Showing posts with label G7. Show all posts
Showing posts with label G7. Show all posts

Sunday, 10 June 2018

The G7 as symbol of western unity and power is DEAD


The 'West' Is Past



9 June, 2018

G-7 summits are supposed to symbolize "the west", its unity and its power. The summits pretended to set policy directions for the world.

We are happy to see that they are dead.

I do not know who made this pic.

It is a modification of a photo by German chancellor Merkel's staff photographer Jesco Denzel that was uploaded to her Instagram account:
Is that supposed to make her look good? Isn't it similar to this scene?

Another picture of that moment shows the various heads of states redacting some common paper and discussing its formulations. Trump was obviously not inclined to compromise.


Before attending the summit Trump trolled his colleagues by inviting Russia to rejoin the G-7/G-8 format without conditions. Russia had been kicked out after Crimea voted to join its motherland. Merkel, who had negotiated the Minsk agreement with Russia, was furious. She wants to use such an invitation as an element of future negotiations. (It is stupid talk. Russia is not interested in rejoining the G-7/G-8 format.)

There are now many fields where the U.S. and its allies disagree: climate change, the Iran deal, trade are only the major ones.

Before leaving the summit Trump again used Mafia language against everyone else:
As he prepared to depart early from the G-7 summit in Charlevoix, Canada, to head to Singapore ahead of his planned meeting with North Korean leader Kim Jong Un, Trump delivered an ultimatum to foreign leaders, demanding that their countries reduce trade barriers for the U.S. or risk losing market access to the world's largest economy.
"They have no choice. I'll be honest with you, they have no choice," Trump told reporters at a news conference, adding that companies and jobs had left the U.S. to escape trade barriers abroad. "We're going to fix that situation. And if it's not fixed, then we're not going to deal with these countries."
The row at the G-7 meeting was in stark contrast to the more important other meeting that happened today, the 18th Shanghai Cooperation Organization (SCO) summit in Qingdao, China:
Dazzling against the city skyline of Qingdao, fireworks lit up the faces of guests who traveled across the vast Eurasian continent to the coast of the Yellow Sea for the 18th Shanghai Cooperation Organization (SCO) summit, on Saturday night.
It is the first such summit since the organization's expansion in June 2017 when India and Pakistan joined as full members.
...
The Shanghai Spirit of 
mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and pursuit of common development, was stated in the Charter of the SCO, a comprehensive regional organization founded in 2001 by China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan and later expanded to eight member states.
This weekend Xi will chair the summit for the first time as Chinese president, which is attended by leaders of other SCO member states and four observer states, as well as chiefs of various international organizations.

...The SCO has grown to be an organization covering over 60 percent of the Eurasian landmass, nearly half the world's population and over 20 percent of global GDP.
Two U.S. 'realists', Henry Kissinger and Zbigniew Brzezinski, had always warned that the 'west' must keep China and Russia apart if it wants to keep its leading global position. Nixon went to China to achieve that.

Years later the U.S. fell for the myth that it had 'won' the Cold War. It felt invincible, the 'sole superpower' and sought to 'rule them all'. It woke up from that dream after it invaded Iraq. The mighty U.S. military was beaten to pulp by the 'sand niggers' it despised. A few years later U.S. financial markets were in shambles.

Crude attempts to further encircle Russia led to the Chinese-Russian alliance that now leads the SCO and soon, one might argue, the world. There will be no photo like the above from the SCO summit. The Chinese President Xi calls Russia's President Putin 'my best friend'.

The 'west' has lost in Eurasia.

The U.S. is reduced to a schoolyard bully who beats up his gang members because their former victims have grown too big.

Trump is off to Singapore to meet Kim Yong-un. Unlike Trump North Korea's supreme leader will be well prepared. It is likely that he will run rings around Trump during the negotiations. If Trump tries to bully him like he bullies his 'allies', Kim will pack up and leave. Unlike the U.S. 'allies' he has no need to bow to Trump. China and Russia have his back. They are now the powers that can lead the world.

The 'west' is past. The future is in the east.



Trump refuses to endorse G7 joint statement


Trump won't endorse G7 joint statement, attacks 'weak & dishonest' Trudeau



RT,
9 June, 2018

Hours after the G7 summit, US President Donald Trump is attacking Canadian Prime Minister Justin Trudeau again for "false statements," and he is refusing to endorse the summit's communique that called for reducing tariff barriers.

On Saturday, Trump lapsed into his pre-summit rhetoric again, calling Trudeau "dishonest and week" in a fresh series of angry tweets. He reiterated that the recently imposed US tariffs on metal imports from Canada and other nations are a response to what he believes is trade inequality.


PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, “US Tariffs were kind of insulting” and he “will not be pushed around.” Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!

Trump lashed out at "Justin's false statements" at a press conference following the summit. There, Trudeau repeated his earlier description of US trade tariffs as "insulting" and vowed retaliatory measures would come in July.


Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!

A few minutes later, Trump changed his Twitter profile header picture from the G7 family photo to a photograph of himself singing the anthem with members of US military in Atlanta in January this year – apparently another jab at his summit-mates, considering how far back he had to dig to find that one.

Trudeau’s office responded to the verbal attack in a statement saying that the PM did nothing to provoke an outburst from Trump.

The Prime Minister said nothing he hasn’t said before — both in public, and in private conversations with the President,” it stated, adding that the Canadian government remains “focused on everything we accomplished here at the summit.”


Statement from the Prime Minister’s Office:

We are focused on everything we accomplished here at the summit.

The Prime Minister said nothing he hasn’t said before — both in public, and in private conversations with the President.

"We strive to reduce tariff barriers, non-tariff barriers and subsidies," the post-summit statement by the G7 leaders, which was released about an hour before Trump's fresh rant, read. For that hour, it seemed like a step toward reconciliation: French President Emmanuel Macron, also at dagger's point with Trump over tariffs, called the document "good news," though on a more cautious note he added: “Nevertheless, I do not consider that with a declaration all is obtained and it is obvious that we will have in the coming weeks, the next months, to continue to work.”

On Twitter, the French leader was more assertive about the summit’s success, claiming that “our exchanges have made it possible to restore the truth over trade between Europe and the United States.”

Before Trump's turnaround, British Prime Minister Theresa May, who Trump snubbed at the summit, strove to reinforce the image of the "special" US-UK relationship. “We work closely with President Trump, and the UK has a very good relationship with the United States,” she said, noting that the two-day summit was filled with “some difficult discussions and strong debate.”

In the run-up to the summit, Trump riled up his fellow world leaders with accusations of unfair trade practices, earning him some flak from both Trudeau and Macron, who even suggested that the G7 could fare as the G6, without the US if need be. During the summit itself, Trump's behavior seemed almost deliberately disdainful: coming late, leaving early, contradicting others on Russia and suggesting that Canada lift all tariffs on US goods (which elicited a nervous laugh from Trudeau).

From the Hill

Trump takes hard line with US allies at G-7 summit



President Trump exited the Group of Seven (G-7) summit on Saturday with a stark warning to some of Washington's closest allies: reduce trade barriers or face consequences.

As he prepared to depart early from the G-7 summit in Charlevoix, Canada, to head to Singapore ahead of his planned meeting with North Korean leader Kim Jong Un, Trump delivered an ultimatum to foreign leaders, demanding that their countries reduce trade barriers for the U.S. or risk losing market access to the world's largest economy

"They have no choice. I'll be honest with you, they have no choice," Trump told reporters at a news conference, adding that companies and jobs had left the U.S. to escape trade barriers abroad. "We're going to fix that situation. And if it's not fixed, then we're not going to deal with these countries."


We’re the piggy bank that everybody is robbing,” Trump added at one point. “And that ends.”

He also warned the countries against trying to hit back against the steel and aluminum tariffs his administration recently announced, adding that he would continue to pursue such trade measures until other countries relented and agreed to "fair" trade deals with the U.S.

"The European Union [EU] is brutal to the United States. And they understand that. They know it," he told reporters at a news conference ahead of his departure from Canada. "When I'm telling them, they're smiling at me, like, the gig is up."

"They can't believe they got away with it. Canada can't believe it got away with it," he continued. "Mexico — we have a $100 billion trade deficit with Mexico, and that doesn't include all the drugs that are pouring in."

In leaving the G-7 summit early, Trump avoided sessions on climate change and the world's oceans, underscoring the stark divide in his priorities and those of traditional U.S. allies.

Going into the summit on Friday, Trump had already cast himself as the odd man out among G-7 leaders.

He sparred on Thursday with French President Emmanuel Macron and Canadian Prime Minister Justin Trudeau over his administration's decision to impose stiff tariffs on steel and aluminum imports from the EU, Mexico and Canada.

