Palestina, erresilientzia (95)

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I got my first banking job in 1973 in

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1972 with 200 million people we had 2.6

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million housing starts a few years ago

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with the financial sector taking 30% of

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the S&P earnings right is that what it

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was okay 2 million housing starts with

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300 million people was an unsustainable

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bubble right clearly the financial

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sector is entirely parasitic and we just

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let it get way out of hand and it did

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more with less back then for obvious

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reason

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try to now

youtube.com

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the eu’s decision to impose tariffs on Chinese electric vehicles set off an unexpected Chain Reaction China’s

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strategic response not only threatened European Industries but also exposed critical vulnerabilities in Western

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Supply Chains It’s achieved this with breaket growth in the industry fueled by

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government subsidies the problem with this is that the Europeans and Americans are saying that that’s given Chinese

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Brands an unfair advantage on price that they’ve being able to flood markets in

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other countries at rates that local Brands can’t compete with and they’re

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threatening to put tariffs on Chinese cars to level the playing

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field the counterargument to that though is that at the beginning you needed to

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have such subsidies the European Union has been embroiled in a heated debate for several

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months regarding the imposition of additional taxes on China’s new energy Vehicles the attitudes within the EU

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have been notably divided with some countries advocating for higher taxes to protect their local automobile

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Industries While others Express concerns about potential retaliation from China

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in August 2024 the EU ultimately decided to impose additional taxes on Chinese

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new energy Vehicles sold in the European market an action that has been perceived as a direct challenge to China however

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the eu’s sanctions have not only failed to intimidate China but have inadvertently created a significant

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opportunity for Russia the market share that originally belonged to the EU is now being seized by Russia which has

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swiftly reached agreements with China in the field of new energy Vehicles

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competition has intensified dramatically in recent years the gap between Europe and its

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competitors particularly China and the United States has widened in key disruptive Technologies

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China’s electric vehicles and Battery Technology have demonstrated Superior performance and price advantages

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compared to similar products in Europe Chinese made models are approximately

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20% cheaper than those produced in the EU this Competitive Edge has allowed

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China to capture 8.2% of the EU electric vehicle Market in

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2023 with projections indicating this share could exceed 20% by

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2027 faced with this growing pressure the EU has implemented a series of

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Economic Security and supply chain security strategies since last year these measures aim to reduce the eu’s

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Strategic dependence on China in this drisking process the French government

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has been particularly vocal about the need to remain competitive in the global new energy vehicle Market in response to

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this challenge France along with several other EU countries imposed tariffs on major Chinese automakers in June 2024

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for the tariffs were set at 17.4% 20% and 38.1% for byd gie and saic

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group respectively additionally a general Tariff of 21% was imposed on

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other manufacturers it’s another step in an escalating trade dispute between China and the West the European

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commission drastically increased import tariffs on Chinese electric cars Chinese

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automakers would face duties as highest 38% up 10 up from the current 10% the

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block is reacting to China’s W widening its Reach In global EV markets Brands

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like byd Gil and saic have been expanding abroad mostly due to their

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lower prices both the EU and the US are accusing Beijing of illegally subsidizing Chinese car manufactures the

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commission says the Tariff hike the European commission established a 10-day window for companies to request a

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hearing if no hearing is requested or if a hearing is filed but no majority objection is obtained The Proposal will

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be passed this effectively means that the eu’s taxation of Chinese electric

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vehicles is almost a foregone conclusion with final measures expected to be implemented within 4 months after the

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implementation of the temporary tax the eu’s Tariff increase will create unprecedented cost pressure for Chinese

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electric vehicles exported to Europe data reveals that in 28 European countries 20% of newly registered

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electric vehicles are made in China in 2023 China’s total automobile exports

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reached 4.6 million of which approximately 900,000 were new energy Vehicles the total value of these

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vehicles exported to Europe was us 11.5 billion accounting for nearly 57% of

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China’s total automobile exports while Chinese automakers have shown impressive growth in the EU Market with exports

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increasing by more than 100% year- on-year the situation is becoming more

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complex the implementation of the eu’s new tariff policy will further increase the price of Chinese cars in Europe

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widening the price Gap with local European cars this could potentially put Chinese manufacturers in a precarious

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financial position if they operate at a loss for an extended period in response to the eu’s tough

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stance on automobile taxation Beijing has not remained passive in June 2024

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China launched an anti-dumping investigation on pork exported from the EU covering pork and its

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byproducts this move is a significant blow to many EU countries as China is a

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crucial market for their pork exports China as one of the world’s most

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populous countries consumes more than 55 million tons of pork annually accounting

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for almost half of global consumption despite being a major pork producer itself China still needs to import large

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quantities of pork each year to meet domestic demand the majority of pork imported by China comes from EU

