In Part 1, we discussed the nature of “world order” and global governance. We learned the crucial difference between the Westphalian model of equal, sovereign nation-states—a mythical ideal, never an actuality—and the various attempts to stamp a world order on that template.
In particular, we considered how the UN has been the leading organisation promoting global governance and how its founding Charter facilitates the centralisation of global power.
We observed that the UN has undergone a “quiet revolution” that has transformed it into a global public-private partnership (UN-G3P).
Latterly, we have seen the rise of a prospective multipolar world order that some say opposes the hegemony of its unipolar predecessor. This new model of global governance will apparently be led by allies Russia and China, the two countries that head up the multilateral partnerships of the BRICS (Brazil, Russia, India, China and South Africa).
The multipolar world order is predicated upon a more prominent role for the G20 rather than the G7. Thereby strengthening Russia’s and China’s positions as permanent members of the UN Security Council.
Whereas the existing unipolar world order established a system of global governance that enables UN-G3P oligarchs to influence policy agendas of nation-states around the world, the new multipolar world order is designed to advance the power of those oligarchs even further—by transforming their influence into absolute control.
Look no further than the Russian and Chinese governments, where the marriage between the political and corporate state is complete. We will address this in detail in Part 3.
Who Wants A Multipolar World Order?
We ask: who wants a multipolar world order?
The short answer: everyone.
The longer answer: everyone who has sufficient power and influence to change global governance.
The multipolar model isn’t being pushed solely by the Russian and Chinese governments, their oligarchs and their think tanks. It’s also being promoted by the erstwhile “leaders” of the unipolar world order.
Consider this remark by German Chancellor Olaf Sholtz. His speech, set within the context of Russia’s military intervention in Ukraine—which every member of the Western establishment lambastes for the cameras—was given at the World Economic Forum’s 2022 Davos gathering:
I see another global development that constitutes a watershed. We are experiencing what it means to live in a multipolar world. The bipolarity of the Cold War is just as much part of the past as the relatively brief phase when the United States was the sole remaining global power[.] [. . .] The crucial question is this: how can we ensure that the multipolar world will also be a multilateral world? [. . .] I am convinced that it can succeed – if we explore new paths and fields of cooperation. [. . .] If we notice that our world is becoming multipolar, then that has to spur us on: to even more multilateralism! To even more international cooperation!
Western central banks, too, have looked toward the multipolar model. In a 2011 round table discussion at the Banque de France, then-French Finance Minister Christine Lagarde, who subsequently became the head of the International Monetary Fund (IMF) and then was appointed President of the European Central Bank (ECB), said:
Our starting point is to create the conditions to achieve two closely intertwined objectives, i.e. strong, sustainable, and balanced growth, on the one hand, and an orderly transition to a world that is multipolar in economic and monetary terms, on the other. [. . .] The G20 reached agreement [to] promote the orderly transition from a world where a small number of economies, with their currencies, represent the bulk of wealth and trade, to a multipolar world where emerging countries and their currencies represent a growing if not predominant share.
That same year, Mark Carney, then Governor of the Bank of Canada, delivered a speech to the Canada Club of Ottawa, during which he said:
We meet today in the midst of another great transformation—one that is occurring more rapidly than most recognise. The financial crisis has accelerated the shift in the world’s economic centre of gravity. Emerging-market economies now account for almost three-quarters of global growth. [. . .] [W]eakness in advanced economies and strength in emerging economies [. . .] determines the global economic outlook. [. . .] This shift to a multi-polar world is fundamentally positive, [but] it is also disruptive.
Still a third speech in 2011, this one by Lorenzo Bini Smaghi, who was representing the Executive Board of the ECB, emphasised the potential of the multipolar world order. Smaghi noted that, in order to move towards the new world order, an economic, financial and policy shift was required. Bemoaning the lack of progress in the financial and policy fields, he suggested:
[W]e have a multi-polar economic world, but no multi-polar financial or policy world yet. [. . .] [H]ow can we improve the functioning of the international monetary system? The first avenue is to start building a new institutional framework[.] [This] will have to be designed for this new multi-polar world. [. . .] The second avenue involves implementing policies consistent with the transition to a more complete multi-polar world, in all its dimensions. [. . .] A more balanced multi-polar world also requires deeper financial and economic integration in Europe[.] [. . .] The G20 is thus destined to become an over-arching grouping, capable of tasking institutions like the IMF, World Bank or FSB with specific mandates but also to give guidance on politically sensitive issues, in the way the G7 operated in the past.
