Geopolitics/Geoeconomics Thread- June 2015

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Viv S
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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby Viv S » 27 Sep 2018 17:31

Neshant wrote:All this is to create the artificial seniority of the fiat currency's claim to value. No rational person would otherwise consider claims to wealth printed out of thin air and issued as currency to have any value.

While all currency is artificial (including cryptocurrency), the dollar's preeminence among reserve currencies isn't artificial. There are very clear & cogent reasons why it is and will continue to be preferred over every other currency including the Euro, by most entities.

The whole point of enforcing the purchase of oil in dollars through threats of military force is to preserve the seniority of the dollar which is highly advantageous to the US but not to buyers. This seniority is artificial since no country would othereise want paper claims printed out of thin air. A huge portion of the value of the dollar comes from coercing countries to make their purchase of this strategic commodity in dollars.

Its quite the other way round. In the early days of the Bretton Woods and particularly after the US abandoned the gold standard, the GCC states helped cement the dollar's place as the world's reserve currency as a quid pro quo for US support (against regional pro-Soviet Arab socialist regimes).

Of course the world has come a long way since and the dollars position has only strengthened in the wake of the GFC crisis & Brexit. The likes of Iraq & Libya aren't a factor - the Euro barely existed at the time of the Iraq war while the Libyan intervention was spearheaded by France & UK (with the US sort of tagging along).

What will break up the US-EU's alliance ultimately is the latter's refusal to support this seniorage believing they are merely paying a "tax" to the US with no equivalent benefits forthcoming.

The problem with the Euro isn't the EU's allegiance to the US but fundamental problems with the Euro Area that prevent it from emerging as a viable and stable alternative to the US.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby Vips » 03 Oct 2018 20:24

US-Mexico-Canada trade deal could lead to China's isolation: Report.

The new US-Mexico-Canada Trade Agreement (USMCA) could become a major threat to China as it gives a near-veto power to America over any attempt by Canada or Mexico to try to reach a similar deal with countries of "non-market economy" status which Beijing is yet to acquire, a media report said.

Trade experts said the USMCA agreement, which replaces the 24-year-old North America Free Trade Agreement (NAFTA), could be the forerunner to economic and trade alliance against China.

China, which became a member of the World Trade Organisation (WTO) in 2001, has not yet been granted the market economy status which could lead to radically lower anti-dumping duties on Chinese goods by forbidding the use of third-country price comparisons.

The US and the European Union opposed granting market economy status to China which is a technical distinction in the WTO framework that would reduce the ability of Washington and Brussels to impose trade sanctions on Beijing.

Beijing argues that it is entitled for the status as it has completed 15 years in the WTO. The WTO is yet to give its ruling.

Significantly, the USMCA agreement stipulates that any of the three parties to the deal has the right to be informed about any negotiations on a free-trade agreement with a "non-market economy" at an early stage.

If one of the three countries were to sign a free-trade agreement (FTA) with a non-market country, either of the other two would have the right to terminate the trilateral USMCA with six months' notice, the Hong Kong-based South China Morning Post reported Wednesday.

With the power to review and then impede or effectively veto a possible FTA between China and Canada or Mexico, the US can block potential "backchannels" for Chinese products to enter US markets through its neighbours, and gain a significant advantage in weakening Beijing's negotiating power in future trade talks, the Post reported.

China is Canada's second-largest trading partner after the US. Ottawa is in talks with Beijing since 2016 to work out an FTA.

But the USMCA clause has wider implications. If the US were to insert a similar clause into trade deals it is negotiating with the EU and Japan, it would mean Beijing's best hope of trading with the EU, Japan and Canada to offset an extended trade war with the US would be quashed, Post reported, quoting trade experts.

US President Donald Trump, the architect of the USMCA, is also asking India to sign a trade deal with America.

The US emphasis on trade deals with different countries could, in effect, create a new partnership hemming in China, the experts said.

Song Eui-young, an economics professor specialising international trade at Sogang University in Seoul, said the clause was a sign of Washington's desire to create an "economic alliance" against China.

Trump, who launched the current trade war with China, has changed his early tactic of quarrelling with all of the US' major trading partners simultaneously and is instead pursuing "a new trade stance to unite Europe, Japan and Canada into an economic alliance against China", Song said.