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countries such as Spain the Netherlands France Germany and Denmark these

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countries have traditionally enjoyed profitable pork exports to the Chinese market however the implementation of

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anti-dumping Duties threatens this important market for EU pork producers for instance Spain one of the main pork

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exporters in the EU exported 500 60,000 tons of pork to China in 2023 if

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anti-dumping measures are implemented the Spanish pork industry could face losses of approximately $400

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million industry experts predict that the entire eu’s pork market share in China May decline sharply with sales

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volumes potentially dropping by 30% to 40% simultaneously pork prices are

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expected to rise by at least 20% eliminating the previous price Advantage enjoyed by EU producers the situation

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has created divisions within the EU countries such as Germany Denmark Italy

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and Hungary have openly opposed the eu’s policy of imposing tariffs on Chinese

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electric vehicles in an attempt to ease tensions the German minister of economy

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actively promoted dialogue between China and Europe particularly regarding the sensitive topic of additional tariffs on

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Chinese electric vehicles German economy Minister Robert HCK is in China to discuss trade

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relations but a planned meeting with Premier leech young was cancelled at the last minute without explanation the

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cancellation comes amid growing Chinese anger over EU plans to increase tariffs

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on Chinese electric vehicles habc said the EU was open to negotiate but said

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that China’s backing for Russia’s war on Ukraine was what was really damaging

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trade relations despite negotiations between the two sides the EU made only

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Minor Adjustments to the Tariff rates saic’s Tariff was reduced from

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38.1% to 36.3% still the highest among all

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manufacturers while byd’s Tariff was reduced from 17.4% to

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177% the EU Justified these high tariffs by citing excessive subsidies provided

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by the Chinese government to domestic car companies the issue has reached a deadlock to stop the decision at least

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15 member states need to vote against it however based on previous voting patterns within the EU only four

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countries clearly oppose the measure far short of the required number in an unexpected turn of events Russia has

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seized the opportunity created by this trade dispute when China announced potential sanctions on European pork

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Russia immediately took action signing numerous trade contracts with Chinese pork suppliers Russian pork companies

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responded positively welcoming increased cooperation with China to ensure smooth pork exports according to Chinese

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Customs data China signed contracts with three Russian pork export companies in August 2024 resulting in the export of

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approximately 50,000 to 60,000 tons of pork to China Russia has stated that if China

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implements anti-dumping measures on EU pork products Russian pork will quickly

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fill the Gap the head of the Russian pig farm Enterprise Union revealed plans to

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capture 10% of China’s pork import market within the next 3 to 4

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years this development poses a significant threat to European pork companies potentially leading to their

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exclusion from the Chinese market for EU pork producers heavily reliant on Chinese demand this could be devastating

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the concerns of EU countries are growing German economic experts have pointed out that if Russia successfully replaces the

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EU as China’s Main pork supplier EU pork exporters will face a surplus this

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oversupply could lead to a sharp fall in pork prices impacting the entire European pork Market China’s counter

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measures extend beyond the pork industry on 20 August 20124 following the

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European commission’s announcement of its draft final decision on the anti-subsidy investigation of Chinese

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electric vehicles China’s Ministry of Commerce announced an anti-subsidy investigation on dairy products imported

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from the EU the China Dairy and dairy products Association submitted applications to the ministry of Commerce

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which after a preliminary investigation deemed the evidence reasonable and officially launched an investigation on

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August 21st Russia has also made inroads into the Chinese dairy market as early

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as May 2024 one of Russia’s largest Dairy companies began shipping milk to

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China by rail however the longdistance and complicated Customs procedures

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result in a 23-day Transit time from Moscow to China Russian companies are

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actively seeking to improve Transportation methods to expand the range of dairy products they can export

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to China the eu’s attempt to use sanctions to Target China’s electric vehicle industry has inadvertently

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affected its own important Supply chains China’s counter measures have been strategic avoiding overreaction while

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accurately targeting the eu’s vulnerabilities the current situation has provided Russia with an opportunity

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to strengthen its economy in the face of the ongoing Russian Ukrainian conflict and Western sanctions in addition to the

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investigations on pork and dairy products the Chinese Ministry of Commerce has also initiated anti-dumping

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investigations on EU products such as Brandy if these investigations confirm

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issues China is likely to impose anti-dumping duties on these EU products

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as well Russia’s opportunistic response to the trade dispute between China and the EU has been Swift and

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strategic recognizing the potential Gap in China’s pork Supply due to the anti-dumping investigation on EU pork

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Russian pork companies have moved quickly to establish themselves as alternative suppliers this chain of events

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highlights the interconnected nature of global trade and the potential for unintended consequences when

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implementing protectionist measures the eu’s decision to impose

