China's Russia Bailout Is An Ominous Sign For The Future
By William Pesek
TOKYO - Thanks to China, Christine Lagarde of the International Monetary Fund, Jim Yong Kim of the World Bank and Takehiko Nakao of the Asian Development Bank may no longer have much meaningful work to do.
Beijing's move to bail out Russia, on top of its recent aid for Venezuela and Argentina, signals the death of the post-war Bretton Woods world. It's also marks the beginning of the end for America's linchpin role in the global economy and Japan's influence in Asia.
What is China's new Asian Infrastructure Investment Bank if not an ADB killer? If Japan, ADB's main benefactor, won't share the presidency with Asian peers, Beijing will just use its deep pockets to overpower it. Lagarde's and Kim's shops also are looking at a future in which crisis-wracked governments call Beijing before Washington.
China stepping up its role as lender of last resort upends an economic development game that's been decades in the making. The IMF, World Bank and ADB are bloated, change-adverse institutions. When Ukraine received a $17 billion IMF-led bailout this year it was about shoring up a geopolitically important economy, not geopolitical blackmail.
Chinese President Xi Jinping's government doesn't care about upgrading economies, the health of tax regimes or central bank reserves. It cares about loyalty. The quid pro quo: For our generous assistance we expect your full support on everything from Taiwan to territorial disputes to deadening the West's pesky focus on human rights.
This may sound hyperbolic; Russia, Argentina and Venezuela are already at odds with the U.S. and its allies. But what about Europe? In 2011 and 2012, it looked to Beijing to save euro bond markets through massive purchases. Expect more of this dynamic in 2015 should fresh turmoil hit the euro zone, at which time Beijing will expect European leaders to pull their diplomatic punches. What happens if the Federal Reserve's tapering slams economies from India to Indonesia and governments look to China for help? Why would Cambodia, Laos or Vietnam bother with the IMF's conditions when China writes big checks with few strings attached?
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http://www.oregonlive.com/opinion/index.ssf/2014/12/chinas_russia_bailout_is_an_om.html
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TexasTowelie
(112,252 posts)that they may end up being the last rat on a sinking ship in some of these countries. How much is the price of loyalty worth?
DetlefK
(16,423 posts)* Propping up Venezuela for the sake of having good relationships with South America.
* Building a second Panama-canal through Nicaragua.
* Investing heavily in Africa to exploit it for mining.
* Bringing Russia in a situation where it can't say No to chinese wishes.
That's actually very impressive. China is going on a massive diplomatic offensive in the Third World while the US squanders their diplomatic capital with war.
And there is a tiny fact about the China-Russia-relationship that should not be forgotten: The far-eastern corner of Russia, at the Pacific, is very sparsely populated. There is a massive chinese immigration going on in that area, both legal and illegal, hundreds of thousands immigrants per year. And China is investing heavily in that area.
What will Russia do when 10 million russian citizens of chinese descent demand that this region of Russia becomes part of China?
What will Russia do when China annexes that area like Russia annexed Crimea and with the very same argument?
What if China threatens monetary consequences if Russia doesn't follow?
DetlefK
That rather large part of land - was a par of China before 1890s - when Imperial Russia won the game - and beat a chinese army outright in war - and now ten of thousands of people from china have been traveling to that area - for at least a decade and a half - to work - and to settle down - Russia was - at least in the 1990s rather worried about it all - and trying to get China to understand it had to stop - China doesn't listen - and even if Putin are not playing hardball with it now - it is a place for concern for many russians, that people from China are now more or less walking over the border as it was their own country - regardless of their legal status...
And as you pointed out - what would Russia do when that large part of land - have 10 million chinese who want it to be part of China instead of Russia.... I doubt Russia will give away that land for free - it would mean war with PRC...
And that large part of land you are pointed out - ca 800.000 square kilometer of land - have also a large part of the gas, oil and minerals Russia needs to grow their economy - lands that China to this day claim Russia stole from them when China was weak - and want it back - and in a situation where suddenly 10 million Chinese nationals want to be part of China instead of Russia - this area rich in minerals would be a booty to behold for a starving China - who is turning upside down in their quest for rare minerals - and well everything that made a modern country works as it is - both the land - and the minerals in the ground will give China many decades with economical growt...
I suspect Putin are playing with matches....
Diclotican
Demeter
(85,373 posts)and I for one worry much less about China and Russia than I do about the local constabulary and the NSA. China and Russia aren't out to kill and/or enslave us.
geek tragedy
(68,868 posts)That's just dumb.
Though I guess we could encourage Japan to re-arm and see if China considers it a nothingburger.
JayhawkSD
(3,163 posts)The $17 billion IMF-backed loan was to replace the US-forced cancelation of a Russian $40 billion loan, about half of which was in the form of energy price cuts which did not have to be repaid in cash. It was a very bad deal for Ukraine.
Chinese financial deals with Russia are a direct result of US financial sanctions on Russia.
Chinese investment in Central America and Afica are to secure access to natural resources, just as are our wars in the Middle East, only they do it with road and rail building while we do it with military occupation and war. They say that if you want their money don't tell them what to do in their own country, while we say if you want our money you must do in your country what we tell you to do.
It's true that "Russia, Argentina and Venezuela are already at odds" with us, largely because they are fed up with our economic blackmail and ordering them around as if they were vassal states.
Fearless
(18,421 posts)In nearly the same way we do for resources and cheap labor?
JayhawkSD
(3,163 posts)I am responsible for what my country does in my name.
I do see my country telling other nations how to hold their elections, how to structure their governments and that they must abandon cultural and religious practices which we find offfensive.
I do see my nation instigating Ethopia to invade Somalia to depose an organization which had relplaced the tyranny of warlords with a significant degree of order and security because we did not like the format of that security and order.
Show me where China has done any of that.
Fearless
(18,421 posts)Patriotism is the idea that your country is better than all others simply because you were born in it.
... Essentially what you're saying is your don't care what happens to people in other countries as long as your name can't be tangentially attached to the occurrence because yes China is doing the exact same things we are... In Africa.. South America... And soon in Russia.
JayhawkSD
(3,163 posts)I am not saying anything of the sort. I am saying that I am not going to go around preaching about the evils of other countries when my country is doing the same things, and worse. I am going to follow the advice that people who live in glass houses should not throw stones. Blathering about how evil China is when they are doing the same thing we are doing, but doing it with less imposition of violence and death, is hypocrisy of the worst sort.
1step
(380 posts)It's all just one, sickening clusterfuck. 
