US allies defect as new world order tips towards China

[webfact]

OVERDRIVE
US allies defect as new world order tips towards China
Thanong Khanthong

BANGKOK: -- Washington is losing its clout. Its allies in Europe - the UK, Germany, France and Italy - have applied to become members of the China-led Asia Infrastructure Investment Bank (AIIB), defying US calls for them to exercise caution.

The institution is seen as a rival to the World Bank and the Asian Development Bank. Once the AIIB gets off the ground, it will become an international financial institution to be reckoned with, offering financing for infrastructure projects in yuan-denominated loans.

This is the underlying reason for Washington's concern over the creation of the AIIB. Allowing the yuan to flourish will hit the international standing of the US dollar as the world's reserve currency of choice. China, Russia and other BRICS countries are moving away from the dollar, preferring to trade among themselves in their own currencies. Not only will this reduce foreign exchange risks associated with the dollar, it will also promote the use of their own currencies. Washington cannot afford to let a new international foreign exchange regime come into being. With a budget deficit of $1 trillion a year, the US needs to finance its debt with borrowing. If the dollar's credibility is questionable, fewer and fewer countries and funds will be willing to become the US's creditors by buying up US bonds. The dollar will be dumped. Interest rates will rise, hurting the economy and the financial markets. The chain reaction will bring another round of financial crisis.

The AIIB was created in October last year from founding members China, India, Thailand, Malaysia, Singapore, the Philippines, Pakistan, Bangladesh, Brunei, Cambodia, Kazakhstan, Kuwait, Laos, Myanmar, Mongolia, Nepal, Oman, Qatar, Sri Lanka, Uzbekistan and Vietnam. China stated that it would hold a 50 per cent stake in the institution by pitching in $50 billion. The remaining $50 billion would come from the other countries - 50 per cent from Asean countries.

The US sought to torpedo the AIIB from the outset. Washington officials came out to caution that the AIIB's lending practice might not meet governance or environment standards. But that was merely a ruse to scare off countries from joining the AIIB amid fear that the US was about to lose its power over global finance.

China has good reasons to set up the AIIB. Along with other emerging market countries, it has been calling for a greater role in international financial institutions such as the IMF. The IMF is undergoing reform to allow a greater role for other emerging market economies. Many countries agree with this move, but not the US. It should be noted that the combined GDP of the developing countries now equals that of their developed counterparts. As such, there is no justification for the US or the EU to maintain their veto privilege in the international institutions.

The US Congress in December last year failed to pass a law that would have increased the capital for the IMF and reformed the institution. This upset the Chinese, who were looking forward to increasing their quota representation in the IMF and adding the yuan to the IMF's basket of currencies. The Chinese economy is now second in size only to the US. In terms of purchasing power parity it is larger. So with this new status, China naturally wants to play a greater role in the international arena. But all along, the US has sought to block Beijing's role.

Now, however, we have come to a point where the US can no longer dictate global events on its own terms. The fact that its allies are deserting to join the AIIB reflects the waning of Washington's influence. Its allies realise they will miss the boat if they fail to join the AIIB, because the growth opportunities are in Asia - not in Europe or the US, where structural problems have yet to be addressed.

The US has the option of either staying out of the AIIB or of applying for membership. But whatever choice it makes, it won't prevent China from playing its yuan card in a big way.

Source: http://www.nationmultimedia.com/opinion/US-allies-defect-as-new-world-order-tips-towards-C-30256394.html


-- The Nation 2015-03-20

[Paulc01]

This is the same anti-American conspiracy theorist who a short while back was writing article after article about how Russia was going to lead the way and destroy the US. Now that the Russian economy is in shambles, he's latching on to China. All that Chinese financial clout? Backed by the world's worst pollution, massive corruption, ghost cities, tofu bridges, buildings, and overapasses, and a middle in class in a debt trap that is pushing them to oblivion. Yeah, China's the answer alright.

Edited March 20, 2015 by Paulc01

[sdanielmcev]

This is the same anti-American conspiracy theorist who a short while back was writing article after article about how Russia was going to lead the way and destroy the US. Now that the Russian economy is in shambles, he's latching on to China. All that Chinese financial clout? Backed by the world's worst pollution, massive corruption, ghost cities, tofu bridges, buildings, and overapasses, and a middle in class in a debt trap that is pushing them to oblivion. Yeah, China's the answer alright.