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tariffs on Chinese electric vehicles intended to protect its domestic industry has instead led to threats to

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other key export sectors such as pork Dairy and Brandy China’s recent decision

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to implement export controls on antimony and related items marks a significant development in the ongoing trade

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tensions between China and the United States this move announced by China’s

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Ministry of Commerce mofcom and the general administration of Customs is set

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to take effect from September 15th 2024 antimon a critical non-renewable

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resource plays a crucial role in various Industries including Electronics solar photovoltaic components

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telecommunications petrochemicals Vehicles Aerospace and notably military

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applications approximately 50% of global antimony usage is in flame retardants

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while another 20% is used in photovoltaic glass for solar cells it’s it’s also essential in lead acid

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batteries which are widely used in vehicles and backup Power Systems the timing of China’s announcement coming in

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the wake of us tariffs on Chinese electric vehicles suggests that this move may be at least in part a response

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to those tariffs while China has not explicitly linked the antimony export

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controls to the EV tariffs the sequence of events and the Strategic nature of the resource involved point to a

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potential connection the ongoing situation raises question questions about the effectiveness of using tariffs

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as a tool for protecting domestic Industries in a globalized economy while the eu’s tariffs May provide some

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protection for its electric vehicle manufacturers in the short term the retaliatory measures by China could

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potentially cause more harm to other sectors of the EU economy think EVS are

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just about zero emissions think again they’re now the spark igniting a billion

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dooll battle between East and West how China’s about to hit Europe where it hurts and why the EU never saw it coming

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into the details how bad can a trade dispute between Brussels and Beijing get well uh we saw during the Trump

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Administration that actually a trade dispute can get completely out of hand

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but frankly we are not really there yet well basically what we are seeing is that the European Union has announced

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that it is investigating Chinese uh Chinese Imports of electrical Vehicles

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whereas China has basically responded in kind and saying that they are investigating Brandy uh so this is

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really just a warning shot and where both sides are looking at each other’s

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position and see and who’s going to Flinch first the global economic landscape is witnessing a seismic shift

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as China and the European Union engage in an escalating trade dispute that threatens to reshape their long-standing

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economic relationship in a move that has sent shock waves through the automotive industry the EU has imposed Hefty

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tariffs on Chinese electric vehicles sparking fears of potential retaliation

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from Beijing that could hit Europe where it hurts most the eu’s decision to slap

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tariffs of up to 38.1% on Chinese EVS marks a significant

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turning point in the Block’s approach to China’s rapidly growing Automotive sector this move is aimed at curbing the

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flood of Cheaper Chinese electric vehicles into the European market which has been posing a serious threat to

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European automakers the tariffs are set to affect major Chinese players like G

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byd and saic with duties ranging from 17.4% to

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38.1% depending on the manufacturer EU officials argue that these tariffs are

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necessary to level the playing field citing concerns over unfair subsidies provided by the Chinese government to

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its EV manufacturers these subsidies they claim have allowed Chinese companies to offer

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their vehicles at substantially lower prices in Europe potentially undermining the competitiveness of european-made EVS

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you argued um you could argue I should say that maybe these sides these two sides actually need each other more than

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ever given the shape of their economies right now if we look at Germany for example um you know huge companies with

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relian is on China the Chinese economy really struggling in this past year to recover completely from covid um what is

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it that’s driving them apart exactly if you had to sum it up well you’re AB absolutely right uh

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they are quite interdependent and if you look at the European economy since the

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EU and Germany doesn’t have much of its own growth it needs to look at large overseas markets uh that can absorb a

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lot of European export what a lot of people don’t actually know is that actually Europe is more export dependent

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than China so in other words if you think China exports too much Europe is actually even exporting even far more

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and now the Chinese economy has been relatively stagnant uh since the the pandemic yet there are

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no other major Market openings or major pockets of growth out there for a large

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economy like the European Union that needs roughly an economy of the same size in order to basically make a dent

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in its GDP and conversely if you look at the Chinese economy it still relies on

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Imports of uh Hightech uh not least in aviation and Advanced Materials and such

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which goes into upgrading its economy and also if you look at services for example like in banking and other

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Professional Services that China is extremely dependent on Europe especially given the trade war that has been going

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on between the US and China however China has not taken this move lightly in

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a Swift and Stern response Beijing has accused the EU of blatant protectionism and urged the block to reconsider its

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decision Chinese officials have made it clear that they do everything in their power to protect the interests of their

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automakers raising the Spectre of retaliatory measures that could severely impact key European sectors the

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potential areas of Chinese retaliation are diverse and could hit Europe in unexpected ways one sector that’s

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already feeling the heat is the alcoholic beverages industry China has initiated an anti-dumping investigation

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into Brandy imported from the EU a move that’s seen as a direct response to the EV tariffs this investigation primarily

