All of the countries joining China’s alternative to the World Bank - Quartz

Russia, the Netherlands, and Australia announced over the weekend that they will be joining the Chinese-led Asian Infrastructure Investment Bank (AIIB), whose membership has become something of a test of diplomatic clout between China and the United States. The development bank is seen as a challenger to existing institutions like the World Bank or the Asian Development Bank.

Unable to increase its voice in the current institutions—China commands just 6.47% of the vote in the Asian Development Bank, 5.17% in the World Bank, and 3.81% in the International Monetary Fund—China is building its own alternative. The bank is intended to make up for the gap in funding the region needs—about $800 billion a year in infrastructure investment, according to the Asian Development Bank. It is expected to launch later this year.

So far, just over 40 countries have joined AIIB, with one day left before the deadline to join as a founding member expires. The United States and only one of its main allies, Japan, remain absent from that list. The US and other critics question whether the Beijing-led institution will uphold international standards of transparency, debt sustainability, and environmental and social protections, or just turn into an arm of Chinese foreign policy. Last week, Japan’s finance minister said, “Unless [China] clarifies these matters, which are not clear at all, Japan remains cautious.”

But as more countries join the bank, the more likely AIIB will have to follow international standards, observers have noted, and the less likely China will be able to use a multilateral institution to wield influence in the region. Here are all the countries that have joined or applied to join the AIIB:

Complete story at - All of the countries joining China’s alternative to the World Bank - Quartz

The Greanville Post • Vol. IX | The New Chinese Dream

What’s in a name, rather an ideogram? Everything. A single Chinese character – jie (for “between”) – graphically illustrates the key foreign policy initiative of the new Chinese dream.

In the upper part of the four-stroke character – which, symbolically, should be read as the roof of a house – the stroke on the left means the Silk Road Economic Belt, and the stroke on the right means the 21st century Maritime Silk Road. In the lower part, the stroke on the left means the China-Pakistan corridor, via Xinjiang province, and the stroke on the right, the China-Myanmar-Bangladesh-India corridor via Yunnan province.

Chinese culture feasts on myriad formulas, mottoes – and symbols. If many a Chinese scholar worries about how the Middle Kingdom’s new intimation of soft power may be lost in translation, the character jie – pregnant with connectivity – is already the starting point to make 1.3 billion Chinese, plus the overseas Chinese diaspora, visualize the top twin axis – continental and naval – of the New Silk Road vision unveiled by President Xi Jinping, a concept also known as “One Road, One Belt”.
In practical terms, it also helps that the New Silk Road will be boosted by a special, multi-billion-dollar Silk Road Fund and the new Asian Infrastructure Investment Bank (AIIB), which, not by accident, has attracted the attention of European investors.

The New Silk Road, actually roads, symbolizes China’s pivot to an old heartland: Eurasia. That implies a powerful China even more enriched by its environs, without losing its essence as a civilization-state. Call it a post-modern remix of the Tang, Sung and early Ming dynasties – as Beijing deftly and recently stressed via a superb exhibition in the National Museum of China consisting of rare early Silk Road pieces assembled from a range of regional museums.

In the past, China had a unifying infrastructure enterprise like the Great Wall. In the future it will have a major project of unifying Eurasia via high-speed rail. When one considers the breadth of this vision, depictions of Xi striving to be an equal of Mao Zedong and Deng Xiaoping sound so pedestrian.

Complete story at - The Greanville Post • Vol. IX | The New Chinese Dream

ClubOrlov: The Rage of the Cultural Elites

A certain unhappy incident happened to my aunt in the summer of 1966. The Cultural Revolution—a political movement initiated by Mao Zedong—was beginning to engulf the country. That same year many American college students were protesting against the Vietnam War and Leonid Brezhnev was keeping his seat warm as the General Secretary of CPSU, having replaced the somewhat volatile Nikita Khrushchev two years earlier. My aunt was then a freshman studying literature at Fudan University in Shanghai.

It so happened that my aunt, then a sensitive and somewhat dreamy young woman, had stubbornly and haplessly clung to certain musical tastes which at that time in China came to be regarded as politically incorrect, being said, in the trendy ideological jargon of that time, to reflect “decadent bourgeois revisionist aesthetics.” To wit, my aunt had kept in her record collection a rendition of “The Urals Mountain-Ash” (Уральская Рябинушка), a Russian folk song in which a young girl meets two nice boys under a mountain-ash tree and must choose between them, performed by the National Choir of the Ukrainian Soviet Socialist Republic. It was an old-style LP spinning at 78 RPM. It had a red emblem in the middle emblazoned with “CCCP.”

One of my aunt's roommates, who probably had always resented her for one reason or another, found out about it and reported her to the authorities. For this rather serious infraction, student members of the Red Guard made my aunt publicly smash her beloved record, then kneel upon the fragments and recite an apology to Chairman Mao while fellow-students threw trash at her face shouting “Down with Soviet revisionists!” This generation of Chinese young people, who once donned Red Guard uniforms, beat people up around the country and smashed various cultural artifacts, is now mostly living on government pensions or earning meagre profits from home businesses, but some have prospered and can be found among the upper crust of contemporary China’s business, cultural, and political elites.

