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‘The Asian century’

April 4th, 2019

East has surpassed West, whether the West knows it or not, says Peter Frankopan

by Greg Klein

East has surpassed West, whether we know it or not, says Peter Frankopan

“Silk roads” can refer to the process of connecting people and cultures
through trade, according to Peter Frankopan’s recently published book.

 

Less than two years ago tensions along an especially sensitive border area sparked fighting between Chinese and Indian troops. Outside Asia, who knew? “As most of the world focused on the Twitter account of the US president and the circus surrounding Brexit, the threat of the two most populous countries on earth going to war was not just a possibility, it looked like becoming a fact,” writes Peter Frankopan. An uneasy truce eventually stalled hostilities but the West’s ignorance of the wider world remains. That’s both symptom and cause of the West’s decline, the author says.

The decisions being made in today’s world that really matter are not being made in Paris, London, Berlin or Rome—as they were a hundred years ago—but in Beijing and Moscow, in Tehran and Riyadh, in Delhi and Islamabad, in Kabul and in Taliban-controlled areas of Afghanistan, in Ankara, Damascus and Jerusalem. The world’s past has been shaped by what happens along the Silk Roads; so too will its future.—Peter Frankopan

Relatively few Westerners realize the extent of China’s Belt and Road Initiative. Actually a complex suite of alliances concerning resources, infrastructure, trade, security and even culture, the BRI forms just part of an Asian awakening that’s shifting the planet’s centre of importance while strengthening Eastern influence beyond Asia and Africa to make inroads into Europe, the Americas, the Arctic, cyberspace and outer space.

That’s the message of historian Frankopan’s latest book, The New Silk Roads: The Present and Future of the World. While present and future aren’t normally the precinct of historians, it was historical perspective that brought Frankopan to the topic. In context, Western global supremacy has been a recent, short-lived development.

Since announcing the BRI in 2013, China has promised nearly $1 trillion, mostly in loans, for about 1,000 projects, Frankopan reports. That money could “multiply several times over, to create an interlinked world of train lines, highways, deep-water ports and airports that will enable trade links to grow ever stronger and faster.”

That would enhance China’s access to, and control over, resources ranging from oil and gas to mines and farmland; provide markets for Chinese exports including surplus steel, cement and metals, as well as manufactured goods; create projects for Chinese contractors; secure foreign ports and other strategic commercial and military locations; and build closer foreign alliances for geopolitical as well as economic benefits.

Backed by Chinese money and local sovereign debt, Chinese companies have pushed roads, railways, power plants, grids and pipelines through Africa and Asia at a much faster rate than ever seen through Western aid. Of course that can put the supposed beneficiaries at the mercy of their Chinese creditors.

East has surpassed West, whether we know it or not, says Peter Frankopan

In 2011, for example, China forgave neighbouring Tajikistan’s infrastructure-related debt in exchange for several hundred square kilometres of territory. A $7-billion rail line in Laos represents over 60% of the country’s GDP. A rail-building boom in Angola left citizens with a per capita debt to China of $754 out of a per capita income of $6,200. In 2017 a Chinese company got a 99-year lease in lieu of debt on the Sri Lankan port of Hambantota, a strategic site for both commercial and military reasons. Other ports in Maldives, Vanuatu, the Solomon Islands and Djibouti could face a similar fate.

Even so, something like 85% of BRI projects “have proceeded without difficulty,” Frankopan states. China conducts many of its most opportunistic acquisitions openly, like buying a controlling interest in Piraeus, the Athenian port since antiquity. Other seaport purchases have taken place in Spain, Italy and Belgium.

Strategic ports and an alliance with Pakistan help position China in the Indian Ocean, while China continues to expand its South China Sea presence by building artificial islands for military bases. This isn’t just “the crossroads of the global economy” but a ploy to extend military power thousands of miles farther, according to a U.S. Navy admiral. China’s ambitions continue in the disputed East China Sea, location of the 2010 Senkaku conflict, in which China’s rare earths tactics demonstrated yet another weapon in the country’s arsenal.

As an economic powerhouse as well as a “geopolitical alternative to the US,” China can profit from American sanctions on countries like Iran. Russia too challenges U.S. policies towards countries like Saudi Arabia and Turkey, while the latter shows its willingness to trade with Iran and buy arms from Moscow.

Military co-operation can create unlikely allies. Last summer, in Russian’s largest war games since 1981, Beijing contributed 30 fighter jets and helicopters along with more than 3,000 troops. Included in the exercises were simulated nuclear attacks.

While futurologists and networking pioneers often talk about how the exciting world of artificial intelligence, Big Earth Data and machine learning promise to change the way we live, work and think, few ever ask where the materials on which the digital new world [depends] come from—or what happens if supply either dries up or is used as a commercial or a political weapon by those who have a near-monopoly on global supply.—Peter Frankopan

Even India, America’s strongest Asian ally and the Asian country most wary of Chinese expansion, stands to undermine U.S. influence with proposed transportation connections and free trade with Iran and Afghanistan.

Yet obvious perils weaken any notion of a united Asia working harmoniously towards a common goal. Russian-Chinese military co-operation doesn’t preclude Moscow stationing its 29th Army 3rd Missile Brigade, with nuclear missile capabilities, near the Chinese border.

Time will tell whether other countries can overcome the Eurasian chaos that inspired this maxim of Canadian miners: “Never invest in a country with a name ending in ‘stan’.”

Then there’s extremist Islam. Uighurs from western China have fought in Syria for the Islamic State in numbers estimated “from several thousand to many times that number.” China risks wider Muslim anger by running a gulag archipelago for Muslims. The country’s Xinjiang Uygur Autonomous Region hosts “the largest mass incarceration of a minority population in the world today.”