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targets major European players like perau Ricard and Remy quantro sending ripples of concern through the European

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Spirits industry but the retaliation might not stop there the eu’s food industry could be next in line with

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China potentially imposing tariffs on European pork and dairy products this move could be particularly painful for

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European farmers and food producers who have come to rely heavily on the Chinese market in 2023 China imported about 36%

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of its dairy products from the EU making it the Block’s second biggest import partner in this sector the luxury goods

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sector a crown jewel of European exports is also bracing for impact China has

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been a major market for European luxury brands with companies like lvmh Gucci

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and Prada enjoying strong demand for their products any retaliatory measures targeting this sector could deal a

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significant blow to these companies especially at a time when they’re already grappling with falling demand

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due to post-pandemic economic challenges perhaps most concerning is the potential for China to leverage its dominance in

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the critical mineral supply chain China has previously shown willingness to use its control over Rare Earth minerals as

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a geopolitical tool as seen in its past disputes with Japan if Beijing decides

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to restrict the export of these crucial materials to Europe it could severely hamper the eu’s green transition goals

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and technological advancement this escalating trade tension comes at a time when EU China relations are already

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strained the two economic Giants have been grappling with increased distrust and disagreements on various issues

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including the ongoing conflict in Ukraine China’s stance on the Ukraine crisis has been a major point of

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contention with EU officials expressing frustration over beijing’s refusal to condemn Russia’s actions and its

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insistence on keeping the issue separate from EU China discussions in response to these challenges the EU has been

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developing a a drisking strategy aimed at reducing its dependence on China in

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critical sectors this approach championed by European commission president Ursula vonder lean seeks to

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strike a balance between maintaining economic ties with China and protecting European interests and values the

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strategy reflects growing concerns in Brussels about China’s economic practices and geopolitical Ambitions the

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eu’s shift towards a more defensive stance is evident in recent policy doents and statements from Top officials

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in March 2023 vonder liion delivered a landmark speech outlining the eu’s

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approach to China emphasizing the need for drisking not decoupling and highlighting concerns about China’s

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strategic intentions this was followed by the European council’s conclusions on China in May which stressed the

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importance of reducing critical dependencies and vulnerabilities in EU Supply chains however this hardening

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stance from the EU presents significant challenges for both sides the economic interdependence between China and Europe

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is deep rooted and complex China remains one of the eu’s largest trading partners

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and many European companies have substantial Investments and operations in China similarly Chinese companies

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have made significant inroads into European markets across various sectors the geopolitical considerations at play

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further complicate the situation both China and the EU are navigating a delicate balance in their relations with

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the United States for the EU maintaining strong ties with its traditional Ally

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while pursuing its own interests VAV China is a challenging diplomatic feat

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China on the other hand is Keen to prevent a united front between the EU and the US that could further isolate

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Beijing on the global stage as tensions escalate the Spectre of a full-blown trade War looms large such a scenario

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could have far-reaching consequences for both economies and the global trade system at large it could disrupt supply

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chain increase costs for businesses and consumers and potentially slow down economic growth on both sides the

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importance of dialogue and negotiation in resolving these issues cannot be overstated both China and the EU have

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much to lose from a prolonged trade dispute and finding common ground will be crucial in preventing further

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escalation however this will require both sides to address each other’s concerns seriously and be willing to

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make compromises looking ahead the future of EU China relations remains

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uncertain the outcome of this current dispute over EV tariffs could set the tone for their economic relationship in

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the years to come will China’s potential retaliation Force the EU to reconsider its approach or will it push Europe

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further towards reducing its economic Reliance on China One thing is clear the global economic landscape is Shifting

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and the Dynamics between China and the EU are at the Forefront of this change as both sides manage these turbulent

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Waters the decisions they make will have profound implications not just for their own economies but for the global

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economic order as a whole the eu’s move to impose tariffs on Chinese EVs and

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China’s potential retaliation marks a critical juncture in their economic relationship it highlights the growing

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tensions between maintaining open trade and protecting domestic Industries a challenge that many countries are

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grappling with in today’s interconnected global economy for the EU this situ

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ation presents a test of its ability to protect its economic interests while maintaining its commitment to free trade

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principles it also raises questions about the Block’s long-term strategy for dealing with China’s growing economic

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influence will the eu’s drisking approach prove effective in balancing economic engagement with strategic

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autonomy on the Chinese side the response to these tariffs will be closely watched how Beijing chooses to

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retaliate if at all could have significant lications for its relationships not just with the EU but

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with other major trading partners as well it will also be a test of China’s ability to navigate trade disputes

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without resorting to measures that could further isolate it on the global stage as this situation evolves both China and

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the EU are entering Uncharted Territory in their economic relationship the

