By Jeff J. Brown
Pictured above: Give me a pink Mao any day, over a green Benjamin.
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[dropcap] A [/dropcap]mazing. On March 26th, only seven weeks ago, Baba Beijing (China’s leadership) launched its much anticipated petroyuan futures oil contract, which pointedly refuses to use the US dollar as a benchmark currency (http://chinarising.puntopress.com/2018/04/08/petro-yuan-is-the-newest-weapon-for-the-china-russia-iran-anti-usd-alliance-china-rising-radio-sinoland-180408/).There was a huge question mark about how the global hydrocarbon trading system would take to the first serious competitor to the dollar dominated Brent and West Texas Intermediate contracts, which have been the industry standard going back decades.
I suspect even Baba Beijing can’t believe what has transpired over the last 50 days. China’s petroyuan has charged out of the gate and already has 12% of the world’s futures contracts. In only 50 days. Over one-tenth of the world market and growing fast (https://www.rt.com/business/426637-china-petroyuan-oil-trade-iran/). Let that timeline and the magnitude of the petroyuan’s rapid acceptance sink in for a moment. Historically and practically speaking, it’s beyond breathtaking.
Now, US President Donald Trump kept his campaign promise and pulled out of the big multilateral nuclear treaty with Iran, called the JCPOA (http://chinarising.puntopress.com/2017/09/24/baba-beijing-and-big-bear-smack-down-uncle-sam-in-iran-and-venezuela-china-rising-radio-sinoland-170924/). China already buys 25% of Iran’s exports. If Uncle Sam can bribe, extort, blackmail and assassinate its “allies” into stopping buying Iranian oil and gas, Iran has a huge incentive to start selling all its futures using the RMB denominated petroyuan. All purchases would be transacted by Iranian and Chinese banks, circumventing empire’s illegal sanctions. By not using the Western controlled Bank for International Settlements (http://chinarising.puntopress.com/2017/08/17/baba-beijing-is-going-to-start-using-blockchain-technology-for-official-business-china-rising-radio-sinoland-170817/), big bully super cop Uncle Sam could not even keep track of the flow of money being used between Iran and China.
This would be a massive blow to Eurangloland’s financial tyranny over China, the world’s biggest hydrocarbon importer, and Iran, an anti-imperial heavyweight OPEC producer. If Russia started selling its future contracts in Shanghai, and not in New York, London and Singapore, it would turn the global oil biz inside out and upside down in a hurry.
There’s another sign that the petroyuan is here to stay. In record time, the media is already dropping the hyphen in the originally announced petro-yuan. That means it has already become normalized and institutionalized in humanity’s consciousness. Words are powerful things. You can take the petroyuan to the bank, boys and girls. It’s gonna kick ass – imperial Western ass, that is.
Postscript: interesting article that shows all the absurdities and unintended consequences of the West’s illegal sanctions against its enemies (https://www.nytimes.com/2018/05/17/business/energy-environment/venezuela-oil-sanctions-iran-china-russia.html). Eurangloland has no vision, just a sledgehammer to pummel the world.
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Why and How China works: With a Mirror to Our Own History
JEFF J. BROWN, Senior Editor & China Correspondent, Dispatch from Beijing
Jeff J. Brown is a geopolitical analyst, journalist, lecturer and the author of The China Trilogy. It consists of 44 Days Backpacking in China – The Middle Kingdom in the 21st Century, with the United States, Europe and the Fate of the World in Its Looking Glass (2013); Punto Press released China Rising – Capitalist Roads, Socialist Destinations (2016); and for Badak Merah, Jeff authored China Is Communist, Dammit! – Dawn of the Red Dynasty (2017). As well, he published a textbook, Doctor WriteRead’s Treasure Trove to Great English (2015). Jeff is a Senior Editor & China Correspondent for The Greanville Post, where he keeps a column, Dispatch from Beijing. He also writes a column for The Saker, called the Moscow-Beijing Express. Jeff interviews and podcasts on his own program, China Rising Radio Sinoland, which is also available on SoundCloud, YouTube, Stitcher Radio and iTunes.
In China, he has been a speaker at TEDx, the Bookworm and Capital M Literary Festivals, the Hutong, as well as being featured in an 18-part series of interviews on Radio Beijing AM774, with former BBC journalist, Bruce Connolly. He has guest lectured at the Beijing Academy of Social Sciences (BASS) and various international schools and universities.
Jeff can be reached at China Rising,
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Baba Beijing should pace itself to steadily accomplish things for long stretches of time, and not just depend on blockbuster moments like this one. Looks like Uncle’s fear of regional enemies using a rival’s similarly large market to help them survive economically has come true.
Excellent analysis, Sergio. You should start a blog!