China Steps In as World's New Bank

[Raphael]

bloombergview.com/articles/2014-12-25/china-steps-in-as-worlds-new-bank

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?

Beijing’s $24 billion currency swap program to help Russia is a sign of things to come. Russia, it's often said, is too nuclear to fail. As Moscow weathers the worst crisis since the 1998 default, it’s tempting to view China as a good global citizen. But Beijing is just enabling President Vladimir Putin, who’s now under zero pressure to diversify his economy away from oil. The same goes for China’s $2.3 billion currency swap with Argentina and its $4 billion loan to Venezuela. In the Chinese century, bad behavior has its rewards.

If ever there were a time for President Barack Obama to accelerate his "pivot" to Asia it's now. There's plenty to worry about as China tosses money at rogue governments like Sudan and Zimbabwe. But there’s also lots at stake for Asia's budding democracies. The so-called Washington consensus on economic policies isn't perfect, but is Beijing's model of autocratic state capitalism with scant press freedom really a better option? With China becoming Asia's sugar daddy, the temptation in, say, Myanmar might be to avoid the difficult process of creating credible institutions to oversee the economy.

There could be a silver lining to China lavishing its nearly $4 trillion of currency reserves on crisis-plagued nations: It might force the IMF, World Bank and ADB to raise their games. Competition, as Lagarde, Kim and Nakao would agree, is a good thing. But more likely, China's largess will encourage bad policy habits and impede development in ways that leave the global economy worse off.

 

[Beast]

This is a terrible article! After losing out to Chinese influence. The only thing this western report is to bad mouth China.

What has the western assist help africa continent during the past few decades? Which africa country flourish during the western times? None. Talking about China support regime. Those west bad policy hinder Africa program and basically ruined any of them.

 

[Genesis]

well, if America isn't smearing on all cylinders, you are the Philippines.

bloombergview.com/articles/2014-12-25/china-steps-in-as-worlds-new-bank

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.

So Bloomberg is not even trying to hide the fact Breton wood is used by American and cronies to push their agenda.

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.

Japan is a huge economy, the third biggest, but we are second, and it's not close. The difference is only going to get bigger, we don't demand supremacy, but we do expect respect in decision. Japan doesn't even give us that. What are we suppose to do? Roll over and die?

We'll take a rain check.

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.

We expect people to scratch our backs when we scratch theirs, but at least we don't expect them to lie on the table and spread.

If Brenton woods is really about what they said China isn't about, China shouldn't have a chance in Asia. Most of ASEAN is US allies, but we have seen ASEAN is a hole far darker than China, if US really isn't about these things, why did these loans never cured ASEAN.

The fact of the matter is China and US is the same, loyalty, except to us, it means help us in our internal affairs, but to the US it means advancing US interests. Military bases, trade rights, et al.

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?

Beijing’s $24 billion currency swap program to help Russia is a sign of things to come. Russia, it's often said, is too nuclear to fail. As Moscow weathers the worst crisis since the 1998 default, it’s tempting to view China as a good global citizen. But Beijing is just enabling President Vladimir Putin, who’s now under zero pressure to diversify his economy away from oil. The same goes for China’s $2.3 billion currency swap with Argentina and its $4 billion loan to Venezuela. In the Chinese century, bad behavior has its rewards.

China helps its interests, but we are also helping the citizens of those country. Do they deserve to lose everything because their leaders are questionable?

The Chinese way doesn't guarantee results, but it gives hope. The American way just fails, if you want proof, look at pretty much half the world and see which nation actually pulled themselves out that wasn't a power before. Nobody say Korea, Korea is a power, most of its history, Korea was right behind China in the Asia pecking order.

If ever there were a time for President Barack Obama to accelerate his "pivot" to Asia it's now. There's plenty to worry about as China tosses money at rogue governments like Sudan and Zimbabwe. But there’s also lots at stake for Asia's budding democracies. The so-called Washington consensus on economic policies isn't perfect, but is Beijing's model of autocratic state capitalism with scant press freedom really a better option? With China becoming Asia's sugar daddy, the temptation in, say, Myanmar might be to avoid the difficult process of creating credible institutions to oversee the economy.

There could be a silver lining to China lavishing its nearly $4 trillion of currency reserves on crisis-plagued nations: It might force the IMF, World Bank and ADB to raise their games. Competition, as Lagarde, Kim and Nakao would agree, is a good thing. But more likely, China's largess will encourage bad policy habits and impede development in ways that leave the global economy worse off.

