Chinese Economics Thread

[delft]

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Anyone know if this is a good source?

Right now i'm on the hunt for sources that can be used to attest to China's growing status as a producer of goods comparable to the west and others.

My story is from several years ago. Mobile phone networks need base station that are placed high on buildings with their antennae. Those stations were so heavy that you needed an engineer to calculate the strength of the wall they were hung on and often to design the needed reinforcements. Perhaps after reinforcing the wall you came with a mobile crane to hoist the base station and mount it. It needed the work of several men. Then Huawei came and produced a base station a single man carried to the roof and mounted there as any wall would be strong enough. I understand Huawei drove the competition out of The Netherlands and several other countries but not out of the US as Congress was able to make a protective law based on fear of Chinese spying.

 

[Quickie]

Germany is joining the AIIB too. It has sort of the the avalanche effect.

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Germany confirms to join China-proposed investment bank: Finance Minister

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2015-03-17 21:20:04

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German Finance Minister Wolfgang Schaeuble attends a press conference in Berlin, capital of

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, on March 17, 2015. Germany confirmed to join the Asian Infrastructure Investment Bank (AIIB), German Finance Minister Wolfgang Schaeuble said on Tuesday. (Xinhua/Zhang Fan)




BERLIN, March 17 (Xinhua)-- Germany is going to be a founding member of the Asian Infrastructure Investment Bank(AIIB), German Finance Minister Wolfgang Schaeuble said on Tuesday.

"We want to work with international financial organizations together, use our extensive experience, to help the new bank to reach a high international reputation," the minister said after the first China-Germany High Level Financial Dialogue held in Berlin.

According to a joint statement of the dialogue, both China and Germany agree that "the AIIB bank as a new investment Bank could play an important role to provide funds for infrastructure in Asia."

Both

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and Italy officially confirmed their intention to join the bank on Tuesday.

With an expected initial subscribed capital of 50 billion U.S. dollars, the AIIB will be an international financial institution to fund infrastructure projects in Asia and is expected to be formally established by the end of this year.

Twenty-one countries including China, India and Singapore signed a Memorandum of Understanding in Beijing in October last year to build the bank.

 

[Quickie]

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France confirms to join China-proposed Asian bank: gov't spokesman

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2015-03-17 21:00:01

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PARIS, March 17 (Xinhua) --

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has confirmed its intention to become one of the founding members of the Asian Infrastructure Investment Bank (AIIB), French government spokesman Romain Nadal told Xinhua on Tuesday.

"This new investment bank, which will aim to work in partnership with existing multilateral investment and development banks, can play an important role in financing infrastructure constructions of which Asia has a major need," Nadal said.

AIIB would not only participate in the economic and social development of the region, but would also contribute to global economic growth, he added.

France, along with Italy and

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who also confirmed their respective intentions to join the AIIB, are eager to work together with the founding members of the AIIB to create this institution, Nadal said.

With an expected initial subscribed capital of 50 billion U.S. dollars, the AIIB will be an international financial institution to fund infrastructure projects in Asia and is expected to be formally established by the end of this year.

Twenty-one countries including China, India and Singapore signed a Memorandum of Understanding in Beijing in October last year to build the bank.

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Italy confirms intention to become founding member of AIIB: economy ministry

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2015-03-17 20:09:58

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ROME, March 17 (Xinhua) -- The Italian Economy Ministry announced on Tuesday that Italy intends to become prospective founding member of the Asian Infrastructure Investment Bank (AIIB).

 

[solarz]

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France confirms to join China-proposed Asian bank: gov't spokesman

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2015-03-17 21:00:01

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PARIS, March 17 (Xinhua) --

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has confirmed its intention to become one of the founding members of the Asian Infrastructure Investment Bank (AIIB), French government spokesman Romain Nadal told Xinhua on Tuesday.

"This new investment bank, which will aim to work in partnership with existing multilateral investment and development banks, can play an important role in financing infrastructure constructions of which Asia has a major need," Nadal said.

AIIB would not only participate in the economic and social development of the region, but would also contribute to global economic growth, he added.

France, along with Italy and

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who also confirmed their respective intentions to join the AIIB, are eager to work together with the founding members of the AIIB to create this institution, Nadal said.

With an expected initial subscribed capital of 50 billion U.S. dollars, the AIIB will be an international financial institution to fund infrastructure projects in Asia and is expected to be formally established by the end of this year.

Twenty-one countries including China, India and Singapore signed a Memorandum of Understanding in Beijing in October last year to build the bank.

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Italy confirms intention to become founding member of AIIB: economy ministry

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2015-03-17 20:09:58

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ROME, March 17 (Xinhua) -- The Italian Economy Ministry announced on Tuesday that Italy intends to become prospective founding member of the Asian Infrastructure Investment Bank (AIIB).

And to think, just a few months ago, people were saying South Korea not joining was a blow. It's pretty amazing how China managed to pull this one off.

 

[Quickie]

And to think, just a few months ago, people were saying South Korea not joining was a blow. It's pretty amazing how China managed to pull this one off.

It's kind of understandable in the case of South Korea for not immediately joining. Maybe at a later date when more countries are already on board.

 

[solarz]

It's kind of understandable in the case of South Korea for not immediately joining. Maybe at a later date when more countries are already on board.

No doubt, I am just amused to see the AIIB issue evolving from a situation where South Korea's failure to join immediately was portrayed as a major blow, to the current situation where their joining is almost an afterthought.

 

[Janiz]

It's easy - Germany or France risk nothing while South Korea risks more and more of Chinese economic policy influence which they won't be able to counter into it's own turf. What's wrong with that?

Being amazed by that is amazing for me.

 

[Equation]

A senior U.S. diplomat said it was up to individual countries whether to join a new China-led international development bank as media reports said a growing number of close U.S. allies were ignoring Washington's pressure to stay out of the institution.

