Thanks to China, Christine Lagarde of the International Monetary Fund (IMF), Jim Yong Kim of the World Bank (WB) and Takehiko Nakao of the Asian Development Bank (ADB) may no longer have a lot of meaningful work ahead, as Beijing has moved in to help Russia, and aid for Venezuela and Argentina.
This action signals the death of the post-war Bretton Woods world. It also marks the beginning of the end for America’s linchpin role in the global economy and Japan’s influence in Asia.
The Big Q: What is China’s new Asian Infrastructure Investment Bank (AIIB) if not a move to ‘kill’ the ADB?
The Big A: If Japan, ADB’s main benefactor, will not share the presidency with Asian peers, Beijing will just use its wealth and power to undermine its mission.
Ms. Lagarde’s and Mr. Kim’s banks also are looking at a future in which crisis-wracked governments call Beijing before the ring up Washington.
China has stepped 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 overblown, change-adverse institutions.
China’s President Xi Jinping’s government does not care about upgrading economies, the health of tax regimes or central bank reserves. It cares about loyalty. The quid pro quo is this: For our generous assistance we expect your full support on everything from Taiwan to territorial disputes to deadening the West’s influence on all national matters.
Russia, Argentina and Venezuela are already at odds with the US and its allies.
And how about Europe?
In Ys 2011 and 2012, Europe looked to Beijing to save Euro bond markets through massive purchases. Economists expect more of this in Y 2015 should more problems hit the Eurozone, at which time Beijing will expect European leaders to align.
Then,what happens if the US Federal Reserve’s tapering slams economies from India to Indonesia and governments look to China for help, and why should Cambodia, Laos or Vietnam bother with the IMF’s conditions when China writes checks with few strings attached?
Beijing’s $24-B currency swap program to help Russia is a sign of things to come. Russia is too nuclear to fail.
As Moscow weathers the worst crisis since its Y 1998 default, it’s tempting to view China as a good global citizen. But Beijing is enabling President Vladimir Putin, who is now under no pressure to diversify his economy away from Crude Oil. The same goes for China’s $2.3-B currency swap with Argentina and its $4-B loan to Venezuela.
There is a lot to worry about as China also gives money to the likes Sudan and Zimbabwe, and there is a lot at stake for Asia’s budding democracies. With China becoming Asia’s benefactor, the temptation in Myanmar for instance may be to avoid the difficult process of creating credible institutions to oversee the economy.
China’s generosity with its $4-T of currency reserves may force the IMF, World Bank and ADB to raise their missions. Competition is good, but the West is limited in its abilities to compete with China’s wealth and mission.
Stay tuned…
HeffX-LTN
Paul Ebeling
China The World's New Bank | Live Trading News
This action signals the death of the post-war Bretton Woods world. It also marks the beginning of the end for America’s linchpin role in the global economy and Japan’s influence in Asia.
The Big Q: What is China’s new Asian Infrastructure Investment Bank (AIIB) if not a move to ‘kill’ the ADB?
The Big A: If Japan, ADB’s main benefactor, will not share the presidency with Asian peers, Beijing will just use its wealth and power to undermine its mission.
Ms. Lagarde’s and Mr. Kim’s banks also are looking at a future in which crisis-wracked governments call Beijing before the ring up Washington.
China has stepped 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 overblown, change-adverse institutions.
China’s President Xi Jinping’s government does not care about upgrading economies, the health of tax regimes or central bank reserves. It cares about loyalty. The quid pro quo is this: For our generous assistance we expect your full support on everything from Taiwan to territorial disputes to deadening the West’s influence on all national matters.
Russia, Argentina and Venezuela are already at odds with the US and its allies.
And how about Europe?
In Ys 2011 and 2012, Europe looked to Beijing to save Euro bond markets through massive purchases. Economists expect more of this in Y 2015 should more problems hit the Eurozone, at which time Beijing will expect European leaders to align.
Then,what happens if the US Federal Reserve’s tapering slams economies from India to Indonesia and governments look to China for help, and why should Cambodia, Laos or Vietnam bother with the IMF’s conditions when China writes checks with few strings attached?
Beijing’s $24-B currency swap program to help Russia is a sign of things to come. Russia is too nuclear to fail.
As Moscow weathers the worst crisis since its Y 1998 default, it’s tempting to view China as a good global citizen. But Beijing is enabling President Vladimir Putin, who is now under no pressure to diversify his economy away from Crude Oil. The same goes for China’s $2.3-B currency swap with Argentina and its $4-B loan to Venezuela.
There is a lot to worry about as China also gives money to the likes Sudan and Zimbabwe, and there is a lot at stake for Asia’s budding democracies. With China becoming Asia’s benefactor, the temptation in Myanmar for instance may be to avoid the difficult process of creating credible institutions to oversee the economy.
China’s generosity with its $4-T of currency reserves may force the IMF, World Bank and ADB to raise their missions. Competition is good, but the West is limited in its abilities to compete with China’s wealth and mission.
Stay tuned…
HeffX-LTN
Paul Ebeling
China The World's New Bank | Live Trading News