This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission. I really don’t think people quite understand just how much trouble China is in right now. That’s no mystery because in the Western media the Chinese economy is almost always described as somewhere between awesome and magnificent (only slight hyperbole). Their government, on the other hand, is not fooled. General Secretary Xi Jinping opened the Communist Party’s 19th Congress with an amazing speech. It wasn’t amazing in the respect of soaring rhetoric announcing some actual, concrete commitment to freedom and free markets; it was instead the opening bell for, I think, a very different world outlook. I write for my column tomorrow that it was in some cursory way reminiscent of the Trump candidacy. On the surface, it almost seemed as if Xi Jinping was channeling Donald Trump. Opening China’s 19th Party Congress this week, the Communist General Secretary of that Congress talked a lot about ‘rejuvenation.’ The word recalled the 2016 US Presidential campaign and the Republican’s promise to ‘make America great again.’
Xi Jinping delivered a three and a half-hour speech at the opening of China’s 19th Party Congress, the once in five years mega-Communist Party gathering (previewed here), to herald a ‘new era’ of power (a term he used 36 times), consolidating his position as perhaps the most influential Chinese leader in decades. While he did lay out guidelines to develop China in this ‘new era’, bottom line: Heavy in superlatives, light on specifics. It was the year’s most carefully politically-staged global event, best understood by the related trivia gleaned from party officials. The drafting process involves 4,700 individuals, 59 organisations, reports from 25 think tanks, nine research committees and 6 discussion forums, hosted by Xi, to hear suggestions. Xi walked into the Great Hall of the people to marching band music with delegates clapping in time. When highlighted the role of Marxism in 21st century China, he was greeted by lots of applause from delegates.
This post was published at Zero Hedge on Oct 18, 2017.
Nearly two years after the historic, and still mysterious “Shanghai Accord” which in early 2016 halted what at the time appeared to a global collapse in capital markets courtesy of what appears to have been unprecedented political, fiscal and monetary coordination between the developed world and China, on October 18 the world turns its attention to what is arguably the most important political event of the year, and the logical conclusion to the stabilization process which started with the Accord, when the Chinese Communist Party kicks off its 19th Party Congress, the political event that will determine the country’s leadership lineup and policy priorities for the next five years. Given the emphasis on maintaining stability in the run-up to this pivotal political transition, what the Congress will mean for China’s economy, its markets, and its place in the world is why Goldman has dedicated its latest “Top of Mind” periodical to the Congress, with editor Allison Nathan asking two experts on Chinese politics how Xi Jinping – who is already widely regarded as the most powerful leader of China since Mao Zedong – can use the reshuffle to further consolidate power. And, more importantly, what he intends to do with it: pursue economic reforms more aggressively or maintain the status quo. Specifically, five of seven seats on the Politburo Standing Committee (PSC) – the senior-most CCP leadership – are expected to turn over, as is about half of the Politburo, the 25-member decision-making body that sits just below the PSC. To explore these issues, Goldman sat down with two Chinese political experts, David Shambaugh of the George Washington University and Willy Lam of the Chinese University of Hong Kong. Both anticipate the Congress will cement Xi Jinping’s absolute authority over the CCP and the country. And both raise the possibility that Xi could be paving the way to stay in power beyond two terms, in a break with historical norms. However, Shambaugh and Lam view Xi as a visionary, not a reformist. They believe his overriding goal is to strengthen and perpetuate CCP rule, with no tolerance for policies that could destabilize the political order. (Lam argues, for example, that Xi is determined to avoid the political self-criticism that he believes brought down the USSR.) As such, both experts see only limited prospects for economic reform. But one possibility to watch: a potential reshuffling involving the role of premier that might signal a more aggressive reform stance.
This post was published at Zero Hedge on Oct 15, 2017.