This episode came to my mind when in the summer of 2014 I came upon video clips of Ukrainian student activists storming university classrooms in mid-lecture and ordering everyone to stand up and sing the Ukrainian national anthem, then forcing the professor to apologize for the lecture not being adequately patriotic. There were also ghastly spectacles of “Enemies of the People” (guilty only of having served under the overthrown president Yanukovich) being paraded around in trash bins. In Ukrainian schools, children were made to jump up and down, and told that “Whoever doesn't jump is a Moscal” (a derogatory term for “Russian”).

Add to this the destruction of public monuments to World War II and the ridiculous rewriting of history (turns out that, during World War II, Germany liberated Ukraine, but then Russia invaded and occupied Germany!) and a complete picture emerges: the Ukrainian Maidan movement is one of a species of “cultural revolution.” The new, fashionable term being thrown around is “civilizational pivot,” but it and the old “cultural revolution” can be understood as approximate synonyms, sharing the need for frenzied spectacles of mass humiliation and destruction.

In 1971 the Vietnam War began to draw toward an agonizing and, from the American government’s point of view, highly unfulfilling conclusion. That same year Dr. Henry Kissinger made a secret trip to Beijing, flying in from a military airport in Pakistan. This was followed by the joint Nixon-Kissinger summit in 1972, which culminated in Nixon's historic handshake with Mao Zedong, completing China's civilizational pivot away from the USSR and toward the west. In hindsight, this dramatic opening could only be properly characterized as a swift dagger-in-the-back against the USSR, in both geopolitical and ideological senses. The decrepitating, inflexible body of the USSR never recovered from this stab wound, leading to its final collapse, from a multitude of internal and external causes, two decades later.

In late February, 2014, just as Ukraine was attempting its civilizational pivot away from Russia and toward the west, I interviewed a senior captain of the Right Sector, a radical Ukrainian nationalist group with neo-Nazi stylings. The burly man looked aggressive in his paramilitary garb, and arrived with bodyguards, but turned out to be rather amiable. He was particularly glad to see me because I look Chinese. He spoke Russian, reluctantly, after announcing that he was ashamed of it. (This is typical; Ukrainians use Ukrainian to spout nationalist nonsense, but when they need to make sense they lapse into Russian.) He said that he had served in the Red Army and had been stationed in the Far East, on the Chinese border. He expressed hope that China would soon do something big in Siberia.

Complete story at - ClubOrlov: The Rage of the Cultural Elites

China’s Tacit Approval of Moscow’s Ukraine Policy | The Jamestown Foundation

By: Roger McDermott

Since Moscow initiated military operations in Ukraine in February 2014, China has seemingly adopted an ambiguous stance as Russia’s annexation of Crimea and destabilization of southeastern Ukraine evoked international condemnation. During the past year, Beijing and Moscow strengthened their strategic partnership by deepening economic ties and enhancing bilateral military cooperation. China’s comparative silence on the Ukraine crisis has given way to unusually blunt remarks from a Chinese diplomat in Brussels who recently expressed tacit support for Moscow (UNIAN, February 27). Such remarks and the continued dynamic growth of Sino-Russian relations contradict efforts by the United States and the European Union to diplomatically and economically isolate Russia. Moreover, they leave open the question as to whether Beijing and Moscow are forming a de facto military alliance.

On February 26, Qu Xing, China’s Ambassador to Belgium urged the West to “stop playing a zero-sum game” with Russia over the Ukraine crisis. In particularly candid remarks, he suggested that Western governments need to “respect” Russia’s interests, appearing to indicate strong Chinese support for Moscow (UNIAN, February 27). China has assumed a publicly ambiguous position on the crisis, although most Russian analysts highlight Beijing’s repeated abstentions in the United Nations Security Council as evidence of some level of support for the Kremlin.

Russian assessments are mixed on issues of the growth of Sino-Russian relations toward some form of alliance or on possible support for Moscow’s actions in Ukraine. Most Russian experts see the former principally driven by economic factors and the latter as more complex—though some level of Chinese backing for Russia is commonly assumed. In terms of economic cooperation, the underlying message coming out of Moscow is “business as usual,” with no indication that Beijing’s policies toward Russia are impacted by events in Ukraine. Russian specialists on China openly declare that economic ties form the long-term basis of the bilateral relationship, and this also feeds into cooperation in multilateral forums such as the Shanghai Cooperation Organization (SCO) or BRICS (loose political grouping of rising economies Brazil, Russia, India, China and South Africa). Bilateral trade is increasing, while the May 2014 energy deal agreeing to supply 38 billion cubic meters (bcm) of Russian natural gas annually to China over 30 years for $400 billion set a new record. Military cooperation is also growing, but has its limits, with Moscow traditionally proving reluctant to supply more high-technology items to Beijing (Rusprav.tv, March 4).

While the future of the Sino-Russian strategic partnership remains open for discussion, a researcher in the General Staff Academy in Moscow has offered some insights into how the top brass may view this relationship, as well as offering additional points concerning China’s diplomatic stance over Ukraine. Colonel (retired) Viktor Gavrilov, a leading researcher in military history at the Research Institute of the General Staff Academy, recently assessed developments in bilateral relations with China regarding whether the strategic partnership is becoming a military alliance (Nezavisimoye Voyennoye Obozreniye, March 6).