The White House announced Thursday night that Trump would leave Charlevoix on Saturday morning and travel directly to Singapore ahead of his planned meeting with Kim on Tuesday — an early departure widely seen as a snub to G-7 allies.

And as the summit began, Trump called on the group to readmit Russia to the G-7 — a call that was swiftly shot down by most of the other members' leaders. Russia was kicked out of the group in 2014 after it annexed Crimea from Ukraine.

Despite that pushback, Trump continued to insist in his remarks on Saturday that Russia should be allowed back into the group of nations. Doing so, he said, would be a "positive thing."

"I would say the G-8 is a more meaningful group than the G-7," he said, referring to the group's name prior to Russia's suspension.

Trump also made a veiled reference to Russia's annexation of Crimea, alluding to the fact that "something happened a while ago" that prompted Moscow's suspension from the G-7. He later placed blame on his predecessor, former President Obama, for allowing Russia to take control of the territory.

At several points in his news conference, Trump appeared to take a friendlier tone toward North Korea than he did toward many of Washington's G-7 allies. He spoke about the North's potential to be a "great" country, and said he looked forward to meeting with Kim on Tuesday.

"I really feel confident," he said. "I really feel that Kim Jong Un wants to do something great for his people and he has that opportunity and he’ll never have that opportunity again."

With Trump's early departure on Saturday, speculation swirled that the U.S. would be excluded from the traditional joint communique issued by the G-7 nations at the close of the summit.

Trudeau ended that speculation on Saturday afternoon, hours after Trump departed Canada, saying in closing remarks at the summit that all seven countries had signed on to the statement.

Asked at his news conference on Saturday about the state of U.S. relations with other G-7 member states, Trump insisted that they had never been better.

"The level of relationship is a 10. Angela [Merkel], Emmanuel [Macron], Justin [Trudeau]. I would say the relationship is a 10,” he said, after haranguing the CNN reporter who asked the question as "fake news."

He added: "The relationship that I've had is great, so you can tell that to your fake friends at CNN."

In a series of tweets issued hours after he left the summit on Saturday, Trump touted what he called "great meetings and relationships" with the six other G-7 leaders. But he insisted that his foreign counterparts understood his gripes about trade imbalances.

"Just left the @G7 Summit in beautiful Canada. Great meetings and relationships with the six Country Leaders especially since they know I cannot allow them to apply large Tariffs and strong barriers to U.S.A. Trade," he tweeted. "They fully understand where I am coming from. After many decades, fair and reciprocal Trade will happen!"

But, hours later, Trump seemed to pivot on his feelings toward the summit's outcome.

Based on Justin’s [Trudeau] false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!” Trump tweeted.


The snub came just hours after Trudeau had confirmed that all G-7 members had signed the joint statement at the summit's conclusion, as is customary.


During the summit, Trudeau had issued a stinging rebuke of U.S. tariffs, asserting that Canadians “will not be pushed around” by Washington.


In a second tweet issued a minute after Trump announced the United States's withdrawal from the communique, the president defended the tariffs and accused Trudeau of acting “meek and mild” during the G-7 meetings.


PM Justin Trudeau of Canada acted so meek and mild during our @G7 meetings only to give a news conference after I left saying that, “US Tariffs were kind of insulting” and he “will not be pushed around.” Very dishonest & weak. Our Tariffs are in response to his of 270% on dairy!” Trump wrote.

Tuesday, 16 June 2015

China

China Mocks G7 As "Gathering Of Debtors", Warns "Confrontation Will Be A Disaster For Europe"

15 June, 2015

Vladimir Putin didn’t get an invite to the Angela Merkel-hosted G7 Summit in Bavaria last week, which means the Russian President not only missed out on two days at the scenic Castle Elmau, but also on lederhosen shopping with US President Barack Obama who, judging from eyewitness accounts and a variety of amusing photo ops, channeled his inner Clark Griswold upon touching down in the Bavarian town of Krun. The G7 isn’t pleased with Russia’s ‘behavior’ in Eastern Europe and so, Moscow has been expelled from the cool kids club until such a time as the Kremlin agrees to uphold Western democratic values. 

(Obama in Krun)

But the G7 is an equal opportunity exclusionist which means it’s not just former superpowers that aren’t welcome, but rising superpowers as well, which means you won’t be seeing Xi Jinping at the table either.

