China dumping the dollar

Goose+

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http://www.mg.co.za/article/2011-01-06-chinese-wooing-in-africa-boom-without-democracy

Once again, China has scored points in Africa. Beijing wants South Africa to become the fifth member of the Bric countries -- the acronym for Brazil, Russia, India and China, the world's leading newly advanced economies.

South Africa is flattered, since Turkey, Indonesia and Mexico have markedly larger economies. South Africa's growth rate is also well below the Bric level.

But China's initiative is yet another example of Beijing's offensive in Africa, a continent succumbing to China's wooing.

Even the government of democratic South Africa is fascinated by the perspectives of growth and prosperity in China under an authoritarian regime.

Just how fascinated the government of President Jacob Zuma, and especially his African National Congress (ANC) party, is by China's centralised planned economy and forced domestic peace can be read in the countless contacts and visits by high-ranking delegations to China.

Increasingly, ANC officials -- and many officials of other African nations -- are being trained and schooled in China, according to the Mail and Guardian.

The Chinese model of the sole-governing Communist Party seems to be more attractive even to the party in power in democratic South Africa.

China disperses itself
China is making even more effective inroads in authoritarian nations such as Zimbabwe, Angola, Mozambique and Congo.

"The Chinese offer attractive solutions out of hand without political demands, and we Europeans just can't match that," complains a high-ranking European Union diplomat in Maputo, Mozambique.

CONTINUES BELOW


Beijing puts together deals involving loans, investment and projects in return for exploitation of natural resources such as oil, gas, iron, copper, bauxite and uranium. Projects include highways and hospitals, airports, stadiums and presidential residences.

China is after good business deals and is little interested in how African leaders treat their own people or minorities.

"China's aide to Africa is oriented towards Africa's needs without political pre-conditions being set," Chinese Deputy Minister of Commerce Chen Jian stressed in 2010.

Much to the joy of dictators, there is no "imperialist intervention", no annoying demands for compliance on standards of human rights or international law.

For that matter, the Bric nations India and Russia, also on an expansion course in Africa, are little interested in mismanagement or corruption here and there.

Miserable Chinese
China has a presence in more than 40 African nations. More than a million Chinese experts and skilled workers are on the ground in Africa.

But the concept, which reflects Chinese doubts as to African expertise and commitment, could be politically explosive.

WikiLeaks documents cite US diplomats in Angola and Nigeria reporting on growing dissatisfaction in those countries. The Chinese in Africa, who mostly live in isolated enclaves, are largely unpopular -- particularly because the flood of cheap Chinese imports such as textiles often ruin domestic producers.

Their image is also tarnished by the often miserably working conditions at Chinese operations. In addition, they are linked to smuggling, poaching and over-fishing in many places.

And yet, China's influence in Africa is growing undiminished. The up-and-coming Asian world power has already overtaking the United States and trade partner number one.

Beijing had invested more than $100-billion in Africa by 2009, according to African Business magazine. Trade between Africa and China rose to over $100-billion in 2010. And in South Africa, the continent's biggest economic power, China overtook Germany as the country's major trade partner.

Western diplomats view China's growing influence in Africa -- especially its political influence -- as an ominous sign of a development which places little worth in democratic values.

The influential ANC Youth League goes even further than the ANC party itself and dispatch representatives to Stalinist North Korea. The young South African political officials called North Korea's dictator Kim Jong Il the "great guardian" for peace, according to Business Day. -- Sapa--DPA

Nobody else slightly worried? If you ask me, China has a blatant interest in securing South African's abundant supply of gold, so as to diversify away from the US dollar and US treasuries. Most likely to give the RNB some intrinsic metallic value when they allow it to free float in the future.

I wonder if we might have another war soon, so as to keep the dollar as the world's reserve currency. Remember when Saddam was talking about pricing his oil transactions in euros, then all of a sudden he turned out to have nuclear weapons? :rolleyes:
 
The US can't act against Brazil, India, China, Russia or South Africa. They just could never do it.

South Africa would make them so much bother in Africa it can't be explained, Brazil would destabilize South America, and Latin America WOULD follow, India, Russia and China are quite obvious, aren't they?

They just couldn't do it. Never, ever.

And China's too involved in the US economy to wreck it anyway, unless they're planning war with the US. And they're probably not. They can't afford it. Trade stops wars, because it's less of an insentive to quarrel once you've got money to lose.
 
No need to worry yet. The only way for China or Bric to really befriend African nations is not to supply them cheap goods, but cheap medicine, mostly for AIDS, Malaria, Onchocerciasis and a few others. China doesn't yet have the sufficient medical industry (most importantly, RnD), but, come 2015-2020 they will, that's when one needs to worry about Africa.
 
Grenada. Panama. Kosovo. Somalia.

Still think we wouldn't do it? We have idiot politicians.

Your comparing apples to cherries.
 
So because China is aggressively expanding into Africa ... that means they're going to "dump the dollar" ... in favor of South African gold? Excuse me if I can't follow that logic. That's the last thing to be worried about here.

China is just after cheap resources. They want to insure that their rapid growth continues long into the future, and they can get away with even more human rights and ecological abuses in Africa than they can at home.
 
So because China is aggressively expanding into Africa ... that means they're going to "dump the dollar" ... in favor of South African gold? Excuse me if I can't follow that logic. That's the last thing to be worried about here.

Apologies for not connecting the dots clearly.

It wouldn't suprise me if they are going through South Africa, so as to avoid having to purchase gold on the open market, which would cause a dramatic spike in the price. The gold market is tiny when compared to foreign exhange or equities, so if a central bank were to purchase gold in large quantities, they would only ensure they pay more the next time round they want it. And if I'm right, they will want more because that current account surplus isn't going away any time soon.
 
We are OK, Ukania sold off their gold when it was cheap and bought Euros just before they dumped - brilliant!

Ukania, Ukania land of fiscal proberty,
Where our Bankers,
Yes our Bankers,
Go home with huge,
Yes huge,
Bonuses - w00t!

To the tune of "I vow to thee my country" - yes I know it does not fit - like modern Ukania really.
 
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Grenada. Panama. Kosovo. Somalia.

Still think we wouldn't do it? We have idiot politicians.
Kosovo? Ethnic cleansing, it had to be stopped.

Other than that, Grenada, Panama and Somalia were either idiotic adventures in the first place (Grenada, Panama) or just badly done (Somalia).
 
What i find interesting is the willingness to switch from "The Chinese have to many reserves in US Dollars that might destroy the U.S." to "the Chinese may pull out of the Dollar which will destroy the U.S." scaremongering.

Nomix: Kosovo was a bad idea, too. But let's not get into that here ;)
 
Yeah, let's not. I'll leave it at saying it had to be done. It wasn't done well, but it had to be done.
 
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