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China – a powder keg

photo ID1974 /
photo ID1974 /
The People’s Republic has 2,8 million troops at its disposal i.e. the world’s largest army. There are also 3,8 million reservists. For years China has been investing billions in its armed forces: in 2016 it was 216 billion dollars.1)Ranking der 15 Länder mit den weltweit höchsten Militärausgaben im Jahr 2015, the United States can afford to spend more on armaments. The task that China has set itself is to be able to win regional wars, for China is in conflict with many of its neighbours.

A bone of contention in the high mountains
In July 2016 China’s ground forces encroached upon Indian territory,2)China marschiert über die indische Grenze ein – Indien reagiert mit Langmut, Epoch Time 28-07-2016.which was not an isolated event since the 1960 war on the Indian-Chinese border or rather a demarcation line that had been drawn by the withdrawing British Empire. As in 2005, India entered into a nuclear agreement with the United States, China perceived it as a hostile act. On the other hand India did not like the fact that China leased a whole island from the Maldives, where it intended to build a port for nuclear-powered submarines.3)Geheime Basis für Atom-U-Boote entdeckt, Spiegel Online 02-05-2008.The border conflict at the foot of the Karakorum should be seen as a part of a broader picture: Pakistan, India’s ally, has been battling against India in Kashmir for years.

References   [ + ]

1. Ranking der 15 Länder mit den weltweit höchsten Militärausgaben im Jahr 2015,
2. China marschiert über die indische Grenze ein – Indien reagiert mit Langmut, Epoch Time 28-07-2016.
3. Geheime Basis für Atom-U-Boote entdeckt, Spiegel Online 02-05-2008.

Is China a Ukrainian ally?

Waving flag of Ukraine and China
photo Mijatovic

China is taking cautious international steps, following its national interests. Much to the Western man’s regret, it did not let itself be dictated to how to respond to the Russian incorporation of Crimea. Still, China kept Ukrainian economy alive in the aftermath, thus strengthening the Ukrainian-Chinese cooperation.

The New Silk Road

As the EU and USA cannot finance all the infrastructural projects in Ukraine, the country is turning to China for help, which in turn is interested in Ukraine as an indispensable part of the New Silk Road. Already in 2013 former Ukrainian President Viktor Yanukovych signed a number of agreements with China,1)Переломный визит Януковича в Китай: $30 млрд инвестиций и гарантированная квота для украинской продукции, Economics 2013-12-09.among them one that with the aid of China’s $13 billion envisaged turning Crimea into a huge transit hub. The Russian military actions thwarted these plans, which were later shifted to Southern Ukraine.

References   [ + ]

1. Переломный визит Януковича в Китай: $30 млрд инвестиций и гарантированная квота для украинской продукции, Economics 2013-12-09.

EU, not China or Japan, is the biggest US Treasury holder. And this is not a good sign.

EU, not China or Japan, is the biggest US Treasury holder. And this is not a good sign.
photo shutterstock / Nik Waller Productions
US-centric media report that Japan has become the biggest holder of the US treasuries, surpassing China last month. However, this is true only in regard to single countries. If we consider European Union member states collectively, then they appear to be the biggest holder of the US treasuries. It has been so almost one year long. Unfortunately, the EU’s holdings are artificially overstated because of some financial havens and they are going in the opposite direction to the trend: up rather than down.

According to the latest data from TIC (Treasury International Capital System), the EU was in possession of $1242 billion of US Treasuries in November 2016, $9 billion more than one month earlier. The EU was the only one from three biggest holders that increased its amount of US treasuries in November, while China and Japan continued to lower their holdings.

China is militarizing the South China Sea, or is it?

South China Sea conflict between China and Philippines over Spratly Islands and Paracel islands
Photo: Lenka Horavova/ShutterStock

China is by far the most powerful contestant. Neither the Philippines, nor Malaysia nor Vietnam can compare, though they, especially Hanoi, dare to put up a fight and stave off the encroachment on its sovereignty. China, true, is willing to sit down to the negotiation table, yet insists on bilateral talks; the smaller contestants prefer group talks. An they all look to the United States, if for different reasons. China is trying to expand its regional clout, the smaller countries are defending their rights. And the United States? Failure to respond to the Chinese challenge entails serious consequences such as damage to Washington’s status of the world superpower and loss of American credibility, not only in the eyes of the few South-East Asian nations concerned but also others, like Japan. The eyes of the world are thus focused on the South China Sea.