The World Economic Forum, which describes itself as the international organisation of public-private cooperation, has been advocating the potential of a multipolar world order for some time.
For example, in 2019 it published an article by Credit Suisse’s Global Head of Investment Strategy & Research, Nannette Hechler Fayd’herbe, who advocated investment in “emerging markets.”
In 2018, we moved closer to the multipolar world that looks set to replace the bipolar US-Russian geopolitical regime that emerged from the Cold War. China’s ascent as a serious economic and geostrategic rival for the US, and its growing assertiveness with programs like “One Belt, One Road” or “Made in China 2025”, has strengthened its influence on the world stage. [. . .] From an investor standpoint, the newly emerged multipolar world brings national champions [—companies in large countries with a sizeable domestic workforce in strategic sectors—] and brands into focus, including emerging market consumers.
Even the Council of Foreign Relations (CFR), whose elitist members are ardent pro-NATO US foreign policy supremacists, accepts the imminent arrival of the multipolar world order.
[T]he Western-led order was on its heels well before Trump, knocked off balance by rising geopolitical competition from China and Russia; a shrinking collective share of global GDP among the member states of the high-income Organization for Economic Cooperation and Development; and public disillusionment with globalization, particularly after the financial crisis. These weaknesses remain. [. . .] The Cornwall summit [G7 summit] will also allow observers to gauge the G-7’s political cohesion and global relevance in an ideologically diverse, multipolar world.
A final example: Speaking at a White House business convention on 21st March 2022, US President Joe Biden said:
We are at an inflection point, I believe, in the world economy[.] [. . .] [I]t occurs every three of four generations. [. . .] Now is a time when things are shifting[.] [T]here’s going to be a new world order out there, and we’ve got to lead it and we’ve got to unite the rest of the free world in doing it.
What’s going on? Why would the architects of the unipolar hegemony obligingly accept being replaced by multipolarity—and offer to help make the transition? Why, no matter where you look, even in the most hawkish Western think tanks, is there universal acquiescence to the emergence of a new multipolar world order?
You could argue that this is the only realistic perspective.
Still, the lack of any resistance at all is conspicuous. It suggests that there is more to this baffling contradiction than meets the eye. Indeed, these statements we have quoted, and many more like them from other Western power brokers, reveal, more than acquiescence to a multipolar world, a clear rationale for the creation of a “new world order.”
The point is, if the current holders of global power wish to retain control, then transition to the multipolar world order is required. They understand that the multipolar system is the necessary next step in the evolution of the unipolar order.
Throwing the Dollar Reserve Currency Away
As if to hammer home the fact that the dollar-backed unipolar world order is over, Jerome Powell, Governor of the US Federal Reserve (the Fed), said in April 2022:
The US federal budget is on an unsustainable path, meaning simply that the debt is growing meaningfully faster than the economy. And that’s by definition unsustainable over time.
He then added a reassuring, but ultimately empty caveat:
It’s a different thing to say the current level of the debt is unsustainable. It’s not. The current level of debt is very sustainable. And there’s no question of our ability to service and issue that debt for the foreseeable future.
If the gods were perfectly aligned, geopolitics didn’t exist, universal peace and joy sprang forth and the world ran smoothly and predictably, then Powell’s reassurances may have been plausible. But that is not how the world works. Nor are Powell’s imaginary “ifs” any basis for a sound global reserve currency. His admission was the salient point.
The US government debt-to-GDP ratio currently stands at an estimated 137.2% of GDP. The cost of the COVID-19 countermeasures and the West’s sanction response to Russia’s military action in Ukraine—including the vast sums the US and some European countries have invested in Ukraine’s supposed militarisation—has only made the situation worse.
The economic, financial and political basis of the unipolar world is rapidly evaporating.
As central bankers like Powell (US), Lagarde (EU), Andrew Bailey (UK) Elvira Nabiullina (Russia) and Agustín Carstens (Bank for International Settlements) know, as do all the other major players like Carney (UN), there is every reason to question how long the US can service its debt obligations—that is, repay the minimum required amount.
America’s only option is to keep the metaphorical money printing presses running, which can only lead to further inflation and eventual economic ruin.
