CHINA TIPTOES TO PETRODOLLAR RECYCLING - By M.K. Bhadrakumar - Jan. 19

macanese

English + Portuguese  -  January 19, 2012.


http://engforum.pravda.ru/index.php?/topic/245307-china-tiptoes-to-petrodollar-recycling-by-mk-bhadrakumar-january-19-2012/


re-posted by Armando Rozário - macanese - Cabo Frio, Brazil     -     January 20,  2012.

firstcause

Thanks for the link:


CHINA TIPTOES TO PETRODOLLAR RECYCLING

The currency swap agreement between China and the United Arab Emirates [UAE] signed during Premier Wen Jiabao’s tour of the Persian Gulf region ending today, will raise eyebrows in the western capitals, especially London and Washington. The list of countries with which China has such deals is slowly and steadily lengthening and this is the first such deal with a Gulf Cooperation Council [GCC] state.
The deal with the UAE is worth $5.5 billion — bilateral trade was $36 billion last year with Chinese exports accounting for two-thirds — and aims at “strengthening bilateral financial cooperation, promoting trade and investments and jointly safeguarding regional financial stability”, according to the Chinese central bank. China is, in essence, providing ’seed money’ so that businessmen wouldn’t need to convert every transaction into dollars, thereby lowering the foreign exchange costs.
The cool reasoning here is practical convenience but its shadows inevitably fall on other domains. Clearly, the Middle East is being ’sensitized’ about the renminbi’s role. To be kept as reserve currency in the UAE vaults enhances renminbi’s prestige. For the UAE, keeping the mighty yuan is one of the safest thing they ever did in the world of high finance, as the appreciation of the Chinese currency in value is a near-certain happening in the future.
Beyond all that, the swap deal calls attention to China’s rapidly-growing economic links with the GCC region. It is a political statement of intent by China to boost ties with the UAE, which has been a ‘pocket borough’ of Britain, historically, in the Middle East. From the dhows, they are calling, ‘Yo, ho, Chinese are coming!’
But they are coming with a strong purpose, too. Abu Dhabi holds 7% of world’s proven oil reserves, oil price is crossing $100 per barrel and UAE will be renewing its oil concessions through fresh tendering in 2014 and this time around, Chinese companies are sure to give Royal Dutch Shell, ExxonMobil and Total a run for their money. Of course, the UAE is a tough market where the western business culture is well-entrenched, but then, never underestimate the Chinese.
Over and above, China is tiptoeing into the dazzling world of petrodollar recycling and it is difficult to conjecture that Beijing is unaware what it could be doing via this swap deal with the UAE — for an ancient country that knows only too well that any long journey must begin with a small step.
The heart of the matter is that the GCC currencies are pegged to the greenback and their massive earnings are largely ploughed into the bank vaults in London or New York or are used to acquire assets such as US equities and Treasury bonds — that is, when they are not spent on arms deals and other extravagant spendings.
The swap deal with the UAE has introduced a tantalizing thought to the GCC states — possibility of renminbi invoicing — that will worry the west. Currently, there may be no need to lose, sleep since Beijing severely restricts the flows of its currency across its borders but China is doubtless putting the infrastructure in place for an era that is not too far off when it may begin to do away with today’s strict limits on currency flows, and Beijing may well seek the use of renminbi in international trade. By 2025, China may be importing three times more oil from the GCC than Uncle Sam would need to buy.

Posted in Politics.

Tagged with China's oil imports, Renminbi as world currency.

By M K Bhadrakumar – January 19, 2012

Ronny

Go!!! China

Hmoonhistorian

Ronny Post time: 2012-1-27 09:04
Go!!! China

China is the future of humanity. Socialist nation don't live for short term profit and that is why we should promote it.

Hmoonhistorian

Firstcause, I learn a lot from your posts. Thanks for sharing and your time here.

firstcause

Hmoonhistorian Post time: 2012-1-27 23:25
Firstcause, I learn a lot from your posts. Thanks for sharing and your time here.

You are welcome, my friend.

I learn a lot from your historical analysis of the thieving Anglos.

I didn't realise that they were thieving from some of the countries you mentioned in some of your posts.

Hmoonhistorian

firstcause Post time: 2012-1-28 03:41
You are welcome, my friend.

I learn a lot from your historical analysis of the thieving Anglos.

I am now American, but I was borned in Laos, a country that was occupied and stolen by French thieves and later the thieves from the U.S. for almost 200 years before it became liberated in 1975. Because my father helped the CIA, he was killed by his in-laws for treason in 1976. Our family escaped to Thailand refugee camp when I was 2 years old and later migrate to the U.S. when I was 7 years old. With the help of historical documents and people's testimony of the war, I am able to forgive my father's in-laws. So I can feel the pain you and many patriotic Chinese feel.  

But China is going to be the future of humanity someday and it is best if we move forward. We don't have to trust Anglos, but we must learn to understand that we have to use Anglos against Anglos in order for the internationa community to achieve peace. There are plenty of Anglos that are not thieves and more then willing to help China's cause of peace and national integrity of all nations. I respect China because of its ideology of corporation better than thieves' traditional way of threats and confrontation. Many Americans such as myself agree with China and China need to appeal the American and other Western citizens in order to improve China's soft power. For a nation to be strong, it needs both soft and military power.

philo09

Capitalism and the dollar are both losing credibility at home and around the world, gold is returning as the only safe form of exchange.

Revolutionar

macanese.



America welcomes the convertibility of the yuan.
America welcomes the internationalisation of the yuan.



this is not politics, not sleigh of hand.

what I say is real

and the consistent policy of America.

Revolutionar

the internationalisation  and independence of the yuan will bring many advantages to America.



not the least of which is that the US$ will no longer need to carry the dead weight of the yuan on its ( US$) back.

Ronny

Revolutionar Post time: 2012-1-29 02:56
macanese.

America welcomes the towing of the american line.

Ronny

Revolutionar Post time: 2012-1-29 02:58
the internationalisation  and independence of the yuan will bring many advantages to America.

Revolutionar

Ronny Post time: 2012-1-29 01:19
America welcomes the towing of the american line.

that shows you internationalisation of yuan benefits America.

American is not scared of internationalisation of yuan.

Revolutionar

ronny


put another way.


If Saudi Arabia accepts yuan for oil, USA will have no objections, (as long as Saudi Arabia also accepts US$ for oil).

US will even welcome it, unlike what internet half baked commentators like to suggest other wise.

liuyedao

Good news!