Mercury Rising 鳯女

Politics, life, and other things that matter

And in another sign of imperial decline….

Posted by Charles II on June 24, 2014

China will be forming an international development bank to compete with the World Bank and the Asian Development Bank. The bank is proposed to have $100B in capital, some of which will be from “West Asia”– the Chinese nickname for the Middle East. They plan to focus development investment on the old Silk Road.. all the way to Baghdad.

And, Chinese foreign direct investment abroad will now exceed investment into China. In other words, Chinese are starting to buy the world, rather than the world buying China.

And, China has taken a major step toward turning the renminbi into a reserve currency by creating an exchange outside of areas that it controls (Hong Kong) or strongly influences (Singapore). For three-quarters of a century, the dollar has been the world’s reserve currency. If the renminbi becomes an alternate reserve currency, US power to manipulate the financial system would be undermined.

These are not developments to applaud. They represent American failures, not Chinese successes. They come from extreme American venality, not from Chinese liberality. Heaven help us all.


8 Responses to “And in another sign of imperial decline….”

  1. notlurking said

    What is the problem. I always thought diversity and competition were hallmark of what capitalism is. Best of luck to China for this initiative.

    • Charles II said

      Both the US and China practice state capitalism administered by a plutocracy. Plutocracy excludes the competition of diverse ideas that genuine democracy provides.

      That’s the problem.

      As for wishing luck to China, it is the same thing as wishing an end to struggling democracies throughout Asia.

  2. jo6pac said

    Just may be the mighty dollar is soon to be just another currency and with war machine debt not worth much.

    Russia and China moving closer together and adding the BRIC there going to be strange times ahead for us on Main Street. Then toss in the trade agreements that are being worked on all I can say is serfs up:(

    • Charles II said

      If Russia is going back on the gold standard, it is in deep trouble, Jo.

      The value of having a single reserve currency is that it prevents other countries from “printing money.” If multiple reserves emerge, I think economic turmoil is not far off. But the US has abused its reserve currency status, which is why other countries are doing this.

      • jo6pac said

        I don’t believe they are going to gold only but it will be an option for some countries that use the dollar. They trade with China in their on currencies.

  3. Yet China’s rich, having turned large chunks of their own country into a cesspit, are seeking to leave it:

    This dovetails with what I’ve heard from friends on the West Coast. China’s prosperity was built on Chinese elites trashing their landscape; now that the ill effects are spelling an end to their ability to continue in that vein, large numbers of them are moving to the US and Vancouver, to name two favored destinations. To some extent China’s central government is trying to rein in polluting — a desire to accelerate the transition from coal is one of the reasons why Chinese wind and solar products are increasingly being deployed at home instead of being sold abroad (that and a desire to provide price supports by avoiding glutting the export market with too much cheap solar and wind gear) — but even the central government can’t do much when local mayors see cranking out scads of junk from crud-belching factories as the road to prosperity.

    The pollution of their own land, air and water is also why Chinese interests are buying up land parcels in sub-Saharan Africa for use as auxillary granaries, thus irritating the European interests who have been doing much the same thing there in the decades since their former colonies decided to become nations.

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