As the US economy sinks, so does the dominant global reserve currency and, apparently, the financial power of the Western-aligned oligarchs. This looks likes deliberate self-destruction.
Just two days after the launch of Russia’s so-called “special military operation” in Ukraine, the governments of the US, UK, Canada, and the European Union—the core of the G7—announced that they had decided to freeze the Central Bank of Russia’s $630 billion foreign currency reserves.
While the US administration has done this kind of thing before, it did it to Afghanistan two weeks earlier, taking the wealth of a major developed nation and a fellow member of the UN Security Council sent very clear signals to the rest of the world.
Countries hold foreign currency reserves for numerous reasons, but chief among them is to hedge against the economic impacts of crises of various kinds.
If, for example, the currency of a nation is devalued, holding reserves of a stable foreign currency ensures that it can maintain levels of international trade in the short term. For some markets, notably the global oil market, trade is overwhelmingly conducted in the current leading reserve currency, the US dollar.
As there is no single, overarching framework of “international law” adjudicating reserve currency, if ever the concept of an “international rules based order” were applicable it was to the agreed role of the US dollar as a global reserve currency.
Regardless of the morality of the Russian government’s military action or its human cost, the Western unipolar clique, in seizing Russia’s reserves based purely upon a foreign policy disagreement, announced to the world that their IRBO was completely meaningless.
The only reason nation-states agree to holding a dominant global reserve currency, beyond economic force, is that they trust the stability of that currency. If those currency reserves are seized whenever the issuing state feels like it, then that currency couldn’t be more unstable and has lost credibility as a viable reserve.
Despite the claims of the Western politicians and their mainstream media (MSM) propagandists, the whole of the world is not united in its condemnation of Russia’s military action in Ukraine. Beyond North America, Europe and Australasia, censure is notable for its absence. By grabbing Russia’s reserves, the so-called IRBO more or less openly declared to the rest of the world that its US dollar, as a global reserve currency, was dead.
Vladimir Putin was apparently right to observe:
Imposing sanctions is the logical continuation and the distillation of the irresponsible and short-sighted policy of the US and EU countries’ governments and central banks. [. . . ] The global economy and global trade as a whole have suffered a major blow, as did trust in the US dollar as the main reserve currency. The illegitimate freezing of some of the currency reserves of the Bank of Russia marks the end of the reliability of so-called first-class assets. [. . .] Now everybody knows that financial reserves can simply be stolen.
He also dropped in some virtue signalling, praising the Russian private sector for its “sustainable development” efforts:
I would like to thank the business community and the teams at companies, banks and organisations, which are not only responding effectively to sanction-related challenges but are also laying the foundation for the continued sustainable development of our economy.
The NATO-aligned nation-states behind the sanctions also decided to progressively cut Russian commercial banks out of the Society for Worldwide Interbank Financial Telecommunications (SWIFT) network.
This is the international financial communication system that enables banks and financial institutions to notify each other of international fund transfers using a standardised set of codes.
Both Russia and China have prospective alternatives to the SWIFT system. Russia developed its System for Transfer of Financial Messages (SPFS) in 2014 and China its Cross-Border Interbank Payment System (CIPS) in 2015.
According to the Central Bank of Russia (CBR) SPFS has expanded rapidly in response to the sanctions. Potentially both systems could supplant the West’s, but CIPS appears to be the most likely replacement for SWIFT.
The G7’s claimed objective for these sanctions was to sever the Russian Federation’s access to global markets, but the world is a big place. All the sanctions did was curtail Russia’s ability to trade its energy and other key commodities such as grain and palladium—vital for the manufacture of semiconductors, with the West. Primarily at the West’s own expense.
Russia and China have long sought to “de-dollarise” their economies and have forged numerous bilateral trade agreements outside of the dollar system. With the sanction, the West handed the Russian Federation one of its major monetary foreign policy objectives on a plate. A strange kind of punishment.
This year the IMF reported that countries around the world have increasingly diversified their foreign currency reserves over the past two decades. In the last quarter of 2021, the dollar share of global reserve currencies had already fallen to below 59%. The sanctions against the Russian Federation provided a massive boost to Russian and Chinese ambitions to reset global reserve currencies for the benefit of their own economies.
