India will help Russia turn Arctic into global trade route

New Delhi is planning to assist in developing Russia’s Northern Sea Route (NSR). And turning it into an international trade artery, according to Indian Prime Minister Narendra Modi.

“India will help Russia in the development of the Northern Sea Route and opening this route for international trade the same way as Russia helps India to develop with the aim of space exploration and the preparation of the national manned Gaganyaan program,” Modi said, speaking via video link at a plenary session of the Eastern Economic Forum.

The Indian prime minister also said Moscow and New Delhi had managed to make significant progress in developing commercial ties despite massive disruptions caused by the Covid-19 pandemic.

The friendship between India and Russia has stood up against the test of time,” he said.

“Most recently, it was seen in our robust cooperation during the Covid-19 pandemic, including in the area of vaccines. The pandemic has highlighted the importance of the health and pharma sectors in our bilateral cooperation.”

According to the Indian head of state, an energy partnership between the two nations would bring greater stability to the global energy market.

Modi also said that such joint projects as the Chennai-Vladivostok sea corridor, which is currently under development, provide greater connectivity along with the North-South transport corridor.


Major deal on developing Russia’s Big Northern Sea Route sealed at Eastern Economic Forum

A broad agreement aimed at providing stable growth of exports, cabotage and transit traffic along Russia’s Arctic sea route has been signed at the Eastern Economic Forum (EEF) in Vladivostok on Friday.

Russian state nuclear corporation Rosatom and the Ministry for Development of the Far East and the Arctic agreed to closely cooperate on projects aimed at developing the transport artery stretching along Russia’s Arctic coast.

“The Big Northern Sea Route from Murmansk to Vladivostok plays an important role in transport security, and connects by sea the European part of Russia with the Far East,” Rosatom’s director general, Aleksey Likhachev, told the media on the sidelines of the EEF.

“We are interested in promoting cooperation under this project with both Russian and foreign counterparts,” he added.

The Northern Sea Route lies from the Kara Gate Strait in the west to Cape Dezhnev in Chukotka in the east. The Big Northern Sea Route includes the Arkhangelsk, Murmansk regions and St. Petersburg and the Far East from the Northern Sea Route’s border in Chukotka to Vladivostok. The 5,500-kilometer (3,417-mile) lane is the shortest sea passage between Europe and Asia.

Russia – China: Cheap Gas, Slow Trains (Eurasianet, USA)

The American edition (EurasiaNet) offers its views on the key events and comments on the relationship between Russia and China in a monthly digest. What did Lavrov talk about in China? How Russia and China operate in Central Asia? What will be the new large investment project of the Chinese in the Far East? Why it was not possible to create a Russian-Chinese analogue of Amazon?

Lavrov’s benefit in China

Foreign Minister Sergei Lavrov became the first high-ranking Russian official to visit China since the start of the pandemic. He extended the good-neighborliness agreement between the two countries for 5 years. Also, he said that Russia and China are promoting a unifying agenda on the world stage, directly opposing both states to the United States.

Relations with the United States were generally one of the main topics of negotiations on the first day of Lavrov’s visit, Kommersant reports. The parties even signed a joint statement in which they called on to abandon the politicization of the topic of human rights protection (for their infringement, the US authorities regularly criticize the Russian Federation and the PRC), recalled that “there is no single standard of a democratic model,” and the rights of sovereign states to independently determine their own way of development.

The meeting was discussed not only in the Chinese and Russian media. British The Times noted that Russia is seeking an alliance with China in the hope of bypassing US sanctions. But this alliance is unlikely to be complete: China will still look down on Russia, says the German Handelsblatt.

Together Against the Dollar

Lavrov also said that Russia and China will do everything to secure their financial and trade relations from threats from unfriendly countries. It was about the need to move away from the use of international payment systems controlled by the West. Including for the sake of this, Russia and China are switching to settlements in national currencies, the minister added.

As of the end of the first quarter of 2020, the share of the American currency in mutual settlements between Russia and China during the previous 5 years decreased from 90 to 46 percent. But they still fail to achieve monetary independence. First, the share lost by the dollar went mainly to the euro, not the yuan or the ruble. Secondly, as explained by the associate professor of the Department of Mathematical Methods in Economics, PRUE. G.V. Plekhanova Nikita Moiseev, the cross-rates of the national currencies of the PRC and the Russian Federation are still formed through the dollar. Therefore, the fall of the ruble against the dollar due to Western sanctions directly affects the cross-rate of the ruble against the Chinese yuan.

Influence in Central Asia will have to yield?

