Thanks to frequent commenter Eoin Bond for the heads up on this piece of news, which may well be very significant for Ireland. From the piece:
The National Treasury Management Agency has signed an agreement with a subsidiary of China’s sovereign wealth fund which would allow the Chinese agency to buy Irish Government bonds.
The agreement was signed after Taoiseach Enda Kenny’s meeting with the Chinese Prime Minister Wen Jia Bao. Ireland is scheduled to return to the bond market next year under the terms of the EU/IMF bail-out.
The official press release is here.
92 replies on “China to the rescue?”
Are China allowed by other countries bonds as well.? What price?
Its very vague so far, and these guys arent a charity, but we need fresh capital and funding, and this can’t be viewed as anything but good news. Suspect their big interest is the infrastructure assets of the State and real estate assets of NAMA, with government bond buying a secondary factor/issue. Market definitely feels supported on the news, fresh “buzz” on Ireland.
“Framework” is the buzzword here in all likelyhood.
Note the 2nd paragraph below from CIC’s executive vice president, in an interview with The Wall Street Journal.
“Global investors have been scrutinizing CIC’s investment strategy lately because of frequent market talk about the potential for China to aid the debt-laden euro bloc by purchasing European debt.
Mr. Wang said CIC “won’t be part of any decision by the Chinese government to help Europe or not.” Such a decision, he said, lies with China’s central bank and the Ministry of Finance “via multinational and international mechanisms” such as the European Financial Stability Facility and the International Monetary Fund.
But “if there are good investment opportunities in Europe, we will consider,” Mr. Wang said. “We base our investment decisions on risks and returns…We are not speculative investors.” ”
A very positive, important step. New /additional capital is desperately needed to get NAMA’s CRE portfolios moving OBS.
However, PE is not “foolish” – I agree with BEB that CIC International is not a charity. It remains still to be seen how real, significant risk transfer can happen in relation to those assets, as they currently sit at artificially high (ask) valuations on NAMA’s books relative to available market bid prices. That Irish Govt /NAMA created gap will not be easy to bridge in any 3rd party commercial scenario.
And Abu Dhabi might own a chunk of Ulster Bank soon … kindness of strangers indeed.
“.this can’t be viewed as anything but good news.”
I wouldn’t be too sure about that – the Chinese will screw us big time. When they are able to bully the Aussies into handing them over their mining industry they will find we are a puhover. You should hope they bring a different management philosophy to your beloved finacial industry than they do to the mining one – but I suppose they are only africans and therefore fair game right?
“A very positive, important step. New /additional capital is desperately needed to get NAMA’s CRE portfolios moving OBS”
i too welcome our new chinese overlords…
There could be a very much better deal available from the Chinese if we left the euro. Everyone is courting China including
No doubt they are as eager as us to see the outcome of Ireland remaining in the EZ area or not. Either way, they want irons in the fire. There’s been a long trail of EU officials going to China recently to persuade them to invest in the european bailout fund. The Chinese seem to be smart enough to hedge their bets and not throw their money after bad. Here’s Merkel:
As for them buying our sovereign bonds in the state this Tir na NÓg is in, they would want to be right leprechauns to do that. But eventually everything will have to be unwound, good the Chinese will be at the table when it does. Their presence of more significance if we leave the mess behind us rather than asking them to join the deluded brigade in making it worse!
@Bond Eoin Bond
“which would allow the Chinese agency to buy Irish Government bonds.”
Why would they have to sign an agreement with the NTMA in order to buy Irish Government Bonds?????
Good piece in the Indo…I too hope they are as clever as we think they are.
i agree, strange phraseology. I think it may have referred to the rules on the CIC side of things.
@Bond Eoin Bond/Gavin
This update posted by Gavin on the PN thread is interesting…
“The Government planned to issue debt to IBRC on an existing bond rather than issuing a new Government bond to cover the next instalment due this Saturday.”
Would this be the 15 yr existing bond and what is the current market yield?
Honohan confirmed its the Irish 25s, 5.4% coupon and current yield of c.6.81%
Re ” Why would they have to sign an agreement with the NTMA in order to buy Irish Government Bonds????? ”
There’s probably a little registration form of account like signing up for email somewhere before you can purchase, you need to open an account. Every little helps though in the propaganda war? Same Q from me though ?
