Since the 1970s, America had repeated military buildups in response to perceived threats. Whether it’s the Soviet military buildup, or the War on Terror, there have been multiple periods where we do these large-scale buildups. This is why America’s military is so ginormous. We have done that under conditions where we don’t raise taxes in four different instances since the 1970s, and because we don’t raise taxes and spend so much on the military, we have to bring in large amounts of foreign capital to finance it. And so, you create global imbalances when you’re the giant sucking machine sucking foreign capital into your economy.
The result of that is not just global imbalances, which produce things like the Asian financial crisis, but it also produces imbalances in our own economy, too. It creates real estate bubbles. So, this is a giant volatility machine to the global economic order and the financial pipes that bring the capital to us. We know it’s a giant volatility machine. It’s driven by high risk financial instruments and speculation, and all of this is pretty destabilizing, in a financial and creating bubbles sense, but it also creates a system where all of these developing economies in Asia have to suppress labor rights to be competitive in the export market because their models of development rely on exports. This system that we perpetuate in the name of supporting military primacy, and military primacy is supposed to in turn support the system, prevents domestic redistribution and balanced capital labor relations in these other Asian economies and countries.
And so, not only are we creating conditions where labor rights get repressed, and imbalances in other countries, it creates systems of kleptocracy and oligarchy, which is rampant in Asia — not everywhere, but it’s pretty prominent. It’s structural violence, and structural violence is what gives way to greater political insecurity, and makes countries need Chinese capital. Chinese capital spreading around Asia is one of the things American foreign policy is so worried about, but we’re creating conditions that we don’t like, and then we do things that worsen those conditions.
[Nathan J.] Robinson
Yes, it seems ultimately kind of self-defeating, even though we might say that what lies beneath the rhetoric of freedom and openness is the desire to pursue dominance and hegemony, or what the U.S. would call 'U.S. interests.' Ultimately, I think one of the conclusions of your work is that our current approach is not actually leading towards a world where the United States gets everything it wants, but, in fact, is putting not only other people but also ourselves in quite a bit of danger.
Jackson
Yes, the thing that Washington has to wake up to, and that I’m worried that it will not because it has incentives not to, is that the requirements of peace and primacy are deeply at odds with each other. Peace requires a certain degree of economic interdependence, regional cohesion, inclusivity in various ways, and above all, military restraint. Primacy requires the opposite of all of that. It requires the formation of rivalry and geoeconomic blocs. It requires containment against your rising rival, arms racing, and weapons proliferation.
It’s patently obvious that by pursuing primacy, we’re making ourselves the enemy of what remains of the Asian peace. It’s that insistence on primacy, coated rhetorically as openness, that is undermining the sources of the Asian peace. The preservation of stability the past 44 years is something that we somewhat take for granted in Washington, and we shouldn’t because it’s eroding rapidly, and Trump was simply a very vibrant data point along a larger trend line. And so, we’re not on a good track."
- Van Jackson being interviewed by Nathan J. Robinson, from "Why This Foreign Policy Expert Thinks Americans Dangerously Misunderstand China." Current Affairs, 16 May 2023.
India may ease rules for non-Chinese investments from Hong Kong
India may ease rules for non-Chinese investments from Hong Kong
India may reduce scrutiny of deals by Hong Kong-based investors as long as Chinese firms aren’t involved in the transactions, people with knowledge of the matter said.
The proposals under consideration include making it mandatory for beneficial owners from nations sharing a land border with India to seek the government’s permission to acquire more than 10% stake in any local firm, the people…
The process of economic growth is highly complex and is influenced by various factors such as social, political, economic and cultural factors.
According to Professor Nurkse, Economic development has much to do with human endowment, social attitudes, political conditions and historical accidents. Capital is necessary but not a sufficient…
China expected to be more dependent on foreign capital due to trade deficit: Morgan Stanley report
China is expected to become more dependent on overseas capital as its trade surplus dries up and it is likely to enter into years of deficit in its current account, a report released by Morgan Stanley forecasted.
1. ADAPTABLE LABOR LAWS NEEDED: CHINA GETS GREATEST FDI (Foreign Capital Investment) IN THE ASSEMBLING SEGMENT, WHICH HAS HELPED THE NATION TURN INTO THE ASSEMBLING CENTER OF THE WORLD. IN INDIA THE PRODUCING PART CAN DEVELOP IF FOUNDATION OFFICES ARE ENHANCED AND WORK CHANGES TAKE PUT. THE NATION SHOULD STEP UP WITH REGARDS TO EMBRACE MORE ADAPTABLE WORK LAWS.
BALANCE OF PAYMENTS
Afflluence Writng…
For a while it seemed that the Vancouver housing bubble, the direct result of a relentless tidal wave of Chinese "hot money" had burst after last August the British Columbia province implemented a 15% property tax to stem the inflow of offshore funds. Alas, it was not meant to be, and less than half a year later, the Vancouver housing bubble is back, and it's - almost - bigger than ever.
For the past year all of the “there’s a property bubble” spruikers have rejoiced and celebrated Vancouver’s 15% property tax for foreigners, especially when prices took a sizeable back-peddle.
Only last month I predicted (without having any data about the Vancouver market) that this would not last, and that this foreign capital would become comfortable with this tax and return to what it wants to do (i.e. park in real estate in liveable cities in stable western countries).
Well, it’s now happened. Capital has flooded back into Vancouver with a vengeance.
This is absolute proof that imposing artificial ‘brakes’ on this market won’t solve the problem at all. Capital is fleeing jurisdictions that it sees as too risky and/or unsafe, and is happy to pay 15% just to park somewhere favourable (or, rather, 15% is simply the necessary cost of preserving their capital).
It’s about the return of capital, not the return on capital.
The current debate in Australia (as well as New Zealand) would do well to pay attention. Taxing foreigners won’t help. Slashing capital gains tax won’t help. Removing negative gearing won’t help.
This investment market is being dominated by “professional” investors, rather than average mum-and-dad nest-eggers with a single investment purchase. These professionals are either running their empire full time, or as part of their superannuation scheme, or even as a commercial second income stream. As well as foreigners.
It won’t be until every other mum-and-dad piles into the scrum before we will have a bubble.
It’s coming, however. I already see the tide turning with first home-buyers... waking up to the fact that interest rates are rising yet property prices have not crash landed. So - their thinking goes - they better start making serious moves to buy something (anything!) soon, before prices and interest rates gallop even further away.
Years after the major economic digging hit the world, specifically the United States, host companies are slowly recovering and finding their way up again. But regardless of cost this point, many financial experts are still seeing more main thing this millennium; a fortiori a crash opening the value of the US dollars. <\p>
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