The Great Game Changer: Belt and Road Intiative (BRI; OBOR)

[TaiShang]

Forces for good...

China, Russia urge NK to return to talks
Source: Reuters Published: 2016-3-12 0:48:54

Pyongyang’s nuclear ambitions deemed unacceptable

China and Russia said on Friday North Korea's nuclear ambitions were unacceptable, urging Pyongyang to resume talks over its nuclear weapons program and heed a UN Security Council resolution banning ballistic missile tests.

Russian Foreign Minister Sergei Lavrov and Chinese Foreign Minister Wang Yi stepped up pressure on Pyongyang after holding talks in Moscow a day after North Korea defied the UN by firing two short-range ballistic missiles into the sea.

"We do not recognize the nuclear status of the DPRK," Wang told a news briefing via a translator, using the official acronym for North Korea.

The North should "fully and comprehensively" implement the UN resolution, Wang said. "At the same time, we will not spare efforts to return to the Six-Party Talks," he noted.

Pyongyang reportedly has a large stockpile of short-range missiles and is developing long-range and intercontinental missiles.

Earlier on Friday, North Korea's official Korean Central News Agency (KCNA) reported that North Korean leader Kim Jong-un had watched a ballistic missile launch test and ordered the country to improve its nuclear attack capability by conducting more tests.

"Dear comrade Kim Jong-un said work ... must be strengthened to improve nuclear attack capability and issued combat tasks to continue nuclear explosion tests to assess the power of newly developed nuclear warheads and tests to improve nuclear attack capability," KCNA said.

Commenting on the North's growing nuclear ambitions, Wang said the latest UN resolution banning its nuclear tests must be "implemented point by point."

Lavrov said Moscow deemed Pyongyang's behavior "irresponsible."

"We believe that the world community's firm reaction will be interpreted by Pyongyang as a signal that there should be no such escapades in future," said Lavrov. "It should be clear in Pyongyang that no one is going to exonerate the DPRK for such escapades," he said, referring to missile tests.

Both Wang and Lavrov also hit out at US plans to deploy the THAAD anti-missile system in South Korea.

"The deployment of this US missile system far exceeds the actual defense needs of the [Korean] peninsula ... and will harm the strategic balance of power in the region, possibly leading to a new arms race," said Wang.

 

[TaiShang]

Europe Bye Bye: China Overtakes Germany as Russia's Largest Oil Customer

The Russian-Chinese oil partnership is shaping to be the most important of such relationships in the world

It only makes sense. We've previously reported that Russia has displaced Saudi Arabia as China's top supplier of oil. But the International Energy Agency has now said that at the end of 2015 China likewise overtook Germany as Russia's top consumer.

"Shipping data suggest that China is importing more and more ESPO crude [East Siberian Pacific Ocean blend] and at the end of 2015 overtook Germany to become Russia’s biggest customer," the IEA said in its Oil Market Report for March released on Friday.

Russia is now the top supplier of oil to the top importer of oil. This is still not quite the biggest energy partnership in the world – the flow of oil from Canada to US is larger – but it's certainly the most geopolitically significant.

The Canadian-American relations would be much the same with or without the massive oil trade, but Russia and China becoming more commercialy important to each other will help to reinforce the many political ties (SCO, BRICS) Beijing and Moscow have been weaving so far.

In fact the growing commercial relationship (particularly in oil and arms) is to a very large extent the consequence of the greater political understanding between the two since 2014 and the Western turn against Russia. The oil relationship specifically is taking off in the wake of a deal whereby Russia is now accepting payment directly in Chinese Renminbi.

This gives Beijing an added ease of mind and is not problematic for Russia either since China is nowadays a massive factory and therefore the renminibi Russia earsn with oil sales can be easily spent on valued Chinese goods. In fact every year Russia imports more from Chine than it exports so there can be no fear of accumulating unwanted currency.

 

[Abacin]

China must strengthen the relations with Russia, thanks to the strategic mistake made by United States. This relation must be strengthened by economic activities to the level that it won't be sabotaged by change of leadership. Russia will not only be a safe resources, but also a deep penetration into EuroAsia continent geopolitically. Alliance of China and Russia can dominate EuroAsia continent while alliance of China and United States can dominate Pacific.

