China’s Growing Arms Sales to Latin America

In recent years China has asserted itself as a key player in the global arms trade. Not only have both export volume and weapons quality increased rapidly, the range of customers China has been supplying has also expanded greatly over the course of the past decade. Latin America is one of the key regions into which Chinese arms have begun to pour. Yet while commentators of the past have doubted the strategic significance of China’s arms sales to this region — pointing to their relatively meager quantity and the fact that most Latin American states still rely on more established suppliers for their most important military hardware (see here, for instance) — there are signs that things may be changing.

Members of the Venezuelan army fly a Chinese-made K-8 jet in Barquisimeto (March 13, 2010).

Image Credit: REUTERS/Miraflores Palace/Handout

With next to no arms sales to the region before 2005, China is now a key supplier to Latin America. Venezuela continues to lead in China’s Latin American arms sales, with the Stockholm International Peace Research Institute (SIPRI) estimating that between 2011 and 2015 Venezuela purchased $373 million of Chinese weaponry. A $500 million deal in 2012 for weaponry including armored personnel carriers and self-propelled artillery ensures that this arms relationship is set to continue flourishing into the future.

Protests threaten China’s nuclear energy plans

NIMBYism is on the rise in China, and without better dialogue between stakeholders, threatens to undermine Beijing’s nuclear plans and efforts to meet its COP21 goals.

Over the past two weeks, thousands of residents of Lianyungang, a town in Jiangsu province, have gathered,halting preparations for a proposed nuclear waste reprocessing plant. Lianyungang is one of six sites under consideration for the project, but the two companies developing the plant, China National Nuclear Co. (CNNC) and France’s Areva, have not yet decided on a final location.

Oil Sanctions Risk Pushing An Unstable North Korea Over The Edge

A new round of United Nations sanctions on North Korea has a lot of loopholes, and China is only enforcing those that hit at Pyongyang’s weapons-making capabilities. The rogue nation, that is once again making nuclear threats, is using its hostage population as a human shield in order to get Chinese oil and food.

In January, Pyongyang conducted its forth nuclear test. In February, it launched a long-range rocket. In early March, North Korean leader Kim Jong-un reportedly ordered the military to deploy the country’s nuclear warheads on standby.

China in the Caucasus: For Armenia, Azerbaijan, and Georgia, China is an important investor and possible regional stabilizer.

Armenian President Serzh Sargsyan (L) shakes hands with Chinese President Xi Jinping during a signing ceremony in the Great Hall of the People in Beijing (March 25, 2015)

Image Credit: REUTERS/Feng Li/Pool

On his first visit to Beijing, then-Armenian defense minister Vazgen Sargsyan is said to have thrown the hosts into a state of mild confusion when he remarked that (paraphrased) “as we say in Armenia, together with the Chinese there is more than a billion of us.” Jokes and linguistic barriers aside, the comment reflected the main motivating factor behind Armenia’s outreach to China. When dealing with larger and often hostile neighbors, it is only natural for small countries to seek out support or, as a paper published by the Armenian government’s think tank put it, a “special partnership,” externally.

China explores its monetary easing toolkit

The People’s Bank of China (PBoC) has flooded China’s financial system with record amounts of cash this past week to pre-empt the annual liquidity crunch ahead of the Lunar New Year in early February. The central bank is cautiously refraining from cutting interest rates or the reserve requirement ratio (RRR), as it fears that the traditional monetary easing tools may send the already weakening renminbi down even further.

The People’s Bank of China (PBoC) pumped a net RMB 690 billion into China’s banking system this past week through open market operations, marking the largest single-week injection on record. The move brought the net cash injections this month to RMB 1.9 trillion, including RMB 1.235 trillion via reverse purchase agreements (repos) and RMB 612.5 billion through medium-term loans.

Without Reform from Beijing, ‘The World Will Endure More China Scares’

On Jan. 21, billionaire investor George Soros said he was betting against Asian currencies, telling Bloomberg Television that “A hard landing is practically unavoidable” in China. The Chinese currency has dropped 5.7 percent since August, when the central bank allowed it to depreciate. “I’m not expecting it,” he added. “I’m observing it.” Though Soros didn’t specifically mention the renminbi, China’s currency, ruling Communist Party mouthpiece People’s Daily attacked him in a Jan. 26 article for suggesting he might short the renminbi, comparing such a move to “declaring war on China’s currency.” In this ChinaFile conversation, experts discussion if Soros may be right.

How the internationalisation of China’s currency could offset the global trade slowdown

The  start of 2016 has seen a tumultuous start for the global financial system. Oil prices have descended below $30 a barrel and economic developments in China have brought episodes of volatility - trading in the Shanghai Composite Index was halted twice in the first week of the year due to sharp selling.