At the same time, not everything is so amicable in relations between the Russian Federation and the PRC. There are also serious contradictions. The interests of both countries collide in Central Asia. In this region Russia can no longer compete for influence with a stronger economy, said Alexander Gabuev, head of the Russia in Asia-Pacific program at the Carnegie Moscow Center.

According to him, this is especially true in the military sphere. If earlier there was an unspoken division of labor between the countries: Beijing is engaged in the economy, and Moscow is engaged in military issues. Now the Chinese “are developing more and more military instruments in the region”, and even without coordination with Russia they opened a border base in Tajikistan. Chinese leaders have repeatedly stated that this region adjacent to the country’s western borders is of “extremely great strategic value from a geopolitical point of view for the PRC.” The growing tension with the United States can only increase Beijing’s interest.

“China will not stop at economic dominance. It is interested in full-scale influence and transformation of the region into an exclusive sphere of its interests. Russia will be assigned the role of a junior partner,” says the expert at the Carnegie Center.

Trains go, Deripaska urges

The rapid recovery of the Chinese economy after the blow of the pandemic, combined with the increase in the delivery time by sea and the rise in prices, made the transportation of goods to Europe by rail through Russia and Asia more attractive for the Celestial Empire. In the first two months of 2021, more than two thousand freight trains traveled this route. This is twice as much as in January-February a year earlier, the FT reported. Since 2016, the indicator has grown sevenfold.

Despite the growing popularity of rail transport, it still accounts for only a small fraction of China’s total exports. The port of Yangshan alone in January loaded about 2 million containers against 209 thousand sent by rail in the first two months of 2021.

The quality of Russian railways does not allow for fast and reliable transportation. Including on the Europe-Asia route. Oleg Deripaska noted that in his Telegram channel. “In Russia, the average speed of a freight train is now 16 km / h,” he laments. “We won’t get very far this way.”

He also noted that, unlike China, Russia does not have a clear plan for the development of the transport industry. “If you deal with Asian transit and achieve at least 50 km / h for cargo, carry out real digitalization of customs services and, as a result, get the delivery of goods in 9 days from Asia to Europe, you can earn billions. That will be a source for deep modernization of Russian Railways. But you have to think and invest, ”Deripaska summed up.

How German Gref did not agree with Jack Ma

Details of the failed partnership between the Chinese trading giant Alibaba and the Russian Sberbank have become known. The story began in 2016, when the retailer began to develop business localization projects and chose Russia as a pilot region. The management of the Chinese company decided that from the point of view of GR-risk it would be difficult for it to develop in Russia without a local partner. “Jack Ma said that he could not imagine that the Russian government would be comfortable with the fact that the largest online retailer is a foreign company, especially a Chinese one,” sources told Forbes.

As a result, Sberbank and Alibaba did not become partners in the e-commerce market. They understood the essence of partnership in different ways. Sberbank wanted to create a company on the basis of a joint venture that would trade outside of Russia. Alibaba had a different goal – to localize in Russia. She achieved it later. In 2019, the Chinese created the AliExpress Russia company together with Mail.ru Group, Megafon and RDIF. But Sber’s dream – to become a “Russian Amazon” – has not yet come true.

New investment project of the Chinese in Russia

China Jingan Iron and Steel Company intends to build the first large metallurgical coke plant in the Russian Far East in Yakutia. Chinese investors plan to produce up to 4 million tons of metallurgical coke a year from local coal. It is expected that 5 billion yuan (about $ 763 million) will be invested in the project. Other parameters of the deal were not disclosed. In addition to metallurgical coke, the enterprise will produce naphthalene, benzene, and ammonium sulfate.


This is how Russia – China relationship is seen from USA.

Europeans froze the largest trade deal with China

Brussels is looking for an alternative in the USA and India

Dmitry Migunov

The European Parliament on May 20 froze the ratification of the investment agreement between the EU and China. The reason was foreign policy friction between Brussels and Beijing. It is not yet clear whether the document will be returned to the vote. A split in relations between two of the three largest economies in the world may prompt the EU to seek other alliances, or perhaps to rely primarily on its own forces and active protectionism. Details – in the material “Izvestia”.

China-EU relations in recent years have been an almost equal combination of love and hate. For the European Union, China was the second most important export market (about € 250 billion a year). Especially for critical industries like mechanical engineering. In turn, the importance of the European market for China was no less important. Although it was inferior to the American one in terms of supply, it grew faster and more stable.

At the same time, Europe has become the most important target for the export of capital from China. Accumulated Chinese investment reached $ 350 billion by the end of 2019, again second only to the United States. Investments in European countries fit perfectly into the Belt and Road project, whose main task was to create in Eurasia a reliable alternative to the United States as a destination for Chinese exports. 

