China: everywhere first
I. China and the USA
If in 2010, US officials dared to instruct the Chinese about the course of the yuan against the dollar they need to set, now Washington, we can say, is silent. One can talk endlessly about American values or the triumph of democratic ideals, but one cannot convince a strong and growing state that it is pursuing an incompletely adequate monetary policy. As they say, first deal with your own crisis, and then begin to teach those who succeed.
Six months ago, Washington’s last sluggish call to strengthen the yuan was heard:
However, the authors of the report abstained from any accusations of the PRC in currency manipulations or something similar. By the way, during the recent election debates both Barack Obama and Mitt Romney publicly declared their intention to call the government of the Middle Kingdom to account for currency manipulations, and at the same time dumping. It seems that this is nothing more than election rhetoric. They shouted - and forgot, and the Ministry of Finance had surrendered before. In short, Americans are not Chinese decree.
Again: it is impossible to convince a strong state that it pursues an incompletely adequate monetary policy. It is pursuing the line that is beneficial to it, and China’s position on the world market is such that the United States can only envy this country. A relatively weak yuan is the basis of a profitable economy for the exporting country, and this need not be explained. In the same way, a weak ruble is beneficial for Russian oil and gas industry workers: more rubles for one dollar for which mineral raw materials are traded.
In the latest OECD report, “A look at 2060 year: long-term growth prospects” было отменено among other things, that by 2060, the share of China and India in world GDP will surpass all the 34 countries that are members of the OECD (the total weight of the two countries mentioned is now just over a third). China will overtake the European Union by the end of this year, and 4 will become the world's largest economy a year later.
Moreover, the status of the world economic leader of China will retain up to 2020 year. Further forward, India and Indonesia can break out (reason: a decrease in the working-age population in China). According to the OECD forecast, by 2060, the coefficient of the demographic load in China (the ratio of the elderly and the working-age population) will increase fourfold. China now benefits from strong productivity growth and large investments in the past ten years.
According to experts, by 2025, the aggregate GDP of China and India will exceed the total economies of the G7 countries, and by 2060, the economies of the two countries taken together will be one and a half times larger than the G7 economies.
As for China’s per capita income, by 2060 it will be 25% higher than the current equivalent in the United States.
At the CPC congress, it was said that the Chinese economy would keep from recession, measures will be takenensuring sustainable development of the economy, in particular, measures to increase domestic consumption, increase incomes of the population, control inflation and restructure investments.
Also at the party congress Hu Jintao presented rather ambitious plan for the development of the motherland. Among other things, it says about the planned doubling of per capita income by 2020 year. Such a goal reflects China’s attitude towards achieving a high standard of living, similar to the Western one, and at the same time reducing social tensions. In solving these problems, not only will higher incomes be provided for the population, but also domestic demand will grow, which the PRC lacks. At the same time, it becomes obvious that the ambitious goal for China, in addition to economic recovery, is also a challenge - financially, economically, and politically - to Western domination of the planet.
Xi Jinping said that China will compensate for the fall in exports to developed countries by expanding trade on the Asian continent: after all, there is still some economic dynamics.
As for the prospects of the Chinese currency, they are the most optimistic. The yuan will soon become part of a new regional financial architecture, and opportunities will be found for the yuan to become an international reserve currency.
That's it.
In this situation, the United States and Western Europe will not even be able to breathe China in the back of the head. At best, the United States or Germany, if it does not become the center of the EU, will have to catch up with India.
The US government is well aware that in the crisis conditions of competitive struggle, American manufacturers lose to Chinese. This is despite the fact that a significant part of American (and European) industries have long been relocated to the Middle Kingdom - for the sake of profits. That is, the economic recession in the US and the EU is also explained by the man-made factor of strangling one's own economy, put into the hands of a competitor for short-term profits, outside of strategic long-term planning. For that fought for it and ran.
American and European strategists could not imagine that semi-hand-made manufacturers of plastic toys and workers of assembly plants would achieve such success. Today, almost the entire world market is focused on China. The Celestial Empire imports oil and ore from Africa, Asia and Latin America, which at the same time raises the economies of exporting countries that are already firmly hooked on the PRC. China factories consume half of the iron ore mined in the world. China has become the largest exporter of steel. Zambia and Chile, the largest producers of copper, and Australia, a leading exporter of coal and iron ore, are working closely with the Chinese. Previously, the priority for these countries was a partnership with the United States. China "pushed" America and the markets of Malaysia and South Korea: there he orders the components for their high-tech industries. Samsung, Nokia, and Apple Apple are assembling their high-tech gizmos in the Middle Kingdom.
The United States is in the first place in the world economy, while China is in the second. Washington is not going to take positions, and China is not going to stop its “locomotive” flying at full steam.
Some increase in tensions in the relations between the United States and the People's Republic of China is associated with the adoption of a strategic document in Washington earlier this year: “Sustaining US Global Leadership: Priorities for 21 Century Defense”. This strategy states that the strengthening of the PRC in the long term may affect the economy and security of the United States. The key points in the adopted US military strategy are reduced to a reduction in the number of American armed forces while simultaneously concentrating budget resources on the development of satellites and unmanned aircraft. The strategy also implies a reorientation of resources to the APR.