The veto clause, presenting a near-insurmountable obstacle to possible free-trade deals between China and major US trading partners, appears to be a necessary part of any new trade deals, the Post quoted him as saying.

Kotaro Tamura, an Asia fellow at the Milken Institute, said the USMCA "will definitely be the [new] blueprint to contain China in terms of trade", with Washington using the "non-market economy" clause as a loyalty test for its major trading partners.

"The US will try to reach a similar agreement with other countries surrounding China, including Japan," Tamura said.

China looks increasingly isolated despite its repeated claim that it is the true protector of global free trade and multilateralism centred on the WTO, the paper said. :rotfl:

A US-led trade system that excludes China would be the worst-case scenario for Beijing because such a structure could lead to fundamental realignments of international economic relations and global value chains, which in turn could curb China's economic rise, it said.

So far, China has signed 16 bilateral free-trade deals, including those with Australia, New Zealand, Iceland, South Korea, Singapore and the 10-nation Association of Southeast Asian Nations, in total accounting for about a quarter of China's total foreign trade. China has no free-trade deal with Canada, Mexico, Japan, Europe and the US.

Christine Loh, an adjunct professor at the Hong Kong University of Science and Technology, said the US' move to form a new trade alliance during its heated trade war with China would "change supply chains all over the world".

China's Ministry of Foreign Affairs and Ministry of Commerce have yet to comment on the USMCA's impact as China is currently celebrating week long National Day holidays.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby ramana » 04 Oct 2018 04:59

So new economic containment of China is in progress.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby Prem » 04 Oct 2018 05:36

ramana wrote:So new economic containment of China is in progress.

Best news of the decade . Arrogant China showed its hand so early in game and now they go way of Japan .

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby JE Menon » 04 Oct 2018 14:46

This is a situation which China created by itself, possibly by a combination of hubris and neglect. It failed to see that its mercantilist approach, combined with a relentless focus on one-sided exports, was not sustainable. And for all its vaunted long-sightedness, it failed to recognise that a backlash would (and could only) involve tariffs. Trump has demonstrated, whether anyone supports him or not (I do), that only blunt instruments work in extreme situations. China is looking for dominance, not co-existence. That is problematic, when you are looking at another who is also of the same mind - but with less to lose by upping the ante.

This is what Trump has done. No other leader, certainly not Hillary and almost certainly not Sanders would have gone this route of aggressive tariff expansion. But this is the only thing that has a chance to work in moderating Han ambitions and providing a sort of reality check on what can and cannot be done in the real world. The general silence from the mainstream media on the actual signficance of what is going on is dumbfounding - but that too just indicates how considerably corrupted, penetrated and venal that pillar of democracy has become, particularly (but not only) in the US.

What sort of equilibrium will emerge after this confrontation comes to a close, in one way or another, remains to be seen. But I believe that it will be one in which significant damage is done to China's current way of war by business practices. Internal strife with significant leadership disruption is entirely likely.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby chetak » 04 Oct 2018 15:43

JE Menon wrote:This is a situation which China created by itself, possibly by a combination of hubris and neglect. It failed to see that its mercantilist approach, combined with a relentless focus on one-sided exports, was not sustainable. And for all its vaunted long-sightedness, it failed to recognise that a backlash would (and could only) involve tariffs. Trump has demonstrated, whether anyone supports him or not (I do), that only blunt instruments work in extreme situations. China is looking for dominance, not co-existence. That is problematic, when you are looking at another who is also of the same mind - but with less to lose by upping the ante. This is what Trump has done.

What sort of equilibrium will emerge after this confrontation comes to a close, in one way or another, remains to be seen. But I believe that it will be one in which significant damage is done to China's current way of war by business practices. Internal strife with significant leadership disruption is entirely likely.


For decades, every country has been pussy footing around china, paying lip service to their oft repeated taqiyya claims of "peaceful rise" when it was anything but.

The first really big reality check for the hans was when Modi refused to back down in doklam. Before this, they were used to groups of nations disputing them in the SCS and some other places and they quickly reacted with belligerence every time they thought that they were being challenged or provoked.