The most important event in China in five years is about to take place, and Beijing isn’t taking any chances. Ahead of the Communist Party’s twice-a-decade congress – an event so massive that according to Bloomberg “nothing escapes its pull” – which is slated to start on October 18 in Beijing, regulators have made it clear to the nation’s top brokers, bankers and financiers that they don’t want to see any major turbulence in markets. In a repeat of the fiasco that followed the bursting of China’s equity bubble in the summer of 2015 when Beijing effectively nationalized the stock market, and went so far as to throw prominent hedge fund managers and assorted “speculators” in prison, the China Securities Regulatory Commission has ordered local brokerages to “mitigate risks” and ensure stable markets before and during the Communist Party’s leadership congress next month, according to Bloomberg. Additionally, to leave virtually nothing to chance – and to have ready scapegoats in case someone does in fact sell – the CSRC also banned brokerage bosses from taking holidays or leaving the country from Oct. 11 until the congress ends. Brokerage bosses were told to avoid travel of any kind from Oct. 11 until the congress ends, including business trips. Luckily for them, China’s national day holidays are coming up in the first week of October. Local markets will be shut for an entire week, providing plenty of time to recharge for the congress. Since the congress, which is expected to replace about half of China’s top leadership, is of paramount importance to President Xi Jinping who will use it as a foundation to cement his influence into the next decade, nothing is allowed to spoil the optics of supreme control at this critical moment.
This post was published at Zero Hedge on Sep 17, 2017.
21st Century Wire says… Eminent author and filmaker, John Pilger speaks to RT about the ratcheting up of tensions between the US and North Korea, led, of course, by the US and its vassal states in the EU. In the last two days, the UN Security Council imposed the harshest-ever sanctions againstNorth Korea. These sanctions restricted North Korea’s oil imports and banned textile exports, all an attempt to severely inhibit the recalcitrant nation’s defensive nuclear and ballistic missile capability and to increase pressure to bring DPRK supreme leader, Kim Jong Un, to the negotiating table with the US. ‘Today, we are attempting to take the future of the North Korean nuclear program out of the hands of its outlaw regime,’ said Nikki Haley, the U. S. ambassador to the United Nations. ‘Today, we are saying the world will never accept a nuclear-armed North Korea,’ she added. ‘And today the Security Council is saying if North Korea does not halt its nuclear program, we will act to stop it ourselves.’ Russia’s President Putin had previously made it clear that North Korea would not bow to such pressure: ‘They would rather eat grass but will not give up the [nuclear] program if they do not feel safe,’ In an article written in April 2017, John Pilger, expressed fears regarding the escalation of military conflict by the Trump administration: ‘The United States is at a critical moment. Having exported its all-powerful manufacturing base, run down its industry and reduced millions of its once-hopeful people to poverty, principal American power today is brute force. When Donald Trump launched his missile attack on Syria – following his bombing of a mosque and a school – he was having dinner in Florida with the President of China, Xi Jinping.
Just over a week after North Korea’s test of a nuclear device, the United States has secured a fresh set of UN sanctions against the country. The speed with which the United Nations Security Council adopted these measures is unprecedented – sanctions on North Korea ordinarily take weeks of back and forth with China, North Korea’s main defender, as well as consultations with Russia. US Ambassador to the United Nations Nikki Haley even thanked China, in particular, Chinese President Xi Jinping. The new UN sanctions will bite deeper into the North Korean economy than those past, but fall short of the sweeping measures included in a version leaked Sept. 7. That draft included a full ban on a range of oil products sold to North Korea, a freeze on the assets and travel of top North Korean leaders – including Kim Jong Un – as well blacklisting military-controlled airline Air Koryo. These broad measures – particularly the oil embargo – were unpalatable for both China and Russia, neither of which wants to see North Korea collapse. Negotiations toward the end of the week led to a second draft of the resolution, circulated Sept. 10.
Shortly after North Korea conducted what’s believed to be its first successful test of a hydrogen bomb (and its sixth nuclear test in total), China’s Nuclear Safety Administration said on Sunday that it would begin emergency monitoring for radiation along its northeastern border with North Korea, according to Reuters. *** The emergency response was set at ‘level 2,’ the second-highest grade on a four-tier system, according to the Times of Japan. The NSA did not indicate whether any radiation had been detected. ”At present, the automatic radiation monitoring stations in the provinces of Heilongjiang, Jilin, Liaoning and Shandong are functioning properly,’ Xinhua reported, citing the Ministry of Environmental Protection, which administers the safety agency.’ Earlier in the day, the presidents of China and Russia agreed to ‘appropriately deal with’ North Korea’s sixth and most powerful nuclear test, according to the South China Morning Post. Beijing strongly condemned Pyongyang’s actions and threatened to work with the United Nation’s Security Council to add sanctions. The agreement came as Chinese President Xi Jinping met his Russian counterpart Vladimir Putin on Sunday night in Xiamen, Fujian province, ahead of Monday’s BRICS leaders’ summit, according to the SCMP.
This post was published at Zero Hedge on Sep 3, 2017.