Complete story at - China’s Tacit Approval of Moscow’s Ukraine Policy | The Jamestown Foundation

Year of the Sheep, Century of the Dragon?

by Pepe Escobar

BEIJING -- Seen from the Chinese capital as the Year of the Sheep starts, the malaise affecting the West seems like a mirage in a galaxy far, far away. On the other hand, the China that surrounds you looks all too solid and nothing like the embattled nation you hear about in the Western media, with its falling industrial figures, its real estate bubble, and its looming environmental disasters. Prophecies of doom notwithstanding, as the dogs of austerity and war bark madly in the distance, the Chinese caravan passes by in what President Xi Jinping calls “new normal” mode.

“Slower” economic activity still means a staggeringly impressive annual growth rate of 7% in what is now the globe’s leading economy. Internally, an immensely complex economic restructuring is underway as consumption overtakes investment as the main driver of economic development. At 46.7% of the gross domestic product (GDP), the service economy has pulled ahead of manufacturing, which stands at 44%.

Geopolitically, Russia, India, and China have just sent a powerful message westward: they are busy fine-tuning a complex trilateral strategy for setting up a network of economic corridors the Chinese call “new silk roads” across Eurasia. Beijing is also organizing a maritime version of the same, modeled on the feats of Admiral Zheng He who, in the Ming dynasty, sailed the “western seas” seven times, commanding fleets of more than 200 vessels.

Meanwhile, Moscow and Beijing are at work planning a new high-speed rail remix of the fabled Trans-Siberian Railroad. And Beijing is committed to translating its growing strategic partnership with Russia into crucial financial and economic help, if a sanctions-besieged Moscow, facing a disastrous oil price war, asks for it.

To China’s south, Afghanistan, despite the 13-year American war still being fought there, is fast moving into its economic orbit, while a planned China-Myanmar oil pipeline is seen as a game-changing reconfiguration of the flow of Eurasian energy across what I’ve long called Pipelineistan.

And this is just part of the frenetic action shaping what the Beijing leadership defines as the New Silk Road Economic Belt and the Maritime Silk Road of the twenty-first century. We’re talking about a vision of creating a potentially mind-boggling infrastructure, much of it from scratch, that will connect China to Central Asia, the Middle East, and Western Europe. Such a development will include projects that range from upgrading the ancient silk road via Central Asia to developing a Bangladesh-China-India-Myanmar economic corridor; a China-Pakistan corridor through Kashmir; and a new maritime silk road that will extend from southern China all the way, in reverse Marco Polo fashion, to Venice.

Don’t think of this as the twenty-first-century Chinese equivalent of America’s post-World War II Marshall Plan for Europe, but as something far more ambitious and potentially with a far vaster reach.

Complete story at - Tomgram: Pepe Escobar, Inside China's "New Normal" | TomDispatch

The Vineyard of the Saker: Three fronts for Russia: How Washington will fan the flames of chaos in Central Asia

by Ivan Lizan for Odnako

Translated by Robin

U.S. Gen. “Ben” Hodges’ statement that within four or five years Russia could develop the capability to wage war simultaneously on three fronts is not only an acknowledgment of the Russian Federation’s growing military potential but also a promise that Washington will obligingly ensure that all three fronts are right on the borders of the Russian Federation.

In the context of China’s inevitable rise and the soon-to-worsen financial crisis, with the concomitant bursting of asset bubbles, the only way for the United States to maintain its global hegemony is to weaken its opponents. And the only way to achieve that goal is to trigger chaos in the republics bordering Russia.

That is why Russia will inevitably enter a period of conflicts and crises on its borders.

And so the first front in fact already exists in the Ukraine, the second will most likely be between Armenia and Azerbaijan over Nagorno-Karabakh, and the third, of course, will be opened in Central Asia.

If the war in Ukraine leads to millions of refugees, tens of thousands of deaths, and the destruction of cities, defrosting the Karabakh conflict will completely undermine Russia’s entire foreign policy in the Caucasus.

Every city in Central Asia is under threat of explosions and attacks. So far this “up-and-coming front” has attracted the least media coverage – Novorossiya dominates on national television channels, in newspapers, and on websites –, but this theater of war could become one of the most complex after the conflict in the Ukraine.

A subsidiary of the Caliphate under Russia’s belly

The indisputable trend in Afghanistan – and the key source of instability in the region – is to an alliance between the Taliban and the Islamic State. Even so, the formation of their union is in its early days, references to it are scarce and fragmentary, and the true scale of the activities of the IS emissaries is unclear, like an iceberg whose tip barely shows above the surface of the water.

But it has been established that IS agitators are active in Pakistan and in Afghanistan’s southern provinces, which are controlled by the Taliban. But, in this case, the first victim of chaos in Afghanistan is Pakistan, which at the insistence of, and with help from, the United States nurtured the Taliban in the 1980s. That project has taken on a life of its own and is a recurring nightmare for Islamabad, which has decided to establish a friendlier relationship China and Russia. This trend can be seen in the Taliban’s attacks on Pakistani schools, whose teachers now have the right to carry guns, regular arrests of terrorists in the major cities, and the start of activities in support of tribes hostile to the Taliban in the north.

The latest legislative development in Pakistan is a constitutional amendment to expand military court jurisdiction [over civilians]. Throughout the country, terrorists, Islamists and their sympathizers are being detained. In the northwest alone, more than 8,000 arrests have been made, including members of the clergy. Religious organizations have been banned and IS emissaries are being caught.

