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Re: Is There a Limit to Financialization?
FIRE. With Chinese characteristics.
Should be entertaining to witness...the endemic corruption of global FIRE married to the endemic corruption of Chinese leadership.
China's new investment bank already paying diplomatic dividend to Beijing
Beijing has won this round, and convincingly, and Washington needs to reassess its game plan as China looks to assert its influence on the international stage with greater frequency, intensity and nuance.
Gideon Rachman, writing in the Financial Times, describes Washington's handling of the AIIB issue as a "diplomatic debacle" that has made it look "isolated and petulant". Robert Zoellick, a former World Bank president, said the Obama administration was "mistaken both on policy and on execution"...
...China is no stranger to using "chequebook diplomacy as a way to buy friends, having already lent billions, particularly to African and Latin American nations. But a downturn in the global economy, and political instability in other instances, have seen the likes of the Ukraine, Zimbabwe and Venezuela struggle to meet their repayments.
Highlighting the risk of unpredictable changes in political winds, the shock defeat of Mahinda Rajapaksa in Sri Lanka's presidential elections has seen a once-friendly investment destination turn nasty. New leader Maithripala Sirisena has since told Beijing Sri Lankawas reviewing the terms of its loans, and suspended work on a key $US1.5 billion port project being funded by a Chinese state-owned enterprise.
Deals with a multilateral institutions like the AIIB have less propensity to unravel.
Chinese lending to developing nations is not entirely altruistic. As well as gains in commercial advantage and strategic influence, it provides a diversifying outlet for its $US3.8 trillion of foreign currency reserves.
It provides an outlet for its steel industry, suffering from chronic overcapacity, and buttresses employment. China has pledged to create 10 million jobs to keep unemployment in check, in an environment where its economy is slowing and house prices are cooling...
...By its own design, the AIIB propels China into a leadership role in the world's financial affairs for the first time, and puts it at the helm of a multilateral institution which counts major Western economies and countries it has diplomatic and territorial disputes with among its core members – providing another intriguing test case of how it navigates inevitable conflicts that arise while continuing on its ultimate goal of amassing international influence.
Originally posted by EJ
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Should be entertaining to witness...the endemic corruption of global FIRE married to the endemic corruption of Chinese leadership.
China's new investment bank already paying diplomatic dividend to Beijing
The China-led Asian Infrastructure Investment Bank is a rival to the United States-led World Bank and the Asian Development Bank
Beijing: As the list of traditional United States allies signing on to the China-led Asian Infrastructure Investment Bank continues to swell – despite direct pleas from the Obama administration – the reaction among Western analysts has been all but universal.
Beijing has won this round, and convincingly, and Washington needs to reassess its game plan as China looks to assert its influence on the international stage with greater frequency, intensity and nuance.
Gideon Rachman, writing in the Financial Times, describes Washington's handling of the AIIB issue as a "diplomatic debacle" that has made it look "isolated and petulant". Robert Zoellick, a former World Bank president, said the Obama administration was "mistaken both on policy and on execution"...
...China is no stranger to using "chequebook diplomacy as a way to buy friends, having already lent billions, particularly to African and Latin American nations. But a downturn in the global economy, and political instability in other instances, have seen the likes of the Ukraine, Zimbabwe and Venezuela struggle to meet their repayments.
Highlighting the risk of unpredictable changes in political winds, the shock defeat of Mahinda Rajapaksa in Sri Lanka's presidential elections has seen a once-friendly investment destination turn nasty. New leader Maithripala Sirisena has since told Beijing Sri Lankawas reviewing the terms of its loans, and suspended work on a key $US1.5 billion port project being funded by a Chinese state-owned enterprise.
Deals with a multilateral institutions like the AIIB have less propensity to unravel.
Chinese lending to developing nations is not entirely altruistic. As well as gains in commercial advantage and strategic influence, it provides a diversifying outlet for its $US3.8 trillion of foreign currency reserves.
It provides an outlet for its steel industry, suffering from chronic overcapacity, and buttresses employment. China has pledged to create 10 million jobs to keep unemployment in check, in an environment where its economy is slowing and house prices are cooling...
...By its own design, the AIIB propels China into a leadership role in the world's financial affairs for the first time, and puts it at the helm of a multilateral institution which counts major Western economies and countries it has diplomatic and territorial disputes with among its core members – providing another intriguing test case of how it navigates inevitable conflicts that arise while continuing on its ultimate goal of amassing international influence.
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