“Questions have been raised within China about whether to separate CIC’s stakes in big Chinese banks out of the fund so that it can focus on international investments only. Mr. Wang pointed to a CIC restructuring late last year that included the formation of its CIC International unit, which focuses on overseas investments. That unit is separate from its domestically focused unit, Central Huijin, which holds its stakes in Chinese banks, though CIC still controls both. Mr. Wang said the move could also help remove hurdles posed by the Chinese bank stakes in CIC’s dealings with overseas regulators. ”
Plus, the guy is an accountant and he is big int establishing ‘frameworks’ – presumably so there is an ‘investment process’ in place that guarantees due dilligence etc – so in future the sort of criticism of losses on overseas investments can be easily defended.
That would really confirm it is essentially a partial rollover that takes some funding pressure off.
@ Bond Eoin Bond.
Entirely as predicted. We exchange Government Bonds for dubious paper and get a slight reduction in rates. Wow, we have some very astute negotiators on our side.
I think it can be confirmed that the ECB guys are clever.
per grumpy, we push the repayment out 13 years, to the very limit of all existing Irish sovereign debt, and most of the “rate” is internalised via Anglos ECB/ELA usage. Its not a bad deal.
I don’t agree. It is not a partial rollover…it is exchanging a reasonably solid asset which can be traded any time for untradable paper of dubious legality…hence the reported potential legal challenge.
And this will be sold to us as clever negotiation on our behalf by our DoF and MN.
“way forward will depend on the direction and goals set by CIC’s shareholder, the Chinese government.” Fund has huge stake in Chinese banks that may be needed in event of China slowdown. It has another investment tranche is in US treasuries that have gained strength because of euro’s woes. Why should it prop up the euro? The dollar gains strength on euro’s woes? More likely its in vulture mode looking for signs of breakup.
I hope Enda raised the subject of Mr Bo and what happened to him.
“Its not a bad deal.”
As feared, its another giveaway mess of a deal where our lot have been once again taken to the cleaners!
“it is exchanging a reasonably solid asset which can be traded any time for untradable paper of dubious legality”
Can it not be stopped through a court injunction pending the outcome of the court New Beginning challenge on the PN’s?
Old Chinese proverb:
“If you have never done anything evil, you should not be worrying about devils knocking at your door.”
Mull on that grasshoppers.
China has been buying some European sovereign debt in recent years and the CIC has expressed some interest in investing in UK infrastructure.
Because of the large holdings of US Treasuries, the leadership is apparently sensitive to local concerns about bailing out rich countries.
The inadequate health system and one-child policy puts a big burden on young couples who may have to support the health and living costs of 4 parents.
Klaus Regling of the EFSF got some promies but not much else from China.
Der Spiegel reported last Nov that the Chinese have called the shots tat the Greek port of Piraeus for 17 months. “The Chinese state-owned company Cosco acquired the rights to the container port for 35 years, with an option for an additional five years. The insolvent country is to receive €3.4 billion ($4.6 billion) in return, a significant contribution to Greece’s battle against the crisis and a good omen for future financial support from Asia. But Georgiou takes a different view. “The conditions here are like something from the darkest Middle Ages,” says the former dockworker.
Any port in a storm!
Be careful what you wish for!
@Bond Eoin Bond
“it’s not a bad deal”
We will have to disagree on that. The problem is the exchange sets a precedent
For all of the debt to be converted to very long term government bonds rather than getting real relief through the EFSF or ESM at tolerable interest rates.
Why does John Corrigan of NTMA always look like he needs a set of razor blades. With a half shaven face like his I think anybody would be squeamish about buying our Bonds. He needs a makeover badly to be selling our Bonds but then maybe the hangdog look works better !!!!
“WEEKS AFTER THE event, I am still being asked by Chinese journalists and civilians alike: “Why did Xi Jinping go to Ireland?” The answer seems to be a combination of things, ranging from our position in the euro zone to our impending presidency of the EU from next January and, possibly, the fact that Shannon’s free-trade zones provided a model for China’s own version.” Clifford Coonan IT
Missed out the deal for the purchase of Gov. Bonds and possibly other assets !
The legal challenge to the PNs looks serious with John Rogers S.C acting.
“the Chinese have called the shots tat the Greek port of Piraeus for 17 months”
I recall this story and first hand tales from Greek workers at the port of widespread malpractice (by the Chinese) such as counting 2 containers as 1 a few hundred thousand times to lower import payments/taxes etc.
The Chinese also featured on some C4 documentary I caught five minutes of last night. Some Zambian copper miners seemed less than pleased to be working for them.
“And this will be sold to us as clever negotiation on our behalf by our DoF and MN.”
Of course it will – can you honestly say they have not “renegotiated” the deal.
