The Chinese state’s intervention after the stock market crash was immensely political — as was the collapse itself.

A man walks past a Bank of China branch in Beijing. Steven Shaver / UPI

The sheer enormity of the destruction was staggering. In less than a month, from mid-June to early July, the Shanghai Composite Index plunged by 30%, wiping out more than $3 trillion in share value from its June 12 peak. The wealth liquidated in the crash was equivalent to approximately 30% of China’s GDP ($10 trillion in 2014), 20% of the United States’s GDP ($17 trillion), and about ten times the size of Greece’s current total debt ($350 billion).

The collapse sent shockwaves around the world, not surprising given that China accounts for more than one-third of global growth. China’s spectacular stock market crash is a testimony to the increasing volatility and the underlying contradictions of the Chinese economy. More importantly, rather than simply being a financial crash, it is also immensely political.

No one can claim they didn’t see it coming — the only uncertainty was the exact timing of the crash. Since last year, there’s been a 150% rally fueled by margin trading (the practice of using borrowed money to buy stocks). The overvaluation of shares was widely recognized, with some analysts estimating by more than 20 percent. The mainstream financial press had been describing it as a bubble for months. Even the Chinese government, which had encouraged people to invest, issued warnings back in April, and tried to tighten trading rules to dampen the exuberance.

The crash finally came this month, producing widespread panic and pushing the Chinese government to implement a range of stopgaps.

It halted all new stock listings, restricted short-selling (the practice of betting against price falls), and ordered some of the largest state-owned enterprises — and even the state pension funds –not to sell shares. Instead, the Chinese state quickly made plans to buy more shares, while the country’s top twenty-one securities brokerages collectively pledged to purchase shares worth at least $19 billion. The Chinese government also directed the central bank to lend money to brokerages and investors to buy shares totaling $365 billion.

It was this highly political intervention into the stock market — popularly dubbed jiushi, or “rescuing the market” — that came as a surprise to many, both within China and abroad. And what made it even more political was the thought of what the spectacle of tens of millions of individual investors — ordinary people investing their incomes, loans, and savings — suddenly losing their money might do to the legitimacy of the Communist Party.

The Chinese Economy and Its Discontents

Stock market crashes are a relatively new phenomena in China — during Mao’s reign (1949–1976), stock exchanges were regarded as a capitalist institution and thus abolished. They weren’t reintroduced until 1991, well into the post-Mao reform period.

In these early years, however, buying shares was considered too risky; instead, investors and ordinary people preferred to purchase government-issued bonds or put their money in state-owned banks for safe returns. Incomes for the majority of the population were also quite low, so few people could afford to invest in the stock market. While volatility and risk certainly existed, stock market crashes were not a part of the economy.

This started to change in the 2000s as China’s economic growth, facilitated by financial liberalization and the commercialization of the banking system, channeled money into the stock market and fueled a huge bubble. Between October 2005 and October 2007, the Shanghai Composite Index grew from a little over 1,000 points to almost 6,000 points — only to plummet to less than 2,000 points with the onset of the global economic recession.

The effects on Chinese industry were even worse. In the first six months of 2008, with the export sector shrinking due to declining demand in the North American and European markets, 67,000 factories closed across China. In the final quarter of 2008, an additional 50,000 factories were shut down. An estimated 20–30 million rural migrant workers temporarily lost their jobs in the process, and labor protests spiked. Many returned to their rural hometowns.

Intent on instantly propping up the country’s falling growth rate, the Chinese government rolled out a $586 billion stimulus package that focused on infrastructure instead of social services and welfare. It largely worked. The stimulus, and government intervention more broadly, was credited with successfully staving off a deeper recession. With mass unemployment and social unrest still a threat, it has committed to keeping its foot on the pedal and boosting the annual rate of economic growth above 8%.

Despite the government’s concerted intervention, China’s GDP growth rate has continued to decline: a mind-boggling 14% in 2007, it dipped to less than 10% for a few years, and then dropped to 7.4% last year — quite good by international standards, but low for China. This year, GDP growth is likely to be 7% or less, causing concerns about a further slide.

The government has made a virtue out of the slowdown, describing the Chinese economy as entering a period of “New Normal” in which growth is purportedly more balanced and sustainable. But there are lingering economic contradictions that are related to the recent stock market crash.

The housing market, built on the back of rapid urbanization, invited speculation that inflated housing prices. The rapid uptick prompted the government to depress housing prices in an attempt to prevent the bubble from bursting and triggering a wider crisis. This deflationary tactic rendered investment in housing and manufacturing industries less profitable, sending investors looking for high returns (often on borrowed money) to the stock market.

At the same time, the post-crisis stimulus package was being financed mainly through bank lending rather than direct state grants, and was made possible by loose monetary policy. The stimulus ended up exacerbating the existing local government debt problem, which the Chinese government was still working to address via a debt-for-bond swap program shortly before the stock market crash.

Finally, while fixed investment has contributed significantly to China’s growth, consumption levels remain low as a percentage of GDP. A sharper increase in domestic spending is necessary for the transition from an investment and export-led economy to a consumption-driven one, but this is a political issue more than an economic one. Low levels of consumption reflect theincreasing share of incomes going to capital instead of labor in the post-Mao era, where workers have lost employment security and labor rights, and face enormous difficulty organizing independently and engaging in collective bargaining.

The expansionary monetary and fiscal policies the government has implemented since the financial crisis have largely failed to resolve these problems, and the recent crash has only made the situation worse.

The Shape of the Stock Market

Financial liberalization and government encouragement have made it extremely easy and appealing for individuals to trade in the stock market. Since mid-2014, more than 40 million new accounts have been set up, and a significant majority are individual investors.

Share trading, unsurprisingly, is concentrated in China’s major cities and the wealthy east coast. But many also trade in second- and third-tier cities and towns, and the spectrum of who trades has broadened considerably.

One group that has entered the market in large numbers over the past year is younger people, primarily those in their twenties and thirties. These are mostly professionals workers making middle-level incomes, and migrant workers making lower- to middle-level incomes. This demographic’s slow wage growth has encouraged it to put money in the stock market in the face of China’s high urban living costs, exacerbated by the recent housing bubble.

Then there are slightly older people, the mom-and-pop investors in their fifties and sixties who have invested part of their retirement savings in the hopes of then contributing to their children’s housing down payment.

Faced with low interest rates that dissuade them from putting their money in the banks, increasing social inequality, and few other ways to earn higher incomes, more and more people are willing to gamble their savings on the stock market, believing the government will not let the market crash. So while much of the Chinese media has focused on the fact that a plurality of the individual investors has only a high-school diploma — cynically implying that investors’ lack of education caused the bubble — it’s China’s new middle class that is heavily involved in the stock market, acting rationally in an irrational system.

On its own, the stock market crash doesn’t pose a real threat to the survival of the Chinese Communist Party, but popular discontent is growing, with large protests that include an increasingly assertive working class.

Politically, many people in China hold contradictory opinions about the role of the government. They believe, for instance, that the state meddles in and manipulates the stock market to the detriment of the investors. But when the stock market collapses, they hope the government comes to the rescue. Thus, both the failure of the state to control the stock market and what some deem excessive intervention damage its credibility and undermine its legitimacy.

This is a politically sensitive period in China; since its accession in 2013, the new leadership has sought to consolidate its power and regain legitimacy. It has launched an expansive anti-corruption campaign, disciplining more than 100,000 cadres across bureaucracies and levels of government, and simultaneously tightened censorship and cracked down on civil society activism. During the stock market crash, the authorities detained and questioned more than 100 lawyers and NGO workers.

Since the 1990s, China’s middle class has reluctantly offered support to the regime in exchange for a rising standard of living at the expense of liberty and democracy. How the government responds to the crash in the coming months may test this loyalty.

While the threat to the Chinese economy is real, there is a risk of overstating the impact of the crash. Even at its lowest point the shares level in the Shanghai Composite Index merely returned to that of March, still 80% higher than a year ago.

Moreover, the stock market plays a fairly minor role in the Chinese economy relative to other developed economies. The amount available for trading is only about a third of Chinese GDPcompared to more than 100% for developed economies.