Within this framework, Chinese companies have actively invested in enterprises in Germany, Italy, France, Hungary and other countries. Manufacturers of car tires, household appliances, oil and gas companies, airports and football clubs – it will be difficult to name a field of activity in Europe, wherever a Chinese investor has penetrated, both private firms and corporations with state capital. 

Mutual rhetoric sometimes blunt

Despite this flourishing relationship, mutual rhetoric was sometimes blunt. In March 2019, the European Commission named China as its “systemic competitor.” Given that this happened in the midst of Donald Trump’s declared trade war, this was not good news for China. Later, the conflict was mitigated, among other things, due to the fact that Trump’s anger fell on Europe itself. Americans began to impose trade duties against European countries, threatening retaliation for the introduction of a “digital tax” and other actions in the economy that the previous US administration took as unfriendly.

In December last year, the EU and China signed the largest investment agreement in European history. Its essence boils down to facilitating the access of European companies to the Chinese market, which was able to withstand even the blow of the pandemic (the only large economy that avoided contraction in 2020). Companies that supply high-tech goods to the PRC have received especially favorable working conditions. China, in turn, received guarantees for its investments in the EU, as well as access to the renewable energy market, where the two sides are simultaneously the two largest players and strategic partners by a wide margin.

However, the signed treaty had to go through a difficult and lengthy ratification process. And something went wrong here. First of all, the power has changed in the United States. The new government, at least at the level of rhetoric (and in some places in fact, for example, on the issue of Nord Stream 2), made concessions to the European states. The transatlantic relationship again came to the fore, and China was no longer vital partner.

The diplomatic conflict turned into a reciprocal exchange of strikes when the sanctions imposed on China (not too significant) were followed by a similar targeted response from an Asian country. This is most often the end of the conflicts. This time everything went much further. The European parliamentarians with an overwhelming advantage – with 599 votes out of 687 possible – voted to freeze the ratification of the agreement.

This is not final decision though

Note that this vote is not a final decision and, in fact, has no legal force as such. But the ratification process may be slowed down for a long time. During this time, foreign policy and economic circumstances may well change. And the attitude of individual countries to the agreements.

I must say that the Europeans did not sit idly by all these months. In the course of the trade conflict with the United States, it seemed that the EU and China would inevitably move closer. Brussels is now considering other options for economic integration. The most obvious option is trade agreements with the United States. In early May, German Chancellor Angela Merkel called for the same deal with America that was agreed with Canada last year.… This agreement was already in the air in the middle of the last decade. The parties had already begun negotiations on a Transatlantic Trade Partnership, but in early 2017, the United States canceled a similar trade alliance with the countries of East Asia and Latin America. The last agreement was “killed” at the stage of full readiness. On both sides of the Atlantic they decided that the treaty had no chance at all.

In all fairness, Merkel’s approach is not shared everywhere on the continent. French President Emmanuel Macron has repeatedly stated that Europe should not rely on other superpowers and should show more independence. Questions can also arise overseas, where, despite all the rhetoric of multilateralism and free trade, slogans like “buy American” are gaining momentum. And the full employment promised by the new American administration is unlikely to be achieved if we give even more privileges to foreign manufacturers in their market.

Protectionism is gaining strength

It is possible that the EU will turn in a different direction. In April, it became known that Brussels is negotiating with India on a global infrastructure plan. That should become a competitor to the Belt and Road. It should include cooperation in third countries, the exchange of scientific and innovative ideas and the drafting of uniform standards, especially in the field of financial sustainability. All this should tie the third largest economy in Asia (and the second in terms of purchasing power parity) more closely to the European Union.

India is not yet a player capable of replacing China and the United States as an economic partner. Rather, an agreement with it could become a demonstration of a course that presupposes self-reliance in Europe. Such a line in the economy is becoming more and more popular, given that protectionism is gaining strength in all regions – and the European Union can in no way be an exception .

Kind nuclear neighbor: What is known about the new project of Putin and Xi Jinping

Об этом сообщает “Рамблер”

By Elena Proshina

Vladimir Putin and Xi Jinping will open a new joint nuclear project between Russia and China on May 19, TASS reports with reference to the Chinese Foreign Ministry . Details of the project are classified. The Chinese Foreign Ministry only announced that the leaders will participate in the presentation via video link. They did not specify what kind of object they were talking about.

Previously, Russia and China collaborated on the construction of four power units at the Tianwan NPP and the CEFR Demonstration Fast Nuclear Reactor. What do they say about the project in Beijing? Konstantin Shchepin, a Russian journalist in China:

“Judging by the open information, we already have a lot of projects in the nuclear power industry. This is the famous Tianwan NPP, which is being built in the Jiangsu province and where more and more power units are being built based on our VVER-1200 reactors. These are uranium enrichment plants in Gansu province. It is said that Beijing and Moscow have long been carrying out a project of a new generation of fast breeder reactors somewhere near Beijing. But there is very little information about this in the official media.