In June 2022, following the sanctions, the BRICS nations announced their plans to establish a new form of global reserve asset based upon a basket of BRICS currencies. This is a direct challenge to the special drawing rights (SDRs) that the IMF allocates to nation-states. Based upon the underlying value of the currencies in the “basket,” they can be exchanged, like any asset, for goods, services, or commodities—or redeemed for currency.
Multipolar Global Governance Is Different Because Reasons
It is easy to believe, as some do, that the Western oligarchs are in danger of losing their power base. Many of the people who hold such views also contend that the current world order is dominated by these same oligarchs. We have to wonder what they think globalist oligarchs do with all that power and authority. Simply sit idle and watch it slip away as the world turns around them?
In reality, they haven’t been idle at all. As witnessed by their statements and actions, they have been making preparations to move to the new multipolar system for decades.
To illustrate: in 2009, global investor, currency speculator and oligarch George Soros told the Financial Times:
[Y]ou really need to bring China into the creation of a new world order, a financial world order. [. . .] I think you need a new world order that China has to be part of the process of creating it and they have to buy in. They have to own it the same way as, let’s say, the United States owns the Washington consensus, the current order[.] [. . .] I think the makings of it are already there because the G20, in agreeing to peer reviews, effectively is moving in that direction. [. . .] As long as the renminbi is tied to the dollar, I don’t see how the decline in the dollar can go too far. [. . .] [A]n orderly decline of the dollar is actually desirable. [. . .] China will emerge as the motor replacing the US consumer and [. . .] China will be the engine driving it [the world economy] forward and the US will be actually a drag that’s being pulled along through a gradual decline in the value of the dollar.
According to representatives of the Russian and Chinese governments, the multipolar world order, supposedly led by them, will empower the G20, rather than the G7, to manage “global economic governance.” No surprises there.
Further, the stated objective is to supposedly reinstate an “international law-based world order” that will enhance “genuine multipolarity with the United Nations.” The UN Security Council will continue to play “a central and coordinating role,” with the objective of promoting “democratic international relations” and “sustainable development across the world.”
This global agenda is virtually indistinguishable from the one promoted by the unipolar IRBO. The claimed difference is that Russia and China will lead a BRICS-centric multipolar order which does more than pay lip service to international law and multilateral agreement. Allegedly, the multipolar model will abide by international law and focus upon collective decision making.
The belated pushback by some US states against BlackRock’s investment strategy in US pension funds is only a minor irritation for the global corporate titan. While they have pressured the US economy to “decarbonise” they have not taken the same approach in China.
The China National Petroleum Corporation (CNPC) is among the largest “fossil fuel” energy companies in the world. It deals in both gas and oil and PetroChina is its publicly listed arm.
In 2021 BlackRock was the first foreign company “allowed” by the Chinese government to launch a mutual fund in China which aims to achieve “long-term capital growth” for Chinese investors. The capital growth will come from BlackRock’s commitment to “sustainable development.” This was met with consternation by the Western MSM, and disgruntled oligarch George Soros, who claimed this was a huge blunder, adding:
The BlackRock initiative imperils the national security interests of the U.S. and other democracies because the money invested in China will help prop up President Xi’s regime.
China’s authoritarian style of technocratic government suits BlackRock. Speaking to Bloomberg’s Erik Schatzker in 2011, BlackRock CEO Larry Fink infamously said:
Markets don’t like uncertainty. Markets like, actually, totalitarian governments where you have an understanding of what’s out there and, obviously, the whole dimension is changing now. [. . . ] with the democratisation of countries. And democracies are very messy, as we know in the United States[.]
This followed the 2010 comment of George Soros that “today China has not only a more vigorous economy, but actually a better functioning government than the United States.” So perhaps his little spat with BlackRock is surprising.
As mentioned in Part 1, oligarchs are not a homogenous group of automatons that all think with one mind. They are collectively committed to long-term goals but often disagree on how to achieve them.
While BlackRock’s investors apparently see China’s technate as advantageous, Soros has always sought to destabalise nation from within, through various revolutionary means, and then use his wealth to instal the system he wants. His apparent backing for violent revolt in Hong Kong and his financial crimes, directed against Chinese companies, hasn’t endeared him to China’s oligarchy.
But upsetting your partners is no reason to loose sight of the long game. Having publicly slated the Chinese government, calling Xi Jinping “the most dangerous enemy” of democracy in 2019, Soros backed NGO’s like the Sunrise Movement and ActionAid USA wrote an open letter to the US administration in 2021 urging closer cooperation with China on the oligarchs’ shared ambition of sustainable development.
