Tag Archives: Economics

Nothing has changed as the Maybot gets stuck in denial mode | John Crace | Politics | The Guardian

https://www.theguardian.com/politics/2018/nov/15/nothing-has-changed-as-the-maybot-gets-stuck-in-denial-mode

A very funny article the days parliament story would do John Sullivan, Antony Jay and Jonathan Lynn proud. All of Only Fools and Horses and Yes Minister.

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The Illusion of Donald Trump and Protectionist Policies. The weakening of the USA.

Historically the USA has been a balancing force in the world however is that about to change? Donald Trump has managed to create problems with most of America’s continental neighbors and Global allies. Although there may be genuine grievances held by the United States however badly thought out aggressive solutions causing alienation can only weaken the USA in the long run causing such large economies as Canada and Mexico to look elsewhere for trading partners and there is elsewhere.

While the West squabbles China is quietly getting on with the job. China is probably the world’s greatest trading nation and has been for 1000s of years. They understand they need all of us to become the world leader that they aspire to through trade and economic power.
During the early middle ages China had a larger maritime fleet than all the European combined fleets.
Zheng He 1371-1433 a Chinese mariner, explorer, diplomat, fleet admiral, and enslaved court eunuch during China’s early Ming dynasty. He was originally born as Ma He in a Muslim family, later adopted the conferred surname Zheng from Emperor Yongle.
Admiral and diplomat who helped extend the maritime and commercial influence of China throughout the regions bordering the Indian Ocean. He commanded seven naval expeditions almost a century before the Portuguese reached India by sailing around the southern tip of Africa.
He first set sail in 1405, commanding 62 ships and 27,800 men. The fleet visited Champa (now in southern Vietnam), Siam (Thailand), Malacca (Melaka), and the island of Java and then through the Indian Ocean to Calicut (Kozhikode) on the Malabar Coast of India and Ceylon (Sri Lanka). Zheng He, returned to China in 1407.
Zheng did 7 voyages including to the upper reaches of the Persian Gulf. My point these voyages although militarily strong where fundamentally trading expeditions on a scale far greater than anything Europe and the rest of the world could mount. Though a nuclear power China has for millennia understood economic power is far more important than contemporary nuclear power.

Today we have The Belt and Road Initiative (BRI) or the Silk Road Economic Belt and the 21st-century Maritime Silk Road is a development strategy proposed by the Chinese government which focuses on connectivity and cooperation between Eurasian countries, primarily the People’s Republic of China (PRC), the land-based Silk Road Economic Belt (SREB) and the ocean-going Maritime Silk Road (MSR). Until 2016 the initiative was known in English as the One Belt and One Road Initiative(OBOR) but the Chinese came to consider the emphasis on the word “one” as misleading.
The Belt and Road Initiative addresses an “infrastructure gap” and thus has potential to accelerate economic growth across the Asia Pacific area and Central and Eastern Europe: a report from the World Pensions Council (WPC) estimates that Asia, excluding China, requires up to US$900 billion of infrastructure investments per year over the next decade, mostly in debt instruments, 50% above current infrastructure spending rates. The gaping need for long term capital explains why many Asian and Eastern European heads of state “gladly expressed their interest to join this new international financial institution focusing solely on ‘real assets’ and infrastructure-driven economic growth”.
China has by far the largest foreign currency reserves with over two and half times more than the second largest reserve holder, Japan. When China and Hong Kong reserves are considered together, the total is $3.6 trillion.5 Apr 2018

Even if only part of this dream is realised it has the potential to combine nearly 3 billion people in a trading partnership more if you add what China is doing in South America and Africa. It will be far more important for Canada and Mexico to find a way into this monolith rather than dealing with 380 million Americans. Remember Russia also skirts the Silk Road. China also has a relatively under-developed enormous home market that more and more emphasis is being placed on. China has been expanding shopping malls and ecommerce (ecommerce reaching $1.2Billion 2017) at a rapid rate shopping mall revenue growing at 8.1% to 2017 there is an expected fall to around 5% (mainly due to mergers) followed by a pickup.
China now has the finest high-speed rail infrastructure in the world. Beijing has just opened a new rail link to Tehran how difficult will that make it for the US to pressure the Iranian regime. The intention is to have fast rail links right into Gare du nord. It is the USA in the long run that will have to negotiate tariffs with a powerful China

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There are Huge long-term dangers in trade protectionist policies and too much dependence on military power war has never been a solution the Chinese understand this issue. USA may find it has to negotiate its long-term way back into the club on a weakened basis. Donald Trump’s incredible deal making skills which we are yet to see may not be enough to even guarantee US future employment figures. Logic dictates that the US needs to stay a global participant totally contrarian to the Trump myopic naïve approach to world affairs. Unfortunately, the Trump philosophy is aimed at the home market and a large proportion of US citizens are detrimentally naïve when it comes to international affairs and geography. US Americans especially those in power are short term thinkers the Chinese have 3000 years of understanding the value of long term planning behind them and foremost is economic power. Economic power enables you to address poverty issues reducing the propensity to rebellion.

Figures confirmation: –

IBIS World

Britannica