 

[Lure]

The Canadian-American relations would be much the same with or without the massive oil trade, but Russia and China becoming more commercialy important to each other will help to reinforce the many political ties (SCO, BRICS) Beijing and Moscow have been weaving so far.

The World order resulting from the WW2 put Russia and China into the same team. Of course they had their differences. But surely the way they see the World is not completely opposite. Even without the warming trade relations China and Russia had enjoyed positive and stable relations since the collapse of USSR.

In fact one can take this into one step further and define a relationship model that is completely opposite of what the author has described. Thanks to a similar World view about the opposition to political leadership of the US, China and Russia enjoys a warm economic relationship. Without a similar World view I can't imagine such a warm economic relationship. Thus Chinese and Russian relationship would be very warm even if there weren't any sweet trade deals between them, and thanks to those political ties we see those trade deals. Not the other way around.

This gives Beijing an added ease of mind and is not problematic for Russia either since China is nowadays a massive factory and therefore the renminibi Russia earsn with oil sales can be easily spent on valued Chinese goods. In fact every year Russia imports more from Chine than it exports so there can be no fear of accumulating unwanted currency.

Even if there were no trade surplus favoring the Chinese side a capital accumulation in terms of RMB is unlikely. Since RMB is recenlty approved as a reserve currency by IMF, a lot of central bank worldwide planning to enlarge their RMB stockpile. Hence Russia can even trade with 3rd party countries using RMB.

Thus there is no need for a trade surplus favoring China in order to use RMB for international trade.

 

[Viet]

China overtaking Germany as the largest oil consumer = downfall of Europe?

China must strengthen the relations with Russia, thanks to the strategic mistake made by United States. This relation must be strengthened by economic activities to the level that it won't be sabotaged by change of leadership. Russia will not only be a safe resources, but also a deep penetration into EuroAsia continent geopolitically. Alliance of China and Russia can dominate EuroAsia continent while alliance of China and United States can dominate Pacific.

Russia-china bilateral trades

2014: $95 billion
2015: $64 billion
2016: $40 billion?

a long way to go if you want to replace the evil west, I guess.

 

[Abacin]

China overtaking Germany as the largest oil consumer = downfall of Europe?


Russia-china bilateral trades

2014: $95 billion
2015: $64 billion
2016: $40 billion?

a long way to go if you want to replace the evil west, I guess.

The commodity price dropped a lot. In terms of quantity, it still rose, even though it dropped in terms of dollars. Russia trade with the whole world dropped 30% due to sanctions and drop of commodity prices. But sometimes trade doesn't review the true relations. With the sanctions, Russia allows Chinese to invest many areas not opened before. For example, Chinese agriculture investment in Russia is thriving, which is helping Russia free from food crisis as in Soviet era.

The sanction on Russia rejuvenates Russian agriculture and light industries since Russia cannot import them with resources money. Many Chinese invest heavily in those areas. Russia has resources and well trained workers. It is a great opportunity to utilize Chinese capitals.

 

[Lure]

2014: $95 billion
2015: $64 billion
2016: $40 billion?

You need to look at the proportion of Chinese bilateral volume to entire international trade volume of Russia. Nominal values mean nothing since Russian currency experienced a huge devaluation and a huge drop in commodity prices.

As you can see from the chart below, Russian trade volume dropped from 2014 to 2015.

Russian exports contracted 31.4% in 2015 as of first quarter

Source : Russia's Foreign Trade Is Collapsing

"Exports fell by 31.4%, from about 39.5 billion US dollars to about 27.5 billion."

Russian exports to China contracted 20.9% in 2015 as of the 3rd quarters.

TASS: Business & Economy - Trade volume between China and Russia down 29% to $50 bln in January-September

"Imports from Russia to China declined in the first three quarters by 20.9% compared to the same period last year to $21.8 bln."

Those are not a very healthy comparison since the timeframe is different but I couldn't find the exact numbers. However those numbers can give you a clue about what's going on since they Show a very strong pattern. Both total exports and exports to China slowed down in Russian economy. However exports to China slowed down slower thus making China obtain a bigger ratio in the Russian exports.