Complete story at - The Vineyard of the Saker: Three fronts for Russia: How Washington will fan the flames of chaos in Central Asia

Russian Debt Safer Than U.S.? So Says China Rating House Dagong - Bloomberg Business

(Bloomberg) -- A currency crisis, recession and plunge in the price of its key export don’t mean Russia is any less creditworthy than the U.S., according to one of China’s biggest debt-rating companies.

Just the opposite -- it’s a better credit risk, says Dagong Global Credit Rating Co. The firm, which downgraded U.S. government debt in October 2013 to A-, today said it has decided to maintain Russia’s rating at A with a stable outlook.

“The debt repayment environment has somewhat deteriorated but is expected to stabilize in the medium term,” Dagong said in an emailed statement regarding its assessment. “As the economy stabilizes and the monetary policy normalizes, the domestic credit environment will gradually recover.”

Russia’s economy is forecast to contract 1.8 percent this year versus 3 percent growth in the U.S., which would be the fastest pace in 10 years, according to economists’ projections. Dagong’s optimism contrasts with the biggest ratings companies: Standard & Poor’s said last month it will probably lower Russia to non-investment grade within 90 days, while Fitch Ratings will announce the results of a review tomorrow.

Privately-held Dagong, established in 1994, isn’t formally tied to the Chinese government. It started sovereign ratings in 2010 in a bid to break the monopoly of U.S. rating firms, according to the company’s website, mirroring the government’s strategy of gaining greater influence on the global stage.

Complete story at - Russian Debt Safer Than U.S.? So Says China Rating House Dagong - Bloomberg Business

​Gazprom gets highest investment grade from China’s biggest ratings agency — RT Business

China’s Dagong rating agency has given Russia’s Gazprom the highest AAA credit rating with a long-term stable outlook. It says US and EU sanctions won’t have a substantial effect on the creditworthiness of the world’s largest gas producer.

"Obtaining such a credit rating by Dagong will further expand the base of investors from the Asia-Pacific region in debt instruments of Gazprom, including pension funds, insurance companies, investment funds and banks, as well as increasing the loyalty of Asian investors in the company," Gazprom said in a statement.

The rating shows Gazprom’s strong wealth creation capability, and “the very low degree of deviation between its available repayment sources and wealth creation capability,” reported Dagong.

The agency says the sanctions imposed by the US and the EU against Russia will have little effect on Gazprom’s creditworthiness. The credibility of Gazprom in local and foreign currency is very high, it goes on to say.

A high credit rating from Dagong allows Gazprom to place shares in Hong Kong, the agency’s president Guan Jianzhong said on Monday.

"The rating reflects a very high potential for the company," he said, adding that the outlook for Gazprom’s long-term credit rating will remain ‘stable’ over the next 1-2 years.

The agency kept the sovereign credit rating of Russia at A level with a stable outlook, which means a high level of credibility.

Complete story at - ​Gazprom gets highest investment grade from China’s biggest ratings agency — RT Business

Growing the Russia-China New Relationship | New Eastern Outlook

While the Obama Administration is preoccupied with keeping an increasingly unhappy EU firm on further economic sanctions against Vladimir Putin’s Russia, Putin is busy outflanking an increasingly desperate Washington. Rather than fixate on the deliberate US and NATO provocations in Ukraine, Russia is deepening its strategic ties with the other Great Eurasian land-power, the Peoples’ Republic of China. Far from Putin going begging to Beijing for money, the two powers are weaving a closer strategic counterweight to an Anglo-American elite gone bonkers as its empire slips from its hands.

Unimportant are all diplomatic declarations by Chinese deputy Prime Ministers and others in recent weeks about how China so deeply respects the unique role of the United States as sole superpower. The reality on the ground speaks of a tectonic and well-thought-through change in the geopolitical world order is underway. Not only are Russia and China signing gigantic oil and gas agreements that insulate Russia from the negative effects of a potential loss of the EU energy markets in coming months.

Now the two powers have agreed on one of the world’s largest-ever infrastructure projects that will create huge new markets across Eurasia.

Transforming Eurasia

Russia and China have agreed to build a 7,000-kilometer high-speed rail link from Beijing to Moscow, at a cost of $242 billion, almost a quarter trillion dollars, according to the Beijing city government. The journey from Beijing to Moscow would take two days on a route passing through Kazakhstan. It will take take eight to 10 years to build. The rail project is the most ambitious rail infrastructure project in the Eurasian history, even surpassing the Trans-Siberian Railway project across Russia.

The new Beijing-Moscow highspeed rail corridor shown in yellow will transform the economic space of Eurasia

In October, 2014, China and Russia signed an agreement to build the first leg of the Beijing-Moscow high-speed rail link. That specified that Chinese firms and their Russian partners will construct a 770-km high-speed line connecting Moscow and Kazan, an important metropolis on the Volga River, en route to Beiing.

Then last November as US sanctions and the US-engineered oil price collapse added a new urgency to the project, Alexander Misharin, vice-president at state-owned OAO Russian Railways, said a section would cost $60 billion to reach Russia’s border, and would cut the Beijing-Moscow journey from five days to 30 hours. Misharin at the time compared the new transport network to the Suez Canal “in terms of scale and significance.” In reality, it has the potential to far exceed the Suez Canal as it serves to unify a high-speed transport network integration vast new markets across Eurasia from Beijing to Moscow that draw in some 4.4 billion of the world population.
First appeared: http://journal-neo.org/2015/01/31/growing-the-russia-china-new-relationship/

Complete story at - Growing the Russia-China New Relationship | New Eastern Outlook

Reuters Objectively See’s Russia’s Options as Losing or… Losing Badly | First Rebuttal

“I’ve long thought that he has pursued a pre-World War Two course which could only end badly – a course in which his power is maximized by crushing internal opponents, expanding empire and using the military to frighten neighboring countries into submission.”, writes John Lloyd of Reuters. I read this excerpt from his recent article and thought finally someone in mainstream media is honestly discussing the foreign policy of America, just to eventually find out he is actually talking about Putin. However, Lloyd does go on to imply American foreign policy can be described much the same way.

