Geopolitical chess - China makes it move to support Europe
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A Surprise Boost for Euro from China
By F. William Engdahl 4 October 2010The embattled Euro has gotten a surprise boost from an unexpected quarter―China. The country with the world’s largest foreign exchange currency reserves, China, has pledged to support Greek debt as well as the Euro in what is clearly a geopolitical decision. In doing so, China has signaled it seeks to prevent the US financial warfare attack on Europe and to play the EU off against the USA in a geopolitical chess game of a fascinating dimension.
Chinese Prime Minister, Wen Jiabao, on an unusual visit to tiny Greece, a country which normally would never warrant such a high-level visit from the world’s fastest growing economic giant, has pledged support for Greece and for the Euro. According to the official Chinese Xinhua News Agency (and China Daily), “China supports Greece in firmly carrying out structural reforms and cutting its fiscal deficits to improve competitiveness. China welcomes the EU and the IMF's rescue package for Greece and stands ready to help Greece out of recession.”
What it means concretely was made clear by Wen Jiabao at a press conference in Athens when he stated, “‘China is holding Greek bonds and will keep buying bonds that Greece issues. We will undertake to support eurozone countries and Greece to overcome the crisis.” The last statement is far the most significant. It indicates that China has made a strategic decision to counter any future attempt by US-based hedge funds and banks to attack the weak countries of the Eurozone, including Ireland, Spain, Portugal or Greece. Early this year, as we noted at the time, Wall Street banks such as Goldman Sachs, working in tandem with the US-based credit rating agencies, Standard & Poors and Moodys and Fitch, exploded the Greece financial crisis at the precise time China and other major investors were beginning to have serious doubts about the fiscal stability of the United States and of the dollar.
Let me be clear. The Euro as it stands, the supranational European Central Bank and the EU approach to international financial stability is not merely a flawed construct. It is inherently programmed to crises. It was born as the product of flawed rotten political compromises in te 1990’s through the Treaty of Maastricht as an attempt by France and Italy and Britain to control an emerging German economic colossus after German unification.
However, the concerted attack by a group of New York hedge funds such as George Soros’ and Paulson’s earlier this year and the precisely timed credit downgrade of Greece to “junk” status were part of a concerted US strategy of financial warfare against that Eurozone, the only potential alternative to the dollar as world reserve currency. Should the US dollar lose its status as the world leading reserve currency―today it still counts for some 65% of central bank currency reserves―the United States would be ultimately doomed as world sole Superpower.
Now the surprise announcement by China of plans to support Greece and the euro give an unexpected boost to the embattled country and to the euro and expose the dollar even more to possible selloff.
Greece desperately needs foreign investment to help it meet terms of a €110 billion bailout from eurozone members and the international monetary Fund that saved it this spring from state debt default.”I am convinced that with my visit to Greece our bilateral relations and cooperation in all spheres will be further developed,” Wen said on his way to Brussels for an EU-China Summit.
Like most things that China does these days, it is part of a shrewd political calculation. Greece has agreed to support EU recognition of full market economy status for China within the EU, while China agrees to back Greece’s call for UN mediation over Cyprus. The two countries will cooperate on development as well of Piraeus Pier, upgrading it to a distributing and transfer center for Asian exports to Europe, the Mediterranean, and the Black Sea.
http://www.engdahl.oilgeopolitics.net/Geopolitics___Eurasia/China_Euro_pe_/china_euro_pe_.html
China’s cash for geopolitics
China conspicuously rode to Europe’s, and especially Greece’s, rescue this weekend. This is another reminder of how China deploys its savings surplus to amass geopolitical powerIn Mao’s China, power flowed from the barrel of a gun: Beijing used war more often than anything else to advance geopolitical ends. But China doesn’t need a gun as often today. Over the weekend, when Premier Wen Jiabao promised to use his foreign exchange reserves to shore up Greece’s flailing economy, the world was reminded that geopolitical power now flows from Beijing’s cash.
With investors again sceptical about Europe’s public finances, China is conspicuously riding to the rescue. On Saturday, Wen offered to buy more Greek government bonds; on Sunday, he talked up the euro, a currency that’s been recently criticized.
China deserves points here for a forward-looking strategy. First, it gets to shop around for new investments and new partners, especially now that its old ones—the US—are prompting some rethinking. Second, it has now effectively set up a beachhead at the peripheries of the euro zone, from where it can make inroads into Europe.
And this continent is an important target. Wen himself has expressed hope that the European Union will from now on look favourably at Chinese trade. This surely means relaxing restrictions on Chinese imports into this vast market. It could even mean not attacking an undervalued yuan: The Financial Times has reported that China has been in secret currency talks with France. Europe is, after all, still a useful card in global forums: If the US isn’t going to support China at the Group of Twenty or the International Monetary Fund—Washington is intent on blaming Beijing’s trade policies these days—perhaps Europe can be enticed to do so.
This kind of diplomacy has already earned China African support. Worries about neocolonialism were shoved aside in August when South Africa’s trade minister emphatically embraced China’s investments. It takes no stretch of imagination to assume that this could be Greece’s trade minister in some years’ time: Wen announced $5 billion for Greece’s shipping industry, so that it can buy Chinese material.
By cleverly deploying its savings surplus, China’s Communist Party has in a mere decade managed to amass serious geopolitical clout, and it’s hardly even fired a bullet. Still, when the balance of power shifts so strongly—no matter how it does—the rest of the world has to sit up and take note. It will be in India’s interests to lead the comity of nations in crafting a strategy in response.
http://www.livemint.com/2010/10/04224027/China8217s-cash-for-geopoli.html?h=B
Chinese premier calls for advancing Asia-Europe co-op
Chinese Premier Wen Jiabao who arrived in Brussels, Belgium on Monday delivered a speech at the opening ceremony of the eighth Asia-Europe Meeting (ASEM) Summit, calling for advancing Asia-Europe cooperation from a strategic and long-term perspective.
Chinese Premier Wen Jiabao (C) speaks at the opening ceremony of the eighth Asia-Europe Meeting (ASEM) in Brussels, Belgium, Oct. 4, 2010. Wen Jiabao delivered a speech at the opening ceremony. (Xinhua/Pang Xinglei)He said "with the joining of Australia, New Zealand and Russia, ASEM partners have formed a close-knit community of interests, covering the entire Eurasian continent from east to west."
Premier Wen made a five-point proposal in which he said the ASEM partners must work together to promote world economic growth.
"We should intensify macroeconomic policy coordination, manage with caution the timing and pace of an exit strategy from economic stimulus, and keep the exchange rates of major reserve currencies relatively stable," he said.
ASEM partners must work together to reform the international economic and financial systems, the premier noted.
"Global economic governance reform is of fundamental importance in overcoming the financial crisis and we must explore ways to establish a more effective global economic governance system," he said.
http://english.peopledaily.com.cn/90001/90776/90883/7157644.html
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aiyah..........
China got rich from money pumped in from the West.............
China will always need to export to the West................
the West is the spring of life..............when it dries up...............China, Japan and India................heck, everyone will die..............
so enough of all the nonsense about China and India decoupling from the West..............
all the bullshit about India's economy is laughable...........just the State of California has a far far bigger economy...........