The previous regime was hamstrung by the hans and was led docilely by the nose, the MEA went about abjectly kow towing to the hans, deathly afraid of displeasing them, NSA, foreign sec all fell in line, including people at the very top.

This is also precisely how most of the world behaved with them.

no wonder the han ambassador, completely stumped by doklam, got cozy with certain opposition people in dilli. The reaction of their global times, every time a new Agni series of the missile is launched with its declared "5000 KM" range, they literally froth at the mouth and get apoplectic.

Now, the opposition to the hans has grown many multifold and in many countries, they are being opposed tooth and nail everywhere. Trump has completely blown away their self created aura of invincibility and their reputation is in tatters.

the slow moving dragon has little defence against a rampaging trump.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby chanakyaa » 04 Oct 2018 16:46

The Big Hack: How China Used a Tiny Chip to Infiltrate U.S. Companies
The attack by Chinese spies reached almost 30 U.S. companies, including Amazon and Apple, by compromising America’s technology supply chain, according to extensive interviews with government and corporate sources...

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby chanakyaa » 10 Oct 2018 06:40

Anti-panda campaign car in the second gear...

New Evidence of Hacked Supermicro Hardware Found in U.S. Telecom
The discovery shows that China continues to sabotage critical technology components bound for America.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby ramana » 10 Oct 2018 06:45

#UN Reform...
https://en.wikipedia.org/wiki/Uniting_for_Consensus

This group looks like a bunch of disgruntled nations with agenda to prevent new emerging G4 powers the seat at high table....

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby ArjunPandit » 10 Oct 2018 11:14

ramana wrote:#UN Reform...
https://en.wikipedia.org/wiki/Uniting_for_Consensus

This group looks like a bunch of disgruntled nations with agenda to prevent new emerging G4 powers the seat at high table....

soko was the surprising member of the list. Rest all are losers who still think they ruled the world

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby Singha » 10 Oct 2018 17:43

despite the loud denials by apple and amazon about the hw spyware thing, bloomberg has stood by its story and come up with a second story today.

the repercussions are catatrophic for the vast number of govt owned servers and sensitive corporate servers worldwide. not even a govt has the resources to take apart and monitor all servers .... my employer a chota mota player at the high table alone must have some 10,000....we do not remotely have the resources to take them offline one by one into a xray lab/security sandbox and monitor for signs of alien life :D

the second article is about bugging the ubiquitous ethernet hw, each server usually has minimum of 2 such ports, often 2 + 4 = 6 for servers hosting client virtual machines

https://www.bloomberg.com/news/articles ... nd=premium

just the large public cloud providers will have millions of intel and amd powered servers online on any day.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby Neshant » 10 Oct 2018 21:32

Singha wrote:despite the loud denials by apple and amazon about the hw spyware thing, bloomberg has stood by its story and come up with a second story today.

the repercussions are catatrophic for the vast number of govt owned servers and sensitive corporate servers worldwide. not even a govt has the resources to take apart and monitor all servers .... my employer a chota mota player at the high table alone must have some 10,000....we do not remotely have the resources to take them offline one by one into a xray lab/security sandbox and monitor for signs of alien life :D

the second article is about bugging the ubiquitous ethernet hw, each server usually has minimum of 2 such ports, often 2 + 4 = 6 for servers hosting client virtual machines

https://www.bloomberg.com/news/articles ... nd=premium

just the large public cloud providers will have millions of intel and amd powered servers online on any day.


If this is the kind of stuff Chinis are exporting to US, imagine the kind of bugged crap they must be sending India.

GAGAN/NAVIC receivers designed & imported from China by some Indian company under "Make in India" banner must be having a nicely hidden shutdown feature. In any war scenario, a single RF command could shut down millions of vehicles and vessels using it in India.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby Neshant » 10 Oct 2018 21:39

JE Menon wrote:What sort of equilibrium will emerge after this confrontation comes to a close, in one way or another, remains to be seen. But I believe that it will be one in which significant damage is done to China's current way of war by business practices. Internal strife with significant leadership disruption is entirely likely.


"Re-education camps" will be a growth industry in China in the years ahead as the country cracks down on the aforementioned strife.