Post Russia’s war with Ukraine and the West’s sanction response, BlackRock’s PetroChina investment doesn’t look like such a monumental mistake now. The spike in oil prices saw a huge surge in profits for PetroChina, as it did for nearly every other oil and gas company. But BlackRock’s Chinese investment strategy is astute for other reasons too.
With energy flows suddenly being directed away from the West and towards the East, moves such as the multibillion dollar deal between Russia’s “state owned” Gazprom and China’s “state owned” CNPC will further improve BlackRock’s bottom line.
Pushed by the sanctions, Gazprom and CNPC will conduct their business in the ruble and the yuan. The consequent underpinning of their currencies strengthens the BRICS plan to challenge the primacy of the dollar as a reserve currency. With its Chinese mutual fund in operation, not only will BlackRock investors capitalise on their PetroChina deal, they are also well placed to take advantage of the likely shift in the International Monetary and Financial System (IMFS).
It seems BlackRock possesses almost magical powers of prescience.
There is no hint that the multipolar world order will do anything the tackle the inordinate power of the private sector oligarchs who dominate the United Nations’ global public-private partnership (UN-G3P). Neither they nor their investment portfolios are confined within national borders. Any nation-state can be an investment vehicle and international relations are just part of their strategic financial planning.
The global mechanisms and partnership networks that “act as a force multiplier” for the globalist oligarchs are not at risk. In terms of global governance, from the oligarchs’ perspective, the shift to the multipolar model is simply a change of middle management.
The oligarchs’ policy agendas, including the creation of a new global economy built upon debt–based sustainable development and natural asset classes, set within a $4 quadrillion carbon-neutral IMFS, remain firmly on track. Far from a threat, the multipolar world order is crucial. Without it, the theft of our natural resources and the capitalisation of nature cannot proceed.
Recently, Larry Fink, speaking at the Clinton Foundation’s Global Initiative seminar, said:
If we are going to change the world, there’s just not enough money that is going in to the emerging world. We must change the Charters of the IMF and the World Bank if we are going to get there. [. . .] There’s huge pools of capital but that capital is not equipped[.] [. . .] Its up to the equity owners [. . .] basically the G20, they have to have a desire for doing this. [. . .] If we can do that, the amount of capital that is going to go into the emerging world, into Africa [for example], will be extraordinary. [. . .] there is that opportunity in the next few years to do this and then we will have, not just a tectonic shift in the developed world, but a tectonic shift in all of the world.
Perhaps Larry is thinking of the kind of reforms that the BRICS, exploiting the pseudopandemic, suggested in 2021. Collectively the BRICS stated priorities for reform of the IMF and the World Bank included “innovative and inclusive solutions, including digital and technological tools to promote sustainable development” and stregnthening nations’ capacity to tackle problem relating to “terrorism, money laundering, [the] cyber-realm, infodemics and fake news.”
The hegemons of the multipolar world order would also like to see “reform” of the UN Security Council by increasing “representation of the developing countries,” such as Brazil, India or South Africa, thereby swinging control in the BRICS favour. They also recognised “the 2030 Sustainable Development Agenda as a comprehensive, indivisible, far-reaching and people-centred set of universal and transformative targets.” All of this will supposedly improve “the system of global governance” they said.
The only perceptible difference is that the BRICS “emphasized the urgency of revitalization of the UN General Assembly so as to enhance its role and authority.”
As we discussed previously, under the UN Charter, the General Assembly doesn’t have any “authority.” Yet the BRICS envisaged reform of the General Assembly will be “in accordance with the UN Charter.” If the BRICS statement doesn’t make any sense that is because it doesn’t.
Clearly BlackRock and the BRICS are on the same page, but leaving that aside, this new model of global governance, headed by China and Russia, while the same as the existing model, will be better presumably because Russian, Chinese and Indian oligarchs are nicer people than their Western counterparts. We will explore that assumption in Part 3.
Just like the IRBO, the multipolar world order has signalled its intention to maintain the censorship agenda. The commitment to reform the IMF and the World Banks is firmly based upon an unshakeable commitment to “sustainable development” and Agenda 2030—thus Agenda21—which suits BlackRock, Vanguard and the rest of the global-public-private partnership perfectly.