Unfortunately the rest of the article is basically ‘informing’ the reader that Putin has two options; 1. he can lose or 2. he can lose badly. John Lloyd’s coverage must be a bit disappointing to all those readers that purchased Lloyd’s 2004 book “What the Media are Doing to our Politics”. It is clear that John Lloyd is nothing more than yet another mainstream media muppet of the neocon storyline. The more they say it apparently the more true they believe it becomes. In any case, I suppose I could overlook the obvious hypocrisy if it were well thought out. However, Lloyd seems to miss the one most likely option, the China factor.

“Russia has the capability and the wisdom to overcome the existing hardship in the economic situation,” Foreign Minister Wang Yi told journalists, China Daily reported Monday. “If the Russian side needs it, we will provide necessary assistance within our capacity.” In a recent piece I published, I discuss the clear motivation of the Western Alliance to crush Russia is an attempt to contain the obvious new world dominating force, China. You see China has just surpassed the US as the world’s top economy. Its military is by far the largest military in the world though probably not the most sophisticated, yet. But there is no rational mind that argues China will not be the world’s single superpower in a mere 20 years if not sooner. The Western Alliance (which is the collective of Western leaders that have long controlled global policies), however, is not so rational. The central banking cartel along with the Western Alliance are not going down without a fight.

The problem is that by way of pure demographics the Western Alliance concedes a majority of the world’s assets will be owned by the East within the next few years and with majority of wealth typically comes control. James Wolfensohn, ex president of the World Bank, lays out the global power shift very clearly in his address at Stanford University. But so how does the Western Alliance hold onto global control whilst no longer holding the majority of the world’s assets? Well that is the challenge James presents to students in his address. In reality the Western Alliance is not calmly passing the challenge onto these future leaders but is very much initiating the battle to end all battles. You see it is natural for the Alpha dog to eventually pass on the crown. It happens in all top-of-the-food-chain species, lions, wolves, bears, etc. The dominating male will eventually be challenged by a more impressive up and comer. And while that alpha dog can hold onto his top rank for a few years past his prime by putting on a show of strength eventually it comes down to his last fight.

I see that as where America and the Western Alliance stands today. You see we’ve been barking very loud and putting on an impressive show of strength by taking on very weak challengers since the beginning of the new millennium, however, the real challenger is China. And we’ve all known that for some time. As Wolfensohn discusses it is becoming a now or never reality for the Western Alliance. Either they find a way to contain the impressive beast or they give up their Alpha status. And so here they are in the fight for global control. In that earlier piece I wrote I describe how the Western Alliance is targeting energy, as it is China’s achilles heel. China’s energy source for the future is Russia. Given its economic, military and energy prowess, a Sino-Soviet Alliance will trump the Western Alliance. The objective then is to destroy the Soviet variable before the Sino-Soviet Alliance is fortified. Control China’s energy and you can contain China.

Clearly Russia’s future has very little to do with the Western world and so they have no motive to start wars with the West. There is nothing to gain by doing so. However, they have every motive to defend themselves against Western aggression. And so if you see Russian aggression with the West it can only be defensive in nature. Nations (other than North Korea) do not act in a way that is to the detriment of its political class. Because warring with the West presents no possible upside but significant downside for Russia and her leaders, they will actually be willing to do everything in their power to prevent such a scenario.

Complete story at - Reuters Objectively See’s Russia’s Options as Losing or… Losing Badly | First Rebuttal

Russian Sanctions Might Be Obama’s Greatest Blunder | Johnson's Russia List

(oilprice.com – Robert Berke – January 25, 2015) One of the greatest foreign policy blunders of the Obama Administration was the push by the U.S. for economic sanctions against Russia. That led to Russia fleeing into the arms of China for refuge. In response, Russia, Europe’s largest and most populated country, is now intent on moving its vast storehouse of resources eastward, strengthening America’s largest emerging rival.

Over the last two years, the two countries have completed a $700 billion agreement for Russia to deliver energy to China, amounting to about 17% of Chinese annual supply, for a period covering twenty years, with China financing much of the initial costs of pipeline construction.

What Russia has done, in that one move, is to help repair a major hole in China’s military armor, making it invulnerable to a U.S. cut-off of sea bourn energy supplies, which until now was one of the greatest fears of Chinese military strategists.

From the Chinese perspective, this is a gift that fulfills its wildest dreams. It’s also a gift that could severely undermine the West’s plans to deliver expensive Liquified Natural Gas (LNG) to China and Asia, while already facing competition from Qatar and Australia LNG, will now also run up against Russian pipeline gas through China.

That can’t be wise policy for the U.S.

Consider the fact that prior to adoption of the sanction regime, Russia and China were not even military allies. Their histories are fraught with mutual distrust, competition, and border conflicts. Although Russia has often supplied China with military equipment, it has always held back on high-tech weapons because of mistrust. Why supply advanced weapons to a country that might one day become your adversary?