Perhaps this experimental reactor will be officially put into operation. These are my guesses. In Beijing, nothing has been written about this yet, it was the message that went through, everyone was surprised, everyone was inspired, everyone froze in anticipation and opened their eyes – what would it be. But so far the people are perplexed. Maybe this will also start a new project: China and Russia have already quite a long time ago, in my opinion, even last year or the year before, agreed on the construction of nuclear power plants in the northeast of China. It is not clear yet.”

In June 2018, after a visit to China, Vladimir Putin said that the countries had agreed on the construction of two power units of the Tianwan NPP by Rosatom , and also agreed on the construction of another Russian-designed nuclear power plant in China. Construction was scheduled to begin in December 2020.
Representatives of Rosatom and the Chinese National Atomic Corporation have already signed a general contract for the construction of the seventh and eighth units of the Tianwan NPP. According to the head of Rosatom, Alexei Likhachev, in May it is planned to “build the first concrete at the seventh power unit.”

Power unit of the Tianwan NPP launched with the assistance of Russian specialists


The work on the physical start-up of the Tianwan NPP in China was completed on September 30 with the participation of the state corporation Rosatom, the press service of the company reports.
The last stage of work on the launch of the Tianwan NPP was the bringing of power unit 4 to maximum capacity, which was carried out on September 30 with the technical assistance of specialists from the Engineering Division of Rosatom.
Rosatom noted that the physical start-up of the reactor was completed ahead of schedule


Russia and China will build a station on the moon


The Russian and Chinese sides signed a memorandum on the creation of a lunar station. This is stated on the website of “Roscosmos” .

Representatives of the governments of Russia and China – the head of Roscosmos Dmitry Rogozin and the head of the Chinese National Space Administration (KNKA) Zhang Kejian – signed a cooperation agreement in the format of a video conference. The parties agreed to be guided by “the principles of parity distribution of rights and obligations” and to use “outer space for peaceful purposes in the interests of all mankind.”

The memorandum specifies that the planned lunar station is intended “for multidisciplinary and multipurpose research work,” and considers the further prospect of the presence of a person directly on the moon. The agreement implies both joint planning, development and implementation of the project, as well as its presentation to the world community.


“Russia and China traditionally strive to develop cooperation in the field of space technologies”, – is specified in the conclusion of the agreement.


The document also implies the cooperation of the Russian mission with the orbital spacecraft Luna-Resurs-1 (OA) and the Chinese mission to explore the polar region of the Moon, Chang’e-7.
At the end of 2020, China, which had previously sent a mission to the moon, planted a national flag on the surface of a natural satellite of the Earth. Thus, the country became the third – after the USA and the USSR – power to plant its flag on the moon.

Russia and China agreed to extend the Neighborliness Treaty


The treaty on good-neighborliness, friendship and cooperation, which Russia and China have agreed to automatically extend for another five-year period, will be filled taking into account new realities and will give impetus to the development of bilateral relations, said Chinese Foreign Minister Wang Yi.

“This year marks the 20th anniversary of the signing of the Treaty on Good Neighborliness, Friendship and Cooperation, which is very important. Over the past 20 years, this agreement has laid a solid legal foundation for the healthy, sustainable development of Russian-Chinese relations and contributed to the optimization and modernization of bilateral relations.

We have agreed on the automatic extension of this agreement, and we must constantly give this agreement a new content, taking into account the realities of the era, so that it adapts to the new conditions of Russian-Chinese relations. I think that this agreement will certainly help us to reach new agreements and give a new impetus to the development of relations, ”TASS quotes a statement by the head of the PRC Foreign Ministry, made before the talks with Russian Foreign Minister Sergei Lavrov

As Wang Yi noted, in recent days, “a handful of European powers have been on the international stage with accusations against China and Russia, but they know that [this is] a lie under a far-fetched pretext, and [once successful] attempts to interfere in the internal affairs of China and Russia have gone far into the past. ” Wang Yi stressed that despite the changing international environment, “our determination to uphold international justice remains unchanged.” “These attempts cannot prevent China from moving forward and cannot change the historical trend,” concluded Wang Yi.


The day before, Russian Foreign Minister Sergei Lavrov arrived in China on a visit. Earlier, Lavrov, in an interview with Chinese media, said that the Treaty of Good Neighborliness, Friendship and Cooperation with China “has successfully passed the test of time and the obligations recorded in it are being sacredly fulfilled,” thanks to the document, relations between the countries reached an “unprecedented level.”