I have pointed out before the ECB’s angle on this, but, politics is politics, and you can’t prove they haven’t “renegotiated”.
What seems clear is that the “it doesn’t matter about paying off all the senior bank bonds ‘ cos we can renegotiate the pro note” argument was good for getting through a news cycle but fundamentally not much more.
Mahon Planning Tribunal report 21st March 2012
” Corruption in Irish political life was both endemic and systemic. It affected every level of government,from some holders of of top ministerial offices to some local councillers,and it’s existance was widely known and widely tolerated”.
I assume this China announcement and the Fiscal Pact announcement is a smoke screen to hide political corruption. George Orwell 1984
Fear of change, something new is beginning to come across from some of the comments. The Chinese people are culturally different, yes. Some of that is bad; some is good….They will bring change, and few (particularly in Ireland!) like change….One thing for sure is that they will be global players for generations to come. We’d better get used to them. How to embrace the change in a positive way is the challenge.
Yes, they have renegotiated all right….from the frying pan into the fire.
But maybe some hope that our learned friends will find a clever technical reason to stymie this deal.
Ballinasloe Horse Fair has better negotiators. You wouldn’t see any trader there exchanging an ass for a thoroughbred…unless you gave loads of dosh in compensation.
China is such a deeply corrupt state that it makes our lot look like complete novices.
Some folk will do anything for political power. Like anything! China needs lots of clean water, arable land and very cheap food. They are a tad short on all three. China folk get might frisky they no have food and water!
@ Paul W
Need to see that MOU before being certain.
With the quality of our negotiating teams over the past few years – Leitrim or our first born males could be up as collateral
I understand that Wen Jiabao has asked after the whereabouts of Peter Matthews.
Will the budget deficit be tackled only after every state asset has been disposed of ?
As much as we need fresh investment, state assets should never be sold in order to fund current expenditure.
No doubt the government will publically ‘earmark’ the cash to point out that it will only be used for capital expenditure, but I’d hope everyone here has enough intelligence to see this is only an excercise in fudging the numbers.
On the road to balancing the budget, it appears that not only is our national debt exploding, but our state assets are to be sold from under us.
This is sheer madness !
Just when we are about to capitulate more news emerges as to who calls the shots….from Der Spiegal….
“German Parliament to Get Greater Say in Euro Bailouts
Under a compromise reached between the ruling parties and the opposition on Tuesday, Germany’s parliament will decide on future measures to release billions of euros to bail out troubled EU member states. The deal fulfills a requirement for greater parliamentary powers stipulated by the country’s highest court. more…
@China and Chinese colleagues
I very much welcome the ongoing and deepening relationship between our two old civilizations.
“The Tao is generous and graceful in what it does
Without ever claiming any merit
And the sage’s greatness lies
in taking no credit. ”
[Tao Te Ching, #2]
May 31 is a foolish date ….. it ignores developments in other parts of the EZ
The Debate in the Bundestag is ongoing – and no way will the Bundestag have voted on this by May 31 …
See: Anglela’ Korset, The SPD/GP forced compromise, the debate on the Korset including measure for growth etc …. & [Hi Olly!] the superior Wisdom of Festina Lente in this case:
Der Spiegel International Today ….
Separately, the main opposition parties on Tuesday rejected plans by Merkel’s government to push a European pact on budget discipline, the so-called fiscal pact, through parliament by June, saying more time was needed to complement it with measures to boost growth.
@ceteris … (are they living in a bubble?)
You gotta love the Kent Brockmanlike fawning welcomes for or new overlords ..
Have to agree with felonius munk
“”How can I tell my kids capitalism is belter than communism when the US is borrowing 14 trillion from the biggest communist country in the world?”
As the poet said;
“its come to this yes it’s come to this but wasn’t it a long way down”
Far to early yet to see what the Chinese “deal” will be but it is the quid quo pro that we should be worried about. They may want to put feet on the ground here. A lot of feet. Paddy, spent a lot of money acquiring sites during the boom for casino prices. He built apartments, shopping centers, hotels on some of these. Sales of developments sites are for fractions of their original prices and “developed” sites are hardly fetching much more.
It’s like what Joseph Ryan said on another thread recently, everything in this country is for sale and the perception is that the Chinese have deep pockets.
What we are likely to see are Chinese buying jots of NAMA loan book but discounted to today’s prices not November ’09. Sure losses will be charged eventually to the banks! Forgot! That’s us too.