But “Big Uncle Xi” (as he is affectionately known in China) likely isn’t losing any sleep because in the eyes of Beijing, the G7 — much like the IMF and the ADB — is a relic of a global economic and political order that is well on its way to obsolescence if it isn’t there already.

(Xi Jinping; illustration: The New Yorker)

The Global Times (which, it should be noted, is owned by the ruling Communist Party’s official newspaper, the People’s Daily) has more on why the G7 is largely irrelevant in the modern world.








The G7 summit concluded in Germany last week. Chinese scholars and media barely showed any interest to this outdated informal institution, except for a Declaration on Maritime Security issued by G7 foreign ministers. The declaration expressed their concerns on "unilateral actions" in the South China Sea, with China as the obvious target.
 
Judging from the agenda and outcomes of this year's G7 summit, it has run counter to the global trend of peace, development and cooperation and become mere of a geopolitical tool.
 
Since the very beginning of the establishment of the G7, it has been a rich-man's club that consists of Western major powers and aims to maintain the collective hegemony of the US-led West. It used to focus on the world's economic issues, and then extended to political and security affairs. After the Cold War, Russia was included in this grouping, which almost became the core of global governance and looked as though it might replace the UN Security Council. 
 
However, the other G7 members never treated Russia as an equal partner. Russia was only entitled to discuss politics and security but not financial and economic issues.
 
As the world entered the 21st century, new economies started to emerge and the world's political and economic center has gradually shifted to the Asia-Pacific. The 2008 global financial crisis forced G7 members into a stalemate, and these nations started to realize that they could only get rid of the crisis with the help of emerging economies. Therefore, the US proposed defining the G20 as the main platform to discuss international economic problems. Within the G20, although the G7, as a sub group, intends to dominate the agenda-setting, the G7 cannot play its role without cooperation from new economies whose voices can be heard more nowadays.
 
Yet countries such as the US and Japan can hardly accept the rising international status of emerging economies and are reluctant to give up their hegemony. When the financial crisis eased slightly, Western media vigorously propagated the "revival" of the G7. But the economic performance of G7 members meant the summit was a gathering of debtors.
 
To some extent, the role of the G7 in global economic governance is negative. The IMF and the World Bank are under the control of G7 members. This is one of the reasons for the low implementation capacity of the G20.
 
In the field of politics and security, Western powers relentlessly promoted the role of the G7. But the G7 has proved to be unable to maintain regional stability, and has led to chaos in the Middle East instead. After the Ukrainian crisis, the West excluded Russia from the original G8, making the current G7 grouping on the way to becoming a Cold War relic.
 
Russia and China are main targets of the discussion at this G7 summit. They decided to continue to impose pressure on Russia amid the ongoing Ukrainian crisis. As for China, they focused on issues around the Asian Infrastructure Investment Bank and the East and South China Sea. But it is worth noting that European members have shown a different stance from the US and Japan on both matters.
 
Whether the G7 will become a geopolitical tool or a Cold War relic largely depends on European countries. Unlike the US, Europe shares a closer geopolitical and economic links with Russia. If the G7 becomes a platform for the confrontation between the West and Russia, it will undoubtedly be a disaster for Europe. Seeking a peaceful solution to the Ukrainian crisis with Russia fits European interests. As for the East and South China Sea disputes thousands of kilometers away from the European continent, these countries needn't necessarily get involved.
 
During the G7 summit, Japanese Prime Minister Shinzo Abe tried to pull European countries to Japan's anti-China bandwagon. China should continue to stay wary of the Japanese government.


Obviously this is to be taken with a grain of salt considering it comes directly from the politburo, but nevertheless, there are some important observations here that deserve attention.

For instance, China equates the G7 with the IMF and the World Bank, two institutions which Beijing is well on its way to challenging via the AIIB and The Silk Road Fund. In public, China has been careful to adopt a conciliatory stance towards existing multilateral lenders. This partly reflects the fact that China isn’t eager to ruffle any feathers among the Western countries who took a rather palpable political risk by throwing their support behind the AIIB in the face of fierce opposition from Washington. Beyond that though, adopting an overly critical stance towards institutions whose goals are ostensibly similar to those of the AIIB risks sending the wrong message to countries who depend on supranational institutions for aid. That said, equating the IMF, The World Bank, and the ADB with the G7 before subsequently calling the latter a “Cold War relic” is a kind of backdoor way of suggesting that the G7-dominated multilateral institutions are, by virtue of their leadership, hurtling towards irrelevancy.