The number of participants is also comparatively low. The recent China Household Finance Survey found that only 9% of households actively traded shares and another 4% of households owned mutual funds. And less than 15% of household financial assets are invested in the stock market. This is still a large number given the size of the Chinese population, but it remains a small percentage for now.

In response to government intervention to restore confidence, two days after the market hit a low of 3,500 points, the Shanghai Composite Index surged by 10.6%, the biggest two-day gain since 2008. Fears were eased as the Shanghai Composite Index returned to 4,000 points.

However, despite the rebound, the ability of the state to continually inject money and confidence into the stock market is uncertain, and its decision to reflate the economic bubble may very well increase the size of the problem.

On Monday, the Shanghai Composite Index suffered an 8% plunge, raising fears of a repeat of the downward spiral of early this month. And if another, bigger crash occurs, it may have a significantly greater ripple effect on China’s real economy.

A Left Response

The crash rekindled the age-old debate about the role of the state in markets, and the government response is being seen as a setback for free-market advocates both inside and outside of China. We will likely hear strong calls for greater financial liberalization and a larger role for the market in the Chinese economy. Indeed, there are already criticisms of government intervention and reports of global capital’s displeasure.

The Communist Party is not opposed to more marketization. It has made clear its receptivity to more market-oriented reforms, including financial liberalization, and its willingness to encourage more market competition, private businesses, and individual consumption. However, it has not been able to implement significant reforms due to opposition within the government and state-owned industry. The current anti-corruption campaign is seen as clearing the way for the reforms.

The Left has to resist such deepening marketization, which will only lead to more economic instability and widening inequality. However, our knee-jerk response should also not be to defend Chinese state intervention in the economy as such. The Chinese government is responsible for creating a financial environment where individual investors are lured into gambling their incomes and savings, and its recent actions will likely inflate the bubble further.

Instead, we need to demand more regulation of the financial sector, as well as more equitable distribution of incomes so people won’t depend on risky investment strategies to compensate for low wages and high living costs.

Because of the highly restricted political space in which they operate, China’s social movements — including the restive labor movement, the environmental movement, and the feminist and anti-discrimination movements — often fly under the radar. But they remain China’s only hope for a more socially just and environmentally sustainable society. When the next crash comes, the ability to chart alternative responses rests on their organizational capacity.

Ministro Mauro Vieira apresenta relatório da Presidência Pro Tempore Brasileira do MERCOSUL

Publicado em 23 de jul de 2015

Foi realizada em Brasília, no dia 17 de julho de 2015, a 48ª edição da Cúpula dos Chefes de Estado do MERCOSUL e Estados Associados. O encontro foi precedido, no dia 16 de julho, pela Reunião do Conselho do Mercado Comum (CMC), que reúne os Chanceleres e os Ministros de Economia e de Indústria dos Estados Partes do MERCOSUL.

A realização da Cúpula de Chefes de Estado encerrou a Presidência Pro Tempore Brasileira (PPTB) do MERCOSUL, exercida durante o primeiro semestre de 2015. Ao final da Cúpula, a Presidência Pro Tempore do bloco foi transferida para o Paraguai

Fonte: MRE

Mangabeira: o Brasil é um protetorado americano !

Se os EUA desligarem o GPS, a Marinha brasileira se guiará como Cabral e Colombo

PHA: Setores estratégicos da Economia, como petróleo e agora a energia nuclear, correm o risco de ser desmontados por ação da Justiça e da própria Polícia Federal. Empresas como a Petrobras, a Odebrecht e a Eletronuclear podem virar, em pouco tempo, um pátio de escombros. O senhor faz parte de um Governo que aparenta incapacidade de impedir que isso se concretize. Por que o Governo age assim?
Mangabeira: O Governo está comprometido com a construção de uma nova estratégia nacional de desenvolvimento. Uma estratégia baseada em capacitações educacionais e oportunidades produtivas. A maior parte das nossas empresas continua afundada em um primitivismo produtivo, embora tenhamos uma cultura empreendedora vibrante.
Uma parte dessa estratégia é tirar as empresas de seu primitivismo e fomentar o empreendedorismo de vanguarda no Brasil. Para isso, precisamos de um choque de ciência e tecnologia.
E o complexo industrial de defesa, inclusive os setores estratégicos – nuclear, cibernético e o espacial – representam um terreno privilegiado para desenvolver o vanguardismo tecnológico.


