The red lines of this week's selected articles are monetary and economic integration.
The United Kingdom seems keen on warming up to China, with Brexit glooming in the shade. The relationship started amicably in 2015. Both countries wanted a "Golden Era" of relations. This resulted in a strong voting position for the UK in the AIIB. In 2016 the momentum drastically cooled down when the UK delayed its decision on Chinese involvement in a nuclear project in Hinkley. In 2017 the UK is looking to seal about a billion pounds in (business) deals by sending two of its top dogs, i.e. Britain's Finance Minister and Central Bank Chief. Based on its entourage the focal points of this visit will be energy and the financial industry [Britain eyes closer Belt and Road cooperation with China].
In the wake of the aforementioned, China is quenching its economic thirst by letting the United Arab Emirates sign a Memorandum of Understanding with Bank of China during a road show to Shanghai and Guangzhou. Earlier this year China focused on regional economic integration in the Middle East and solidifying the Maritime Silk Road by investing $ 10,7 billion in the Duqm in the neighbouring country Oman. In light of the ambitions of the countries involved and the available natural resources in the Middle East it is clear that these countries are becoming more than a supporting financial/business partner for cash pooling purposes [UAE essential to One Belt One Road, says Bank of China GM].
The Sino-Russian interests are amalgamating. The imposed embargoes forced Russia to look for different export countries to offset its natural resources. China is a perfect partner, since it's craving for economic growth. Also, Russia could be an ally in materializing the Northern Maritime Silk Road [China thinks big in backing Russian Arctic LNG project]. Allegedly, exports of Russian oil to China have more than doubled during the past six years. Historically speaking, one might say that Russia has taken land from China. Nonetheless, both countries stayed on relatively good terms, especially after Russia announced the resolution of all border disputes with China in 2006 [Russia, China Grow Closer As The New Silk Road Unfolds].
In connection with the steps taken by China one might deduce that it is securing its supply of natural resources for ensuring production of goods, improving and diversifying the access to its markets in order to supply its customers fast and pooling cash together with partners for more business opportunities. 2018 could mean interesting developments for the OBOR, in light of China’s wish to internationalize its currency (Yuan).
Ali Cikmazkara
Season’s greetings, good wishes for 2018, and thank you for your continued readership!
The next edition of Silk Road Headlines will be published on Thursday, 4 January 2018.
This week's Silk Road Headlines
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