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outcome of this dispute could set important precedents for how similar conflicts are handled in the future not

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just between these two powers but in the broader context of global trade relations the unthinkable has happened

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the Chinese Yuan has officially outpaced the US dollar in Global Payments by

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2.5% and the big question on the world’s mind these days is the Chinese Yuan

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going to overtake the dollar in the world economy its role and if so when

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and how and with what consequences might this happen rise of China is absolutely

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crucial now it is the second economy in the world it’s roughly 2third the size

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of the United States economy and gaining fast it has been growing faster than the

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United States for the last 25 years two to three times faster every year that’s

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why it is as big as it is now and that’s why most predictions have it be a bigger

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economy at the end of this decade than the United States citizens who are

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planning to do all kinds of growth and expansion and trade now need to have

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yuan in their wallets yuan in their bank accounts because more and more countries

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are saying we want to be paid in that currency because we do more business with China than we do with the United

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States countries are doing the same with what the reserve is to back up their

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currency people will have confidence in their currency not now only because they also have dollars but because they also

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have Yuan and with the prospect of the Yuan becoming a bigger Factor connected

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to the biggest economy in the world within a few years it will diminish the

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subsidy we get as a nation it will squeeze American capitalism it will be a

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boon to the Chinese cap ISM in just the ways the dollar Supremacy was for the

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United States the sanctions imposed on Russia are speeding up the importance of

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the uan because the Russians with their Alliance on the Chinese are doing more

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and more trade with the uan because they are shut out of the United States this

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shift is largely attributed to the Strategic moves made by China and its allies particularly Within the brics

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block the founding members of brics Brazil Russia India China and South Africa have been increasingly adopting

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the Chinese one for crossb trade effectively reducing their Reliance on the US dollar the rise of the yuan in

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international trade is not merely a coincidence but a result of careful planning and execution by China and its

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Partners China and Russia two of the most influential bricks members have joined forces to make uniz a reality

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their Master strategy aims to to replace the Dollar by providing the world with a living example of how the Yuan can be

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used for all kinds of trade transactions Russia has played a pivotal role in this shift following Western sanctions

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imposed on its economy in February 2022 Russia began fully accepting the Chinese

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Yuan for payments this move was not just a reaction to sanctions but a calculated step in the larger plan to challenge

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dollar hegemony the results have been striking in 2023 and 2024 the Chinese

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Juan accounted for 4 2% of all International transactions initiated in Russia while the US dollar represented

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39.5% this 2.5% difference marks a significant milestone in the yuan’s

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ascendency the adoption of the Yuan extends Beyond Russia other developing

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countries including brics members like India and Brazil have also started using the Yuan for their trade especially for

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Commodities like crude oil India for instance saved an impressive $7 billion

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in currency exchange fees by using the Yuan instead of the US dollar to purchase oil at discounted rates between

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2023 and 2024 the appeal of the Yuan to developing countries is multifaceted it

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not only offers a way to circumvent potential Western sanctions but also strengthens their local currencies and

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domestic economies this strategy aligns perfectly with the broader goals of dollarization and economic sovereignty

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pursued by many emerging economies the yuan’s performance in international trade has been nothing short of

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remarkable according to data from the society for worldwide interbank Financial telecommunication the world’s

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largest interbank messaging service the W’s usage in international trade reached an all-time high in July 2024 the one

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maintained its position as the fourth most traded currency globally with its share of global transactions increasing

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to 4.74% from 4.6 61% in June this marked the ninth consecutive month that the

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yuan’s share remained above 4% a clear indicator of its growing importance in the Global Financial system Swift

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payment data is crucial in measuring a currency’s standing in the international Arena it reflects not only the frequency

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of use in foreign exchange markets but also in commodity trading and inclusion in government foreign reserves the

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recent data shows that the value of transactions conducted in Yuan Rose by 13 4% compared to June outpacing the

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10.3% growth recorded for all currencies combined China’s efforts to internationalize the Yuan have been

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Relentless and multifaceted in a significant development the Yuan became the most widely used currency for crossb

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transactions in China in March surpassing the US dollar for the first time according to data from the state

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administration of Foreign Exchange crossborder payments and receipts in Yan hit a record 549 .95 billion in February

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the Yuan accounted for 48.4% of all crossborder transactions while the dollar share dropped to

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46.7% from 48.6% the month before by May 2024 the

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yuan’s share had climbed to an impressive 53% while the US dollar share

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fell to 43% the Euro accounted for 2% and the Hong Kong dollar for 1% these figures

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cover both current account and capital account transactions highlighting the comprehensive nature of the Wan’s

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adoption the use of the Yan has also grown significantly in China’s own foreign trade in the first quarter of

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2024 28% of China’s Goods trade was conducted in Yuan this internal shift is