Now, things have changed drastically, with both countries developing an alliance clearly balanced against the West. Recently, Russia offered China its most advanced ballistic missile system, that China had long sought in order to offset US sea and airpower superiority. With that, China will become far more capable of countering America’s pivot to Asia.

Just this week (1.20.15), China agreed to finance a high-speed rail link between Beijing and Moscow, with an estimated cost of $242 billion.

Complete story at - Russian Sanctions Might Be Obama’s Greatest Blunder | Johnson's Russia List

2015: A World Ruled by Hubris, Willful Blindness and Desperation - Washington's Blog

Issuing lies and pursuing willful blindness is not leadership: it’s failure on a grand scale.

Rather than issue predictions for 2015, this week I’ll cover themes that I believe will be consequential in the year ahead.

The first theme is the dominant psychological dynamic of global leadership, which can be distilled down to a toxic brew of Hubris, Willful Blindness and Desperation.

Examples of leadership hubris abound, and they all arise from the false confidence that the same playbook and tools that rescued the Status Quo from well-deserved oblivion for the past six years will continue working splendidly in the years ahead.

Prime examples include the Federal Reserve, which clearly believes its own PR (we are omnipotent and the markets rise at our command) and China’s leadership, which clearly believes that the strategies and tools that rescued China from implosion in 2008-09 can be applied to the entirely different problem of deflating the world’s greatest quadruple-bubble in shadow banking, real estate, commodities and state-owned enterprises (SEOs).

The two problem-states could not be more different, and hence the Chinese leadership’s bravado is classic hubris.

The legal definition of willful blindness is when someone attempts to evade responsibility by claiming ignorance of conditions that they should have known.One classic example is the drug mule who claims “I didn’t know there was cocaine in this diaper bag, officer.” The courts take a dim view of this bogus defense, and the public should take an equally dim view of leadership’s claims that they couldn’t possibly have foreseen the coming crisis in pensions and unfunded liabilities.

Our leaders’ claims of ignorance are even more absurd than those of a drug mule, for leadership means grasping the nettle of what is obvious to everyone who glances at the basic facts. I have chosen pensions and unfunded liabilities as a prime example, but there are many other equally visible examples of our leadership’s willful blindness.

Complete story at - 2015: A World Ruled by Hubris, Willful Blindness and Desperation Washington's Blog

2015 Will Be All About Iran, China and Russia / Sputnik International

Pepe Escobar

BEIJING, December 31 (Sputnik) — Fasten your seatbelts; 2015 will be a whirlwind pitting China, Russia and Iran against what I have described as the Empire of Chaos.

So yes – it will be all about further moves towards the integration of Eurasia as the US is progressively squeezed out of Eurasia. We will see a complex geostrategic interplay progressively undermining the hegemony of the US dollar as a reserve currency and, most of all, the petrodollar.

For all the immense challenges the Chinese face, all over Beijing it's easy to detect unmistakable signs of a self-assured, self-confident, fully emerged commercial superpower. President Xi Jinping and the current leadership will keep investing heavily in the urbanization drive and the fight against corruption, including at the highest levels of the Chinese Communist Party (CCP). Internationally, the Chinese will accelerate their overwhelming push for new 'Silk Roads' – both overland and maritime – which will underpin the long-term Chinese master strategy of unifying Eurasia with trade and commerce.

Global oil prices are bound to remain low. All bets are off on whether a nuclear deal will be reached by this summer between Iran and the P5+1. If sanctions (actually economic war) against Iran remain and continue to seriously hurt its economy, Tehran’s reaction will be firm, and will include even more integration with Asia, not the West.

No matter how it was engineered, the fact that stands is that the current financial/strategic oil price collapse is a direct attack against (who else?) Iran and Russia.

Washington is well-aware that a comprehensive deal with Iran cannot be reached without Russia’s help. That would be the Obama administration’s sole – and I repeat – sole foreign policy success. A return to the “Bomb Iran” hysteria would only suit the proverbial usual (neo-con) suspects. Still, by no accident, both Iran and Russia are now subject to Western sanctions. No matter how it was engineered, the fact that stands is that the current financial/strategic oil price collapse is a direct attack against (who else?) Iran and Russia.

Complete story at - 2015 Will Be All About Iran, China and Russia / Sputnik International

Go West, Young Han — RT Op-Edge

November 18, 2014: it’s a day that should live forever in history.

On that day, in the city of Yiwu in China’s Zhejiang province, 300 kilometers south of Shanghai, the first train carrying 82 containers of export goods weighing more than 1,000 tons left a massive warehouse complex heading for Madrid. It arrived on December 9th.

Welcome to the new trans-Eurasia choo-choo train. At over 13,000 kilometers, it will regularly traverse the longest freight train route in the world, 40% farther than the legendary Trans-Siberian Railway. Its cargo will cross China from East to West, then Kazakhstan, Russia, Belarus, Poland, Germany, France, and finally Spain.

You may not have the faintest idea where Yiwu is, but businessmen plying their trades across Eurasia, especially from the Arab world, are already hooked on the city “where amazing happens!” We're talking about the largest wholesale center for small-sized consumer goods - from clothes to toys - possibly anywhere on Earth.