Oddly enough for someone who knocks Western insularity, Frankopan seems to share the current preoccupation with the U.S. president. Among Frankopan’s criticisms of the West is its supposed opposition to immigration, even though that’s a marginal position within liberal countries but official policy in most of the East.

Nor does Frankopan mention the weird ideological zealotry that threatens to destabilize if not destroy the West from within.

Still, history’s greatest value might be perspective on the present. This historian’s view of the present and future can help Westerners understand their not-so-esteemed status in the Asian century.

Canada’s gold sell-off bucks international trend

February 15th, 2016

by Greg Klein | February 15, 2016

Canada’s gold sell-off bucks international trend

With no help from Canada, central bank gold purchases totalled
588.4 tonnes last year, second only to the 2013 record of 625.5 tonnes.
Chart: World Gold Council

 

Other countries have been net buyers of gold since 2010, but not Canada. The Great White North has less than one tonne left, the CBC reports. Last year’s reserve was modest enough, but still stood at over US$100 million through most of 2015. Recent selling drove the stash down to $19 million by February 8, according to finance ministry figures cited by the network.

Canada’s gold sell-off bucks international trend

Photos: Royal Canadian Mint

They show sales of 41,106 ounces in December and another 32,860 ounces the following month, all in maple leaf coins. That left 21,929 ounces at the end of January, which the Bank of Canada called “negligible,” the CBC stated.

Gold’s recent price spike, which on its February 11 peak had some retailers offering over C$1,780 for one-ounce maple leafs, had nothing to do with the sales, finance ministry spokesperson David Barnabe informed the CBC.

“The government has a long-standing policy of diversifying its portfolio by selling physical commodities (such as gold) and instead investing in financial assets that are easily tradable and that have deep markets of buyers and sellers,” he stated in an e-mail.

That seems to be at odds with the policies of other countries. The World Gold Council attributes the metal’s attraction to other central banks to the “size and diversity of gold supply and demand,” which means it’s “highly liquid and remains so throughout periods of uncertainty. Gold’s historic lack of correlation with other reserve assets and negative correlation to the U.S. dollar mean it is commonly used to manage market risk and improve portfolio performance.”

Central bank buying “surged” in H2 2015, according to WGC figures released February 11, “resulting in the second-highest annual demand in our records.”

With Canada apparently among the exceptions, central banks have been net buyers of gold since 2010, “driven in part by uncertainty over the future of the international monetary systems and the need to diversify reserves,” the WGC stated.

But the CBC found, “Our gold holdings amount to less than 0.1% of the US$82.6 billion that Canada has in official international reserves.” The world’s largest officially reported hoard belongs to the U.S., with its 8,133.5 tonnes making up 72% of total American reserves in 2015, according to the WGC. Following the U.S. is Germany (3,381 tonnes, or 66% of reserves), Italy (2,451.8 tonnes or 64%) and France (2,435.6 tonnes or 60%). To consider a country more comparable with Canada, Australia reported 79.9 tonnes, or 6% of reserves.

Among those selling gold last year, the WGC noted Germany (3.2 tonnes), El Salvador (5.4 tonnes) and Colombia (6.9 tonnes).

Canada held more than 1,000 tonnes of gold during the 1960s, the CBC stated.

June 8th, 2015

Italy accuses Chinese bank in massive money laundering investigation Stockhouse
The real value of gold in the ground: Part 3 GoldSeek
Sprott wringing value from aged bull market NAI 500
How to ride the lithium battery boom: JGL Partners’ Jonathan Lee Equities Canada
Yukon Premier Darrell Pasloski: Our goal is to be the number one mining location Streetwise Reports
Strict specifications: UK frac sand potential Industrial Minerals
Great deposits of the world—Hishikari, Japan Geology for Investors

June 5th, 2015

Italy accuses Chinese bank in massive money laundering investigation Stockhouse
The real value of gold In the ground: Part 3 GoldSeek
Sprott wringing value from aged bull market NAI 500
How to ride the lithium battery boom: JGL Partners’ Jonathan Lee Equities Canada
Yukon Premier Darrell Pasloski: Our goal is to be the number one mining location Streetwise Reports
Strict specifications: UK frac sand potential Industrial Minerals
Great deposits of the world—Hishikari, Japan Geology for Investors

Copper price jumps again as global manufacturing gathers pace

September 3rd, 2013

by Frik Els | September 3, 2013 | Reprinted by permission of Mining.com

The spot copper price enjoyed another strong session on Tuesday, adding more than 2% to its gains yesterday to a high of $3.32 a pound.

By early afternoon the red metal was trading at $3.30 on Comex in New York, up 2.2% or $0.0725 from Monday’s close.

The move higher on Tuesday amid a generally strong day for mining and metals was driven by good manufacturing numbers from China and the UK on Monday, followed by data showing surprisingly strong industrial activity in the Eurozone and continued recovery in the U.S. out on Tuesday.

UK order books and output grew at their fastest pace in almost two decades in August while Eurozone manufacturing data released Monday showed the recovery in Germany spreading to laggards Spain and Italy.

On Monday, official Chinese non-manufacturing purchasing managers data dipped slightly but new orders showed a sharp increase setting up strong growth over the coming months, according to the National Bureau of Statistics.

The non-official index of the manufacturing sector out last week also provided a pleasant surprise to markets, rising above 50 for the first time in four months, indicating expansion.

U.S. manufacturing also showed improvement. While top line growth shrunk, inventories fell dramatically with demand outstripping available supply last month.

Copper gained 4.5% in August, a second month of gains, and hit a two-month intra-day high of $3.38 in the middle of last month.

Copper has also rallied more than 8.5% from the intra-day low of $3.03 hit at the end of July.

Reprinted by permission of Mining.com