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crucial as it demonstrates China’s commitment to using its own currency for international transactions setting an

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example for other nations to follow the global acceptance of the Yuan is expanding rapidly several developing

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economies including Brazil Argentina Iraq and Pakistan have announced their

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willingness to accept uan payments in trade with China there are also media

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reports suggesting that Saudi Arabia is considering using Yuan for oil trade with China a move that could potentially

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reshape the global oil Market the yuan’s rise is not limited to trade

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transactions it’s also making significant inroads in financial markets

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as of the end of May 2024 foreign investors held 4.2 trillion uon in

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Mainland Chinese debt Securities a 32% increase from the previous year the

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issuance of Yuan denominated bonds by Foreign entities in mainland China known as Panda bonds has also increased

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substantially since last year the appeal of panda bonds lies partly in their relative affordability with China’s

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nominal interest rates significantly lower than those in the US between January and May 2024 Panda bonds worth

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81 billion wian were issued in the inbank market bringing the total stock of panda bonds to around 240 billion

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yuan up from 195 billion yuan at the end of 2023 the rise of the Yuan as an

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international currency is not without challenges the US dollar still holds a dominant position in many aspects of

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global finance and the transition away from it will likely be gradual however the recent developments signal a clear

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shift in the Global Financial order with potentially far-reaching consequences for international trade investment and

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geopolitics as the Yuan continues to gain traction questions arise about the future role of the US dollar in the

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global economy how will this shift affect us economic power and influence on the world stage will other countries

34:18

follow suit and reduce their Reliance on the dollar these are critical questions that policy makers economists and

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Business Leaders will need to Grapple with in the coming years the implications of this shift extend beyond

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economics as countries increasingly use the uan for trade and investment China’s

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political influence May grow correspondingly this could lead to a realignment of global power dynamics

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with China playing an increasingly Central role in shaping International economic policies and norms for

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developing countries the rise of the uon offers both opportunities and challenges

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on one hand it provides an alternative to Dollar dominance potentially reducing vulnerability to us sanctions and

35:04

economic pressure on the other hand it may lead to increased dependence on China raising questions about economic

35:11

sovereignty and geopolitical Alignment the financial industry will need to adapt to this changing landscape Banks

35:17

investment firms and multinational corporations will need to develop expertise in un denominated transactions

35:24

and Investments this could lead to new Financial products services and career opportunities centered around the

35:30

Chinese currency as we witness this historic shift in the Global Financial system it’s clear that the world is

35:37

entering a new era of economic multipolarity the rise of the Yuan

35:42

challenges long held assumptions about the structure of international finance and trade it opens up new possibilities

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for economic cooperation and development particularly among emerging economies

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however this transition is likely to be complex and potentially turbulent as the Yuan gains ground we may see increased

36:02

competition and tension between China and the US in the financial sphere this could lead to new forms of economic

36:09

diplomacy as countries balance their relationships with these two economic Giants in conclusion the recent news of

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Yuan payments surpassing the US dollar by 2.5% marks a significant milestone in

36:21

the ongoing transformation of the Global Financial system it underscores China’s growing economic clout and signals a

36:28

potential shift away from the dollar Centric model that has dominated international finance for decades as we

36:35

move forward it will be crucial to monitor how this trend develops and what implications it holds for the global

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economy will the uvon continue to gain ground or will the dollar reassert its dominance how will other major

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currencies like the Euro and Yen fare in this changing landscape these are questions that will shape the future of

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global finance and international relations in the years to come Russia and China are in discussions about a $13

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billion oil and gas pipeline project Mongolia initially proposed as a Transit

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country for the pipeline May no longer be needed instead there’s growing speculation that the route could shift

37:12

to pass through Kazakhstan this potential change has raised eyebrows and left people wondering why is China

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hesitant about the Mongolian route what is the current status of the project and how could this new route enhance Russian

37:25

exports the invasion of Ukraine has had severe consequences for Russia’s gas

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exports to Europe since the conflict began these exports have plummeted

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resulting in an annual loss of approximately $150 billion for Russia

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this enormous Financial blow has forced Russia to look Eastward for new buyers with China being the primary target

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however Russia faces significant challenges in this pivot towards Asia one of the main obstacles is Russia’s

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lack of liquefied natural gas LNG infrastructure LNG facilities allow

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natural gas to be cooled and compressed into a liquid form which can then be transported by ships to markets around

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the world without adequate LNG infrastructure Russia’s ability to export gas to distant markets is

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severely limited in a bid to address this issue and secure new export routes

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Russian President Vladimir Putin recently visited China to discuss the power of Siberia 2 project despite

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Russia’s eagerness to see the deal China has shown a surprising lack of enthusiasm this tepid response from

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China has raised questions about the Project’s viability and the future of Russia China energy

