Here’s the full interview that I gave to VOA China’s FM Shakil on this subject, excerpts of which were published in their report on 20 January titled “安全和阿富汗问题将考验2025年中国与巴基斯坦的关系”
China does not have enough money to spend on BRI or CPEC. Therefore, China has to focus on the projects most likely to succeed and carry the highest strategic values. The top pick is certainly the Siberia-2 pipeline going through Kazakhstan. Northern Sea Route seems to be a nice choice if it matches Russia's planning Siberia. Developing China's Northwest for strategic depth needs a lot more work, including the migration of enough people, and all the consequences to deal with. Then you have the armament needed to face the open threats from the USA. I suspect 2025 and 2026 will be years for looking inward in China and in the USA. Lots of thunders but not much, if any, rain.
" China does not have enough money to spend on BRI or CPEC. "
Please elaborate, that doesnt sound correct at all. Doesnt China hold massive US debt ? Doesnt China print its money without interest charges being automatically generated ?
China can print RMB as much as they want (actually they have been fairly careful about this. Officially China has not launched any QE in the US style.) However, BRI and CPEC need USD to buy out local officials, rebel leaders, land use rights, leases, and pay local wages (through the unfavorable exchange rate of the host nations). China always tries to bring in their own companies, labor forces, and machins. But China cannot do without the USD in these projects.
Yes China is doing that. In some corners of the world, one can use the US treasury literally as the USD. But at the same time, China has too keep a large amount of USD on hand just to smooth the trades and to deal with the exodus of foreign companies.
" But at the same time, China has too keep a large amount of USD on hand just to smooth the trades and to deal with the exodus of foreign companies."
Has to, or is compelled to ? I'm sure you're aware of the petro dollar, but what about the Sino Dollar which serves a similar purpose. I wager that was the deal Kissinger gave to China in the 70's in return for China's rapid prosperity. Most countries pay China for its goods in what currency ? We all know the answer.
I am not aware that Sino-Dollar concept. I assume you meant that US buy Chinese products in green papers and China's central bank will store them back to USA by purchasing US Treasury. Yes I believe there is such an "understanding" but it is also consistent with China's intention. Except Chin has tried to divest from USD at least 10 years ago by trying to buy up US assets in US, then they realized that Americans will confiscate thse assets if war comes. China now mostly buy US grains and agriculture products. Since Trump's first term, China's accumulation of UST has been slowed down then starts to drop slowly because China does not have other good options to store the trade surplus, until China started to suck in gold and other minerals from around the world. Yes, this can upset USA.
I understand that China tried very hard to make its RMB an IMF official option for reserve calculation. The net effect is capital flight from China due to the need to satisfy IMF requirements. But most countries don't keep much RMB at hand. KSA started to receive RMB for oil only in 2024. Russia did so only in 2022 and has been known to frequently dump RMB in the markets because Russians simply do not buy that much from China. So far China has post minimal difficulties in foreign exchanges when foreign companies divest from China, with Japanese companies suffering a little bit, but not too much. Civilian requests for foreign exchanges, especially USD, have been under very tight control in the last several years.
My estimation is China will use surplus UST on hand to buy gold in the international market. However, it is for China's own interests NOT to dump USD or buy gold openly lest USD loses value or gold rises too fast. But even if USA exports oil and gas to China and China does buy them, that would not be enough to balance the US-China trade.
Chinese are concerned about and especially the Chinese communists. Media programs toward the West will not see much cut, if any at all. and these are small expenses compared to others. SilkRoador BRI will focus on areas around the Siberia-2 pipeline. Looking toward arctic is a must for China to consider marine transport with less chance of being interrupted by marine power (Chinese ships can hug the coast in the summer). All grandiose projects have purposes. When there is not money, only the most practical parts in the grandiose projects would get funding. China's spending on BRI hs been greatly reduced in the last two years.
I doubt if Voice of America China is anything like China Radio International.