Recall that on March 1, the Ministry of Defense of the PRC characterized the Russian-Chinese relations in the military sphere as a partnership in comprehensive strategic interaction. In early January, Chinese Foreign Minister Wang Yi said that strategic cooperation between Russia and China has no end, no upper limit, and no exclusion zones.

Then in November 2020, Beijing announced China’s readiness “side by side with Russia to jointly oppose one-sided policies, protectionism and hegemony” of states that “strike a blow at international relations and international order.” In October, Russian President Vladimir Putin at a meeting of the Valdai Discussion Club admitted the possibility of concluding a military alliance between Moscow and Beijing.


September 2020, the Chinese Foreign Minister stressed the special importance of relations with Russia, and Chinese President Xi Jinping, in a congratulatory telegram to President Vladimir Putin on the occasion of the 75th anniversary of the Victory in World War II, announced China’s readiness to join forces with Russia for the sake of global peace, security and prosperity for future generations.

Food has become one of the main points of growth in trade between the PRC and the Russian Federation

Trade in food products in recent years has become one of the key points in the growth of economic cooperation between China and Russia, said Russian Trade Representative to China Alexei Dakhnovsky on Tuesday, speaking at the opening ceremony of the Russian pavilion at the SIAL food exhibition.
On Tuesday, within the framework of the SIAL international food exhibition in Shanghai, a joint stand of the Russian Federation was opened; 18 Russian companies are represented on an area of ​​400 square meters.


“Trade in agricultural products and food products in recent years has been one of the key points of growth of bilateral economic cooperation between our countries. China is the largest importer of these products, Russia has something to offer from this range, the high quality of which is in high demand among the Chinese consumer,” Dakhnovsky said, follows from the widespread video recording of the opening ceremony.


He stressed that the pandemic and quarantine measures that exist in China today have certainly had a negative impact on trade in this area. However, according to the trade representative, with the exception of seafood, in the first quarter of this year, the volume of Russian food products exports to China increased by 17.6%.

“Therefore, companies from Russia pay serious attention to their work in the Chinese market and work at the Chinese international food exhibition. We are confident that the products of Russian companies presented here will find their customers. I wish all the participants of the Russian exposition successful work at the exhibition.” added Dakhnovsky.


According to the General Administration of Customs of the PRC, the trade turnover between Russia and China in the first four months of 2021 increased by 19.8% compared to the same period last year and amounted to $ 40.2 billion.


The official representative of the Ministry of Commerce of the PRC, Gao Feng, said that China expects that trade with Russia will reach a new maximum by the end of this year.


At the end of 2020, trade between the two countries fell by 2.9% and amounted to $ 107.76 billion.

China bought helicopters from Russia for $ 2 billion


In 2019, China bought 121 helicopters from Russia for $ 2 billion, the state corporation Rostec reported.


We are talking about 68 Mi-171 helicopters, 18 Mi-171Sh helicopters, 14 Mi-171 helicopters with a VK-2500 engine and 21 Ansat helicopters. All versions of the Mi-171 are produced at an aircraft plant in Buryatia. China plans to supply 86 helicopters with Ukrainian engines.


The cost of only 100 Mi-171 helicopters can exceed $ 2 billion, expert Konstantin Makienko estimated . One “Ansat” can cost China at least $ 3.3 million.


The contracts for helicopters are the largest known with China after Russia supplied China with Su-35 fighters and S-400 anti-aircraft missile systems, said Vasily Kashin , a spokesman for the Higher School of Economics . There are about 500 Mi-8 or Mi-17 helicopters in operation in China. China also produces its own Z-20 and Z-18 helicopters, but, apparently, their characteristics do not satisfy the army, Kashin suggested.

Chinese Foreign Minister calls relations with Russia “unlimited”


Chinese Foreign Minister Wang Yi commented on the strategic relationship between Beijing and Moscow. They have no “no-go zone” or “upper limit”, RIA Novosti quoted a diplomat who was interviewed by Xinhua News Agency and China Central Television.


The PRC Foreign Minister admitted that last year the Chinese-Russian relations withstood the test of the pandemic and reached a qualitatively new level. At the same time, the countries continue to cooperate on the containment of coronavirus infection and research on the development of vaccines.


“Collaboration in new formats such as digital economy and e-commerce is expanding rapidly,” concluded Wang Yi.

Can Australia achieve economic growth without China?

By Stan Grant

China, India, Indonesia, Russia, Brazil: What do these five countries have in common?

They are the future. Our future depends on them. They are not the West.