38:38

cooperation yeah I’m I’m happy to start so you know there is a lot of enthusiasm

38:43

I think right now in Russia and in Mongolia for routing the power of

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Siberia to pipeline through Mongolia um I think that right now that there’s not

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an equal amount of enthusiasm in China One you know they don’t need this gas

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right away uh and two I think there are concerns about routing this pipeline

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through a third country that isn’t supplying natural gas to China um you

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know obviously you know the more countries you route a pipeline through the more chances there are for things to

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um you know disrupt the flow of gas you know intentional or accidental so I’ll

39:24

leave it at that okay anybody else uh want to pop in on that one to understand

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the context of this new pipeline proposal we need to examine China’s current natural gas demand and sources

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in 2022 natural gas accounted for 9% of China’s total energy

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consumption this might not seem like a large percentage but given the size of China’s economy it represents a

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significant amount of gas moreover China has set an ambitious Target to increase

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this share to 15% by 20 30 as part of its efforts to reduce carbon emissions

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and improve air quality thank you um happy to address all of those topics um so I’ll start

40:08

with the role of natural gas in China’s Energy Mix uh last year natural gas

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counted for almost 9% of China’s total

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energy consumption and that compares to 24% for the world as a whole uh China

40:27

would like to increase the role of natural gas in its energy consumption mix uh both to reduce air pollution and

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to combat climate change uh the government has a target of increasing

40:41

the share of natural gas to 15% of the energy mix by

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2030 China’s growing appetite for natural gas necessitates increased Imports currently China sources its

40:54

natural gas through a combination of pipeline Imports and LNG shipments the country has existing pipeline

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connections with several neighboring countries including Turkmenistan Russia and Myanmar additionally China receives

41:08

LNG from various Global suppliers allowing it to diversify its sources of natural gas uh the main play in Central

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Asia in gas is turkistan and turkistan pumping gas to China um Erica already

41:24

mentioned the fourth P pipeline pipeline d uh to increase uh the supply of gas to

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China I think last year about 35% of natural gas Imports were pipeline gas so

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Russia Central Asia Myanmar um other 65% are

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LNG um and if you look at you know China’s gas suppliers as a whole I think

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77% of China’s natural gas Imports last year came from um just six countries but they nicely sort of illustrate this

41:55

diversity of suppliers and rout so we have you know Australia and turkistan and Russia and the United States um and

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Malaysia and cutter um and you know earlier this year there were reports of

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Chinese companies Chinese National oil companies negotiating with cutter

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forecasts of China’s gas demand through 2030 and 2040 show a potential Supply

42:20

gap which Russia hopes to fill with the power of Siberia 2 pipeline however the

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situation is Complicated by China’s existing import commitments and the uncertain trajectory of its future

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demand these factors make it challenging to predict exactly how much additional gas China will need and when let’s take

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a closer look at China’s current gas pipeline infrastructure the country has three major pipelines from Turkmenistan

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known as a b and c these pipelines were constructed between 2008 and 2014 at a

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combined cost of approximately $14 billion together they currently Supply 55

42:59

billion cubic meters of gas annually to China there are plans to increase this capacity to 85 BCM in the next 3 years

43:08

reflecting China’s growing demand for natural gas the power of Siberia one

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pipeline connecting Russia to China became operational in 2019 this massive

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infrastructure project spans 3,000 kilm and cost an estimated $55 billion to

43:26

construct in 2023 it delivered 22 BCM of natural gas to China the pipeline’s

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capacity is expected to increase gradually with projections to reach a maximum capacity of 38 BCM by

43:39

2027 China also receives gas from Myanmar through a pipeline constructed in

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2013 this pipeline was designed to deliver 12 BCM of gas per year however

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it currently operates at only onethird of its capacity due to various operational issues Des desite these

43:57

challenges the pipeline remains an important part of China’s gas import infrastructure the proposed power of

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Siberia 2 pipeline would take a different route from its predecessor while power of Siberia 1 travels through

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Eastern Siberia and enters China in its Northeastern region power of Siberia 2

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would pass through Mongolia to reach China this route presents both

44:21

opportunities and challenges the estimated cost of the power of Siberia 2 project is $13.6

44:30

billion this is a significant investment especially considering the current geopolitical tensions and economic

44:37

uncertainties the high cost raises questions about funding and economic viability particularly given China’s

44:44

apparent hesitation the pipeline’s proposed route through Mongolia introduces additional political risks

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agreements must be reached not only between Russia and China but also with Mongolia for Transit rights

44:57

this adds complexity to the negotiations and potential vulnerabilities to the gas supply chain any future political

45:04

tensions between these countries could potentially disrupt gas flows however recent discussions about this project

45:11

have hit some unexpected complications China it turns out isn’t too keen on the pipeline passing through