As if there weren’t enough geopolitical stress points in the world to fill a lifetime of “sleepy, vacationy” Augusts, late on Friday night President Trump spoke to Chinese President Xi Jinping and told him that he’s preparing to order an investigation into Chinese trade practices next week, according to NBC. Politico confirms that Trump is ready to launch a new trade crackdown on China next week, citing an administration official, a step that Trump delayed two weeks ago under the guidance of his new Chief of Staff Gen. Kelly, but now appears imminent. It is also an escalation which most analysts agree will launch a trade war between Washington and Beijing. As Politico details, Trump on Monday will call for an investigation into China over allegations that the nation violated U. S. intellectual property rights and forced technology transfers, the official said. While it’s unclear how much detail Trump will get into in the announcement, administration officials expect U. S. Trade Representative Robert Lighthizer to open an investigation against China under Section 301 of the Trade Act of 1974. The ordering of the investigation will not immediately impose sanctions but could lead to steep tariffs on Chinese goods. Trump has expressed frustration in recent months over what he sees as China’s unfair trade policies. As we discussed two weeks ago, Trump had planned to launch the trade investigation more than a week ago, but he delayed the move in favor of securing China’s support for expanded U. N. sanctions against North Korea, the senior administration official said.
This post was published at Zero Hedge by Tyler Durden /Aug 12, 2017.
As part of the People’s Liberation Army’s 90th anniversary celebration – it was founded on August 1, 1927 – President Xi Jinping (in military fatigues) hosted a giant parade at the Zhurihe Training Center. *** Zhurihe – Zhurihe certainly has enough room to hold all the people and equipment for a parade with thousands of soldiers, hundreds of tanks and armored vehicles, and dozens of ICBMs. -Xinhua News Agency Here, PLA’s most elite forces demonstrated how far China has come in modern warfare. CCTV broadcast the session, which means a domestic and global audience of millions saw the army’s showcase of tanks, stealth fighters, artillery, and ICBMs.
This post was published at Zero Hedge on Aug 8, 2017.
Winnie the Pooh has been censored on Chinese social media, thanks to the comparisons on memes between the communist country’s president, Xi Jinping, and the cartoon bear. The first time Winnie the Pooh grabbed the attention of the communist party’s censorship in China was in 2013 when memes compared the characters in the cartoon to former president Barack Obama, and Xi Jinping. Censorship has proven to be an effective propaganda arm of totalitarian regimes, but it isn’t limited to China. Left-leaning media in the United States has even claimed recently that ‘alt-right memes’ will be the downfall of democracy.
If there was any confusion whether in addition to Moscow, Beijing was also behind Assad, today all doubts were laid to rest when both Russia and China called on all involved parties “to support the efforts of the OPCW and the United Nations in investigating the alleged use of chemical weapons in Syria,” according to a joint statement by Russian and Chinese leaders on the current international situation posted on Kremlin website on Tuesday, following a meeting between Putin and China’s president Xi Jinping. “The sides emphasize that in matters of chemical weapons in Syria, all parties, with respect to Syrian sovereignty, must support the efforts of the Organization for the Prohibition of Chemical Weapons [OPCW] and relevant UN structures to conduct an independent and comprehensive investigation in order to obtain irrefutable evidence, establish genuine circumstances and draw conclusions that are capable of withstanding the verification by facts and time.” Additionally, in the document Russia and China both “strongly condemn any use of chemical weapons anywhere and by anyone.”
This post was published at Zero Hedge on Jul 4, 2017.
Ahead of this week’s G-20 summit in Hamburg, Germany, Donald Trump called the leaders of China and Japan to discuss the “threat posed by North Korea’, along with trade issues, the White House said on Sunday. Trump spoke with Chinese President Xi Jinping and Japanese Prime Minister Shinzo Abe, whose LDP had just suffered a devastating loss in the Tokyo Assembly elections, and according to the White House read out, “both leaders reaffirmed their commitment to a denuclearized Korean Peninsula” adding that “President Trump reiterated his determination to seek more balanced trade relations with America’s trading partners.” The terse statement did not provide further details of the call or say if Trump managed to persuade Xi to endorse his approach of exerting maximum pressure on North Korea, including a slew of further economic and trade sanctions. According to Reuters, the call may have been prompted by Trump increasing frustration with China’s inability to rein in North Korea, and the reference to trade was an indication the president may be ready to return to his tougher-talking ways on business with Beijing after holding back in hopes it would put more pressure on Pyongyang. Trump and Xi discussed the “peace and stability of the Korean peninsula”, China’s Foreign Ministry said, without elaborating.