Collectively, they will account for more than half of all global growth through to 2024, according to figures from the International Monetary Fund. Think again about that: five countries, 50 per cent of growth.

The giant among the five is, of course, China. It has already surpassed the United States as the biggest engine of global economic growth — 28 per cent annually between 2013 and 2018.

By the end of this decade, China is expected to overtake America as the single biggest economy in the world. And of the other four countries — Brazil, Russia, Indonesia, India — each lists China as its biggest trading partner.

The IMF says there is no way the global economy can grow unless these countries also grow. Yet in this week’s budget, did we hear mention of any of them?

No. We did not even hear mention of China. Incredible, given China is Australia’s biggest trading partner, too.

How is Australia handling this hinge point of history?

Australia’s trade with China dwarfs its trade with any other country: more than $90 billion, an enormous 43 per cent of all our exports. For comparison, the next biggest market is Japan, at $19 billion.

Trade is equivalent to 45 per cent of Australian GDP and one in every five jobs in the country.

Treasurer Josh Frydenberg has said this budget is about stimulating, spending and creating jobs. How do we seriously achieve that when our political leaders cannot speak to their counterparts in Beijing? 

In the meantime, we hear increasing talk of the “drumbeats of war”. How can we achieve economic growth and boost jobs when the Treasurer, in his budget speech, cannot mention China by name and instead makes allusions about a more dangerous world (read: China threat) and commits to ever more spending on our military?

This isn’t to deny that we live in a more perilous age or that an authoritarian China does not present a threat — or that we need to keep our defence force ready and equipped for any eventuality. But there are serious questions about how our political leaders are handling this hinge point of history.

China is an indispensable nation; our future depends on it. Our future depends on those other countries that make up half the world’s growth — countries we rarely even talk about.

This is not 1992. We have not just emerged from the Cold War; America is not the predominant or sole power in the world; this is not the end of history. We can no longer say, as Western political leaders did then, that China is on the wrong side of history.

The world is turning, history is turning

In its report The World in 2050, international professional services company PwC lists what will be the top 10 economies in the world:

1.China

2.India

3.US

4.Indonesia

5.Brazil

6.Russia

7.Mexico

8.Japan

9.Germany

10.UK

Where did the West go? The report says simply: today’s developing markets will be tomorrow’s economic superpowers.

Outside of the top 10, Vietnam, the Philippines and Nigeria will be the biggest movers in the rankings.

The report compares the E7 (emerging economies) with the G7. In 1995, the E7 were half the size of the G7; by 2015, the E7 had drawn level; by 2040, the E7 could be double the size of the G7.

A Rip Van Winkle “go to sleep and dream away the future” approach won’t work.

The West has been battered by war, growing inequality, stagnant wages, terrorism, economic collapse, declining democracy and rising political populism.

America — the so-called leader of the free world — is a country damaged by unending crisis.

President Joe Biden talks a good game about “America is back” and rebuilding alliances. But how does America lead a world where economic power has so dramatically shifted?

Betting against America

In his recent speech to Congress to mark the first 100 days of his presidency, Joe Biden said it was never a good idea to bet against America. But that’s precisely what many countries are doing.

China’s massive Belt and Road Initiative — one of the largest infrastructure and investment projects in history, covering 70 countries, 65 per cent of the world’s population and 40 per cent of gross domestic product — is a bet against America.

It is part of Xi’s China Dream of a rejuvenated nation, returned to the apex of global power.

Australia is caught in the crosshairs of this global historical turn. We are still a European outpost in Asia, a country with historical ties to Britain and all in with the US. 

It has served us well, but that world is passing. The geopolitical, economic and military plates are shifting as the world walks ever more treacherous fault lines.

But this isn’t the discussion we have been having post-budget.

Instead, we are talking about debt and deficit and vaccine rollout and possible election dates. Journalists are engaging in the usual round of predictable “gotcha” questions, and politicians are looking to score tit-for-tat political points.

All around us, the world we knew is giving way to the world we don’t truly understand, let alone are truly equipped for.

China, our biggest trading partner, is now a global Voldemort — he who cannot be named.

But call it what we will — or won’t — China looms over our world and it is dragging those other emerging economic giants along with it.

To stay with the movie analogy, for the West, there is no back to the future.


Source: ABC

India’s China fears put to rest in Sri Lanka

Sri Lanka hands India major port development deal that will tie the two neighbors together for decades to come

By MK BHADRAKUMAR

In a stunning coincidence, a mere two weeks ahead of Indian Prime Minister Narendra Modi’s planned visit to neighboring Bangladesh, the Sri Lankan government on Monday issued a Letter of Intent to India’s Adani Ports and Special Economic Zones Ltd (APSEZ) to develop and operate the West Container Terminal (WCT) in Colombo. 

