the next step in this development is "our own system of international payments."

Recently, Russian Presidential Assistant, Yuri Ushakov, announced the intention of the BRICS commonwealth to create a payment system using a blockchain-based digital currency, with the purpose of developing a modern, effective payment service (BRICS Pay) intended to make international payments between countries "convenient, cost-effective, and most importantly, free from political influence."

"We need to completely move away from the peg [of international trade] to the dollar and Western instruments like [the] SWIFT [payments system]." Ushakov added.

Experts point to a BRICS payment system as a method of avoiding the sanctions of the United States and its Western allies, emphasizing that BRICS countries, and countries trading with BRICS member-states, will be able to perform mutual payments while avoiding the U.S. dollar, weakening the currency's role as the backbone of international payments and the world reserve currency.

The report also adds that a decentralized cryptocurrency payment system based on blockchain technology would be far more difficult to track, helping countries to avoid secondary sanctions while trading with nation-states under economic assault by the West like the Russian Federation.

Furthermore, a BRICS payment system will become a direct competitor to the Western-dominated and controlled SWIFT payment scheme, strengthening multipolarity in global finance and undermining the dictats of the United States and the European Union, while increasing the financial and political heft of the BRICS organization and its members.

According to Yaroslav Ostrovsky, a specialist in the strategic research department at Total Research, “If this project is implemented, its participants will switch to their own currencies in international payments, without the dollar and SWIFT terminals. At the same time, it is planned that countries outside the bloc will also be able to use the new system. The synergistic effect from such interaction will strengthen the position of BRICS in the global economic system."

Setting up such a payment system will take time, with financial experts suggesting it could take upwards of a year for debugging and implementing the payment scheme, while some experts say the system could become the basis for a future, single, BRICS supranational currency, and perhaps even a direct challenger the U.S. dollar's position as the world's reserve currency.

The new payment system, as well as any future BRICS currency, are a part of a process for which BRICS aims to become a global organization, trade union, and international financial association in direct competition with the Western-dominated international trade system, based on the U.S. dollar, that is currently wielded as a weapon against the adversaries of the West through its sanctions regime and it's control over International institutions.

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