PHA: O senhor lança a sua visão para um futuro grandioso, mas estamos diante de um fato concreto que é a possibilidade de termos uma obstrução do processo de construção da energia nuclear. O senhor não acha que o Governo deveria ser mais enfático na defesa?

Mangabeira: O Governo tem um compromisso com esse vanguardismo tecnológico. O Governo não pode impedir o curso da Justiça.
Agora, o que eu vejo é que há um problema que tem a ver com a relação entre o nosso desenvolvimento interno, inclusive o desenvolvimento da tecnologia de vanguarda nesses setores, e a nossa posição no mundo.
Veja a situação das nossas relação com os Estados Unidos. Eu defendo há muito tempo a aproximação com os EUA. Entendo que teríamos muito a ganhar com uma relação estratégica com os EUA. Talvez uma inibição mais poderosa dessa aproximação é a dependência em que nos encontramos frente aos EUA. Quase toda a nossa comunicação de internet com o mundo, inclusive com a Europa e a Ásia, passa pelos EUA. O governo americano pode ver todas as comunicações internas do Brasil. E estamos inteiramente independentes do GPS americano. Se os EUA decidissem desligar o GPS teríamos que conduzir os nossos navios de guerra por navegação astronômica. Essa é a realidade.
Eu tenho dito que, se persistir essa situação, na prática, o Brasil é um protetorado dos Estados Unidos. O Brasil precisa decidir se quer ou não quer ser um protetorado dos EUA. As nossas Forças Armadas não são para serem uma força policial que mantenha tranquilidade na América do Sul, como um braço acessório da defesa americana. Nós queremos uma Defesa de verdade. Para isso, precisamos construir o avanço tecnológico, inclusive nos setores cruciais, e só com essa independência é que podemos ser parceiros dos EUA. Parceiros, sim. Satélites e protegidos, não.

PHA: O senhor, durante o Governo Lula, ajudou a formular a Estratégia Nacional de Defesa, que virou lei em 2008. Quais são os pontos cardeais dessa estratégia?
Mangabeira: Um dos eixos é a construção do Complexo Industrial da Defesa. Ali nós prevemos que o Estado, na produção de Defesa, deve operar no teto tecnológico em vez de ter aquilo que historicamente temos tido que é a produção primitiva desvinculada da pesquisa e pesquisa sem vazão produtiva. E, ao mesmo tempo, construir para as empresas privadas um regime jurídico especial de compras públicas que as exima das regras gerais de licitação, mas que, em troca, assegure ao Estado um poder estratégico nessas empresas.
Outro elemento no Complexo Industrial da Defesa é o compromisso com o avanço nos setores estratégicos. Isto é um grande instrumento para o erguimento do país para que se defenda e se desenvolva. Eu não quero viver em um mundo onde só os meigos são desarmados e os beligerantes estão armados até os dentes.
O Brasil é um caso único na história moderna de um país da nossa dimensão que emerge sem pretensões imperais. O Brasil ascende sem imperar. Para que o Brasil possa se rebelar, precisa poder dizer não. E para poder dizer não precisa defender-se. E para se defender precisa ter tecnologia de vanguarda que não dependa das grandes potências do mundo.

PHA: Mesmo em relação aos Estados Unidos ? O senhor cita, por exemplo, que o Barão de Rio Branco e Joaquim Nabuco – “fundadores da política exterior brasileira” – perceberam o que o senhor chama de “nações irmãs”: o Brasil e os EUA que têm afinidades profundas. Ao mesmo tempo, o senhor disse que os EUA não permitirão que qualquer país ganhe em qualquer região do mundo uma ascendência tão incontrastável que sirva de base a buscar uma hegemonia mundial. Devo entender, então, que nessa aliança de “nações irmãs” caberá sempre ao Brasil um papel subalterno, de sub-potência?
Mangabeira: Não. O que eu digo é que a política exterior dos EUA sempre repousou sobre dois princípios.
O primeiro é que os EUA não permitirão que qualquer país ganhe, em determinada região do mundo, uma ascendência tão incontrastável que sirva de base para pleitear uma hegemonia mundial.
O segundo é que no Hemisfério Ocidental os EUA exercerão uma ascendência incontrastável.
Nós não podemos aceitar esses dois princípios, pois são incompatíveis com a nossa construção nacional. O que podemos fazer é construir uma teia de relações de iniciativas comuns, sobretudo iniciativas a serviço da democratização das oportunidades educacionais e econômicas nas Américas. Para que isso aconteça, a preliminar é que não sejamos um protetorado deles. E daí a importância da independência tecnológica.


