China’s big chess move against the U.S.: Latin America

China is making friends right under America’s nose.

Latin America is China’s latest business buddy. Chinese banks increased investments in Latin America by 71% last year, and the country plans to double its trade volume with the Central and South American region over the next decade.

This comes as U.S. power in the Americas is starting to erode. U.S. cash is actually fleeing the region as investors see better deals at home or elsewhere.

Partner Nation Russia

From a historical perspective, the last two times Germany and Russia went down this road of ‘partnership’, and eventually non-aggression pacts, it led to two world wars.

HANNOVER (Own report) – The German Chancellor and the Russian President attended yesterday’s opening of the annual Hannover Industry Trade Fair. This year, Russia was the fair’s chosen “partner nation,” a move to help promote German-Russian economic relations. The German Committee on Eastern European Economic Relations announced a German-Russian economic summit to be held today. Since the SPD/Green coalition government encouraged the economic cooperation ten years ago, the trade volume has grown from 15.1 billion Euros in 1998 to more than 80 billion in 2012 – to Germany’s advantage. Germany is ensuring its access to energy resources from Russia’s huge deposits, while also tapping into the lucrative market for the German export-oriented industry. The German industry needs this market, since its sales to the southern Euro zone are tapering off, due to the economic crisis. Berlin is also seeking to boost this cooperation because of China’s growing influence in Russia. Moscow and Beijing are not only planning to expand their bilateral economic relations, they are also increasing their political and military cooperation – at the expense of Western hegemony, as seen from the German perspective.

Yen-Yuan trade plan

The world is beginning to undermine and move forward without the Dollar. The US is clearly (and quite literally) on borrowed time.

In contemporary world the real indicator of state power is economy rather than territory, population or army, days of physical warfare are long gone, now is the era of economic warfare. Economy determines the destiny and position of states in international politics. The phenomenon of interdependence in international economy has modified the concept of sovereignty, Terms such as sovereignty are irrelevant to countries with weak economies, and sovereignty cannot be protected unless a country is self-sufficient with no dependency on any other country. One can see that leading countries in contemporary world having a strong position in world affairs are countries with huge economies at their back. Economically powerful countries Such as the United states use organizations like World bank and International Monitory Fund (Which are described by many economists as modern tools of colonization) to further their agenda and influence the policies of strategically important but economically weak countries, there is a very well known phrase in economics that aid of any kind is never without strings attached to it. One of the preeminent things that have happened at December 26, 2011 was the Sino Japan currency deal. Sino Japan deal is the beginning of direct trading in their currencies. Currently yen Yuan are not convertible and for trade between two countries need to buy Dollars that adding up extra expenses. China is the biggest trading partner of Japan, according to static’s of Japan external trade organization; trade volume between two countries was $339bn in 2010, which is expected to grow rapidly after Yen Yuan deal.

Through this deal it is first time that Chinese Government allowed any state to issue Bond in Yuan. Japan bank of international cooperation will issue Bond in Chinese market. Japan Government was interested to buy Chinese Government bond and through this deal a new door of mutual cooperation is open which is beneficial for both states. Japan Government stance to adopt China bond as foreign exchange reserve will assist Yuan’s future role as international currency. Sino Japan deal will be beneficial to get investor’s confidence to invest in China bond that give a credible boom to Yuan in eastern markets. China and Japan has long history of rivalry but they come to an agreement, which is beneficial for both states that will give confidence to foreign investor. Japan is the world’s third and china is second largest economy and the deal clearly depicts that rule of Dollar as global currency is going to end.

Full article: Yen-Yuan trade plan (Pakistan Observer)