They will be picking up investments at bargain basement prices prices for investing in Irish government bonds, which of course have their own existential risks attached. I have predicted from day one that the Irish government would target the Chinese and they have been doing this relentlessly. This idea of the Chinese suddenly becoming aware of Ireland and everyone wondering why is a joke. We have sent delegation after delegation to fetch them. Anyone that knows our history knows this is what we always do.
On David Hall’s challenge “Mr Hall also submits that letters of comfort by the Minister for Finance in 2010 to the Central Bank in relation to the provision of credit facilities for Anglo, EBS, and Irish Nationwide are of no effect and void.”
This is getting interesting. The former AG getting involved brings with it a serious portend of what may unravel.
Yes! I predicted the Chinese would ride to rescue aaaaaaages ago.
They’re the only ones with money, right?
A country that cannot print paper is not a serious place………..its a joke.
What did the Chinese get for their paper I wonder ?
Except for very special people of course…….. when they make some very minor & innocent malinvestments…………
Then it is A OK to Print.
@ The Dork
The Chinese arn’t spending their paper, they’re spending American paper.
The most relevant Chinese proverb in all of this is:
MAN WITH ONE CHOPSTICK GO HUNGRY.
That’s us – one chopstick to bring to a feast.
I am confused. Was there some impediment to chinese buying IGBs prior to now?
On the other hand NAMA assets are a different story. I believe they have a lot of property to shift.
..long way down
I checked that out. Great stuff.
And perhaps an excuse to intrude on this thread and ask you all for some ideas.
I’ll be back on air April 7th and our show begins with a poem every week. I’ve been nagging pals for suggestions, but if anyone here has a favourite please let me know. They can’t be too long and too…well complicated. Listeners have to get them on a first hearing. AND it’s great if they are linked to anything current – so if there any poems about economics and burning bondholders, that’s cool 🙂 (We did a Wordsworth one who lost out when Pennsylvania defaulted!)
Email talkingpoint at newstalk dot ie or request my personal email here. (just don’t want to publish willynilly).
Apologies Stephen for crashing thread! Hope ok.
Yes I guess thats true – China is a depositor while the US treasury / FED is the Bank – its a sick world we live in.
But what happens to depositors who run out of deposits and lose their jobs ? – they end up on the streets.
Watch out for the deflation genie China.
On a European level this is not what Europe needs – it needs to monetize its debt to reduce its money transfers to Arabia & China.
This all fits in with the unfolding now obvious narrative – the ECB is a bitch of the FED
But at least the esteemed professor Klaus Regling will be very pleased.
One must never Assume
@ Sarah Carey
about your comment
the worlds only poetry website with promissory notes, troika and Irish economy in the tag cloud.
Here’s a link to my personal favorite
Text from ET:
@Sarah Carey, there’s a guy who makes economics limericks. I’ve read out a few for him for the craic (an economist from limerick reading out an economic limerick, hilarious, I know). http://www.limericksecon.com/
An economist whispered: “I fear
That the time for can-kicking draws near”
Hello Prof. Kinsella,
Thank you for the shout-out – here is the audio craic of which you were speaking and on which you spoke: http://www.limericksecon.com/2011/05/stephenkinsella-recites-dr-goose.html
I’m looking forward to another lark this Limerick Day (that is, the 12th of May, being Edward Lear’s birthday).
@Sarah Carey, can your show be heard on the web?
China’s involvement in both South America and Africa has generally been very positive.
South America is as dependent on comodities today as it was 40 years ago but this time it’s very different for them.
There is good news too coming out of Africa on the economic and political front.
China is paying more attention to soft power. In 2004, in the aftermath of the big earthquake off Sumatra and tsunami, the US led the relief effort while China did very little.
It should be understood that successful Chinese entrepreneurs would not find adaptation to Europe’s 35 hour week, social costs and pay, very easy.
The FT reported in early March that Chinese tycoon Huang Nubo may get a fresh chance to buy a vast tract of land in Iceland as local municipalities explore ways to circumvent national legislation that scuppered the deal last year.
Huang, a mountaineer and poet who is also one of China’s richest men, last year tried to buy 300 sq km of wild heathland in northern Iceland to build an eco-resort. But the deal was blocked on the grounds that it contravened rules on foreign land ownership. Nine municipalities in north-east Iceland are now trying to put together a new deal that would have them buy the land and lease it back to Huang.
Maybe he’s an advance Trojan horse for the new sea lanes that would open with an acceleration of climate change?
Like rich Arabs who inhabit areas of London and Paris but would not allow a foreigner to buy a sand-pit back home, I guess that the Chinese would be in the same boat.
Totally on topic for once:
Here is a poem I wrote last month, when hte China VP was in town, on Ireland and China doing business
Nice photo too of Grant Avenue, Chinatown, San Francisco.
Reading between the lines it looks like the Irish want them to buy bonds – they want to buy actual assets. The Irish hope is that assets will be used as sweeteners to buy bonds. It’s another hope based strategy in some ways.
There are ways in which this could be great – e.g. developing Atlantic energy potential.
Its worth reading both the actual press release and the article in the Irish Times…
3 seperate stories… One from the Irish Times on how China is now allowed buy Irish bonds…
In the official press release, 2 seperate stories one from the Irish delegation on mutual understanding blah, bla, blah, and a businesslike comment from the CIC Chairman Lou Jiwei:
“CIC International is a financial investor and seeks stable and
sound financial returns over the long run. The memorandum signed today reflects our strong working relationship and shared commitment. It will be of valuable assistance for us in identifying and assessing potential opportunities in Ireland.”
The vultures are flying lower now over GR, ICE, IE. Coillte must be a contender. Environmental concerns should have priority in any deals:
The fact CIC have not ponied up to support the European bailout mechanism as yet should be noted out of concern they’re flogging a dead horse:
There’s much talk of a new reserve global currency to replace the dollar and the euro is finished as an alternative, perhaps the renminbi might be a contender, but at the moment this is becoming less science fiction than it may first appear.
“Steadily pushing ahead with the interna- tionalization of the renminbi. International- izing China’s currency will bring important long-term benefits for China. The renminbi is already being used increasingly as the cur- rency for cross-border settlement (figure 9). If a substantial portion of China’s assets and trade were denominated in renminbi, then fluctuations in the dollar-renminbi exchange rate would have few implications for domes- tic stability. But internationalizing the ren- minbi requires opening the capital account, and that can be done only after China has in place a stable financial sector with improved corporate governance in banks and other financial institutions; well-functioning legal, supervisory, regulatory, and crisis manage- ment frameworks; deep financial markets with credible indirect monetary controls to manage liquidity; and an exchange rate that is made flexible over time. The many prereq- uisites for an open capital account was the main reason why many European countries took nearly 20 years after the collapse of the Bretton Woods system to achieve full capital account liberalization.41 In the case of China, therefore, a relatively prudent approach, stretching over many years, is recommended in transitioning safely to a more open and efficient financial and exchange rate system. ”
“At the same time, China will need to address a number of significant challenges and risks, such as an aging society, rising inequality, a large and growing environmental deficit, and stubborn external imbalances.”
“..the number of disputes in the WTO involving China has accelerated in recent years and currently stands at 107 (78 as third party, 21 as respondent, and 8 as complainant). These are expected to rise in the short term. The share of developing-country antidumping actions against China (as a share of their total actions) increased from 19 percent in 2002 to 34 percent in 2009. 37..”
These visits in the past month have been important but pour a sack of salt on the new dawn lark.
Having met the main people in the space of a month and signed MOUs and not big contracts shows that China is not short of suitors.
One important benefit for the Chinese is that there will be no welcome mat anytime soon in Dublin for the gentleman they call the ‘dalai terrorist.’
I suppose that the European powers always acted in the best interests of their African workforce?
These anti Chinese claims are merely the last bleat of the racist bourgeois powers confronted with their inexorable decline at the hands of the working people of the world. It is saddening but not surprising that there are Irish people stupid enough to fall for this propaganda.
China has implemented Marxist Leninist Principles in order to pull half a billion people out of absolute poverty over the past 2 decades.
I hope that the Irish people will see the success of Socialism with Chinese Characteristics and be inspired to build our own revolution. The only hope for this country is Socialism With Irish Characteristics and the liquidation of the comprador class that has sold out the people!
Dare to think, dare to act!
Not sure these pointa are related but I heard Hilda Solis, US Secretary for Labor, calling for end to transfer pricing for US MNC’s recently….interesting times….euro, dollar, renminbi and future PuntNUA amalgamate into world reserve currency, the forgeIT 🙂
I don’t like the idea of looking for some hero to rescue Ireland. And I don’t see why China would act in some benevolent way towards the Irish. We have friends in the US. The UK; being neighbours. And Europe to some extent. If we’re looking for charity, China seems an unlikely candidate. Would it prove popular to Chinese workers if they came to believe their government was propping up Irish wages?
It may be the case the China sees some potential in investing in Ireland and strategically strengthening ties may pay dividends in the future. This needs to be encouraged and a good starting point is that we act in good faith – i.e. we don’t sell them a pig in a poke. For example; if our government has niggling doubts over our debt sustainability, it would be better not to recommend buying Irish debt until our debt was been restructured. Ireland needs to do some contingency planning and it would be good to have potential buyers in a post default situation. The same goes for Irish pension funds.
My understanding of the Chinese is that yes they would require assets/infrastructure as a sweetener to buy bonds but what they are really interested in are real commodities to keep the industrial fires burning back home. Short of buying up some unfinished housing estates to use as kindling, I’m not aware of any copper mines etc. up for sale in Ireland.
Of course, it might be that they fancy Ireland as some sort of ‘allotment?’
Somewhere they can grow veg and rear animals to feed those back home (or maybe those that will be based here?) once their own massive pollution has totally caked it on their own doorstep. A good source of fresh water too when the whatsit hits the fan over water supplies/wars in the coming years?
Who knows what plans are being cooked up behind closed doors. Any group of people barmy enough to put up with the great leap forward and the cultural revolution is barmy enough to do anything imho.
Epic by Patrick Kavanagh.
I have lived in important places
Times when great events were decided
Who owned that half a rood of Rock?
Wen Jia Bao.
E. Bond: ”Suspect their big interest is the infrastructure assets of the State and real estate assets of NAMA”
– short-term gains for long-term losses, surely ?
Apart from commercial assets, most viable residential property have been taken over by local authorities. The huge quantity of rezoned residential land would need a population increase in the millions for it’s ‘value’ to be realised. ‘Returns’ from this part of Nama’s assets books should be written-off rather than sought – the potential costs in every respect could result in multiples of our current predicament. Of course, Chinese interest in this area is only a speculation, but we could certainly do without the pressure of yet another colossal outsider forcing our hand into suicidal actions.
One other question – how much competence (as taoiseach) does Kenny have with regard to introducing such potential outside liabilities ? State ‘assets’, properties, companies, etc., cannot be committed to buyers/investors through the weight brought down by whatever type of agreement he has – without consultation or discussion – seemingly signed-off on, surely ?
C.Brazel:”There’s been a long trail of EU officials going to China recently to persuade them to invest in the european bailout fund”
– but none of them are seeking involvement in their affairs to the extent that Kenny is currently doing. One British ex-minister commented on the recent visit here from the chinese as containing talks involving the turning over of part of Ireland’s agriculture industry to factory-style farming for the Chinese market. Sour grapes ? Hardly. Despite illusions in our media to the contrary, their is nothing special about Ireland, neither for the Chinese nor for Obama (cf – recycled/couldn’t-be-bothered ‘punch-above-your-weight’ -remarks at annual shamrock ritual/debacle)
– anything Ireland can do could be done better and bigger elsewhere.
It could of course be scaremongering. But if not, China’s own agricultural model -and thus their expectations- should give us pause for thought.
Nor is there any special access to the European market we can give them that they do not already possess, contrary again to repeated media comment.
I’d guess that most of europe aren’t yet in as much an immediate quandary to necessitate any more than begging for some long-term loans.
M. Hennigan: ” ‘But Georgiou takes a different view. “The conditions here are like something from the darkest Middle Ages,” says the former dockworker.’
Any port in a storm!
Be careful what you wish for!”
– Indeed; Communism severed much of Chinese society’s particular philosophical/ethical conventions which had tempered their far greater propensity to totalitarianism than usually existed in western civilisation.
For all of my own feelings about our own faults and more local dangers, I think we need to beware of the mechanical totalitarian capitalism that has emerged from the ashes of their obliterated culture and inverted communism.
The ‘west’, rather than bring China ‘into the fold’ has capitulated to her excesses; with the result that we are seeing the beginnings of their introduction here.
Their current treatment of workers in Africa being a salutary warning of what we can expect.
There would appear to be important opportunities for the Irish health sector as China intends to further develop its own in yrs ahead; after developing our own:
We should also learn more. traditional. Chinese.
What about China aiming for our new found oil resources?? Timely.
This isnt good or bad in itself. It depends how we play it. If we are committed to paying off debt then anybody can come in and strip us of whatever they want. The Chinese are ancillary to this in a way.
Our land is not our own any more (that’s because of commitment to pay debt – not anything else)
@ MH-ff: “There is good news too coming out of Africa on the economic and political front.”
Eh, like what Michael? Sub-Saharan (possibly with SA the exception) is doomed. The Med region is short of water and the populations there are increasing. That’s not good news by any standard.
There are unconfirmed rumours about the stability and viability of China’s financial sector (they are having – or have had, a property asset boom). Their exports may be in decline (too early to guesstimate this). Their next-door neighbour Japan, has a real bad economic problem. Combined these spell HAZARD – with a high level of attached risk.
If things get a tad frisky in China – they get real frisky! Methinks the situation resembles a neglected pressure cooker. All is well until it explodes and every one has a ‘Come to Issa Moment’.
PR Guy seems to be closer to the Bullseye.
And Yes Dr. You can hear it live or playback here
Separate page for poems already read. Can’t wait to try the Limericks!
Great – a proper poet on the blog! tx.
I like this one
A Country’s Standard of Living Depends on Its Ability to Produce Goods and Services.
“My sweet,” said a lovable lout,
“Of this there can be little doubt:
The continuing health
Of our national wealth
Is dependent on how you put out.”
These lads are good.
Three Men Talking About Things They Kinda Know About – Project Arts Centre – April 2012
“@ MH-ff: “There is good news too coming out of Africa on the economic and political front.”
Eh, like what Michael?”
Like these growth rates for the entire continent:
“@ MH-ff: “There is good news too coming out of Africa on the economic and political front.”
Eh, like what Michael?”
Like these growth rates for the entire continent:
2012 5.8% (projected)
Average fiscal deficit projected to be just above 3% of GDP in 2012.
Lots more positive stats too, eg, between 2000 and 2010 the sum of FDI, portfolio investment and ODA into Africa increased fivefold, to USD122 billion.
Source: African Economic Outlook 2011
Can you really say that you are surprised by this. It’s clear that Ireland has already gone so far down the rabbit hole that it has to keep going. There’s really no other country that Ireland should sell bonds to. I’m not saying China is all it’s cracked up to be, but it’s certainly better that China is buying our debt than a country or block that has no resources to back it up.
This country went this route a long time ago under Lemass – who everyone still worships. He came up again in the 2011 HLC History paper I see. He might have meant well but globalism (which Ireland bought into more than anyone under Lemass) cannot possibly benefit anyone except the elite. It’s China so who knows? The question is whether our politicians have negotiated for long term Chinese backed development of enterprise and trade between Ireland and China under terms favorable to China (to make modest amounts of money over a long period – our only hope without default) or have they just bought up assets. It it’s the latter, Irish people could be faced with the prospect of being tenants again only this time under a more multinational group of landlords. If it’s the former, then you can look to China’s influence in Taiwan to see what their agenda is there. AFAIK, China controls just under 50% of many large corporations in Taiwan now. The reasons are very different. Taiwan or (Chinese Taipei) is not indebted, but the agenda could be the same.
Will the world flourish under a new top dog – China – or are we all doomed? Time will tell.
Whats that got to do with us and China – ah now I get it. Hope they’ll be gentle..
Sorry to leave an OT post but is anyone at IEc working on a post re: IL&P’s forced divest of Irish Life and what the implications are for the rump (shoved into IBRC?)
Thanks in advance.
What makes you think that PTSB would be shoved into IBRC?
Why do we need the Chinese to buy our troubled assets – surely we can just sell them all to the State like Irish Life?
The Irish State are much more gullible than the Chinese one, having paid €1.3bn for a business that wasn’t able to fetch €1bn for at the end of a competitive process last year.
… oh wait, maybe that would just be really, really stupid.
I believe this Chinese investment furore will be as damp a squib as all the other potential international investors that came pounding the streets this time last year, only to find that: (a) the government/NAMA/receivers have outrageous value expectations that do not reflect the risks/reality of investing in Ireland; and (b) there are so many different interested parties (e.g. NAMA, civil service, DoF) involved in every decision that it’s not possible to get sign off for things to be sold to you in any case.
I know several investors at large international institutions that just gave up looking in Ireland and moved on to other things. The problem isn’t a lack of international investors – there are plenty of them who’ll invest at a reasonable rate of return – it’s a lack of inexperienced suckers as gullible as the Irish State who are willing to overpay. Perhaps that’s how they view the Chinese.
An indirect impact of the interaction with China:
I heard Ethiopia had 12% growth last year.
@ Stephen Kinsella
Apologies for going off topic, but the thread has a had a good run.
Interesting column from Krugman going after Steve Keen, via Minsky:
“Minsky and Methodology (Wonkish)”
It also link’s to Keen’s paper.
Any of our money/banking people care to adjudicate?
Strengthening the ties that bind China to Ireland
By Luo Linquan, Chinese ambassador
Wednesday, March 28, 2012
The charm of Irish culture is becoming more attractive to the Chinese, as relations between the nations continue to grow in value and importance, writes Chinese ambassador Luo Linquan
IN THE 33 years since diplomatic relations were established between Ireland and China, the bilateral ties based on mutual respect and equal treatment have developed smoothly. The relationship has become a model of friendly co-existence for countries that have different territory sizes, social systems, and cultural traditions.
Read more: http://www.irishexaminer.com/features/strengthening-the-ties-that-bind-china-to-ireland-188555.html#ixzz1qRFmASC5
@Ninap: Thanks for the comment. Mine still stands: SSA is doomed. There is not enough energy to go around to sustain the growth rates they need. Without the minimal amount of energy (2 liters, per person per day) – which must be delivered each day without fail, their economies will falter.
Wholesale, delivered cost of a liter of kerosene is near enough USD 0.80 – depending on location. Many SSA’s subsidize this cost. For which they need Forex – which they have precious little of. Many SSA’s have very underdeveloped infrastructures, and any countries that had a reasonable inventory, simply lack the resources to maintain and repair. Their political and civic administrations are just plain corrupt. Its a matter of when, not if, the SSA’s collapse.
Raw stats are useless. They are Meaningless Means. Look at the individual countries in SSA (the Med region has its own intractable problems) they have dire economic stats.
I spend about 9% of my pre-tax income on liquid hydrocarbon fuel. For a SSA resident, with an income of USD 5 per day (which is very good), 2 liters costs (with the heavy subsidy) USD 1. Many SSA folk earn between USD 2.50 and 3.00 per day. But many more have less than USD 2. I’ll leave you to do the math. And ponder about SSA’s future – absent a massive inflow of energy.
great indeed – well tickets booked for the return to kilmainham 🙂
How much farther than our own WB must you go:
Was it for this the wild geese spread
The grey wing upon every tide;
For this that all that blood was shed,
For this Edward Fitzgerald died,
And Robert Emmet and Wolfe Tone,
All that delirium of the brave?
Romantic Ireland’s dead and gone,
It’s with O’Leary in the grave.”
John waters has just finished a book and it’s called “was it for this?” 🙂
I like Yeats. But isn’t it time Ireland got over all of that. Fitzgerald…oh so he is prominent in the Irish psyche now? mmm. Not so sure about that. No disrespect intended, but while other countries embrace their new and their brave, Ireland is still on about Yeats, and of course Dubliners was chosen for the one city one book.
Is there an Artisitic as well as budgetary deficit? or is it something else?
“other countries embrace their new and their brave,”
I don’t get this comment – need a few plausible examples.
As for one city one book – maybe ulysses but that’s not exactly contemporary. What’s your pick?
I see comments stating that we should rely on our “friends”, notably the UK and USA.
It helps to understand that countries do not have friends, they have interests first, foremost and always. When the interests are aligned then nations are cooperative with each other. When the interests are diametrically opposed then there is mutual hostility.
Money from China is good or bad for Ireland based on the terms of the loan not whether the Chinese love us or loathe us. The Chinese are a practical people with the most highly educated Government in the world (a meritocracy in spades), they are well aware that the EU is their biggest market and that imports to the EU are stagnating. If Ireland had an intelligent and competent government it would be aggressively pursuing trade deals with the second largest economy on earth. Not only large but growing. Mandarin and Cantonese language courses would be mandatory for our diplomats and foreign trade officials.
China could use a friendly base in Europe or an aircraft carrier firmly anchored within sight of Britain. Ireland has to take off the emerald lenses and engage with the world as it is.
also: in China they jail poets. So beware, Irish utility/state workers of the future, your new employer may be keeping tabs on your wordpress account
The lack of reference in the China /Ireland discussion (not this blog but in general) to serious human rights violations and ecological damage is literally astounding, coming from a country who collectively and habitually berated Bush (who deserved it). Somehow it’s different when it’s China.
@ Amac, it was more of a philosophical point, and almost a given in most discussions. California being more open to the new and the brave is actually a subtopic for my next set of poems.
“also: in China they jail poets.”
I’m with you there – they also have no qualms about sacking and even shooting striking workers in countries where they have a foothold, as I linked above in regard to Zambia. I have a horrible feeling that Enda is using the Chinese as a stick to beat the Europeans. Enda might be a cute hoor but cute hoorism won’t cut it on the big stage.
“Mandarin and Cantonese language courses would be mandatory”
I know it’s a cliche but ..be careful what you wish for