China does not have enough money to spend on BRI or CPEC. Therefore, China has to focus on the projects most likely to succeed and carry the highest strategic values. The top pick is certainly the Siberia-2 pipeline going through Kazakhstan. Northern Sea Route seems to be a nice choice if it matches Russia's planning Siberia. Developing China's Northwest for strategic depth needs a lot more work, including the migration of enough people, and all the consequences to deal with. Then you have the armament needed to face the open threats from the USA. I suspect 2025 and 2026 will be years for looking inward in China and in the USA. Lots of thunders but not much, if any, rain.
" China does not have enough money to spend on BRI or CPEC. "
Please elaborate, that doesnt sound correct at all. Doesnt China hold massive US debt ? Doesnt China print its money without interest charges being automatically generated ?
China can print RMB as much as they want (actually they have been fairly careful about this. Officially China has not launched any QE in the US style.) However, BRI and CPEC need USD to buy out local officials, rebel leaders, land use rights, leases, and pay local wages (through the unfavorable exchange rate of the host nations). China always tries to bring in their own companies, labor forces, and machins. But China cannot do without the USD in these projects.
Why not sell some of the US debt they hold, or convert it to local currencies ? Its going to become worthless soon anyhow ?
Yes China is doing that. In some corners of the world, one can use the US treasury literally as the USD. But at the same time, China has too keep a large amount of USD on hand just to smooth the trades and to deal with the exodus of foreign companies.
" But at the same time, China has too keep a large amount of USD on hand just to smooth the trades and to deal with the exodus of foreign companies."
Has to, or is compelled to ? I'm sure you're aware of the petro dollar, but what about the Sino Dollar which serves a similar purpose. I wager that was the deal Kissinger gave to China in the 70's in return for China's rapid prosperity. Most countries pay China for its goods in what currency ? We all know the answer.
I am not aware that Sino-Dollar concept. I assume you meant that US buy Chinese products in green papers and China's central bank will store them back to USA by purchasing US Treasury. Yes I believe there is such an "understanding" but it is also consistent with China's intention. Except Chin has tried to divest from USD at least 10 years ago by trying to buy up US assets in US, then they realized that Americans will confiscate thse assets if war comes. China now mostly buy US grains and agriculture products. Since Trump's first term, China's accumulation of UST has been slowed down then starts to drop slowly because China does not have other good options to store the trade surplus, until China started to suck in gold and other minerals from around the world. Yes, this can upset USA.
I understand that China tried very hard to make its RMB an IMF official option for reserve calculation. The net effect is capital flight from China due to the need to satisfy IMF requirements. But most countries don't keep much RMB at hand. KSA started to receive RMB for oil only in 2024. Russia did so only in 2022 and has been known to frequently dump RMB in the markets because Russians simply do not buy that much from China. So far China has post minimal difficulties in foreign exchanges when foreign companies divest from China, with Japanese companies suffering a little bit, but not too much. Civilian requests for foreign exchanges, especially USD, have been under very tight control in the last several years.
My estimation is China will use surplus UST on hand to buy gold in the international market. However, it is for China's own interests NOT to dump USD or buy gold openly lest USD loses value or gold rises too fast. But even if USA exports oil and gas to China and China does buy them, that would not be enough to balance the US-China trade.
If that why they spend more on China Radio International than the US does on VoA China?
Is their burgeoning Silk Road program looking inward as it progresses toward the Arctic?
Chinese are concerned about and especially the Chinese communists. Media programs toward the West will not see much cut, if any at all. and these are small expenses compared to others. SilkRoador BRI will focus on areas around the Siberia-2 pipeline. Looking toward arctic is a must for China to consider marine transport with less chance of being interrupted by marine power (Chinese ships can hug the coast in the summer). All grandiose projects have purposes. When there is not money, only the most practical parts in the grandiose projects would get funding. China's spending on BRI hs been greatly reduced in the last two years.
"Chinese are concerned about" what?
What is "BRI?"
Sorry, my bad. I meant Belt-Road-Initiative.