Obama starts and wins - that's the plan for the White House. The Chinese, of course, cannot agree with this. They cannot retreat from development plans either.
No, it's not about the war between China and the States. It's about competition and regional influence. Now, experts say, the struggle is for the ownership of the rights to energy resources. Analysts say they write that weapons China and the United States in the struggle for markets in the coming years will be oil and gas. The “Arab Spring” in Africa was provoked by the United States just to deprive China of sources of mineral raw materials (first of all, its supplies from Libya and Sudan — in the latter, China was fixed for a long time, and the split of the country into two warring Sudan deprived China of oil supplies for almost a year ). Iran is also a link in a single strategic chain: after all, China is a buyer of Iranian oil. It closes all this specified strategic document, according to which the US Navy is gradually located on the main routes of China transportation of oil from Venezuela, Nigeria, Sudan and Middle Eastern countries.
Political scientist Mikhail Khazin says:
The above OECD forecast tells us who will emerge victorious in the world race for resources, and whose currency can initially push aside and then completely suppress the American dollar. Four years left before the jump of the “tiger” to the first place, according to the OECD, just in the middle between three and five years, about which comrade Khazin spoke. That is, in 2016, China will become the leader of the world economy, pushing the US to 2-place.
Ii. China and Russia
5 December ended The ninth round of negotiations “Energy Dialogue: Russia - China” with the participation of the Russian electricity exporter in the Far East - Eastern Energy Company (EEC) - and the State Grid Corporation of the People's Republic of China.
By the end of the year, WEC pledged to deliver 2,6 billion kilowatt-hours to China, and in 2013, the company plans to increase exports to 3 billion kilowatt-hours. Moscow and Beijing have decided on the price of electricity, but so far there is no information about it. Moreover, the parties will clarify further and the volume of electricity exports - most likely, it will be about their further increase.
After the signing ceremony, Deputy Prime Minister Alexander Dvorkovich said that over the nine months of 2012, the EEC increased the supply of electricity to China to 1,8 billion kilowatt-hours, which is almost twice as much as the 2011 period.
In addition, at the 5 negotiations in December, a “road map” on the development of cooperation in the coal sector was signed. A cooperation agreement was also drawn up to assess the energy market conditions.
Chinese firms are very interested in participating in the competition for the Gerbekan-Ogodzhinsky coal-bearing region of the Amur Region. The competition this Russian government plans to hold in 2013 year.
Continued and negotiations between Gazprom and the Chinese company CNPC regarding the price of Russian gas supplies to China. Previously, the parties agreed in principle the volume of gas supplies along two routes: the western - 30 billion cubic meters. m (project "Altai") and East - 38 billion cubic meters. The construction of the Altai gas pipeline starts after the conclusion of a gas purchase and sale contract with the Chinese side.
In addition, 5 December was discussed and the possibility of joint construction of nuclear power plants in third countries.
The countries in whose territory such projects can be implemented have not yet been named. It was only about plans for joint cooperation.
In addition, at a meeting on Wednesday, the parties signed a protocol on the construction of the second stage of the Tianwan NPP. Construction will begin this month.
The General Contract for the construction of the second stage of the Tianwan NPP Atomstroyexport CJSC and the Jianssu Nuclear Power Corporation (JNPC) signed in November 2012 of the year in St. Petersburg.
Also on December 5, the Russian side handed over to the Chinese partners a draft intergovernmental agreement on the construction of the Tientsin refinery for consideration.
Deputy Chairman of the PRC Government at the negotiations сказалthat joint projects on cooperation in the field of coal supplies are also well implemented. By the end of the current year, the volume of coal supplies by Russia to the PRC could amount to 18 mln. Tons, including 3 mln. Tons - by rail, the rest - through seaports.
The Russian billionaire Alisher Usmanov focuses on the Chinese market today, who has decided to “change” from the Middle Kingdom of the USA. If in America the value of technological assets is too high, then the Chinese market in terms of investment looks more promising. USMAN owns shares in the Chinese Internet giants Alibaba Group Holding and 360buy Jingdong Mall. Billionaire in China interested in mainly network trade.
As for the United States, there Mr. Usmanov has invested in Facebook shares, which since the initial public offering (IPO) in May of this year have fallen off by as much as 28%. You will inevitably switch to the Chinese ...
Trade between Russia and China is growing by leaps and bounds. According to Chinese customs statistics, in January-October 2012, the turnover of Russian-Chinese trade up compared to the same period last year, by 13,4% - to 73,6 billion dollars. Russian exports to China increased to 37,2 billion dollars (by 12,7%), imports from China grew to 36,4 billion dollars (by 14,1%).
The direct investments of the PRC into Russia over nine months of 2012 increased by 2011% compared to the same period of the 36 year and amounted to 266 million dollars.