The Yiwu-Madrid route across Eurasia represents the beginning of a set of game-changing developments. It will be an efficient logistics channel of incredible length. It will represent geopolitics with a human touch, knitting together small traders and huge markets across a vast landmass. It’s already a graphic example of Eurasian integration on the go. And most of all, it’s the first building block on China’s “New Silk Road,” conceivably the project of the new century and undoubtedly the greatest trade story in the world for the next decade.

Go west, young Han. One day, if everything happens according to plan (and according to the dreams of China’s leaders), all this will be yours - via high-speed rail, no less. The trip from China to Europe will be a two-day affair, not the 21 days of the present moment. In fact, as that freight train left Yiwu, the D8602 bullet train was leaving Urumqi in Xinjiang Province, heading for Hami in China’s far west. That’s the first high-speed railway built in Xinjiang, and more like it will be coming soon across China at what is likely to prove dizzying speed.

Today, 90% of the global container trade still travels by ocean, and that’s what Beijing plans to change. Its embryonic, still relatively slow New Silk Road represents its first breakthrough in what is bound to be an overland trans-continental container trade revolution.

Complete story at - Go West, Young Han — RT Op-Edge

Unfortunately US Neo-Cons Have Not Reversed A Confrontationist Course Towards China

The goal of the Obama administration’s ‘pivot to Asia’ was encircling and containing China. This was officially denied but was evident from the facts and, therefore, naturally was transparently clear to China’s leadership,consequently considerably increasing tensions in the Pacific region.

A new element in the ‘pivot’ was the clear US administration calculation that China was now sufficiently strong that the US alone could not by itself feel sure of winning a contest with China in the Pacific. Therefore the US administration attempted to construct an ‘anti-China alliance’

US policy steps in line with the ‘pivot’ only made sense in that framework - stationing US military forces in Australia; announcing the Diaoyu Islands were included in the military alliance with Japan; stating 60% of US military forces would be in the Pacific; encouraging Philippine challenges to China, seeking agreements with Vietnam clearly de facto aimed against China.

China undoubtedly attempted to persuade the US against a course of confrontation. In June 2013, shortly after becoming president, Xi Jinping went to California, for a summit with President Obama, to try to establish US-China relations based on what China terms mutual respect for 'core interests'/a ‘new type of relation’ between powers. Regretfully the US did not change its policies. If there was a personal coolness at the Xi-Obama press conference after the APEC summit, as some commentators have suggested, this was possibly due to the fact that Xi’s personal attempt to head off a US-China confrontation had been rebuffed.

Slightly over a year later, around the APEC and G20 summits in November 2014, it is evident that China’s growing strength has won a decisive victory against the US confrontationist policy. But, regretfully, as will be seen, US neo-con forces have not concluded this fight is strategically damaging but merely that the terrain of confrontation with China must be shifted.

Complete story at - Key Trends in Globalisation

And The Biggest Winner From The OPEC Price War Is... | Zero Hedge

"This is a golden time window to acquire more strategic oil at lower costs," notes one Hong-Kong based analyst, as Bloomberg confirms what we have noted here and here, that China is emerging as the winner from OPEC’s battle with rival oil producers as the world’s biggest energy consumer stockpiles crude.

84 tankers remain en route to Chinese destinations...



As Bloomberg reports,

The dwindling number of investors still betting on a rebound in prices can at least count on Chinese demand. OPEC decided to maintain output targets even as a shale boom boosts U.S. production to the highest in more than three decades and causes a global supply glut. As crude extends its slump to the lowest level in more than four years, China is seeking to build a strategic petroleum reserve.

“This is a golden time window to acquire more strategic oil stockpiles at lower costs,” Gordon Kwan, the Hong Kong-based head of regional oil and gas research at Nomura Holdings Inc., wrote in an e-mail Nov. 28. China will be “a big beneficiary” from the OPEC decision, he said.

Complete story at - And The Biggest Winner From The OPEC Price War Is... | Zero Hedge

Russian news: Europe's Next Energy Crisis Is Now Assured - Russia Insider

Russia inked a second blockbuster deal with China that will starve Europe for natural gas in just a few short years. It's now increasingly clear that 2018 will mark the beginning of the end for any hopes Europe had of returning to robust economic growth.

It was by far the biggest news of the day. While it did make headlines, you might have missed it because not much was made of the affair beyond the announcement. The story came and went as if Russia has oodles of natural gas (NG) to send to China.

It doesn't. And the supplies it has now contracted to send to China will be pulled from supplies that currently go to Europe.

For the people who understand global energy markets -- that energy is the one non-negotiable substance required for economic stability and growth -- this announcement was a huge deal.

Here's what was announced:

Moscow and Beijing signed an agreement to supply gas from western Siberia to China, in a deal that could eventually see more of Russia’s gas flowing to its vast eastern neighbour than to its traditional European markets.

Assuming crucial details such as price are agreed, the deal would mark another big step in President Vladimir Putin’s efforts to build a closer energy relationship with China to offset increasing isolation from the west.

It would see Gazprom, the Kremlin-controlled energy group, supply China’s state oil company CNPC with 30bn cubic metres of gas per year. That would be on top of the 38bcm/y Russia agreed to sell China in a $400bn agreement signed in May.