Further, the assertion that “the economic performance of G7 members [means] the summit [is] a gathering of debtors” is on the one hand hypocritical (China, after all, is sitting on $28 trillion in debt) but on the other hand speaks to the fact that, even as China’s economic growth slows as Beijing marks a difficult transition from an investment-led economy to a consumption driven model, economic growth in the West has simply stalled out altogether and as for Japan, well, Tokyo has been grappling with a deflationary nightmare for decades, something Abenomics has so far failed to correct. In other words, China’s economic miracle may be “landing hard” so to speak, but there’s certainly an argument to be made that even in its crippled state, the Chinese economic machine is still capable of outperforming the West.

Finally, and perhaps most importantly, China suggests Washington’s dominance has led the G7 to pursue myopic foreign policies that have conspired to stoke sectarian chaos in the Middle East (it’s now almost impossible for the US to keep track of where it supports Shiite militias and where it backs Sunni militants) and create the conditions for a second Cold War in Eastern Europe. The deliberate exclusion of Russia, Beijing says, risks transforming the G7 into what is effectively the political arm of NATO, which undercuts the institution's ability the foster peace and cooperation. 

Again, some of this is propaganda served hot and fresh straight from the Communist Party kitchen. That said, the underlying geopolitical analysis is spot-on even if it's presented with a hyperbolic veneer. 

The G7, like the IMF and the World Bank, is quickly falling victim to the arrogance of its most powerful members. If an overriding sense of Western exceptionalism is allowed to create the same type of complacency and rigidity that has paralyzed the IMF, it may not be long before the world's emerging powers supplant entrenched political bodies much as they have moved to supersede ineffectual economic institutions.

China Dumps Record $120 Billion In US Treasurys In Two Month Via Belgium


15 June, 2015


Those who have been following the saga of "Belgium's" US Treasury holdings learned last month that the "mysterious buyerbehind Belgium's Euroclear was, as some speculated, China all along. Nowhere was this more evident than when showing an overlay of China and Belgium's combined TSY holdings versus China's forex reserves.

This is what we concluded last month:
  • "Belgium" is, or rather, was a front for China: either SAFE, CIC, or the PBOC itself.
  • That Belgium's holdings, after soaring as high as $381 billion a year ago, have since tumbled back to only $2532 billon as China has dumped the bulk of its Euroclear custody holdings, and that once this number is back to its historical level of around $170-$180 billion, "Belgium" will again be just Belgium.
  • China's foreign reserves tumbled and this was offset by a the biggest quarterly drop in Chinese pro-forma treasury holdings, which dropped by a record $72 billion in the month of March, and a record $113 billion for the quarter.
It wasn't precisely clear just why China, which had historically used UK-based offshore banks to transact in US paper in addition to the mainland, would pick Belgium or why it chose to hide its transactions in such a crude way, however the recent accelerated capital outflow from China manifesting in a plunge in Chinese forex reserves, coupled with a record monthly liquidation in total Chinese holdings, exposed just where China was trading.

And while we have yet to get an update from Beijing of its April forex reserves, we know that China's Treasury liquidation has continued. Enter: Belgium, only this time it is not a "mystery" buyer behind the small central European country, but a seller.

As the chart below shows, after a record $92.5 billion drop in March, "Belgium" sold another $24 billion in April, bringing the total liquidation to a whopping $116.4 billion for the months of March and April.

This means that after adding mainland China's token increase of $2 billion in April after a $37 billion increase the month before, net of Belgium's liquidation China has sold a record $77 billion in Treasurys in the most recent two months.
And while we eagerly await the monthly update of Chinese official forex reserves, we can estimate that the drop will be another $50-60 billion in the month of April.


The good news, for those tracking the story of China's unprecedented capital outflows, is that after "Belgium's" record March dump, in April Chinese Treasury sales slowed to the slowest pace in the past three months.


In other words, China may finally be getting its capital outflow problem under control, which, incidentally is bad news for the Chinese stock market because if true, it means the PBOC can now step back from micro-managing the stock market bubble and its "beneficial" current account inflows to offset the declining capital account.

But what is perhaps most curious is that even with China liquidating such a massive amount of US paper into a very illiquid market, the yield on the 10Y did not blow out far more in the months of March or April. And the last question: who did China sell all this paper to?