In order for this new model of G20 based “global governance” to have a bite and not merely a bark, a global tax system is required.
To this end, in December 2021 the G20 and the Organisation for Economic Co-operation and Development (OECD) finalised their “Two Pillar Solution To Address Tax Challenges.”
Supposedly designed to stop the tax avoidance of “multinational enterprises” (MNEs), which it won’t, the impetus for this nascent global tax system has largely come from the G20.
Unsurprisingly, the BRICS core of the multipolar world order are all signatories to the first concerted effort to legislate a single, unified global tax system into being. It seems that the new world order will fund itself into existence just as all empires do—by taxing the people.
Changing the Neighbourhood
The Western, unipolar, debt-ridden world order is economically and financially spent and, for the UN-G3P, is approaching its used by date. The current IMFS, first established with the Bretton Woods Agreement and maintained by the subsequent petrodollar scheme, is finished. It finally pegged out in 2008 with the global financial collapse. Since then it has been kept on life support simply by printing—digitally speaking—trillions of dollars.
Little of that money found its way into the real economy that you and I inhabit. The bulk of it has been siphoned off to prop up the financial markets while the move towards the multipolar system progresses.
This excess supply of the US dollar, the current leading global reserve currency, will keep eroding—and ultimately destroy—its value. Consequently, the US economy in its present form, along with significant swathes of the Western economic order, is degrading.
As noted by BlackRock, the existing drivers of financial exploitation are tapped out. Now that Western economies have reached their limits of growth, new sources of global economic stimulus are required.
Neither Russia nor China have become the world’s engine for growth by chance. China is energy hungry and Russia is energy rich. Collectively they lead the world in military technology and China leads the world in manufacturing which Russia is happy to fuel with its oil, gas and coal.
Despite the enmities of the past, the leadership in both nations not only recognised the mutual benefit of a closer partnership, they forged one.
If capable, all nation-states engage in industrial espionage. It is silly to claim that Russia and China don’t. Equally silly were the comments of the former director of the US National Security Agency (NSA) and then head of US Cyber Command, Gen. Keith Alexander, who, when speaking about China’s technological development, told a 2015 US Senate Armed Forces Committee:
All they’re doing is stealing everything they can to grow their economy. [. . .] It’s intellectual property, it’s our future. I think it’s the greatest transfer of wealth in history.
Tax and inflation are the greatest transfers of wealth in history, but that wasn’t the end of Gen. Alexanders blunders. Contrary to his claims, the Western public-private partnership has done everything it possibly can to assist China’s development.
In 1970 Zbigniew Brzezinski published Between Two Ages: America’s Role In The Technetronic Era. He recognised that private sector power had already exceeded that of governments and saw the a merger of the political and corporate state as the logical way forward in an emerging world dominated by digital technology:
The nation-state as a fundamental unit of man’s organized life has ceased to be the principal creative force: International banks and multi-national corporations are acting and planning in terms that are far in advance of the political concepts of the nation-state.
In 1973 Brzezinki joined the oligarch David Rockefeller in the formation of the Trilateral Commission (think tank). Their objective, with a mind to US led public-private partnership dominance, was to invigorate development in the East, with a particular focus upon China. Recounting their initial purpose and subsequent evolution, the Commission says:
[T]here was a sense that the United States was no longer in such a singular leadership position as it had been in earlier post-World War II years. [. . .] , and that a more shared form of leadership [. . .] would be needed for the international system to navigate successfully the major challenges of the coming years. [. . .] [T]he enduring effects of the financial crisis that began in 2008 has been felt in every nation and region. It has fundamentally shaken confidence in the international system as a whole. The Commission sees in these unprecedented events a stronger need for shared thinking and leadership by the Trilateral countries.
In 2009 delegates from the governments of China and India joined the Pacific Asian Group of the Trilateral Commission. Hence trilateralist George Soros’ promotion of greater involvement for China in the creation of a “new world order” in the same year.
Efforts to shift the centre of global power eastward began in earnest in the 1980’s. Guided by the policy trajectories advised by the Trilaterlists and other globalist think tanks, the West notably stepped up its efforts to bolster China’s economic, financial and technological development.