Sri Lanka’s Rajapaksa clan-led government took a calculated risk. If New Delhi were in Colombo’s shoes, it probably would have waited for another week. To make up its mind before formalizing the audacious decision to invite a big Indian presence. Right at the epicenter of the Sri Lankan dream to be “another Singapore.” 

For, in another week, Colombo would know which way the Indians actually voted in Geneva when the crunch time came on the US-sponsored resolution at the UN Human Rights Council regarding the alleged war crimes committed during the last brutally violent phase of the struggle to vanquish the rebel Liberation Tigers of Tamil Eelam (LTTE). 

Colombo has drawn New Delhi into a ring of long-term engagement that will be difficult to shake off easily. Indian high commissioner to Colombo has reportedly been touring the eastern and northern provinces of Sri Lanka to explain to the Tamil parties what is on the anvil in Geneva. 

What brilliant geopolitical “outsourcing!” Colombo expects that New Delhi will discourage Washington from undermining the stability of the island nation’s government. And to stop threatening to dispatch President Gotabaya Rajapaksa to The Hague. To meet the same tragic fate as Slobodan Milošević, the last president of the former Yugoslavia. Before it was carved up by the North Atlantic Treaty Organization (NATO) like a turkey on Thanksgiving Day.

Public Private Partnership

The WCT project envisages that APSEZ will partner with John Keells Holdings PLC. It is Sri Lanka’s largest diversified conglomerate, and the Sri Lanka Ports Authority as a part of the consortium with a 51% majority shareholding. It will be developed on a build, operate and transfer (BOT) basis for a period of 35 years as a public-private partnership. 

India’s biggest investment

The WCT will have a quay length of 1,400 meters and alongside depth of 20 meters. Thereby making it a prime transshipment cargo destination to handle ultra-large container ships. The project cost is estimated at US$750 million as of now, which may rise.

The WCT will become the single biggest economic project ever executed by an Indian company in the country’s immediate neighborhood. 

The huge significance of the WCT for the region’s economy cannot be minimized. An APSEZ statement highlighted that the project is expected to boost the WCT’s container handling capacity. And to further consolidate Sri Lanka’s locational advantage as one of the world’s top strategic nodes along the busiest global transshipment route.

The Port of Colombo is already the most preferred regional hub for transshipment of Indian containers and mainline ship operators. 45% of Colombo’s transshipment volumes is either originating from or destined to an Adani-run port terminal in India. 

Simply put, the Sri Lankan government is intertwining its economic prosperity with India’s massive market in an inseparable way. This takes the breath away. Particularly considering that it was only five years ago that New Delhi allegedly became messed up with an Anglo-American project to overthrow the established government in Colombo. It was, ironically, headed by the same leadership as today. 

India had teamed up with its Quad partner Japan originally to bid (unsuccessfully) for the East Container Terminal project at Colombo Port. There was much-suppressed fury when the Sri Lankan government spurned the offer. Indian strategic analysts thereupon went overboard with the stupid hypothesis that Colombo had buckled under “Chinese pressure.” 

Political stability

But now, the WCT, a much bigger BOT project, has been offered to India on a platter with no strings attached. Colombo seems to prefer that the Indians shake off their Quad ally and undertake the WCT on its own steam.

India is de facto becoming a stakeholder in the political stability of Sri Lanka. The bittersweet lesson of 2015 is that securing an easier, cost-effective, risk-free, predictable and durable outcome is possible with a pragmatic outlook and strategic patience.

No one in Delhi talks any more about the “China factor.” The paradox is that the WCT project will be adjacent to the massive Colombo Port project that Chinese companies are funding and executing.

Yet, apparently, there is no heartburn in Beijing either that the Adani Group is moving in as next-door neighbor.

Arguably, Beijing knew about the WCT project, which has been under discussion for a while. But in its ingenuity and wisdom, Beijing assessed that it is just as well if India’s paranoia about China’s presence in Sri Lanka is set at rest.

The WCT saga is unfolding just before Prime Minister Modi’s visit to Bangladesh planned for March 26-27. Bangladesh is another example where it emerges that India doesn’t need to carry a Quad visiting card to build a partnership. The Sri Lankan experience nonetheless has great relevance to Bangladesh.

World Bank Report

According to a new World Bank report titled “Connecting to Thrive: Challenges and Opportunities of Transport Integration in Eastern South Asia,” seamless transport connectivity between India and Bangladesh has the potential to increase national income by as much as 17% in Bangladesh and 8% in India.