Tofu bridges? Okay, that's funny.

[squarethecircle]

Nope. Go back to China Thanong.

[zydeco]

China, Russia and other BRICS countries are moving away from the dollar, preferring to trade among themselves in their own currencies.

Hmmm. Russia tries to sell overpriced oil and gas and what else? Caviar? Brazil? It's corrupt political class just brought out 1.5 million protesters. I hope they didn't get too thirsty, because the news reports I see say Brazilians find it increasingly difficult even to get water pumped into the homes. There's a trading giant for you--can't even pump water. And, then, there's China. Just waiting for the crash. Maybe the Indians can save them.

[bangkokheat]

like rats deserting a sinking ship

[Credo]

Jumping ship, maybe, but they are still in the middle of the ocean.

I think it's more like out of the frying pan and into the fire.

[Seastallion]

like rats deserting a sinking ship

Smart rats.

[TheKnave]

Would that it were so, Khun Thanong. It would be delightful to see those memory-challenged little countries trade the US for China, and the inevitable consequences. Sadly, only Thailand is seemingly moving in that direction.

I hear Chinese language classes are standing room only in Bangkok these days. Think they will be selling knee pads in 7-Eleven soon?

Sinking ship, indeed.

[ALLSEEINGEYE]

well perhaps if all those American job creators created some jobs in USA instead of creating them in China then some of this problem could have been averted. But the rich get richer even while shooting themselves in the foot.

[Berkshire]

This is the same anti-American conspiracy theorist who a short while back was writing article after article about how Russia was going to lead the way and destroy the US. Now that the Russian economy is in shambles, he's latching on to China. All that Chinese financial clout? Backed by the world's worst pollution, massive corruption, ghost cities, tofu bridges, buildings, and overapasses, and a middle in class in a debt trap that is pushing them to oblivion. Yeah, China's the answer alright.

Agree. As soon as I saw the title, I immediately checked to see who wrote it and sure enough, it was this guy Thanong. He's extremely anti-American for whatever reason and is simply not credible. It's one thing to report reality and trends and such, but to leap to outrageous conclusions is irresponsible.

[emilymat]

This is the same anti-American conspiracy theorist who a short while back was writing article after article about how Russia was going to lead the way and destroy the US. Now that the Russian economy is in shambles, he's latching on to China. All that Chinese financial clout? Backed by the world's worst pollution, massive corruption, ghost cities, tofu bridges, buildings, and overapasses, and a middle in class in a debt trap that is pushing them to oblivion. Yeah, China's the answer alright.

Agree. As soon as I saw the title, I immediately checked to see who wrote it and sure enough, it was this guy Thanong. He's extremely anti-American for whatever reason and is simply not credible. It's one thing to report reality and trends and such, but to leap to outrageous conclusions is irresponsible.

Also agree. But the General will like it and maybe that's what matters.

[zydeco]

This is the same anti-American conspiracy theorist who a short while back was writing article after article about how Russia was going to lead the way and destroy the US. Now that the Russian economy is in shambles, he's latching on to China. All that Chinese financial clout? Backed by the world's worst pollution, massive corruption, ghost cities, tofu bridges, buildings, and overapasses, and a middle in class in a debt trap that is pushing them to oblivion. Yeah, China's the answer alright.

Agree. As soon as I saw the title, I immediately checked to see who wrote it and sure enough, it was this guy Thanong. He's extremely anti-American for whatever reason and is simply not credible. It's one thing to report reality and trends and such, but to leap to outrageous conclusions is irresponsible.

Also agree. But the General will like it and maybe that's what matters.

Listening to nutbars like the author of the OP is damaging for Thais. Want to know what Thailand would be without the huge sums of money, infrastructure, and direct aid that the US poured into Thailand during the 50s, 60s, and 70s? Answer? Laos.

[Benmart]

Alliance - in international politics, the union of two thieves who have their hands so deeply inserted in each other's pockets that they cannot separately plunder a third.

Ambrose Bierce

Edited March 20, 2015 by Benmart

[Benmart]

This is the same anti-American conspiracy theorist who a short while back was writing article after article about how Russia was going to lead the way and destroy the US. Now that the Russian economy is in shambles, he's latching on to China. All that Chinese financial clout? Backed by the world's worst pollution, massive corruption, ghost cities, tofu bridges, buildings, and overapasses, and a middle in class in a debt trap that is pushing them to oblivion. Yeah, China's the answer alright.