Complete story at - Russian news: Europe's Next Energy Crisis Is Now Assured - Russia Insider

Russia, China Sign Second Mega-Gas Deal: Beijing Becomes Largest Buyer Of Russian Gas | Zero Hedge

As we previewed on Friday, when we reported that "Russia Nears Completion Of Second "Holy Grail" Gas Deal With China", moments ago during the Asia-Pacific Economic Cooperation forum taking place this weekend in Beijing, Russia and China signed 17 documents Sunday, greenlighting a second "mega" Russian natural gas to China via the so-called "western" or "Altay" route, which as previously reported, would supply 30 billion cubic meters (bcm) of gas a year to China.

Among the documents signed between Russian President Vladimir Putin and Chinese leader Xi Jinping were the memorandum on the delivery of Russian natural gas to China via the western route, the framework agreement on gas supplies between Russia's Gazprom and China's CNPC and the memorandum of understanding between the Russian energy giant and the Chinese state-owned oil and gas corporation.

“We have reached an understanding in principle concerning the opening of the western route,” Putin said. “We have already agreed on many technical and commercial aspects of this project, laying a good basis for reaching final arrangements.”

RIA adds, citing Gazprom CEO Alexei Miller, that the documents signed by Russia and China on Sunday define the western route as a priority project for the gas cooperation between the two countries.

"First of all these documents stipulate that the "western route" is becoming a priority project for our gas cooperation," Miller said, adding that the documents provide for the export of 30 billion cubic meters of Russian gas to China annually for a 30-year period.

Miller noted that with the increase of deliveries via the western route, the total volume of Russian gas deliveries to China may exceed the current levels of export to Europe in the medium-term perspective. In other words, China has now eclipsed Europe as Russia's biggest, and most strategic natural gas client. More:

Complete story at - Russia, China Sign Second Mega-Gas Deal: Beijing Becomes Largest Buyer Of Russian Gas | Zero Hedge

Beijing $40 billion offer to revive the historic Silk Road, starts Central-Asia geostrategic competition

Beijing says it will spend $40 billion to revive the historic Silk Road and connect China with Central Asia, the Middle East and Europe. Chinese President Xi Jinping said the ambitious project is designed to "break the connectivity bottleneck" in Asia.

The "Silk Road Economic Belt" initiative, announced by Xi Jinping in 2013, is designed to allow capabilities of Chinese state-controlled construction companies to further expand its already booming trade with central Asia and Europe by diversification of Chinese trade routes, lowering transportation costs, opening up new markets, and an expansion of the Chinese sphere of influence beyond Asia. It will also secure the supply of Uranium and rare metals from Central Asia.

The land route will begin in Xi'an, in central China, before stretching to the border with Kazakhstan. The Silk Road, then heads southwest to Iran before passing through Iraq, Syria and Turkey. The new Silk Road, then crosses the Bosphorus and heads through Europe, traversing Bulgaria, Romania, the Czech Republic, Germany and Rotterdam in the Netherlands – from which the path runs south to Venice where it converges with the planned maritime route.

The Chinese Silk Road plans, however, compete with other Central Asian strategies, especially the Russia-initiated the Eurasian Economic Union and the U.S.-initiated New Silk Road Initiative.

Complete story at - Beijing $40 billion offer to revive the historic Silk Road, starts Central-Asia geostrategic competition

Asia Times Online :: Do the Trans-Siberian shuffle

By Pepe Escobar

A specter haunts the elites of the Empire of Chaos; the new Russia-China strategic partnership. It's manifesting itself in myriad ways - energy deals, investment deals, a closer political alliance inside the G-20, the BRICS and the Shanghai Cooperation Organization, a concerted effort to progressively bypass the petrodollar. I have described this long process as essential to the birth of the Eurasian century.

From a Washington/Wall Street point of view, it was so much easier in those long gone, unipolar, "end of history" days. China was still tiptoeing on the banks of the river of capital accumulation, and Russia was down if not out.

So allow me a flashback to the early 1990s. I had been on the road in Asia for months, from all points Southeast Asia to India, Nepal, the Himalayas and the eastern Chinese seaboard. Then I finally hit Beijing - waiting in the bitter winter of early 1992 to take the Trans-Siberian to Moscow. I was barely aware of the collapse of the Soviet Union - not exactly a news item in the Himalayas. I was also fortunate enough to be in southern China just a few days after Deng Xiaoping made his famous tour - whose key consequence was to catapult the dragon to dizzying development heights. A look back to those heady times may have the merit of illuminating our present.

All aboard the night train

It's 8:32 pm in Beijing Railway Station, and the Trans-Manchurian Train 19 to Moscow is about to depart. It's minus 9 degrees Celsius. A bunch of Romanian crazies are trying to load more than 20 huge, vaguely green bundles stuffed with Made-in-China gear into one of the carriages. The Russian comptroller spouts out a "Nyet". Romanian chicks immerse in Transylvanic hysteria. Then a stash of George Washingtons changes hands at the final whistle, just in time for PLA soldiers and lady sweepers sporting the ubiquitous red armband with the words "Serve The People" to impassibly observe the happy ending.

A cacophony of Russians, Poles, Romanians, Czechs and Mongols has deployed dozens of bags, bundles and sacks to totally overload the train corridors. 300 kg of shoes. 500 kg of jackets. 200 kg of T-shirts. Thousands of beauty cream pots that will be all the rage from Bucharest to Cracow. A "bed" on the train is a concavity over one of the bundles. That will be story for six days, across over 9,000 snowy kilometers in the former USSR, now Russia, from East to West.

Complete story at - Asia Times Online :: Do the Trans-Siberian shuffle