How long has it been since you saw news about the Belt and Road Initiative? China has not talked about it for half a year, and its Taiwanese cheer squad has also fallen silent.
In August last year, Malaysian Prime Minister Mahathir Mohamad announced the termination of his nation’s big East Coast Rail Link contract with China after he was given the cold shoulder during a visit to Beijing.
Two months later on Oct. 4 when the US-China trade dispute was picking up speed, US Vice President Mike Pence delivered a speech on China at the Hudson Institute in Washington. That was when the world finally saw through the expansionist ambition behind the initiative.
China intended to export its overcapacity in the railway, highway and airport sectors while creating a debt trap to hold other countries hostage, all while supporting corrupt, puppet regimes, of which Venezuela is blood-drenched proof.
It remains uncertain to what extent Chinese President Xi Jinping (習近平) has fulfilled his “China dream” since announcing his strategic goal in 2014.
However, his spendthrift policy has caused a domestic backlash, as the widening poverty gap is intensifying the sense of deprivation and planting the seeds of social unrest.
Xi has had no choice but to spend huge amounts of money to stabilize the situation, further intensifying China’s debt crisis.
Knowing that he could not continue, Xi changed his approach. On Feb. 18, the Chinese State Council announced the Guangdong-Hong Kong-Macau Greater Bay Area plan, which is to bring together Hong Kong, Macau and nine cities in the Pearl River Delta to an economic zone covering 56,000km2 and 66 million people.
The plan adds to the mirage of China’s economic prosperity, which is created by printing money and flipping property. The combined market value of properties in Beijing, Shanghai, Shenzhen and Guangzhou exceeds the value of all property in the US.
Last year, China’s broad money supply, M2, increased by 174 trillion yuan (US$26 trillion at the current exchange rate), more than twice its GDP, and the total market value of its housing market is five times its GDP.
The bubble economy is growing and no one knows how to fix it.
Economics 101 says that printing two dollars to produce something worth one dollar leads to inflation.
However, China uses forceful controls to distort economic laws and directs huge capital flows toward the real-estate market, using it as a reservoir and turning 1.4 billion Chinese into mortgage slaves while the government reaps great financial benefit. As the public’s purchasing power weakens, they have no choice but to become docile, obedient citizens.
Now that the Belt and Road Initiative is broken, China is turning to Hong Kong. Once trapped, the “one country, two systems” framework will be put to sleep and Hong Kongers’ assets will dry up.
Worse still, Hong Kong will lose its century-old reputation for financial freedom as it is sacrificed in the competition between the great powers.
China’s economic volume is 63 percent that of the US, but it issues two times more yuan than the US issues dollars, while the real value of the yuan is anyone’s guess. This is how “red capital” survives.
Late last year, Taiwanese yuan deposits hit nearly 300 billion yuan, but the value of yuan-denominated financial instruments is unclear, something those who fantasize about the currency should consider.
As for Taiwanese businesspeople who have funds trapped in China, all that can be done is to wish them good luck.
Chen Chih-ko is a non-professional investor and a resident of New Taipei City.
Translated by Chang Ho-ming
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations