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G7 Aims to Raise $600 billion to Counter China’s Belt and Road

Andrea Shalal wrote . . . . . . . . .

Group of Seven leaders on Sunday pledged to raise $600 billion in private and public funds over five years to finance needed infrastructure in developing countries and counter China’s older, multitrillion-dollar Belt and Road project.

U.S. President Joe Biden and other G7 leaders relaunched the newly renamed “Partnership for Global Infrastructure and Investment,” at their annual gathering being held this year at Schloss Elmau in southern Germany.

Biden said the United States would mobilize $200 billion in grants, federal funds and private investment over five years to support projects in low- and middle-income countries that help tackle climate change as well as improve global health, gender equity and digital infrastructure.

“I want to be clear. This isn’t aid or charity. It’s an investment that will deliver returns for everyone,” Biden said, adding that it would allow countries to “see the concrete benefits of partnering with democracies.”

Biden said hundreds of billions of additional dollars could come from multilateral development banks, development finance institutions, sovereign wealth funds and others.

Europe will mobilize 300 billion euros for the initiative over the same period to build up a sustainable alternative to China’s Belt and Road Initiative scheme, which Chinese President Xi Jinping launched in 2013, European Commission President Ursula von der Leyen told the gathering.

The leaders of Italy, Canada and Japan also spoke about their plans, some of which have already been announced separately. French President Emmanuel Macron and British Prime Minister Boris Johnson were not present, but their countries are also participating.

China’s investment scheme involves development and programs in over 100 countries aimed at creating a modern version of the ancient Silk Road trade route from Asia to Europe.

White House officials said the plan has provided little tangible benefit for many developing countries.

Biden highlighted several flagship projects, including a $2 billion solar development project in Angola with support from the Commerce Department, the U.S. Export-Import Bank, U.S. firm AfricaGlobal Schaffer, and U.S. project developer Sun Africa.

Together with G7 members and the EU, Washington will also provide $3.3 million in technical assistance to Institut Pasteur de Dakar in Senegal as it develops an industrial-scale flexible multi-vaccine manufacturing facility in that country that can eventually produce COVID-19 and other vaccines, a project that also involves the EU.

The U.S. Agency for International Development (USAID) will also commit up to $50 million over five years to the World Bank’s global Childcare Incentive Fund.

Friederike Roder, vice president of the non-profit group Global Citizen, said the pledges of investment could be “a good start” toward greater engagement by G7 countries in developing nations and could underpin stronger global growth for all.

G7 countries on average provide only 0.32% of their gross national income, less than half of the 0.7% promised, in development assistance, she said.

“But without developing countries, there will be no sustainable recovery of the world economy,” she said.


Source : Reuters

Charts: Inflation in G7 Countries

Source : CTV

Chart: Energy Inflation Is Soaring Across G-7 Economies

Source : OECD

Can G7 Countries Compete With China’s Belt And Road Initiative?

From Oxford Business Group . . . . . . . . .

Following the expansion of Chinese-led projects in many emerging markets over the past decade, the G7 has unveiled its own initiative to support global infrastructure development, dubbed Build Back Better World (B3W). Announced at a G7 meeting in June, the B3W will focus on four main areas: climate, health, digital technology and gender. Its overarching goal is to catalyse hundreds of billions of dollars of infrastructure development in low- and middle-income countries.

Beyond this outline, little information has been released about how the B3W initiative will operate in practice. However, it is clear that it responds to two broad, interconnected aims.

On the one hand, the B3W will constitute “a values-driven, high-standard, and transparent infrastructure partnership”, according to a fact sheet put out by the US government. It seeks to help narrow the more than $40trn infrastructure gap in the developing world, which has been exacerbated by the Covid-19 pandemic.

On the other hand, the B3W will serve as a counterweight to China’s flagship Belt and Road Initiative (BRI), with the fact sheet highlighting that it will be a means of “strategic competition with China”.

BRI pivots away from infrastructure

Launched in 2013 and initially intended to revive ancient Silk Road trade routes between Eurasia and China, the BRI grew to become a far-reaching plan for transnational infrastructure development, linking countries and continents through land and sea corridors and industrial clusters.

The BRI caused consternation among G7 countries from the moment of its inception. This was due in part to the fact that it was widely seen as a way to expand Chinese geopolitical influence.

For example, in December 2017 Sri Lanka formally ceded 70% control of Hambantota Port to a Chinese state-owned firm on a 99-year lease after the government was unable to service Chinese loans used to build the $1.3bn strategic gateway on the Indian Ocean.

Concerns have also been raised over the lack of transparency in terms of lending, environmental and social impacts, and corruption.

However, some of these apprehensions have been eased by recent developments. As OBG has covered previously, since the Covid-19 pandemic the BRI has increasingly moved away from big-ticket infrastructure projects, with China placing a greater focus on sustainable, digital and health-related aspects – the so-called green, digital and health silk roads.

This pivot has meant that the countries participating in the BRI are receiving fewer financial resources: from a peak of more than $125bn in total spending in 2015, China spent around $47bn on BRI projects last year.

Mind the gap

China’s shift away from infrastructure projects has left a gap which the B3W is aiming to fill.

A key aspect of the B3W is the mobilisation of private sector capital through the expansion of existing development finance tools.

This reflects an awareness that what the US administration calls “status quo funding and financing approaches” are insufficient to close the vast infrastructure gap which continues to stymie development in emerging economies around the world.

According to the Global Infrastructure Hub, a G20 initiative, the world is facing a $400bn gap in infrastructure investment this year, a figure that could cumulatively grow to $15trn by 2040 if current rates of spending continue.

Another key pillar of B3W is sustainability, a term that has become a watchword globally in light of Covid-19 and escalating ecological disasters.

In this respect, the B3W’s aims dovetail with growing appetite among private sector investors for green projects – evidenced by the record $269.5bn in green bond issuance last year, according to the Climate Bonds Initiative, a figure which some expect to double in 2021.

Among other factors, this would suggest that the B3W is well placed to capitalise on investment trends.

Many emerging economies are in urgent need of funds to drive their Covid-19 recoveries, and are waiting expectantly for further details of how the initiative will operate. However, while the principles enshrined in recent announcements are certainly encouraging, more details will need to emerge promptly in order to demonstrate that the B3W is more than a memorable acronym.


Source : Oil Price

President Biden and G7 Leaders Launch Build Back Better World (B3W) Partnership

On June 12, 2021, President Biden met with G7 leaders to discuss strategic competition with China and commit to concrete actions to help meet the tremendous infrastructure need in low- and middle-income countries.

Build Back Better World: An Affirmative Initiative for Meeting the Tremendous Infrastructure Needs of Low- and Middle-Income Countries. President Biden and G7 partners agreed to launch the bold new global infrastructure initiative Build Back Better World (B3W), a values-driven, high-standard, and transparent infrastructure partnership led by major democracies to help narrow the $40+ trillion infrastructure need in the developing world, which has been exacerbated by the COVID-19 pandemic.

Through B3W, the G7 and other like-minded partners will coordinate in mobilizing private-sector capital in four areas of focus—climate, health and health security, digital technology, and gender equity and equality—with catalytic investments from our respective development finance institutions.

B3W will be global in scope, from Latin America and the Caribbean to Africa to the Indo-Pacific. Different G7 partners will have different geographic orientations, but the sum of the initiative will cover low- and middle-income countries across the world.

In announcing this partnership, the United States and its G7 partners are expressing a unified vision for global infrastructure development. As a lead partner in B3W, the United States will seek to mobilize the full potential of our development finance tools, including the Development Finance Corporation, USAID, EXIM, the Millennium Challenge Corporation, and the U.S. Trade and Development Agency, and complementary bodies such as the Transaction Advisory Fund. In doing so, the Biden Administration aims to complement domestic infrastructure investments in the American Jobs Plan and create new opportunities to demonstrate U.S. competitiveness abroad and create jobs at home.

In addition to the billions of dollars which the United States mobilizes in overseas infrastructure financing through existing bilateral and multilateral tools, we will work with Congress to augment our development finance toolkit with the hope that, together with the private sector, other U.S. stakeholders, and G7 partners, B3W will collectively catalyze hundreds of billions of dollars of infrastructure investment for low- and middle-income countries in the coming years.

Together with leaders of the G7, the Biden Administration fully endorses the guiding principles of B3W:

  • Values-Driven. Infrastructure development carried out in a transparent and sustainable manner—financially, environmentally, and socially —will lead to a better outcome for recipient countries and communities. We will offer countries a positive vision and a sustainable, transparent source of financing to meet their infrastructure needs.
  • Good Governance and Strong Standards. High standards have become ever more important at a time when governments are grappling with complex decisions on how to tackle climate change, build back local economies, direct scarce financing, and boost employment in an inclusive way. We are committed to providing citizens of recipient communities with the long-run benefits they expect and deserve from infrastructure projects. Our efforts will be guided by high standards and principles, such as those promoted by the updated Blue Dot Network, relating to the environment and climate, labor and social safeguards, transparency, financing, construction, anticorruption, and other areas.
  • Climate-Friendly. The investments will be made in a manner consistent with achieving the goals of the Paris Climate Agreement.
  • Strong Strategic Partnerships. Infrastructure that is developed in partnership with those whom it benefits will last longer and generate more development impact. Infrastructure created under the B3W will be developed through consultation with communities and assessing local needs as a true partners. We will establish a taskforce together as a G7, and with others, to coordinate, harmonize our efforts, and increase our impact and reach.
  • Mobilize Private Capital Through Development Finance. Status quo funding and financing approaches are inadequate to address the tremendous infrastructure gap in low- and middle-income countries. We are committed to augmenting the development finance tools at our disposal to support and catalyze a significant increase in private capital to address infrastructure needs. Infrastructure investment by a responsible and market-driven private sector, paired with high standards and transparency in public funding, is crucial for long-run development effectiveness and sustainability.
  • Enhancing the Impact of Multilateral Public Finance. Multilateral development banks and other international financial institutions (IFIs) have developed rigorous standards for project planning, implementation, social and environmental safeguards, and analytical capability. The United States will incorporate these standards and safeguards to help ensure that U.S. taxpayer resources are used appropriately and effectively. We will work with the IFIs to enhance their catalytic impact and increase the mobilization of capital—both public and private—needed for impactful and sustainable infrastructure investment.


    Source : The White House

Chart of the Day: G7 Nations Spend More On Fossil Fuels Than Green Energy

Source : Statista

Group of Seven Illustrates Existential Global Problem Not Solution

The G7 represents much about the world order that is totally unsustainable: elite wealth promoting false conflicts among nations instead of implementing genuine cooperation and peace.

Posing as problem-solvers of the globe’s ills, the leaders of the so-called Group of Seven (G7) nations are gathered in an English seaside resort this weekend for an annual summit. It’s a spectacle that has lost any illusion of luster. Indeed, the gathering of such an elitist and effete group looks ridiculous against the backdrop of urgent global needs for cooperation and development.

A fawning media headline hailed the forum as “democracy’s most exclusive club”. How’s that for an absurd contradiction that inadvertently speaks of grotesque reality?

It is US President Joe Biden’s first overseas trip since he entered the White House nearly five months ago. He will be convening with counterparts from Britain, France, Germany, Italy, Canada and Japan, as well as leaders of the European Union.

The G7 forum has existed since 1976 and it is a fair question to ask what has it ever achieved in terms of actually helping global development? The forum has become something of an anachronism that no longer reflects the realities of a world that has changed significantly from nearly half a century ago.

The G7 nations claim to represent over 70 percent of the world’s wealth. Yet in economic output terms, the group currently accounts for only about 30 percent. The imbalance speaks of shameful structural inequality and therefore the so-called advanced group is really an emblematic sign of the problem that Western capitalism creates, not solves.

There is a palpable sense of embarrassing spectacle. Posing as “great and good” the politicians in Cornwall look “impotent and frivolous”. In the past year, the world has been hit by a pandemic and most of the globe’s 7.7 billion population remains unvaccinated while the United States and Britain have hoarded their supplies of vaccines. Biden comes to the summit “pledging” that the US will soon donate 500 million doses of anti-Covid-19 shots to the rest of the world. That offer has been dismissed as a “drop in the bucket” given the billions of people needing immunization.

Yet the American president and his “elite” allies are posing as saviors of the world, a world that they have largely ignored.

If G7 leaders had any genuine intention of global development, they would seek to work with other major nations instead of demarcating the world into artificial camps under misleading labels of “democracies” and “autocracies”. The latter pejorative term has been applied to China and Russia. Both of these nations have done much more in getting vaccines to other countries, only to be disparaged by Western opponents for having alleged cynical interests in using “vaccine diplomacy”.

The elitism and divisiveness that underlies the concept of G7 is something that should be repudiated as a relic of a bygone era.

Today, China is the world’s biggest economy, according to some reckoning. Or at least the second biggest after the United States. China has overtaken the US as the largest trade partner for the European Union. Why isn’t its leader, President Xi Jinping, attending the forum in England this weekend?

Apologists would say because the group has “shared values” of “democracy” and “human rights” which China does not possess. Sorry, but that sounds like lame excuses for making gratuitous global divisions. The real reason is that the G7 is an instrument for asserting American hegemony and trying to exclude perceived rivals.

The arbitrariness of the G7 is an indication that it is a political construct for partisan objectives.

Back in 1998, the group abruptly became the G8 after the admission of Russia to the fold. That was during the leadership of Boris Yeltsin whom the United States was trying to co-opt as part of its global hegemony. When Vladimir Putin succeeded Yeltsin and charted a more independent geopolitical course, then Russia fell out of favor with the Americans and their Western partners. In 2014, the Ukraine crisis engendered by Western meddling provided the pretext for ejecting Russia from the club. Not that Moscow gives a fig about that.

But the point is the arbitrariness and anomalies that make up the G7.

It’s a petty theater to showcase Western elite concerns rather than the democratic concerns of humanity. For his part, President Biden wants to demonstrate that “America is back” after four years of policy chaos under his predecessor Donald Trump. In doing so, Biden is trying to corral Western partners to adopt a more hostile stance towards China and Russia. He is due to meet with the Russian leader on June 16 in Geneva, and the G7 has been used as a platform for Biden to espouse belligerence towards Russia. What’s that got to do with solving a pandemic crisis, addressing climate change, or promoting global development to improve the lives of billions of poor? Precisely, none.

For British Prime Minister Boris Johnson, he gets the chance to play a “world statesman” (instead of the buffoon that he really is) who is supposedly rebranding his nation as “Global Britain” following the ragged and bitter departure from the European Union.

It’s easy to dismiss the Group of Seven as a useless talking shop for pompous politicians. Yes, it is that of course. Nevertheless, the manifest consequences are serious enough and should focus global efforts to seek real solutions, rather than indulge in vain distractions. What the group signifies is the apartheid world that Western capitalism creates: massive inequality and the futile destructiveness of foisting divisive relations onto the rest of the world that leads to conflict and ultimately war.

With bitter irony one of the subjects on the agenda this weekend is “sustainable development”. The G7 represents much about the world order that is totally unsustainable: elite wealth promoting false conflicts among nations instead of implementing genuine cooperation and peace.


Source : Strategic Culture Foundation

G7 Chides China on Rights, Demands COVID Origins Investigation

Guy Faulconbridge and Steve Holland wrote . . . . . . . . .

Group of Seven leaders on Sunday scolded China over human rights in its Xinjiang region, called for Hong Kong to keep a high degree of autonomy and demanded a full and thorough investigation of the origins of the coronavirus in China.

After discussing how to come up with a unified position on China, leaders issued a highly critical final communique that delved into what are for China some of the most sensitive issues, including also Taiwan.

The re-emergence of China as a leading global power is considered to be one of the most significant geopolitical events of recent times, alongside the 1991 fall of the Soviet Union that ended the Cold War.

China’s rise has also unnerved the United States: President Joe Biden casts China as the main strategic competitor and has vowed to confront China’s “economic abuses” and push back against human rights violations.

“We will promote our values, including by calling on China to respect human rights and fundamental freedoms, especially in relation to Xinjiang and those rights, freedoms and high degree of autonomy for Hong Kong enshrined in the Sino-British Joint Declaration,” the G7 said.

The G7 also called for a transparent, expert-led Phase 2 COVID-19 Origins study including in China, to be convened by the World Health Organization (WHO). Reuters earlier reported the finalised version of the draft communique.

“We haven’t had access to the laboratories,” Biden told reporters.

Biden said it was not yet certain whether or not “a bat interfacing with animals and the environment… caused this COVID-19, or whether it was an experiment gone awry in a laboratory”.

Before the G7 criticism emerged, China pointedly cautioned G7 leaders that the days when “small” groups of countries decided the fate of the world were long gone.

The G7 also underscored “the importance of peace and stability across the Taiwan Strait, and encourage the peaceful resolution of cross-Strait issues”.

“We remain seriously concerned about the situation in the East and South China Seas and strongly oppose any unilateral attempts to change the status quo and increase tensions,” they said.

FORCED LABOUR

Biden said democracies were in a global contest with “autocratic governments”, and that the G7 had to deliver viable alternatives.

“We’re in a contest, not with China per se, … with autocrats, autocratic governments around the world, as to whether or not democracies can compete with them in a rapidly changing 21st century,” Biden told reporters.

“As I’ve told (Chinese President) Xi Jinping myself, I’m not looking for conflict. Where we cooperate, we’ll cooperate; where we disagree I’m going to state this frankly, and we are going to respond to actions that are inconsistent.”

The G7 – comprising the United States, Japan, Germany, France, Britain, Italy and Canada – said it was concerned about forced labour in global supply chains including in the agricultural, solar, and garment sectors.

Beijing has repeatedly hit back against what it perceives as attempts by Western powers to contain China. It says many major powers are still gripped by an outdated imperial mindset after years of humiliating China.

U.N. experts and rights groups estimate that more than a million people, mainly Uyghurs and other Muslim minorities, have been detained in recent years in a vast system of camps in Xinjiang in northwest China.

China denies all accusations of forced labour or abuse. It initially denied the camps existed, but has since said they are vocational centres and are designed to combat extremism. In late 2019, China said all people in the camps had “graduated”.


Source : Reuters

歐美視中國為21世紀競爭對手,是百年積來的榮幸

作者: 深藍 . . . . . . . . .

1919年的五四運動是由醒覺的青年學生發起, 後來5月4日定為「五四青年節」,中國追求民主與科學的夢,至今百年還未止息。

成功推翻清朝和數千年帝制,已經進行全盤西化,引進及學習西方科技和經濟建設的民主中國,在第一次世界大戰參加歐美日的協約國陣線,勝利之後,身為戰勝國的中國,受到的待遇竟然好不過戰敗國。1919年1月18日在巴黎凡爾賽宮召開的會議,中國期望收回戰敗國德國在山東的權益,不過,日本和英國私下聯手,要把山東轉讓給日本而不回歸中國;西方根本不當中國是盟友。消息傳之後,釀成一場轟轟烈烈的「愛國、進步、民主、科學」的自強運動。

五四運動是中國耻紀念日,同日中國亦開始不耻西方秩序,一批由年紀28歲以下青年核心成員組成的組織,3年後在上海成立,這就是中國共產黨。

五四百年之後,日前以美國為首召開的G7會議上,美國國務卿布林肯表明要聯合各國,以同共價值為基礎,全面抵制專制的、非民主的中國,阻止中國在21世紀崛起。布林肯日前接受美國CBS電視台《60分鐘》採訪,表示美國不打算遏制中國,但不會允許其破壞國際規範與凖則。他形容中國是「世界上唯一一個在軍事、經濟、外交上有能力損害或挑戰」現有國際規則的國家。

百年之後的中國已經不是期盼「上車」的龐然弱國,西方這班民主自由專列承載不起中國了,不過,西方想出一個折衷的辦法,就是經濟那部分可以接受中國合作,其他就拒不接收,那便可以嘛!把中國「一分為二」的嶄新戰略方案,將在拜登政府落實執行,名之為「小院高牆」(small yard, high fence)。

「小院高牆」由美國智庫New America於 2018年提出,政策是分而化之,把精華保留,防範核心技術外流到中國。美國先確定與國家安全相關的特定技術和研究領域,定之為「小院」,然後劃定適當的戰略邊界——「高牆」。「小院」內的核心技術,採取最嚴密最強的封鎖,「小院」之外的其他科技,則可以對華開放。

這樣還未夠,Google前董事長施密特(Eric Schmidt)領導的「中國戰略組」(China Strategy Group,CSG)出報告,呼籲建立由美國、日本、德國、法國、英國、加拿大、荷蘭、韓國、芬蘭、瑞典、印度、以色列、澳洲組成「科技12國(T-12)論壇,共同應對來自中國的科技競爭。

美國想以佔世界經濟體量逾60%的聯盟,把中國孤立起來,當中國別無環圓之地,再沿用瓜分中國的列強思維——即是好的留給自己,不好的也拿來要和中國換錢——為了保證中國不得不服從,美國與12個科技與經濟先進國結成一體,擺出圍堵威脅中國之勢,如是者,中國或重蹈百年前覆轍,當再一次西方的「忠誠朋友」。

我不好意思說美國提出的古怪戰略思想,其實即係「撳住搶」,或者形容為「糾黨行劫」,反而要說,中國今天有此榮幸得到這群國家的抬舉,證明中國百年進步,這個「五四青年節」讓我們感覺良好。說起來,今天的西方差在還未出現「義和團」。


Source : 巴士的報


Hat Tip to Johnson Ng

G7 Still Awash in Debt

Debt and GDP in the last decade vs From Start to 2003

  • Until 2003, every $3.6 dollars in debt generated $1 dollar in GDP growth.
  • In the past ten years, it took $6.7 dollars of debt to create $1 dollar of economic “growth.”
  • Total G7 debt/GDP at the end of 2012 was 450%.

Debt and Nominal GDP Since 1998

The G7 have added around $18tn of consolidated debt to a record $140 trillion, relative to only $1tn of nominal GDP activity and nearly $5tn of G7 central bank balance sheet expansion (Fed+BoJ+BoE+ECB).

Over the past five years in the developed world, it took $18 dollars of debt (of which 28% was provided by central banks) to generate $1 of growth.