Shanghai Cooperation Organisation (SCO) and Global South strategic cooperation

tphuang

tphuang

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taxiya said:
That USD between Malaysia and China is the one going to be replaced by RMB when the two countries are expanding RMB and Ringgit usage in bilateral trade. This is the squeezed dollar that I was talking about. Since China and ASEAN are number 1 trading partners of each other, the dollar to be replaced is huge. Only trade involving other countries will remain priced in USD.

For trade of fixed amount of goods, there is a fixed amount of currency in circulation. Since dollar is used (printed supplied by Fed) in place of RMB and Ringgit (for example) in trade between China and Malaysia, if the two decides to print more RMB and Ringgit for serve that purpose, they can. The problem would be that there is surplus USD already printed for the same purpose.

I am not sure about how currency and economy are taught in the west, I am only educated in China by the Marxist analysis. In that theory, currency should not be over-issued, if it does, currency will devaluate, no amount of monetary policy can change that. In the scenario that we are discussing, one can say USD was overprinted or RMB is to be overprinted, the outcome is the same, it is only matter of which currency is accepted as the new medium for trade and the share of them.
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I agree replacing USD is very important for China. I'm just saying that it probably doesn't work the way you are thinking here. in an environment where all commerce is done in USD, the businesses and/or their banks have to keep some amount of USD on hand, so they can pay or take payment in USD. This is a process that allows American institutions to take a cut out of all the transactions. Dealing directly in RMB will save a lot of cost for Chinese businesses. It also cuts American control from the process.

I'm saying those USD doesn't come from printing or what not. They are created by the financial institutions in the middle of the transactions. a US financial institutions can $10 billion of FX transactions or $100 billion of FX transactions with the same amount of USD liquidity on hand. Since at the end of the day, you are just buying and selling.
 
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taxiya

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tphuang said:
I agree replacing USD is very important for China. I'm just saying that it probably doesn't work the way you are thinking here. in an environment where all commerce is done in USD, the businesses and/or their banks have to keep some amount of USD on hand, so they can pay or take payment in USD. This is a process that allows American institutions to take a cut out of all the transactions. Dealing directly in RMB will save a lot of cost for Chinese businesses. It also cuts American control from the process.
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Totally agree.
tphuang said:
I'm saying those USD doesn't come from printing or what not. They are created by the financial institutions in the middle of the transactions. a US financial institutions can $10 billion of FX transactions or $100 billion of FX transactions with the same amount of USD liquidity on hand. Since at the end of the day, you are just buying and selling.
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not sure if I understand right, but currency is printed to represent goods in circulation. No financial institution can create it in any way. Only outcomes of the factories, farmers and barber's services determine how much paper currency should be printed and in circulation.

This is where I think that differs our understands. In my (Marxist's) view, financial institutions determines nothing about money circulation. However, in the west, they do have this power and ability as you said. That is why Marxists see it as a flaw in capitalism, a flaw with no cure and a flaw against how economy would have worked without circular crisis.

Now we have gone to the point where everything is clear and agreeable except the ultimate question like "who created the world". :D It is time for me to stop.
 
tphuang

tphuang

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taxiya said:
Totally agree.
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So, I'm really curious to see where China goes from here. The amount of trading done using RMB and processed through CIPS is more what I thought was happening. That's a great sign for their dominance of ASEAN region and RCEP. Russia is already using Chinese financial instruments for a lot of their stuff. Seems like Central Asian countries are next. And then, Middle Eastern, certain friendly South Asian states. Africa might come around soon too.
 
2handedswordsman

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taxiya said:
Totally agree.

not sure if I understand right, but currency is printed to represent goods in circulation. No financial institution can create it in any way. Only outcomes of the factories, farmers and barber's services determine how much paper currency should be printed and in circulation.

This is where I think that differs our understands. In my (Marxist's) view, financial institutions determines nothing about money circulation. However, in the west, they do have this power and ability as you said. That is why Marxists see it as a flaw in capitalism, a flaw with no cure and a flaw against how economy would have worked without circular crisis.