Tossing money at rogue government, well, all of Africa's got IMF money, and there are no change, at least not for the better, China is helping Africa build infrastructure, at least when we are done, if nothing else they will have good roads and rails, and they can build on that. You can't build on empty promises.

Out of all the things that are wrong with China, press freedom is at the forefront? At least pretend like you are not biased.

US has press freedom, After Korea, after Vietnam, and after Blackhawk down and after this and that, did press freedom help? Iraq, Afghanistan.

America's like the kid that gets a D on a test and shows it to everyone and promises to improve, only to come back with a F.

Philippines got press freedom, well, where they are is indeed for all the world to see.

I'm not saying Press freedom isn't important to China, but using it to attack us on this particular issue, foreign policy in particular, is weak at best.

China's policy encourages nothing, everything must run its course, Chinese civil war, we fought like mad men, and great leap forward as well as cultural revolution left us destitute, but today, we got an article that fears our oversize wallet.

The one nation America can't easily push around even while weak, is now heading the assault on American world order, really says it all.

 

[TaiShang]

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.

The Taiwan string is very obvious. If they want China's assistance, the by default understanding is that Taiwan is a province of China.

But human rights? Well, the city of Ferguson does not have any, and China has nothing to do with it.

The same goes for China’s $2.3 billion currency swap with Argentina and its $4 billion loan to Venezuela. In the Chinese century, bad behavior has its rewards.

One smilingly remembers the School of Americas and all the dictators and blood-thirsty junta it has churned out over the years.

Well, in the American century, not only bad behavior got its rewards, one was also encouraged to more bad behavior.

The so-called Washington consensus on economic policies isn't perfect, but is Beijing's model of autocratic state capitalism with scant press freedom really a better option?

Yes it is, because it is not what you think it is. The author first gives his own particular description and then rests the entire argument on it. Sounds more like an inner-dialogue.

There could be a silver lining to China lavishing its nearly $4 trillion of currency reserves on crisis-plagued nations: It might force the IMF, World Bank and ADB to raise their games.

The problem is China is not lavishing any currency reserves; the total is more or less stable, as can be empirically proven. Lavishing would be throwing 700billion USD on US' financial state autocracies to bail them out at the cost of the rest of the people.

Apparently, bad behavior is rewarded.

The one nation America can't easily push around even while weak, is now heading the assault on American world order, really says it all.

Perfect sum-up!

 

[Raphael]

This is a terrible article! After losing out to Chinese influence. The only thing this western report is to bad mouth China.

What has the western assist help africa continent during the past few decades? Which africa country flourish during the western times? None. Talking about China support regime. Those west bad policy hinder Africa program and basically ruined any of them.

William Pesek, the author, is basically a mini-Gordon Chang. He always talks about the collapsing Chinese economy and "hard landing" caused by the "failure to liberalize". But here, he presents Chinese as an ominous financial boogeyman, ready to bankroll all of the USA's enemies. I can't help but feel these characterizations are incompatible.

 

[AgentOrange]

William Pesek, the author, is basically a mini-Gordon Chang. He always talks about the collapsing Chinese economy and "hard landing" caused by the "failure to liberalize". But here, he presents Chinese as an ominous financial boogeyman, ready to bankroll all of the USA's enemies. I can't help but feel these characterizations are incompatible.

He's just peddling what his audience wants to hear. He doesn't have to be consistent and sure enough, he isn't. As long as he's painting China in a bad light, he and Gordon Chang will have an endless supply of groupies eager to lap up their bullshit and throw money at them. Even if it means gloating over China's imminent demise one day while fearmongering about China's inevitable takeover of Asia the next. His goal is to make his anti-China audience feel better about their own relative loss of status/influence/power as China closes the gap between itself and the US. And he gets paid for it even if his articles are mostly fiction. Quite brilliant actually.

 

[bolo]

This is a terrible article! After losing out to Chinese influence. The only thing this western report is to bad mouth China.

What has the western assist help africa continent during the past few decades? Which africa country flourish during the western times? None. Talking about China support regime. Those west bad policy hinder Africa program and basically ruined any of them.

The west has helped Africa by uniting American singers and sang 'We are the World' and scamming common folks of their hard earned cash to give to charity where little money get to the needy.