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Mongolia instead they’re pushing for a route through Kazakhstan there are several reasons for this potential

45:24

change firstly China has expressed concerns about mongolia’s growing alliance with the United States Mongolia

45:31

has been strengthening its ties with the US in recent years signing a strategic partnership in 2019 and participating in

45:39

joint military exercises this closer relationship between Mongolia and the US has raised

45:45

eyebrows in Beijing as China is wary of increased American influence in the region Kazakhstan on the other hand

45:52

presents several advantages as a Transit country it already has experienced with oil and gas pipelines including those

45:59

connecting to China the Kazakhstan China oil pipeline operational since 2006 and

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the central Asia China gas pipeline which passes through Kazakhstan demonstrate the country’s existing

46:11

energy infrastructure links with China moreover kazakhstan’s political landscape may be seen as more stable and

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predictable from China’s perspective while Kazakhstan has its own challenges it has maintained relatively

46:25

balanced relations with both Russia and China potentially making it a less risky Transit option the Kazakhstan route

46:33

would also be shorter than the Mongolia route potentially reducing construction costs and transit times this could make

46:40

the project more economically viable an important consideration given the estimated 13 to 15 billion price tag

46:49

Chris weer CEO of Eurasia based strategic consultancy macro advisory

46:54

said using the khaak route where the cost of repair and upgrade will be considerably less than power of Siberia

47:00

2 is a much more attractive option and one which appears to be acceptable to Beijing he further added they share a

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long Common border and the old Soviet infrastructure is repairable to allow more gas via Kazakhstan selling at a

47:16

price lower than it gets from Europe and turkey is an acceptable cost to expand volumes and

47:22

infrastructure while natural gas remains a key part of China’s energy strategy

47:27

the country is also exploring Alternatives China has shown significant interest in hydrogen as a future energy

47:34

source particularly green hydrogen produced using renewable electricity hydrogen production methods

47:40

are categorized as gray blue or green gray hydrogen is produced from fossil

47:46

fuels without capturing the resulting CO2 emissions this is currently the most

47:51

common and cheapest method of hydrogen production but it’s also the most environmentally damaging blue hydrogen

47:58

uses fossil fuels but captures and stores the CO2 making it more environmentally friendly than gray

48:03

hydrogen but still not entirely clean green hydrogen produced using renewable

48:09

electricity to split water molecules is the most environmentally friendly option but currently the most expensive to

48:15

produce China recently announced a massive $45 billion investment in green

48:21

hydrogen development signaling its strong commitment to this technology this move could potentially impact

48:28

future natural gas demand as hydrogen could replace natural gas in some applications particularly in industrial

48:35

processes and transportation Russia’s desperate need for new gas export routes contrasts

48:41

sharply with China’s lack of urgency this imbalance in negotiating positions could significantly impact the

48:48

final terms of any deal Russia currently holds about 24% of the world’s proven

48:53

natural gas reserves making it the country with the largest gas reserves globally however these vast reserves are

49:00

of little value if Russia cannot get the gas to Market it’s worth noting that the power of Siberia 2 project is not just

49:07

about natural gas recent statements from Russian officials suggest that the

49:12

pipeline could also be used to transport oil Russian President Vladimir Putin

49:18

stated moreover it’s possible to lay both a gas pipeline and an oil pipeline

49:24

in the same Corridor this dual use potential could make the project more attractive

49:30

economically the geopolitical implications of the power of Siberia 2 project extend beyond just Russia and

49:37

China the United States which has been promoting its own LNG exports to Asia is

49:43

likely watching these developments closely increased energy ties between

49:48

Russia and China could potentially challenge US influence in the region despite all the challenges Russia

49:55

remains optimistic about the project Alexander Novak Russia’s Deputy Prime

50:00

Minister has stated that they expect to sign a contract for power of cyberia 2 soon the negotiations surrounding the

50:08

power of Siberia 2 project are intricate with pricing being a key point of

50:13

discussion despite these complexities Putin remains confident in the Project’s

50:19

potential he emphasized that China’s expanding economy has a growing need for energy resources and he positioned

50:26

Russia as the most Dependable supplier to meet this demand Putin also highlighted the

50:33

Project’s resilience against potential Western interference he asserted that the deal would be structured in a way

50:39

that makes it impervious to sanctions whether they target shipping fleets or financial

50:45

institutions Putin stated nobody can get in the way of this neither sanctions on

50:50

tanker fleets or even sanctions on financial institutions we will buy and sell everything in our National

50:57

currencies so the interest from both sides is confirmed by conducting transactions in

51:03

their National currencies Russia and China aim to circumvent potential Financial restrictions this approach

51:09

according to Putin underscores the mutual interest and commitment of both Nations to the project