This post was published at Zero Hedge on Jul 3, 2017.
Trump’s “up and down” relationship with China may be on the precipice of taking a sharp dive into the proverbial abyss. After frequently threatening to label China a “currency manipulator” on the campaign trail last year, Trump’s relationship with China’s President Xi Jinping took a decided turn for the better after a meeting at Mar-a-Lago in which China vowed to help address the “menace of North Korea” . I explained to the President of China that a trade deal with the U. S. will be far better for them if they solve the North Korean problem! — Donald J. Trump (@realDonaldTrump) April 11, 2017
This post was published at Zero Hedge on Jul 1, 2017.
One day after the US announced it would sell $1.42 billion in weapons to China’s offshore nemesis Taiwan, Beijing lashed out at the United States, saying it was “outraged” and demanded the US revoke immediately its “wrong decision”, saying it contradicted a “consensus” President Xi Jinping reached with his counterpart, Donald Trump, in talks in April in Florida. The proposed U. S. package for Taiwan includes technical support for early warning radar, high speed anti-radiation missiles, torpedoes and missile components. The sales would send a very wrong message to “Taiwan independence” forces, China’s embassy in Washington said in a statement. A U. S. State Department spokeswoman said on Thursday the administration had told Congress of seven proposed sales to Taiwan, the first under the Trump administration. “The Chinese government and Chinese people have every right to be outraged,” the embassy said. Besides token bluster, however, this time China also warned that Trump’s action was counter to the agreement reached with Xi in Palm Beach, suggesting retaliation will likely be imminent. “The wrong move of the U. S. side runs counter to the consensus reached by the two presidents in and the positive development momentum of the China-U. S. relationship,” the embassy said. This was the second major diplomatic escalation between the US and China in just the past 24 hours, with the US announcing late yesterday the first sanction imposed on Chinese entities for ties with North Korea, a move which likewise was slammed by the Chinese press.
This post was published at Zero Hedge on Jun 30, 2017.
Ahead of next week’s G-20 summit in Hamburg, Germany, chancellor Merkel had some fiery words about her two least favorite topics: Donald Trump and Brexit. In a speech to lawmakers in Germany’s lower house of parliament on Thursday, Merkel said that ‘the world has become less united’ and acknowledged that discussions at the G-20 meeting in Hamburg on July 7-8 ‘will be very difficult.’ Quoted by Bloomberg, Merkel said that ‘the discord is obvious and it would be dishonest to paper over the conflict.”
The unexpectedly confrontational posture comes as Germany is set to host world leaders including President Donald Trump and Russia’s Vladimir Putin, who are expected to hold their first head-to-head meeting in Hamburg, although the details have not yet been ironed out. Also present will be China’s Xi Jinping and Merkel’s nemesis, Turkey’s president Erdogan, with the meeting taking place “amid a global shake-up that threatens much of the international order on issues established since World War II. On the agenda for the meeting are free trade, climate change and migration.” If recent G-20 summits are any indication, next week’s meeting is likely to end in confusion and even more fingerpointing, with little in terms of consensus and even shorter communiques. Aware of the upcoming dissensus, to use a word coined by Deutsche Bank, Merkel took a swipe at Trump’s ‘America First’ rhetoric, saying that nations turning to isolation and protectionism are making a serious mistake and showcased a renewed ‘spirit of unity’ in the European Union after the U. K. decision to exit.
This post was published at Zero Hedge on Jun 29, 2017.
Based on the principle that transformative world events are not random, but are in fact predictable, Stratfor develops decade, annual and quarterly forecasts. These forecasts are built upon Stratfor’s geopolitical methodology, our framework for identifying and forecasting the fundamental trends shaping the international system. Below are the global trends highlighted in Stratfor’s forecast for the third-quarter of 2017. The complete forecast is available at Stratfor Worldview. The US Exits Stage Left? When world leaders gather in Germany for the approaching G-20 summit, they will no doubt make a slew of assertions – some alarmist, others justified – about a US retreat from the global stage. Talk of leaders like German Chancellor Angela Merkel, French President Emmanuel Macron and Chinese President Xi Jinping stepping in to fill the void and uphold global governance on major issues such as free trade, climate change, and security can be expected. But there is an underlying reality to that narrative that should be kept in mind. Simply put, those hoping to fill the United States’ shoes in leading the world still have their own existential threats to contend with at home. Germany and France are buying valuable time with their electorates to try to repair the European Union and make an example of the United Kingdom’s departure, but the bloc’s members still have vastly different visions of what European integration should look like and how nationalism might fit in. China, meanwhile, is not a globalist power with a model of governance to offer the world; it is a fiercely nationalist power with global clout, caught between the compulsion to operate as a market economy and the imperative to centralize political power under the ruling Communist Party. None of these countries come close to matching the US military footprint or the country’s ability to shoulder the burden that comes with superpower status.