China today is Russia's main trading partner. The Russian Federation ranks ninth in the list of ten major trading partners of China. In terms of commodity turnover growth, Russia ranked 5-e among the main trading partners of China - after South Africa, Vietnam, the Philippines and Hong Kong. Alas, in the Russian export, as before, commodity group goods dominate, while the share of machine-technical products is extremely small. In the import from China - the opposite situation. Here machines and equipment occupy the first place in the structure.
Iii. China and Central Asia
Ivetta Frolova, Senior Researcher, Center for Asia and the Middle East, Russian Institute for Strategic Studies, считаетthat China is becoming the new “Big Brother” for the states of Central Asia.
Over the past two decades, the countries of this region have gone from border “barter” cooperation to full-fledged partnership relations, which are based on cooperation in the energy sector and joint projects in non-primary sectors of the economy. The Chinese factor has become an integral element of regional geopolitics. To deny it or argue with it is meaningless.
Back in 2006, China became the third largest foreign trade partner of the countries of the region - after Russia and the EU. In 2000-2010 PRC investment activity in the Central Asian markets increased by 20-40% (depending on specific areas). The 10 years have come to the fore: high-tech industries, the development of mineral resources, infrastructure development, construction, agriculture, transport, power generation, and oil and gas production.
China, Tajikistan, Turkmenistan and Uzbekistan were selected as priorities for the PRC capital investment.
Central Asia today is presented to China as a “strategic rear”. In addition, Beijing takes into account the wide transit possibilities of Central Asia - routes to Europe, the Middle and Middle East, the Caucasus region. Finally, the most elementary: the Central Asian countries are an important sales market for Chinese consumer goods, and at the same time an energy supplier whose role may increase over time. The fact is that the instability of the situation in a number of regions supplying energy resources (mentioned above in the article Iran and African countries), as well as the problem of sea terrorism in Southeast Asia, forced the Chinese government to study the issue of transporting oil and gas through land trunk pipelines . This led to the increased attention of the PRC to cooperation in the energy field with Russia and the countries of Central Asia.
Bearing in mind including its own energy security, the PRC is now putting strategic emphasis on building relations with the Central Asian countries on a bilateral basis, focusing on cooperation in the fields of energy, transport and logistics, as well as trade and regional security. The primary interests of China are in the oil and gas industry of Kazakhstan and Turkmenistan, as well as the nuclear industry of Kazakhstan. In the field of transport, Beijing focuses on Kazakhstan and Uzbekistan, and in the field of hydro-resources, Tajikistan and Kyrgyzstan are put in the forefront.
And if Beijing regards Central Asia as a raw material rear, then the local authorities see in it a new “Big Brother”.
As for the import-export structure, it is very reminiscent of the sad Russian picture. I. Frolova writes:
In addition, China is active in creating a transport and logistics infrastructure in the region. One of the most ambitious projects in this area is the construction of the Uzbek-Kyrgyz-Chinese railway Andijan-Karasu-Torugart-Kashgar. Another area is the construction of modern highways that extend to the western borders of China. In XUAR, Beijing plans to build 12 expressways, which will link Western China with the Central Asian countries. Xinjiang will become a major transportation and energy hub, which will lead to the strengthening of China’s cooperation with the countries of Central Asia and the strengthening of Chinese influence here.
In the long term, the influence and presence of the PRC in the Central Asian region will only increase, and the Celestial Empire, whatever one may say, will push Russia out of the region. If earlier Ashkhabad purchased railway equipment in Russia, now it is in China. While in 2000, the trade turnover between the Russian Federation and the countries of Central Asia was six times higher than the volume of trade between the PRC and the region, in 2006, it was only one and a half times. As a result, Russia as a trade and economic partner may lose interest for the countries of Central Asia.
According to I. Frolova, today the main task of Russia is to preserve and, if possible, strengthen its positions in Central Asia, but without confrontation with China.
This month, the PRC became even more active in the commodity markets of Central Asia. In December, the Celestial Empire put forward the idea of major investments in the countries of the region. This is a series of road, rail and energy projects, for which China is now ready to allocate a loan of $ 10 billion, which was first reported in June of this year. Projects involve a direct connection of the countries of Central Asia with Beijing.
Chinese Prime Minister Wen Jiabao saidthat the state banks of China are ready to finance these projects, including railways from Uzbekistan through Kyrgyzstan.
Wen Jiabao said this at the SCO meeting on Wednesday, in which Russia and four Central Asian states participated. Wen Jiabao noted that he would like to speed up the construction of a railway from Uzbekistan to China, and therefore Beijing is ready to finance interested parties.
China plans to work closely with Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Over time, this will create a counterbalance to Russian expansion in the region. Nevertheless, China and Russia have a common interest in strengthening the region’s weak borders in order to prevent the movement of Taliban terrorists, which should be feared when withdrawing ISAF troops from Afghanistan.
Thus, by importing raw materials and exporting manufactured goods, China follows the strategy of highly developed countries. If Russia and the countries of Central Asia, as well as the countries of Africa or Latin America, cooperating with China, sell Celestial oil, gas, ore and valuable metals, then Beijing in return supplies consumer goods and high-tech products, and successfully competes in price with its Western counterparts. By 2016, according to forecasts of OECD experts, China can become the leading economy in the world, surpassing the United States.
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