China’s President Xi Jinping is currently visiting the UK setting the stage for a new “Golden Era” as is often mentioned recently in the mainstream news. Of course numerous parties are set to benefit from such collaboration and agreements. For the most part, most deals seem legitimate and mutually beneficial to both countries. My concern however - one that I hope will become shared by many in China – is that China may be falling into a deadly financial and monetary trap which other nations have also experienced.
Let me explain.
What most people around the world don’t know is that the global financial capital of the world is located in The City of London, not London. There is a difference. The City of London is a tiny area (roughly one square mile) within London. The City of London is a sovereign state in itself and is actually governed by the City of London Corporation. To quote an article from The Guardian on the topic:
"the Corporation exists outside many of the laws and democratic controls which govern the rest of the United Kingdom. The City of London is the only part of Britain over which parliament has no authority. "
You can get a brief yet very informative overview from the following video:
via Youku: The (Secret) City of London – Part 1: History
via YouTube: The (Secret) City of London – Part 1: History
This is the jurisdiction under which all the major banks from the UK including its central bank (The Bank of England) as well as global corporations operate. Keep in mind that these are the banks from which the British Government gets financed (at great interest and expense mind you).
Although it wouldn’t appear so on its website The City of London Corporation is a highly secretive organization with its own government (dating as far back as 1066), Governing Bodies, Police and Departments, laws and regulations.
The first 20 minutes of the following video gives a remarkable view of the landmarks and powerful players that are concentrated in the city center’s area. It’s definitely worth the watch as it contains lots of interesting facts and historical context. The video also explains how the banks in the city have financed both sites of numerous wars and how a small number of powerful families – such as the Rothschilds and the Rockefellers – have controlled banks and governments for centuries.
via Youku: David Icke – Tour around the City of London
via YouTube: David Icke – Tour around the City of London
With this background information out of the way, it’s back to my concern on how China may unknowingly (and naively) get caught in The City of London’s evil web.
As many financial deals are currently being signed between China and the UK, mostly in secrecy, how do we know that China, its Central Bank (the PBOC), its major corporations (including many SOEs), and its Capital Markets are not at risk of this corporation’s secret agenda? What could this agenda entail?
By leaps and bounds China is opening itself up to the world. The internationalization of the Yuan and the opening up of its financial markets will see China cede a lot of control over its financial destiny. Recently, there has been a plan in the works to link the London Stock Exchange with the Shanghai Stock Exchange. The following two articles can bring you up to speed on this deal:
ChinaDaily - London Financial Circles Welcome LSE-Shanghai Exchanges plan
To repeat an earlier concern of mine: what exactly is being negotiated? The devil is in the details, they say. How do we know that China will not be taken advantaged of? You see, the British, with centuries of related experience in the financial markets, are extremely savvy. At the heart of this experience are the officials from The City of London Corporation. Moreover, the laws and rules under which they operate are mostly geared in their favor.
Last summer we saw how the Chinese government and its financial institutions dealt with the Stock Market Crisis. And it wasn’t pretty at all. This proves the inexperience of China in such matters. I think that if China opens its financial markets up too much and too early (especially to those from this power base in London), it will put the country at great risk in the future. Opening up the markets too much such as with the stock market could prove catastrophic. Last summer, many domestic investors shorted Chinese stocks. Even though there is no law against that the Chinese authorities have cracked down on such practices promising to punish those that take such investment actions. Needless to say if China decides to open up its market (as proposed with the LSE- Shanghai Stock Exchange plan) it will have to permit short-selling and other practices found in Western financial markets. Many of these practices would in turn be extremely detrimental to the Chinese economy (as can currently be witnessed in the United States and Western Europe).
Since the devil is indeed in the details, I sincerely hope that the Chinese leaders and delegates currently visiting the UK know what they are doing and what they are up against. Hopefully, they will be employing some of Sun Tze’s tactics which have historically proven useful for this proud nation. The rest is up to the citizenry of China (i.e., YOU) to be well informed and cautious about the inherent risks in continued efforts of opening up to the rest of the world. Spread the word.
Related articles:
The Guardian - The medieval, unaccountable Corporation of London is ripe for protest by George Monbiot
http://www.theguardian.com/commentisfree/2011/oct/31/corporation-london-city-medieval
The (British) Crown Empire and the City of London Corporation
http://humansarefree.com/2013/11/the-british-crown-empire-and-city-of.html
Die Tempel der Macht: City of London Corporation (in German)
http://www.pravda-tv.com/2015/03/die-tempel-der-macht-city-of-london-corporation-videos/
City of London Corporation – La Denuncia di Borghezio (in Italian)
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