 

[Abacin]

This sanction will decrease the dependence of the West for Russian Industries and enhance intertwined connections between China and Russia. China will become the crossing point where American Industry and Russia Industry meets. This will further Chinese status as the world manufacturing center.

Russia is still full of cheap foods in the counter. Just more Made in Russia instead of imports. Sanction of Russia is a gold rush for many Chinese capitals although bad for exporters.

Furthermore, Russia accepts CNY instead of dollar in Sino-Russia trades and starts to allow the usages of Chinese financial tools such as Union Pay to hedge against MasterCard and Visa.

 

[mike2000 is back]

China must strengthen the relations with Russia, thanks to the strategic mistake made by United States. This relation must be strengthened by economic activities to the level that it won't be sabotaged by change of leadership. Russia will not only be a safe resources, but also a deep penetration into EuroAsia continent geopolitically. Alliance of China and Russia can dominate EuroAsia continent while alliance of China and United States can dominate Pacific.

Lol awww....how sweet.
WHY HAS RUSSIA AND CHINA NOT FORMED AN ALLIANCE ALL THESE TIME EVEN UP TO NOW? Lol I dont see any country stopping both countries from doing so.
Or Is it also because of the 'evil' west manipulations? Lol If you cant form an alliance at the height of your most friendliest relations so far, then when will you form an alliance? Lol

Why has RUSSIA NEVER(and still doesn't) support China when it comes to your core interests and vice versa? Is it also because of the 'evil' west manipulations? Lol

Name me one SINGLE time Russia has ever publicly voiced its suppory to China regarding your disputes with other Asian countries, taiwan or even against the U.S. lol With allies/strategic partners like that who needs enemies?

Now ask yourself WHY IS THAT?? Thing is Russia doesnt trust China any more than they trust the west. If anything they often rather prefer the west, only thing is we placed sanctions on them for their aggression. Lol

Thing is Russia just has a normal business relationship with China, not different from U.S/Wesr-China massive business/investment ties. They only difference is that they have been selling you all sorts of weapons systems these past decades, but we placed sanctions on China after 1990 Tiananmen massacre, so we cant overtly sell sophisticated weapons to you people, apart from parts, engines, 'civilian helicopters' etc.

 

[Abacin]

Lol awww....how sweet.
WHY HAS RUSSIA AND CHINA NOT FORMED AN ALLIANCE ALL THESE TIME EVEN UP TO NOW? Lol I dont see any country stopping both countries from doing so.
Or Is it also because of the 'evil' west manipulations? Lol If you cant form an alliance at the height of your most friendliest relations so far, then when will you form an alliance? Lol

Why has RUSSIA NEVER(and still doesn't) support China when it comes to your core interests and vice versa? Is it also because of the 'evil' west manipulations? Lol

Name me one SINGLE time Russia has ever publicly voiced its suppory to China regarding your disputes with other Asian countries, taiwan or even against the U.S. lol With allies/strategic partners like that who needs enemies?

Now ask yourself WHY IS THAT?? Thing is Russia doesnt trust China any more than they trust the west. If anything they often rather prefer the west, only thing is we placed sanctions on them for their aggression. Lol

Thing is Russia just has a normal business relationship with China, not different from U.S/Wesr-China massive business/investment ties. They only difference is that they have been selling you all sorts of weapons systems these past decades, but we placed sanctions on China after 1990 Tiananmen massacre, so we cant overtly sell sophisticated weapons to you people, apart from parts, engines, 'civilian helicopters' etc.

China cannot form alliance with Russia since Sino-USA is equally important. Deteriorating US-Russia relation allows China to become the anchor point for the triangular relation.
United Nations' Permanent Security council is one form of alliance for China/US/Russia. Europe was designed to be one, however, the impact of Europe without ability to unify will only become weaker and weaker compared to China/US/Russia.
In this kind of triangular relations, no action means support since both China and Russia can stand on its own. China supports Crimea through no action; while Russia supports China in Taiwan, ECS and SCS through no action.