Agree. As soon as I saw the title, I immediately checked to see who wrote it and sure enough, it was this guy Thanong. He's extremely anti-American for whatever reason and is simply not credible. It's one thing to report reality and trends and such, but to leap to outrageous conclusions is irresponsible.

Also agree. But the General will like it and maybe that's what matters.

Listening to nutbars like the author of the OP is damaging for Thais. Want to know what Thailand would be without the huge sums of money, infrastructure, and direct aid that the US poured into Thailand during the 50s, 60s, and 70s? Answer? Laos.

"Nutbars", such at the author of this article, are free to voice their position. Often times, I believe the position is a sitting one, inside a closed room with porcelain, flushing fixtures installed.

[Baerboxer]

This is the same anti-American conspiracy theorist who a short while back was writing article after article about how Russia was going to lead the way and destroy the US. Now that the Russian economy is in shambles, he's latching on to China. All that Chinese financial clout? Backed by the world's worst pollution, massive corruption, ghost cities, tofu bridges, buildings, and overapasses, and a middle in class in a debt trap that is pushing them to oblivion. Yeah, China's the answer alright.

Agree. As soon as I saw the title, I immediately checked to see who wrote it and sure enough, it was this guy Thanong. He's extremely anti-American for whatever reason and is simply not credible. It's one thing to report reality and trends and such, but to leap to outrageous conclusions is irresponsible.

Also agree. But the General will like it and maybe that's what matters.

Listening to nutbars like the author of the OP is damaging for Thais. Want to know what Thailand would be without the huge sums of money, infrastructure, and direct aid that the US poured into Thailand during the 50s, 60s, and 70s? Answer? Laos.

Not forgetting Thailand was a close US ally during the Vietnam war. Whereas neutral Laos was bombed, napalmed and illegally attacked.

[Expat1]

Outstanding. It is long overdue. America has had it's time and like Rome and others before it either has to adapt or get pushed aside and face the consequences of it's decisions. The difference is that if America can get it's collective head around the fact their manifest destiny is not be the world police and not to dictate policy and attempt to control the planet through financial and forceful intimidation but to be another good citizen-state of the world then they may end up faring better. If they don't, then they don't and must deal with the consequences and the rest of the world that does not agree with them.

World War 2 and the Cold War are over, deal with it.

[pmarlin]

The OP reads like it was written by a 11 year old.

[granuaile]

China is rising, the West in decline. The old empires are fading, just as the old European powers such as Britain, France, Germany faded in the 20th century to be replaced by the US and Russia, now those powers wane as well. Asia is the future, and China will be the major power in that realignment....

[BlackJack]

Cant blame them really after all the USA crap that has been dished out over the years.

The banksters and Wall Street and Washington as corrupt as they get.

And the FED " start the printing presses" with no asset to back them

The petro dollar

Dirivatives

stop the gold standard

rigging interest rates

ratings rigging

repackaging bad debts and selling them off as good investments

bankrupting countries

oh and the list goes on

Yes its gonna get rough folks

[Anon999]

China is rising, the West in decline. The old empires are fading, just as the old European powers such as Britain, France, Germany faded in the 20th century to be replaced by the US and Russia, now those powers wane as well. Asia is the future, and China will be the major power in that realignment....

China has its own problems if you care to check. However, they are trying to do something about it. Not sure what the US is doing about its own problems apart from spending ever more and more $'s.

[Paulc01]

China is rising, the West in decline. The old empires are fading, just as the old European powers such as Britain, France, Germany faded in the 20th century to be replaced by the US and Russia, now those powers wane as well. Asia is the future, and China will be the major power in that realignment....

China has its own problems if you care to check. However, they are trying to do something about it. Not sure what the US is doing about its own problems apart from spending ever more and more $'s.

If you're not sure, why not try and find out? Then, maybe your comment would mean something.

[ToddinChonburi]

So china's ghost cities and unmanageable air quality is going to lead the way.

One ? What will china do if the US no longer buy's, MADE IN CHINA !!!!!!