China’s Belt and Road Forum, hosted with great fanfare, signals the priority of this flagship connectivity initiative while also underlining its credentials as the new ‘shaper’ of global trends and norms. Exhorting all countries to participate, Chinese President Xi Jinping suggested that ‘what we hope to create is a big family of harmonious co-existence.’ But India, an emerging economy that shares a contested border with China, worries about containment and new pathways for aggression from Pakistan. Other nations wonder if hegemonistic designs are hidden behind the rationality of connectivity and trade. The policy initiative aims to enhance China’s centrality in the global economic unilateral approach in how the project is conceived and implemented so far belies the rhetoric of multilateralism emanating from Beijing. Taking inspiration from the ancient Silk Road trading route, China’s One Belt One Road initiative, or OBOR, hopes to link more than 65 countries, encompassing up to 40 percent of global GDP. Xi’s signature foreign paradigm – linking China to Asia, Europe and Africa via an ambitious network of ports, roads, rail and other infrastructure projects. Beginning in China’s Fujian province, the projected Maritime Silk Route passes through the Malacca Strait to the Indian Ocean, moving along the Red Sea and the Mediterranean, ending in Venice.
This post was published at Zero Hedge on Jun 25, 2017.
A tectonic geopolitical shift happened in Astana, Kazakhstan, only a few days ago, and yet barely a ripple registered in Atlanticist circles. At the annual summit of the Shanghai Cooperation Organization (SCO), founded in 2001, both India and Pakistan were admitted as full members, alongside Russia, China and four Central Asian ‘stans’ (Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan). So now the SCO not only qualifies as the largest political organization – by area and population – in the world; it also unites four nuclear powers. The G-7 is irrelevant, as the latest summit in Taormina made it clear. The real action now, apart from the G-20, also lays in this alternative G-8. Permanently derided in the West for a decade and a half as a mere talk shop, the SCO, slowly but surely, keeps advancing a set up that Chinese President Xi Jinping qualifies, in a subdued manner, as ‘a new type of international relations featuring win-win cooperation.’ That’s the least one can say when you have China, India and Pakistan in the same group.
A sinkhole just opened in front of President Trump’s Mar-a-Lago estate THE ORB DEMANDS SACRIFICE — Oliver Willis (@owillis) May 22, 2017
A sinkhole has just appeared right in front of President Donald Trump’s Mar-a-Lago resort. This appeared to have happened while he was visiting the Western Wall and the Church of the Holy Sepulchre in Jerusalem, and social media responded much like when he touched the glowing orb. Trump has spent numerous weekends at the Mar-a-Lago resort since taking office. He’s even hosted world leaders such as China’s Xi Jinping and Japan’s Shinzo Abe and has played several rounds of golf there. Twitter users quickly mocked the news of the sinkhole and even though it’s now been two days since it appeared, the jokes continue to be funny. The sinkhole was definitely a coincidence, but this thanks to social media, it conjured up images of heavenly forces sending clear signs to humanity that something is seriously wrong at the moment. As if we didn’t know that humanity was doomed, social media made the connection for us between the sinkhole and Trump’s visit to Israel. And it’s almost as funny as when he set off an internet firestorm by touching a glowing orb in Saudi Arabia.
The Russia-China strategic partnership, uniting the Pentagon’s avowed top two “existential” threats to America, does not come with a formal treaty signed with pomp, circumstance – and a military parade. Enveloped in layers of subtle sophistication, there’s no way to know the deeper terms Beijing and Moscow have agreed upon behind those innumerable Putin-Xi Jinping high-level meetings. Diplomats, off the record, occasionally let it slip there may have been a coded message delivered to NATO to the effect that if one of the strategic members is seriously harassed – be it in Ukraine or in the South China Sea – NATO will have to deal with both. For now, let’s concentrate on two instances of how the partnership works in practice, and why Washington is clueless on how to deal with it.