Between 1983 – 1991, Western foreign direct investment (FDI) in China increased from $920M to $4.37Bn. In 1994, in terms of US overseas investment, China ranked 30th. By 2000, it was 11th, as Western multinational corporations quadrupled their FDI into China between 1994 and 2001. By 2019, it had eclipsed $2.1Tn.
The pseudopandemic saw an initial 42% slow-down in global FDI, but not in China where it grew again by another 4%. Consequently, China overtook the US to temporarily become the world’s leading recipient of foreign direct investment.
While the private sector drove the modernisation of the Chinese economy, the public sector in the West encouraged China to embolden its global political presence.
In 1979, the US granted China full diplomatic recognition; in 1982, the commitment was reaffirmed in the third joint communiqué; in 1984, Beijing was permitted to purchase US military hardware; in 1994, the Clinton Whitehouse intervened to scrap the cold war embargo on the export of “sensitive technology” to China (and Russia); the 2000 US – China Relations Act was signed by President Clinton (a member of the Trilateralist Commission), establishing further improvements to trade relations; In 2003 the US supported China’s entry into the World Trade Organisation and soon thereafter the Bush administration established permanent normal trading relations (PNTR) with China and, in 2005, then Deputy Secretary of State Robert B. Zoellick, called on China to take its place as a “responsible stakeholder.”
A 2019 report by the World Bank, titled Innovate China: New Drivers of Growth, noted the depth of the West’s G3P commitment to Chinese development:
Governments in other high-income countries have supported specific technologies and industries, particularly by targeting research and development (R&D). In the United States, government agencies such as the Defense Department’s Defense Advanced Research Projects Agency (DARPA) and the National Institutes of Health provided critical financing for key technologies. [. . .] These policies are complemented by support for key enabling technologies and industries—such as the space, defense, automotive, and steel industries—including through various funds, such as the European Structural and Investment Funds (five funds worth more than €450 billion) and Horizon 2020 (€77 billion for 2014–20).
Bringing his enthusiasm for the multipolar world order with him, then Bank of England Governor Mark Carney, and now UN Special Envoy for Climate Action & Finance, spoke at the G7 Central Bankers symposium in Jackson Hole, Wyoming, in August 2019.
This remarkable speech, shocking to anyone who believes that politicians run the world, more or less laid out where the world order is heading:
[A] destabilising asymmetry at the heart of the IMFS is growing. While the world economy is being reordered, the US dollar remains as important as when Bretton Woods collapsed[.] [. . .] In the medium term, policymakers need to reshuffle the deck. That is, we need to improve the structure of the current IMFS. [. . .] In the longer term, we need to change the game. [. . .] Any unipolar system is unsuited to a multi-polar world. [. . .] In the new world order, a reliance on keeping one’s house in order is no longer sufficient.
The neighbourhood too must change. [. . .] [A] multi-polar global economy requires a new IMFS to realise its full potential. That won’t be easy. Transitions between global reserve currencies are rare events. [. . .] [I]t is an open question whether such a new Synthetic Hegemonic Currency (SHC) would be best provided by the public sector, perhaps through a network of central bank digital currencies. [. . .]
[A]n SHC might smooth the transition that the IMFS needs. [. . .] The deficiencies of the IMFS have become increasingly potent. Even a passing acquaintance with monetary history suggests that this centre won’t hold. [. . .] Let’s end the malign neglect of the IMFS and build a system worthy of the diverse, multi-polar global economy that is emerging.
In a nutshell, according to Carney: The “world economy is being reordered,” the dollar only remains “important” in the short term and “we”—the G7 central bankers—need to improve the IMFS by changing “the game” to suit a “multi-polar world” because the unipolar system is unsuitable. “The neighbourhood” (the Earth) must change to realise the potential of a “multi-polar” IMFS.
This requires transforming “the global reserve currency” to some sort of “Synthetic Hegemonic Currency,” perhaps based upon “central bank digital currencies” (CBDCs).
China, thanks in part to Western assistance, leads the world’s developed economies in CBDC technology. It began seriously testing CBDC in 2014, and started rolling it out in cities like Shenzhen, Chengdu and Suzhou in 2020. This year, China extended use of the digital yuan, called e-CNY, as it surged ahead in the race to become the first cashless major economy.