A bit of re-education and you'll be all cured.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby chanakyaa » 14 Oct 2018 05:00

MBS forgot that his nuts are in someone else's hands

Davos in the Desert(ed)

Smoothie Barbaria Summit in Crisis

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby Suraj » 15 Oct 2018 00:08

MIGHT TRUMPS RIGHT: LESSONS LEARNED BY CHINA IN THE OPIUM WARS RING TRUE IN US TRADE ROW
Are there lessons Beijing can draw from the first opium war (1839-42) as it faces an increasingly adversarial United States that regards China as a threat to its strategic dominance?

That war saw a British force of about 20,000 troops sail to defeat a Chinese army of more than 220,000 marshalled by the Qing dynasty then ruling China. It marked the beginning of what has been seared into the Chinese memory as “100 years of humiliation” by foreign powers.
...
By the early 18th century, the British had so taken to drinking tea that some in the British government called it a “necessity of life”. The tea came from the southern Chinese city of Canton, designated by the Qing government as the only place where trading with foreigners was allowed. By 1725, the British East India Company was importing 250,000 pounds of tea per year. This ballooned to 24 million pounds per year by 1805.

Unfortunately for the British, the Chinese bought few British products, and worse, they wanted to be paid only in silver. Thus, between 1710 and 1760, Britain paid 26 million pounds of the precious metal for its tea.
...
Britain soon ran out of silver and ideas of how to pay for its tea until it stumbled on the one item the Chinese liked and became addicted to – opium. In 1773, the East India Company secured a monopoly on the production and sale of opium grown in India.

And so, through subterfuge and underhanded tactics such as using smugglers, the British flooded the Chinese market with opium – paid for in silver, of course – even though it was banned by the Qing government. In the last decade of the 18th century, 200 chests of opium, each weighing 64kg, went from India to China. By 1838, this grew to 40,000 chests, and the trade deficit had reversed in Britain’s favour. The Qing government, alarmed by the addiction spreading like wildfire among its subjects, ordered Viceroy Lin Zexu to stamp out the problem.

He took drastic action, including the confiscation of more than 20,000 chests of opium and detention of the British traders. The British merchants called on London to intervene. When negotiations failed, London sent the Royal Navy and the rest, as they say, is history.

At the time, Britain was ambivalent about going into a war on behalf of drug smugglers, as American historian Stephen Platt tells it in his book Imperial Twilight. For example, the young William Gladstone, who was to become four-time prime minister, wrote in his diary: “I am in dread of the judgments of God upon England for our national iniquity towards China.” He and other opponents of the war nearly succeeded in stopping it through an 1840 motion in the House of Commons.

In the end, Britain chose to attack China because, among other things, the accurate intelligence that it had gathered pointed to an opportunity to “open up” a weak China with a huge market and remove all restrictions on foreign traders. What followed its victory in 1842 was a succession of unequal treaties in which China was forced to give concession after concession to not just Britain but also other imperialist powers, including Japan.

Herein lies the most important lesson – foreign powers could do what they wanted because of their might, morality be damned. Beijing understands this today even if Daoguang, the Qing emperor, did not. He thought it was just a law enforcement issue and China was on the moral high ground in ridding itself of the drug menace. He could not see the larger strategic picture.

Not so for Beijing today. It knows the US and its allies are fearful China will succeed in leapfrogging them in all the hi-tech sectors that matter in the future and so will do what they can to stymie that. Hence the complaints about Chinese subsidies for key industries, intellectual-property theft, denying entry of foreign companies into strategic sectors … the list goes on.

Beijing cannot be so stupid as to not realise there is merit to some of the complaints about its unfair trade practices. It has proclaimed time and again that it is embarking on reform and market liberalisation. But how far and fast to go without jeopardising its own development strategy – or appearing to the world to be stalling? Having declared it will not negotiate “with a knife at its throat”, it must be looking for a way out without looking as if it has capitulated to US pressure.

In this regard, Chinese historian Mao Haijian has thrown up an interesting thought in his book on the opium war, Collapse of the Celestial Empire.

