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Strange Bedfellows
China Sends Russia Love but Not Money

While the recent gestures of affection between Russia and China has caught the international eye, it appears this marriage of convenience does not entail any financial promises. From The Moscow Times:

China’s direct investments in Russia shrank by 25 percent in the first half of this year, even as its overall foreign investment increased, according to Chinese Ministry of Commerce figures cited by Russian media.

China invested $56 billion in the non-finance sectors of 147 countries and territories around the world in the first six months of this year, marking a 29.9 percent increase from the same period in 2014, Ministry of Commerce spokesman Shen Danyang said Tuesday in Beijing, Russia’s Prime business news agency reported.

The partnership between the two revisionist powers was dubbed a “bad romance by TAI columnist Lilia Shevtsova earlier this month. As she put it, “[i]n this new entente, the Kremlin has but two choices: play the role of lap dog, or get ready to whine about how it is being humiliated all over again.”

With the economy beleaguered by the combination of Western sanctions and the persistently low price of oil, the present outlook for Russia is bleak. In January, writing in these pages, Swedish economist Anders Åsland predicted that Russia’s GDP would fall by around 10 percent this year. China’s not letting its feelings get in the way of good business.

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  • Jacksonian_Libertarian

    “With the economy beleaguered by the combination of Western sanctions and the persistently low price of oil, the present outlook for Russia is bleak.”

    The fact is China’s outlook is bleak as well, $800 billion in foreign exchange left China in the last year and that is accelerating. China doesn’t have a single world recognized name brand like Sony, Toyota, Samsung, Kia, Apple, Intel, Microsoft, etc…not one! In addition, China’s belligerence, territorial ambitions, and extreme strategic vulnerability to a blockade, make China’s ambition of world domination very unlikely. Once the blockade begins, China will lose all its world markets and never get them back. China doesn’t make anything, that can’t be made elsewhere more cheaply and with much less risk. The Chinese politicians would like to take credit for China’s uplifting of the last 40 years, but they demonstrated their real competence in the water buffalo level economy which came before. China’s rise is completely the result of foreign investors building state of the art factories in China to take advantage of cheap Chinese labor and hopefully get a piece of the 1.3 billion Chinese consumer market. But when the foreign investors leave, as they mostly already have, they take their world markets with them, and China is left with aging factories and angry citizens with a taste of the good life.

    This of course was America’s strategy all along in opening up China, “Uplift the Chinese, give them a taste for the good life, and they will hang the communists from the lampposts when that good life is threatened.” China has a history of rebellion and civil war, and the politicians are likely putting together their plans to get out of dodge with as much of their ill-gotten gains as they can.

    • Dhako

      Keep thinking like this (or more precisely keep deluding yourself in this way) and I assure you, China in the reminder of this on-going decade (that is before 2020 is reached) will eat US’s lunch, across the board.

  • Dhako

    Here is the funny part. which is bordering on deep delusion. And, that is, the idea of money leaving China is considered in this parish as a sign of China’s impeding implosion. In fact, it’s China’s strategical decision to use her 4 trillion of surplus to buy up as much of natural resources she needs going forward as well as invest every corner in the world. I am sure, our friends in this parish have heard about “Chinese One-Belt-One-Road” intended to invest in bulk of the Eurasia/ Middle-East/Africa. But, then, again, this sort of glib talk about China’s implosion in which some forever holding on (or pining their hope on) come across to those who know what is really going in China, as if some geo-strategical theoreticians in America have decided to hold on to this fictitious prognosis, like so much of “comfort blanket”, lest they found themselves really hard to swallow how China is beating a path to the rest of the world while America is coming across as a tired former bully who is, politically and strategically, on the ropes, vis-a-vis the likes of China.

    PS: this is something you really need to read to educate yourself:

    http://www.nytimes.com/2015/07/26/business/international/chinas-global-ambitions-with-loans-and-strings-attached.html?hp&action=click&pgtype=Homepage&module=second-column-region&region=top-news&WT.nav=top-news

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