Kazakhstan: the next victim of chaos and global games

The time of Kazakhstan’s stability and prosperity is just passing away. And this conclusion does not come from recent protests and shootings in the city of Aktobe, but from the panicky reaction of President Nursultan Nazarbayev. According to the 75-year old declared Leader of the Nation and his officials, latest developments are a “color revolution” aiming at a “coup” made by “pseudo-religious extremists” financed by detained pro-Russian businessmen; the President voices this opinion despite the fact that previously he claimed it was the “fifth column” of undefined third (western) powers that attempted to interfere with Kazakhstan’s internal policy. Madness. As if it were not  the sharp decline in oil revenues has nothing to do with that in a country which produces 1.7 million barrels per day.

Making things even worse, it is questionable if the Aktobe event was prepared by Wahhabis or other Islam terrorists. Religious extremists usually do not attack gun shops and military units, but prefer bombings and random mass killings1)Kazakhstan: Nazarbayev Embraces Color Revolution Paranoia, Source: 2016-06-08. Moreover, they usually wear beards, whereas most of Aktobe assailants were clean-shaven2)Nazarbayev believes that in the tragedy of Aktobe blame the “color revolution”, Source: The Newspapers 2016-06-09. Radio Liberty attributes the responsibility for the attack to the “Army for the Liberation of Kazakhstan,” which, according to officials and some other experts, does not even exist. The level of misinformation is enormous.

References   [ + ]

1. Kazakhstan: Nazarbayev Embraces Color Revolution Paranoia, Source: 2016-06-08
2. Nazarbayev believes that in the tragedy of Aktobe blame the “color revolution”, Source: The Newspapers 2016-06-09

Ruthenia delenda est

It toohannibalk three wars for Rome to destroy Carthage. Carthago delenda est was the catchphrase of the day. Weakened though Carthage was, it was not allowed to exist. It took two wars for the Atlantic Anglo-Saxon alliance to destroy Germany. Germany must perish1 was the catchphrase of the day. And so Germany perished in the firestorms of carpet bombings. Now Germany is an American protectorate with a docile government and a people so re-educated that it has been turned into German self-haters. What will it take to destroy Russia? Because Ruthenia delenda est, Russia must perish, has been the catchphrase of the day for years now. And will be.

Collapsing global trade a harbinger of the next crisis

photo BigRoloImages
photo BigRoloImages

A falling industrial demand, falling commodity prices, falling trade, falling sales. This is what we see now in China, Europe and even in the USA. What comes next? Falling employment, falling customers’ demand, falling economy. Global trade gives us clear signals that we cannot ignore.

A crisis is coming and these are the signs:

  1. China: October imports fell 18.8 percent in comparison to the previous year1. It is the beginning of the domino effect, with its coal and iron background.
  2. Taiwan: October orders from China fell 10.6 percent in comparison to the previous year, from Japan 24 percent down. Taiwan’s export orders are seen as an indicator of a demand for high-tech gadgets and for Asia’s exports2.
  3. Japan: first decline in exports in October since August 2014 (2.1 percent in comparison to the previous year). Reasons: China’s slowdown, poor Asia’s demand, the yen not weak enough. Double-digit declines in auto parts and electronic components3.
  4. Germany: a monthly drop in exports in August, due to declines in industrial production and the number of factory orders4.
  5. UK: 40% of respondent-companies are below average in export orders. Reasons: China’s downturn and a strong sterling5.
  6. Baltic Exchange’s main sea freight index fell below 500 for the first time. Baltic’s BDI Index (gauging the cost of shipping) reflects a slower coal and iron ore demand in China. 19-commodity Thomson Reuters/Core Commodity CRB Index reached 13-year lows6.
  7. USA: quiet three busiest U.S. seaports during ‘peak shipping season’. Imports in Los Angeles, Long Beach and New York fell in both September and October for the first time in a decade7.