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He did it, his way; Chinese President Xi Jinping descended on the Swiss Alps; profited from a geopolitical vacuum only three days before Donald Trump’s inauguration with the Atlanticist West mired in stagnation and/or protectionism; unleashed a charm offensive; and deftly positioned China in the lead of “inclusive” globalization.
In a wide-ranging speech that went from global angst to China’s new normal, Xi sounded all the right notes that global capital needed to hear; protectionism is like “locking oneself in a dark room,” and “no one is a winner in a trade war.”
His speech delved into the necessity of peace in Syria, the perverse effects of the absence of financial regulation, and the struggle for “balance between efficiency and equity.”
So onwards with the fourth industrial revolution – and may China deliver.
Xi, the first Chinese president to visit the turbo-capitalist World Economic Forum talkfest, meant business from the start.
He arrived with an 80-strong delegation that included Alibaba’s Jack Ma, Dalian Wanda’s Wang Jianlin – China’s top two billionaires – as well as Baidu’s Zhang Yaqin.
Compare these “globalist princelings” with the Trump camp, represented by one of his official business advisers, Anthony Scaramucci, founder of hedge fund SkyBridge Capital and Salt, a not exactly stellar Las Vegas investment conference (the next one is at the Bellagio in May).
Where’s the ticket to the Rothschild party?
A “humanized” Davos 2017 is very worried about saving the world – or at least saving the wealthy from most of the world. The WEF has suddenly discovered that globalization as we know it fosters massive inequality, as much as globalization’s self-appointed managers remain inflexible about their moral right to bend whole nations to their will, as the “miraculous” numbers of the Irish economy attest.
Thus an alarmed WEF is promoting at least six sessions discussing inequality, from “Combating Rising Insecurity and Inequality” to “Squeezed and Angry: How to Fix the Middle Class Crisis,” starring IMF’s Christine “Vuitton” Lagarde and a bunch of hedge funders.
In pure neo-Dadaist fashion, there could not be a more graphic emblem for inequality than Davos itself. To get a green card all-area-access, mostly in and around the Grandhotel Belvedere, corporations must become strategic partners of the WEF.
The list is a beauty. Each membership costs a whopping US$600,000, allowing a CEO to bring up to four cohorts; but still they must pay for each individual ticket. And even that does not guarantee an invitation to the glitziest party in town, thrown by Nat Rothschild in tandem with Russian billionaire Oleg Deripaska.
Still, those who shelled out the cash will hardly resist the chance to hear Facebook’s COO Sheryl Sandberg (with a US$1.3 billion fortune) expand on how “older” global leaders can profit from the optimism of youth. Eric Schmidt (worth US$11 billion), chairman of Google’s parent company Alphabet, is also in town, but this time he opted for discretion.
Listen to the sound of my ‘win-win’ clapping
Xi was very careful not to advertize a new “Chinese consensus,” or model, as the model itself is being carefully, and painstakingly, tweaked.
What stood out in his presentation is that Beijing does not interpret globalization in a Western, turbo-neoliberal sense.
There are indeed benefits. They also do mask the plunder of the developing world’s resources via stealth “international laws” and (now dead in the water) trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP) or the Trans-Pacific Partnership (TPP), mostly for the benefit of the West’s 0.01%, who then become alarmed by “inequality.”
A passerby casts a shadow over a map illustrating China’s One Belt, One Road project. Photo: Reuters/Bobby Yip
Xi instead is promoting the notion of serial win-win deals; and that’s why his positioning is essentially the ultimate glorious pitch for the New Silk Road, a.k.a. One Belt, One Road (Obor) project, largely featured in the last part of his speech.
Everyone knows about Obor as an essential tool to tweak the Chinese model; develop the Chinese Far West; open an array of Eurasian markets; promote the internationalization of the yuan; and of course consolidate a major geopolitical shift, not least by neutralizing most of the Obama/Clinton “pivot to Asia.”
So when we get the concerted firepower of the Asian Infrastructure Investment Bank (AIIB); the Silk Road Fund; and the New Development Bank (NDB) under Brics (Brazil, Russia, India, China and South Africa), we have enough capital to generate generous financing for an infrastructure bonanza from China, across Central Asia, and all the way to Western Europe and Eastern Africa.
Only in Kazakhstan, for instance, there are more than 50 deals valued at over US$20 billion in effect. The new peace in Syria negotiations – Russia, Iran and Turkey – will take place in Astana, not Geneva. Kazakhstan represents the intersection of the New Silk Roads and the Eurasia Economic Union (EEU). Russia and China are luring Iran – and later on Turkey – into the Shanghai Cooperation Organization (SCO) fold. Syria, pacified and rebuilt, will be a key plank of Obor. It’s all interlinked.
So what China is proposing has nothing to do with deglobalization. It’s rather about “localization.”
But trade deals never die. With the death of TPP, Xi had to extol the merits of the pan-Asian Regional Comprehensive Economic Partnership (RCEP), which excludes the US but crucially merges all of the Association of Southeast Asian Nations members with everyone ASEAN has trade deals with; China, India, Japan, South Korea, Australia and New Zealand.
RCEP will be a boon for manufacturing within the vastly complex and broader supply chain across Asia, smashing tariffs across the board. That will include China-India trade. Yet it remains to be seen how Prime Minister Narendra Modi’s Make in India campaign will cope with opening up its markets to Chinese imports.
And, of course, Xi had to refer to the yuan question. The yuan is currently overvalued. The People’s Bank of China does not want it to slide down even further; its priority is a stable exchange rate – to stabilize trade. Still, Danske Bank strategist Allen von Mehren, who’s usually spot on, predicts the yuan falling to 7.26 to the US dollar by the end of September.
Somebody’s got to explain all this to Trump, implications included. It won’t be Scaramucci. Not to mention Peter Navarro, Wilbur Ross, “Mad Dog” Mattis or Michael Flynn. It has to be global helmsman Xi in person.
Pepe Escobar is correspondent-at-large for Asia Times. His latest book is 2030, published by Nimble Books.