[Credo]

Some of us already don't buy "MADE IN CHINA". Whether in my home country or in Thailand, I try to look at the label carefully. If it's made in China, I look for another product. That's not always possible, but I have had very, very bad luck with things made in China. Absolutely atrocious workmanship.

[Scott]

Off-topic posts and replies removed. The topic isn't about the Vietnam War or Laos.

[Vagabond1]

Signs of outr times. The centers of power are changing and whatever one's attitude towards China - only a fool will still ignore its economic power. They have become the world's biggest manufacturer, a financial powerhouse and are actively developing internal market to become less dependent on those of us who might choose to boycott their goods. If one travels across Africa or Asia - most major infrastructure and industrial projects are financed by Chnese. This is a reality the West has to face.

And no - I am not anti-American. But ignoring the reality will not help find ways forward for the West.

[Rancid]

This is the same anti-American conspiracy theorist who a short while back was writing article after article about how Russia was going to lead the way and destroy the US. Now that the Russian economy is in shambles, he's latching on to China. All that Chinese financial clout? Backed by the world's worst pollution, massive corruption, ghost cities, tofu bridges, buildings, and overapasses, and a middle in class in a debt trap that is pushing them to oblivion. Yeah, China's the answer alright.

You make some good points about China the rest seems to be garnered from Fox News. The US economy is however also a mess, unrepayable debt propped up by reserve currency status and money printing.

The economic attack on Russia he drawn blood but their economy is still in reasonable shape and no debt. Goldman even declared their bonds a buy.

As to the Chinese infrastructure bank, the US applied a lot of pressure to keep UK etc out. No doubt British banksters didn't want to be left out of a play so set govt position accordingly.

[ggold]

This is the same anti-American conspiracy theorist who a short while back was writing article after article about how Russia was going to lead the way and destroy the US. Now that the Russian economy is in shambles, he's latching on to China. All that Chinese financial clout? Backed by the world's worst pollution, massive corruption, ghost cities, tofu bridges, buildings, and overapasses, and a middle in class in a debt trap that is pushing them to oblivion. Yeah, China's the answer alright.

Agree. As soon as I saw the title, I immediately checked to see who wrote it and sure enough, it was this guy Thanong. He's extremely anti-American for whatever reason and is simply not credible. It's one thing to report reality and trends and such, but to leap to outrageous conclusions is irresponsible.

Sorry to burst your bubble but! it is all true and is going to happen.

http://www.bbc.com/news/business-31921011

France and Germany are to join the UK in becoming members of a Chinese-led Asian development bank.

The finance ministries of both countries confirmed on Tuesday that they would be applying for membership of the Asian Infrastructure Investment Bank (AIIB).

Last week, the US issued a rare rebuke to the UK over its decision to become a member of the AIIB.

http://www.wsj.com/articles/china-to-start-direct-foreign-exchange-trades-with-u-k-1403086815

A package of measures announced Wednesday by China's central bank gave the U.K. a boost in its bid to be a leading center for yuan trading.

The moves, which came as Chinese Premier Li Keqiang tours the U.K. this week, highlight London's important role as China pushes to increase use of the yuan as an international currency.

Next time the USA has a financial meltdown they may very well find themselves on their own. It is very much about reducing the influence of the dollar on the global market.

[rijb]

Outstanding. It is long overdue. America has had it's time and like Rome and others before it either has to adapt or get pushed aside and face the consequences of it's decisions. The difference is that if America can get it's collective head around the fact their manifest destiny is not be the world police and not to dictate policy and attempt to control the planet through financial and forceful intimidation but to be another good citizen-state of the world then they may end up faring better. If they don't, then they don't and must deal with the consequences and the rest of the world that does not agree with them.

World War 2 and the Cold War are over, deal with it.

Don't get too excited. You'll pee yourself. It's just a development Bank.

BTW: You shouldn't watch Ben Hur, Wild Wild West, Wall Street, and Patton back to back. It's really messing with your metaphors.

[Loptr]

Western controlled hegemony is being shown the door... The AIIB is a direct threat to western central banks, the World Bank and the IMF...

http://www.economist.com/news/asia/21646740-development-finance-helps-china-win-friends-and-influence-american-allies-infrastructure-gap

Early members of the AIIB include:

Thailand

New Zealand

UK

France

Germany

Italy

BRICS nations

Those considering joining:

Australia

Japan

S Korea

Luxembourg

Switzerland