Implications of new ‘Silk Route’

Dubai: Pakistan Prime Minister Nawaz Sharif’s recent five-day trip to China after assuming power has been termed highly successful in Islamabad. Important deals were inked on this visit that is emblematic of Sharif’s economic policy aimed at fixing the country’s staggering economy. But more significant is the strategic development pertaining to the decision to develop the trade corridor between the two countries — a project with regional implications beyond South West Asia.

The much-publicised agreement to speed work on developing a 2,000-km trade corridor linking Gwadar Port on Pakistan’s Makran Coast to Kashgar in China’s Xingjian province has been called a “game changer” by Sharif. Continue reading

Jonathan Manthorpe: Fears grow of Japan’s stimulus provoking a currency war

As Japan sets out to double its money supply to $2.71 trillion in order to propel its economy out of two decades of stagnation there are growing concerns the program will ignite a currency war in Asia.

Among Asian manufacturers such as South Korea, China and the countries of Southeast Asia concern is building to alarm. The Japanese currency, the yen, has dropped by 25 per cent in value since the election of Prime Minister Shinzo Abe and the Liberal Democratic Party last November with a pledge to kickstart the economy. Continue reading

Europe and US pledge to create world’s biggest trading bloc

A very good point is made in the sense that this could be a means to contain China’s growing economic hegemony while simultaneously bolstering both EU and US growth.

The European Union and America are to open negotiations with the aim of creating the world’s biggest free trade area worth €86bn (£75bn) within two years.

The talks have been heralded as a “game-changer” that could help kick-start stagnant or contracting European economies back into growth by adding 0.5pc to GDP every year.

David Cameron pledged that Britain, which currently chairs the G8 group of countries, would do everything it could to help broker the difficult talks. Continue reading

China was top investor in Germany last year: agency

Germany is the economic heart of the EU and the Euro has been called the worlds second reserve currency by the IMF. It’s no secret that China is divesting from the US Dollar, T-Bonds and the like as it continues economic warfare. The EU is their alternative investment and it is increasing its holdings in both frequency and volume. China has also called for the creation of Eurobonds in the past which is likely a means to achieve the end of the US’ global economic hegemony.

Germany has the manufacturing, the technology and is the second highest holder of gold reserves in the world. It is also the most populated country, the most forward thinking and focused of all with a clear sense of destiny in Europe — and it’s becoming increasingly awash in cash from foreign investment. While most eyes are fixated on the rise of China in belief that it will be the next dominant world super power, people might be in for a shock as Germany could very well take that crown.

China was the top foreign investor in Germany in 2011, ahead of the United States, Switzerland and France, the government development agency Germany Trade & Invest said on Thursday.

China invested in 158 projects, while the US invested in 110, Switzerland in 91 and France in 53, GTAI said in a statement.

Full article: China was top investor in Germany last year: agency (Yahoo!)

W.T.O. Orders China to Stop Export Taxes on Minerals

This is a setback indeed for China, who has control over 90% of the earth’s rare minerals. One should come to expect that they find a way around this or hit back by further assaulting the US Dollar, for example.

In the closely watched case, the trade organization’s Appellate Body, its highest tribunal, ruled that China distorted international trade through dozens of export policies it maintains for bauxite, zinc, yellow phosphorus and six other industrial minerals.

The Appellate Body, reviewing an earlier decision by a W.T.O. dispute settlement panel, said the panel had gone too far in defining why more than three-dozen Chinese policies had violated free-trade rules. But the appeals group said Monday that the overall effect of China’s export restrictions was harming international trade and the policies would have to be scrapped.

“This is a major win for the United States,” said James Bacchus, a former chairman and longtime member of the Appellate Body, who now helps lead the global trade practice in the Washington office of the law firm Greenberg Traurig.

Continue reading article: W.T.O. Orders China to Stop Export Taxes on Minerals (NY Times)