France, Germany and Italy have agreed to follow Britain's lead and join the Asian Infrastructure Investment Bank (AIIB), the Financial Times reported, quoting European officials.

The newspaper said the decision by the four countries to become members of the AIIB was a major diplomatic setback for Washington, which has questioned if the new bank will have high standards of governance and environmental and social safeguards.


The bank is also seen as contributing to the spread of China's "soft power" in the region, possibly at the expense of the United States.

EU parliament president Martin Schulz said he welcomed the four European nations joining the AIIB, but added the bank must conform to internationally accepted standards.

"I find it good that they join," he told reporters while on a visit to Beijing. "If more member states would join I would find it even better.

"There is one additional element. Such new organizations must answer to the requirements of international standards. That is quite important."

China's state-owned Xinhua news agency said South Korea, Switzerland and Luxembourg were also considering joining.

However, Chinese foreign ministry spokesman Hong Lei would not comment on which countries had applied to join, and repeated that the bank would be "open, inclusive, transparent and responsible".

On Tuesday, Washington's top diplomat for east Asia signaled that concerns about the AIIB remained, but the decision on whether to join was up to individual nations.

"Our messaging to the Chinese consistently has been to welcome investment in infrastructure but to seek unmistakable evidence that this bank...takes as its starting point the high watermark of what other multilateral development banks have done in terms of governance," U.S. Assistant Secretary of State for East Asian and Pacific Affairs Daniel Russel said in Seoul.


"Every government can make its own decision about whether the way to achieve that goal is by joining before the articles of agreement are clarified or by waiting to see what the evidence looks like as the bank starts to operate," he told reporters.

WORLD BANK RIVAL

The AIIB was launched in Beijing last year to spur investment in Asia in transportation, energy, telecommunications and other infrastructure. It was seen as a rival to the Western-dominated World Bank and the Asian Development Bank.

China said earlier this year a total of 26 countries had been included as founder members, mostly from Asia and the Middle East. It plans to finalize the articles of agreement by the end of the year.

A finance ministry official in India, one of the countries that has joined, said the members of the AIIB would meet in Almaty, Kazakhstan, on March 29-31 to discuss the articles of agreement.

China has said March 31 is the deadline for accepting founder-members into the organization.

Japan, Australia and South Korea remain notable regional absentees from the AIIB, although Australian Prime Minister Tony Abbott said at the weekend he would make a final decision on AIIB membership soon.


South Korea has said it is still in discussions with China and other countries about its possible participation.

Japan, China's main regional rival, has the biggest shareholding in the Asian Development Bank (ADB) along with the United States and the Manila-based bank is headed by a Japanese, by convention.

Japan is unlikely to join the China-backed bank, but the head of the ADB, Takehiko Nakao, told the Nikkei Asian Review that the two institutions were in discussions and could cooperate.

"We've begun sharing our experience and know-how," Nakao was quoted as saying.

"Once the AIIB has actually been established, it's conceivable that we would cooperate," he said.

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[broadsword]

It's easy - Germany or France risk nothing while South Korea risks more and more of Chinese economic policy influence which they won't be able to counter into it's own turf. What's wrong with that?

Being amazed by that is amazing for me.

They stand to lose out more by not joining. They can offer their competitive edge and win some something and that is why they are negotiating with China to join.

 

[PanAsian]

It's easy - Germany or France risk nothing while South Korea risks more and more of Chinese economic policy influence which they won't be able to counter into it's own turf. What's wrong with that?

Being amazed by that is amazing for me.

I think you are missing the point. That the US needs to exert any diplomatic pressure at all with any of these countries for them to hesitate joining is a sign something is amiss. The AIIB is purportedly sharing power among its members so that it is not just China's (or any other single country's) house unlike the WB, ADB, and IMF, all of which have devolved to practically just carrying out US favored policies with some consideration of Western European and Japanese interests.

Which was not a big problem until the US elite chose "quantitative easing" to handle the '07 financial crisis bailing out select US investments and financial institutions at the expense of everyone else including the US and foreign publics, savers, and foreign investments. Other countries had consensually set up the US as the lynchpin of the international economic system in a "rising tide lifts all boats" spirit, but since the crisis the US has proven that it is unwilling to divest itself of its international economic influence when asked nicely despite clearly having misbehaved and essentially betrayed others' trust by using its position to benefit itself at the expense of others.

This Reuters article touches very gently and briefly on what I am talking about:

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...
The AIIB was launched in Beijing last year to spur investment in Asia in transport, energy, telecommunications and other infrastructure. It was seen as a rival to the Western-dominated World Bank and the Asian Development Bank. China has said it will use the best practices of those institutions.

NOT AN ACCIDENT

The World Bank is traditionally run by a U.S. nominee and Washington also has the most influence at the IMF. The United States and Japan are the dominant members of the Asian Development Bank (ADB).

The planned reforms at the IMF would double the fund's resources and hand more voting power to countries such as the BRICS - Brazil, Russia, India, China and South Africa. The adjustment of shares and voting rights was brokered by Britain at a Group of 20 summit in 2010, and European countries ratified it long ago.

Lew told lawmakers that the U.S. delay in ratifying the agreement was undermining its credibility and influence as countries question the United States' commitment to international institutions.
...

Given this reality every country that wants some economic independence and safety is looking for options and alternatives to anything US-directed. This includes many countries including South Korea, Japan, and Australia choosing to settle more trade in their own and others' currencies other than USD. The US can still regain others' trust by changing course, unfortunately the same circle of self-serving elite who shrugged off accountability at others' expense during the financial crisis still wield enormous influence in the US and the international economy will probably never be the same again. Hopefully as the saying goes, Americans will always do the right thing, only after they have tried everything else.