While the slowdown in China has understandably made the markets nervous, it’s worth pointing out that with an estimated $4 trillion in foreign exchange reserves, the opening up of the Chinese financial system and the internationalisation of the renminbi (RMB) are likely to have a significant impact on the global economy.

China's European charm offensive: Silk Road or Silk Rope?

The UK should not imagine that Chinese President Xi Jinping’s October visit means it now has a 'special relationship' with China. The visit was just part of a Chinese charm offensive aimed at the EU. 

Xi Jinping’s state visit to the UK from October 20th-23rd had every possible element of flattery and friendship. The Chancellor of the Exchequer, George Osborne, said before the visit that the UK was China’s “best partner in the West”. Xi told a joint session of Parliament that China and the UK were becoming “an interdependent community of entwined interests”.

China divided: Beijing struggles for control

The 60th anniversary of the establishment of the autonomous region of Xinjiang has been saluted by Beijing as a great step toward a stronger national unity. However, rising tensions and incidents seems to jeopardize Beijing’s control over one of its most strategic regions. 

This October, the massive celebrations for the 60th anniversary of the founding of the Xinjiang Uyghur Autonomous Region in Urumqi were disrupted by the dreadful news of an attack in a coal mine that is believed have claimed the lives of 50 workers.

How China's Currency Policies Will Change the World

The recent fluctuations in China's currency typify the best and worst of a globalized world, where developments in one place can instantly change the political and financial calculations of governments in others. For most of human history, the communities, cultures and economies of the world existed independently of one another, separated as they were by vast distances and difficult terrain. It would, for instance, take months or even years for news of China to reach Europe across the great Silk Road trading route during the height of its use some 1,000 years ago. Even then, the communities along that route could hardly be considered entirely coherent.

But that is clearly no longer the case. And now, as China continues to adjust the yuan, markets throughout the world will react accordingly, even as they react differently. 

China seeks to secure oil supply in the South China Sea

China’s land reclamation is not just rooted in erecting a military and political presence in the South China Sea, but in its desire to safeguard the security of its petroleum supply.

China’s land reclamation project among the disputed islands in the South China Sea has drawn extensive international attention. While focus has been on China’s military presence, there seems to be another implication of China’s provocative behaviour. In fact, erecting bases within the region is an extension of China’s oil supply security strategy.

Chasing the dragon: Russia's courtship of China

Russian leaders talk of a pivot to Asia and a strategic partnership with China partly to frighten the West. But behind the warm rhetoric, many Russians worry about China dominating their bilateral relationship, and China worries that Russia’s confrontation with the West will get out of hand. What China wants from Russia is an open road to Europe; but that is not part of Russia’s plan. 

The Russian authorities like to claim that they have a lot in common with China: both emerging economic powers, both permanent members of the UN Security Council, but above all both non-Western and perhaps even anti-Western powers. A recent report by the influential and well-connected Russian International Affairs Council argues that “the bond between Moscow and Beijing…will serve as basis for creating a ‘non-American’ world”. As Russia’s relationship with the West has deteriorated as a result of the conflict in Ukraine, Russian officials have talked more about a Russian ‘pivot to Asia’.

Out of the Bretton Woods

When China proposed the Asian Infrastructure Investment Bank (AIIB) in late 2013, it hoped to offer a regional alternative to the multilateral institutions of the Bretton Woods system that left Asia underrepresented. When 58 member nations bucked Washington’s warnings and joined the bank this year, including allies of the United States and G–7 stalwarts such as France, Germany, South Korea, and the United Kingdom, China realized that it had a potential vanguard for an alternative economic world order.

Why China's Stock Markets Matter

Analysis

• Beijing will continue to intervene where possible to prop up markets and market sentiment.
• A collapse of the stock market would likely increase deposits in ordinary bank accounts.
• This would compel Beijing to rely more heavily on banks to fuel growth and pressure China to accelerate financial liberalization efforts as a way to cultivate household consumption.

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The Shanghai Composite Index fell 6 percent on July 3, rounding out a 28 percent decline since June 12, when the country's stock markets peaked. The deterioration occurred despite intensive government efforts to stabilize prices and revive investor sentiment. Overt attempts by Beijing included cutting benchmark interest rates and reserve requirement ratios and loosening restrictions on investor access to margin loans, in addition to less overt moves, such as direct interventions to prop up the market with government-backed purchases of blue chip stocks. On Friday, in a clear bid to win investor confidence in its oversight abilities, the securities regulator announced it would investigate signs of potential market manipulation. Yet so far, Beijing's efforts have failed to achieve the desired effect of stimulating, or at least stabilizing, China's leading stock markets.