The report says a 297% increase in Bangladesh’s exports to India and a 172% increase in India’s exports to Bangladesh. It could be within reach if only transport connectivity improves between the two countries and they were to sign a free-trade agreement.

Nobody’s puppets

From the perspective of diplomacy and foreign policy, the bottom line is that the Indian strategic community should remain self-assured that the political elites in the SAARC (South Asian Association for Regional Cooperation) capitals surrounding India are not only nobody’s puppets but have always regarded New Delhi as their most important partner.

That, in turn, puts the onus on India to act with maturity and a sense of responsibility and decorum. 

Only with such a comfort level can India eschew its paranoia about the Chinese presence. It can instead focus single-mindedly on the pursuit of its business interests optimally in regional capitals. Ideally, leave it to the Adani Group to reset the India-Sri Lanka relationship and put it on a realistic, pragmatic footing.

As for the strategists and think-tankers in Delhi, do not suspend rational thinking after reading the garbage disseminated by US propaganda outfits from time to time expanding on the Central Intelligence Agency’s decade-old hypothesis about a Chinese “string of pearls” around India’s delicate neck. 

This article was produced in partnership by Indian Punchline and Globetrotter.

M K Bhadrakumar is a former Indian diplomat.

Iran and China Sign ‘Historic’ 25-Year $400 Billion Strategic Partnership Agreement

The signing ceremony came after years of intense behind-the-scenes negotiations. Chinese President Xi Jinping first proposing a draft version of a comprehensive agreement with Tehran during his 2016 visit to Iran

Iranian Foreign Minister Mohammad Javad Zarif and Chinese Foreign Minister Wang Yi signed the highly anticipated Iran-China Comprehensive Strategic Partnership agreement after more than five years of grueling talks.

The comprehensive agreement, signed in Tehran on Saturday, consists of 20 articles, and although details of the pact have yet to be provided, local media indicates that it likely covers everything from political and cultural ties to “security and defence” and “regional and international” cooperation.

The deal reportedly envisions increasing bilateral trade over 10-fold to $600 billion per year. It promises Iran Chinese investment of as much as $400 billion. Mainly into the Middle Eastern nation’s oil, gas, petrochemicals, renewable energy and nuclear energy infrastructure. Tehran is committing to becoming a major reliable source of energy for Beijing.

Bringing Iran into the grasp of Belt and Road infrastructure scheme

The accord also brings Iran into the grasp of Beijing’s Belt and Road infrastructure scheme. An ambitious scheme worth the equivalent of over $1 trillion. It is aiming to link China to Europe and Africa via a series of new land- and sea-based infrastructure projects across dozens of nations.

Iranian President Hassan Rouhani praised the signing of the agreement. He expressed gratitude to Beijing for its support for Tehran in the international arena in the face of unilateral US sanctions, including insofar as the Joint Comprehensive Plan of Action nuclear deal is concerned.

Rouhani went on to suggest that the US military presence in West Asia is the root cause of regional instability. He stressed the importance of collective efforts by regional parties to ensure regional security. Also including via Iran’s proposed Hormuz Peace Initiative mechanism.

Foreign Minister Zarif called the agreement a “historic 25-year strategic roadmap.” Then said he and Foreign Minister Wang had an “excellent exchange on expansion of global, regional and bilateral cooperation in the context of our comprehensive strategic partnership.”

“The nail in the coffin ending US imperialist hegemony over West Asia”

Wang echoed the Iranian officials’ sentiments, saying “relations between the two countries have now reached the level of strategic partnership.” Also that “China seeks to comprehensively improve relations with Iran.”

The foreign minister added that China’s ties with Tehran “will not be affected by the current situation, but will be permanent and strategic,” noting that “unlike some countries,” Iran “does not change its position because of a phone call.”

Independent investigative journalist Ben Norton called the deal “huge.” He characterized it as “the nail in the coffin ending US imperialist hegemony over West Asia.”

Bloomberg described the inking of the deal as a “challenge” to the Biden administration. As the latter works to “rally allies” against Beijing. “Iran’s closer integration with China may help shore up its economy against the impact of [US sanctions]. It is sending a clear signal to the Biden administration of Tehran’s intentions.”

A draft version of the agreement is thought to have been leaked by the New York Times last year. It is envisioning security cooperation, intelligence sharing, joint drills, and dramatically expanded economic ties. Tehran did not confirm the authenticity of the leaked document at the time. However it admitted that it was indeed negotiating a major 25-year strategic partnership agreement with Beijing.

After the Biden administration made clear that it would not lift sanctions and return to the nuclear deal unless Iran dramatically reduced its uranium enrichment activities, Iranian Supreme Leader Ali Khamenei announced that “the post-US era” had begun.