Russia aren’t far behind. Russia 12 leading banks began technical trials of the digital ruble in 2021 prior to its official launch on the 15th February 2022, just nine days before the “special military operation” began in Ukraine. The First Deputy Chairman of the CBR, Olga Skorobogatova, said:
The digital ruble platform is a new opportunity for citizens, businesses and the state. We plan for citizens transfers in digital rubles [to] be free and available in any region of the country[.] [. . .] The state will also receive a new tool for targeted payments and administration of budget payments.
More than that, adoption of CBDC in a cashless society, where no other form of payment is “permitted,” enslaves every citizen to the state. CBDC is both programmable money and a liability of the central banks. Not only does it always belong to the central bank, and never the user, it can be programmed to function as they see fit.
Russia has already installed the legal framework to make this a reality.
In 2019 Vladimir Putin announced amendments to Russian federal law that enables the Russian state to outlaw the use of cryptocurrencies. In a “cashless society” these could potentially be a form of alternative currency.
As yet, the legal amendments have had little effect. But, if and when Russia moves to a cashless control grid the regulatory platform is ready and waiting.
According to the NATO think tank, the Atlantic Council, as 105 countries representing 95% of global GDP explore CBDC, “the G7 economies, the US and UK are the furthest behind on CBDC development.”
It seems strange that the unipolar IRBO is apparently lagging so far behind again. Especially given that fact that some of its leading “thinkers” would like to see “a network of central bank digital currencies.”
Still, in its search for a Synthetic Hegemonic Currency, it may come as some relief to the leaders of the IRBO that, as noted by the Atlantic Council, “many countries are exploring alternative international payment systems” and that the “proliferation of different CBDC models is creating new urgency for international standard setting.”
While it is evident that China are leading, perhaps the IRBO and the Central Bank of Russia can take some consolation in the NATO think tank’s assessment:
The trend is likely to accelerate following financial sanctions on Russia.
The neighbourhood is certainly changing.
Building the New IMFS
Russia is the third–largest oil-producing nation after the US and Saudi Arabia and the second–largest producer of natural gas after the US. But since US domestic energy consumption far exceeds Russia’s, it is the second–largest oil exporter, after Saudi Arabia, and the leading natural gas exporter in the world. Russia also possesses the largest gas reserves on Earth.
In 2018, the Shanghai International Energy Exchange started trading oil futures denominated in the Chinese yuan (CNY). All that was required, in order to make the yuan a full-blown petroyuan, was for crude oil exporters to widely accept it as payment. China has been paying Russia and Iran for oil using yuan since 2012, but the sanctions this year moved the credibility of the petroyuan to a whole new level.
The Russian Federation has not only massively increased its oil exports to China, becoming its leading oil supplier, but is accepting payment in renminbi (RMB). The CNY is the principle of account for the RMB. Globally, as a direct consequence of the West’s sanctions, the petroyuan is now a practical reality.
Venezuela, too, has already agreed to accept the petroyuan. If Saudi Arabia accepts the petroyuan, as seems increasingly likely, the yuan will also have taken a leap forward as a potentially dominant global reserve currency.
Perhaps it is just a coincidence that both the pseudopandemic and the war in Ukraine have resulted in nation-states the world over committing to policies that precisely facilitate the transition to the multipolar world order. That both of these world-changing events just happen to “reshuffle the deck” exactly as desired by the global parasite class is certainly uncanny, if not downright unbelievable.
Nonetheless, as the centre of power moves eastward, maybe the new world order will ultimately deliver on the promise claimed by some—namely, that Russia and China really are standing up to the insidious Great Reset. Could it be true? We live in hope.
Despite the fact that the Western public-private partnership has played a pivotal and seemingly intentional role in this polarity shift, perhaps the Russian and Chinese governments are determined to create a better world order for us all, as some commentators suggest:
[A] higher geopolitical reality is being born which will have a much greater benefit to [. . .] humanity more generally if it is not sabotaged. [. . .] A potentially beautiful new future driven by the re-awakening of the spirit of the Silk Road is being painted before our eyes.
When we conclude this series with Part 3, we may just discover that the wondrous vision of a “beautiful new future” led by China and Russia is a realistic prospect.
Or perhaps not.
You can read more of Iain’s work at his blog IainDavis.com (Formerly InThisTogether) or on UK Column or follow him on Twitter. His new book Pseudopandemic, is now available, in both in kindle and paperback, from Amazon and other sellers. Or you can claim a free copy by subscribing to his newsletter.
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