He points to another seminal event in Asian history – the opening of Japanese ports to American traders after a show of force by commodore Matthew Perry, whose naval convoy sailed into Tokyo Bay in 1853 to prise open markets Japan had closed to the world for 220 years.

Mao argues that the Tokugawa shogunate, the de facto ruler of Japan at the time, was right not to resist the Americans’ gunboat diplomacy, having watched the Qing government fight vastly superior British forces. This so stirred the elite in Japan that they overthrew the inward-looking shogunate, implemented important reforms through the Meiji Restoration, abandoned learning from the Chinese and turned to imbibing Western ideas and technology in a concerted national movement best described as “Japanese soul, foreign skills”. Within 50 years, Japan became a world power.

Mao is careful not to suggest the Qing government not put up a fight. But the careful reader might discern a hint that war could have been prevented had cooler heads prevailed – and China could have had breathing space to build its capabilities and fight another day.

On that, US historian Platt is in agreement. His view is that had Viceroy Lin and his British interlocutor Charles Elliot not overreacted and caused a collapse in talks, the outcome could have been very different.

So is there room for China and the US, now seemingly locked on a collision course, to pause and ponder? Former Australian prime minister Kevin Rudd, who knows his China, thinks Beijing is likely to double down.

If he is right, it can only mean Beijing is prepared for the worst. And having seen how the Royal Navy could roam freely in its waters and attack cities at will during the opium war, it is inconceivable that Beijing has not learned the importance of protecting its sea lanes.

Why else is it investing heavily in a rapid military build-up in the South China Sea?

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby ramana » 15 Oct 2018 10:14

GD, I talked to a Desi network guy. He thinks the Bloomberg story is psy-ops.
Says no sys admin would be so clueless at packets moving to unknown IPs.

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby Gyan » 15 Oct 2018 11:09

Bloomberg is anti Trump, anti tariffs & pro Chinese Imports. Why will it come up with a fake story?

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby chanakyaa » 17 Oct 2018 07:17

India currently has no sovereign dollar bonds outstanding and most of its debt is rupee-denominated. The more and more I see news/events like the following piece, my appreciation grows stronger for such strategy to stay in rupees.

August 7, 2018
Turkey May Be Locked Out of Bond Market as U.S. Sanctions Bite
...
Dollar-denominated June 2028 bonds of Turkiye Is Bankasi AS lost 27 percent, while Akbank TAS’s March 2027 securities declined 23 percent. High yields in the secondary market may mean that issuers will wait for asset prices to stabilize before testing the waters, even though they have $17 billion foreign-exchange debt coming due by the end of next year, according to data compiled by Bloomberg.
...


Turkey blinks (just before Thanksgiving :lol:). Looking at the amount of debt maturing, Turkey had no choice but to end up on Yankee dinner plate.
Turkey Releases Pastor After 2 Years In Prison

10 hours ago
Turkey eyes return to international debt market with new dollar bond

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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby chanakyaa » 21 Oct 2018 21:36

Geopolitics of Gas (Energy) Connections in Europe (and understanding armed conflicts and regime changes)

Lots of projects are underway to provide natural gas (and oil to some extent) to europe. Stakes are high -- whether provider of energy is in western camp (within the wyestern camp if the payments occur in dollar or euro) or russ fold, whether the provider is large enough to replace russ as the provider of oil/gas to oiurope (and that can be used to choke russ) etc. etc. And, while this is being played out, sultan ottoman finds himself (and his country) in charge of the biggest energy toll booth of da world..

Until alternative source of energy becomes a realty, India is in such enviable position (customer is bhagwan), similar to EU, as the country slowly becoming one of the largest consumer of energy. Question is, can India play such dynamics to its advantage, instead of acting like sheepish europe

Europe's Southern Gas Corridor: The Italian (Dis)connection

The Impact of Turkish Stream on European Energy Security and the Southern Gas Corridor

Three Pipelines and Three Seas: BRUA, TAP, the IAP and Gasification in Southeast Europe


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Re: Geopolitics/Geoeconomics Thread- June 2015

Postby Gyan » 21 Oct 2018 22:39

I wonder whether Trump will go through with third round of Chinese Tariffs & also hit German auto exports.

France wants to draw a redline on agricultural imports & sacrifice Germans to Trump actions.


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