Now we have gone to the point where everything is clear and agreeable except the ultimate question like "who created the world". :D It is time for me to stop.
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They FED and ECB are not printing money out of thin air like the popular saying. They are indebting themselves, and the whole world consequently. The results are obvious worldwide and the recent decades are obvious in US and EU itself. The point is, when the time will come when their own people demand to stop indebting them indirectly, or an other stronger party come and ask for the debts to be repaid.
 
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The SCO is not the vehicle for China to take the economic lead. That would be ASEAN and RCEP. SCO is for securing and stabilizing the hinterland/rear guard so that in the event of a China-US war, China has the diplomatic relationships and land routes (for trade) in continental Eurasia in case of blockaded sea trade. Especially for necessities like minerals, oil/gas, food, fertilizer, etc.
 
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taxiya

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2handedswordsman said:
They FED and ECB are not printing money out of thin air like the popular saying. They are indebting themselves, and the whole world consequently. The results are obvious worldwide and the recent decades are obvious in US and EU itself. The point is, when the time will come when their own people demand to stop indebting them indirectly, or an other stronger party come and ask for the debts to be repaid.
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Well, the average price of gold was $40.25 per ounce in 1950. Today an ounce of gold is worth almost $1,200. That is 30 times. I don't think the gold extracted increased that much since1950s. You can also compare the dollar price of 1kg beef with today. The dollar price increase for the very same product of same quality is what printed out of thin air, its other name is inflation.

Because FED does it, every other central banks (PBC and ECB included) will follow suite to keep their price competitiveness, racing to the bottom regardless they wanted or not. In the end everybody print money out of thin air. The only difference is scale. Note, any major economy can start the loop, not only US, but since US is the largest economy and the dominance of USD, US is the most responsible one.

US and EU indebt themselves because of over-expenditure, while China is much less indebt because of higher saving rate among Chinese and the government practice more "量入而出" than western counterpart, even though all three countries over-print their currencies.
 
tphuang

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https://twitter.com/i/web/status/1572160698603687937
Alright, so MOUs with Kazakhstan and Laos for RMB clearing with their central banks.

of course, China needs to continue to work with its Asian partners to increase the role of RMB. They need probably less currency restrictions and greater role of local bond market.

This is after the one signed with Mauritius 2 weeks ago
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Also a lot of desire in Pakistan and Bangladesh for more clearing
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tphuang

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Natural partnership between China and Kazakhstan on nuclear energy front. This was probably a large part of the trip
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Another part is just further increasing the rail network between the two countries. The quicker they can set this up the better. China will benefit from Kazakhstan export to rest of Asia through this rail network.
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With Uzbekistan, there is less resources, but there were quite a few deals signed. Getting into the local power sector is one part of it.
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SanWenYu

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Russia sets the bar for Turkey to join SCO: quit NATO.

Putin's special envoy to SCO explained it as that candidate countries cannot be in conflict with any current SCO member, cannot have ongoing external conflicts either, not sanctioned by UN, and not a member of international groups that are hostile to any current SCO member. He specifically named NATO as such international group which has declared Russia as its number one enemy.

But by these conditions, how were India and Pakistan allowed to join then?

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俄外交部：土耳其必须符合加入上合组织标准，不能是北约成员国​


据俄罗斯卫星通讯社9月20日消息，俄罗斯总统上合组织事务特别代表、俄罗斯外交部无任所大使巴赫季耶尔∙哈基莫夫表示，土耳其应符合加入上海合作组织的一系列标准，不能是北约等集团的成员国。


哈基莫夫说：“我们有接纳新成员的条例，其中规定了一些标准，包括属于欧亚地区国家，积极保持与上海合作组织成员国的外交、经贸和文化联系，既与上海合作组织成员国没有冲突，也没有卷入外部冲突，不受联合国安理会制裁，同时也不参与敌对或针对上海合作组织成员国的活动和集团。”


哈基莫夫称，土耳其是北约成员国，北约“宣布俄罗斯不仅仅是敌人，而且是头号敌人”。
 
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