Maybe US is also supporting China in SCS. With US military involvement, China has solid reasons to militarize SCS without strong critics from other parts of world. US wants China to fill this military vacuum when US retreats from first island chain to make sure that every part of the world is dominated by US/China/Russia alliance. Politics is not as simple as it shows on the surface.

There may be competition of interests among China/US/Russia. But the biggest threat to all of three is countries such as North Korea, who is not obedient to United Nations system.

 

[Viet]

China cannot form alliance with Russia since Sino-USA is equally important. Deteriorating US-Russia relation allows China to become the anchor point for the triangular relation.
United Nations' Permanent Security council is one form of alliance for China/US/Russia. Europe was designed to be one, however, the impact of Europe without ability to unify will only become weaker and weaker compared to China/US/Russia.
In this kind of triangular relations, no action means support since both China and Russia can stand on its own. China supports Crimea through no action; while Russia supports China in Taiwan, ECS and SCS through no action.

Maybe US is also supporting China in SCS. With US military involvement, China has solid reasons to militarize SCS without strong critics from other parts of world. US wants China to fill this military vacuum when US retreats from first island chain to make sure that every part of the world is dominated by US/China/Russia alliance. Politics is not as simple as it shows on the surface.

There may be competition of interests among China/US/Russia. But the biggest threat to all of three is countries such as North Korea, who is not obedient to United Nations system.

Russia, America support you in the SC Sea?
Don't consume too much drugs, boy, that's not good for you!

 

[Abacin]

I US SCS actions, China benefits the most through island reclamation while Philippines is the biggest loser.

Russia, America support you in the SC Sea?
Don't consume too much drugs, boy, that's not good for you!

Through US SCS actions, China benefits the most through island reclamation while Philippines is the biggest loser. Is this not the reality?

 

[Viet]

You need to look at the proportion of Chinese bilateral volume to entire international trade volume of Russia. Nominal values mean nothing since Russian currency experienced a huge devaluation and a huge drop in commodity prices.

As you can see from the chart below, Russian trade volume dropped from 2014 to 2015.

Russian exports contracted 31.4% in 2015 as of first quarter

Source : Russia's Foreign Trade Is Collapsing

"Exports fell by 31.4%, from about 39.5 billion US dollars to about 27.5 billion."

Russian exports to China contracted 20.9% in 2015 as of the 3rd quarters.

TASS: Business & Economy - Trade volume between China and Russia down 29% to $50 bln in January-September

"Imports from Russia to China declined in the first three quarters by 20.9% compared to the same period last year to $21.8 bln."

Those are not a very healthy comparison since the timeframe is different but I couldn't find the exact numbers. However those numbers can give you a clue about what's going on since they Show a very strong pattern. Both total exports and exports to China slowed down in Russian economy. However exports to China slowed down slower thus making China obtain a bigger ratio in the Russian exports.

That's not changing the fact on the ground: China foreign trade is in freefall.

 

[Abacin]

The backbone of US foreign policy is still the United Nation system designed by President Roosevelt. US is just trying to see if it can get more than that. If not, it will withdraw to the United Nation system.

That's not changing the fact on the ground: China foreign trade is in freefall.

The whole world is in free fall. We are entering the stage of anti-globalization because workers in developed countries get really hurt.

In 1980, US had 19 million manufacturing jobs with 200 million populations; but in 2016, US only has 13 million manufacturing jobs with 300 million populations. From now on, manufacturing factories have to go closer to the market, not cheaper jobs. Many Chinese companies have already started factories in US to meet this demand.

Lenovo's new Whitsett, N.C., plant

the state-of-the-art American Yuncheng Gravure Cylinder plant

Closer to the market, not closer to cheaper labors, will become the mainstream. That's why China invests heavily in Europe, America, Russia and India to protect market shares of Chinese products through revenue and jobs sharing. Samsung's investment in Vietnam proved to be a big mistake. Its market share in China and United States has dropped significantly.

Global trade dropped 13.8% in 2015, but world GDP still increased 3.1%. This just reflects that more factories move closer to the market. Instead Chinese share of global exports jumped in 2015.

China Economic Watch | China Outperforms in Global Trade

 

[gambit]

I hope China get more and more dependent on Russia for energy.