PHA: O senhor acha que essa associação do Brasil aos BRICS permitirá esse tipo de independência?

Mangabeira: Os BRICS são um instrumento poderoso de mudança do quadro mundial, mas é preciso ter clareza a respeito das limitações e das oportunidades desse movimento.
Os grandes países emergentes como o Brasil, a Rússia, a Índia e a China estão tentados a apenas pleitear uma posição melhor dentro da ordem mundial existente. A ordem de segurança,  monetária e a comercial.
Eu entendo que o nosso interesse profundo é fazer mais do que buscar um lugar ao sol dentro da ordem existente. É mudar essa ordem.
Vou dar um exemplo do regime comercial que está sendo construído no mundo sob a égide dos tratados da Organização Mundial do Comércio e dos novos blocos regionais como o Transpacífico, que os EUA estão organizando. Ali, a tendencia é construir um regime comercial baseado no que se pode chamar de “o maximalismo institucional”. Não é apenas aderir à economia de mercado. É aderir a uma variante especifica da economia de mercado. Por exemplo, uma variante que proíbe, sob o rotulo de subsídios, todas as formas de coordenação estratégica entre governos e empresas que os países hoje ricos usaram para enriquecer. Outro exemplo, uma variante que quer incorporar as regras do comércio, o odioso regime de propriedade intelectual, que foi desenvolvido no final do século XIX, o regime de patentes, que deixa as tecnologias mais importantes para a humanidade nas mãos de um pequeno número de multinacionais.
O nosso interesse como potência emergente, que coincide com o interesse da humanidade, é ser uma potência revisionista. No caso da ordem mundial do comércio, é dizer que queremos o minimalismo institucional. O máximo de abertura econômica com um mínimo de restrição aos experimentos institucionais necessários ao nosso desenvolvimento.
Projeto forte externo como esse só vai existir na medida em que tivermos um projeto interno forte. A minha preocupação maior é que o Brasil tenha um projeto interno forte, que dê braços, asas e olhos a nosso atributo mais importante que é a vitalidade do Brasil.

PHA: A única novidade que a oposição apresentou nos últimos tempos é fazer com que o Brasil se integre à TTP, Transpacific Partnership (do Presidente Obama).
(Clique aqui para ver as ideias mais “novas” do ex-professor e depois banqueiro Edmar Bacha).
O senhor, portanto, considera que isso não é uma boa ideia?

Mangabeira: Nós estamos engajados na América do Sul. Nós não temos nenhum lugar natural, inclusive por geografia, no Pacífico. O que devemos fazer na América do Sul é construir uma convergência profunda em direção a um novo rumo de desenvolvimento. O Brasil e grande parte da América do Sul cedeu à tentação de basear o seu desenvolvimento apenas na riqueza fácil da natureza. É preciso dizer que essa estratégia surtiu grandes benefícios, permitiu manter a maioria dos brasileiros empregada e resgatou milhões da pobreza extrema. Mas, dependia de circunstâncias que não existem mais no mundo, como a alta no preço dos produtos primários, o crescimento da China e a abundância de dinheiro fácil.
Quando essas circunstâncias viraram, a estratégia se inviabilizou. E ao se inviabilizar revelou um defeito que ela tinha desde o início que era o de conviver com o nível muito baixo da produtividade na economia brasileira.
Produtividade baixa não é uma categoria apenas econômica, é também uma categoria moral. Significa condenar a maioria dos cidadãos a viver vidas pequenas. O que devemos buscar é uma nova estratégia de desenvolvimento, um produtivismo includente e capacitador, que busque a riqueza dentro de nós e não apenas dentro da natureza.
Aí estão as grandes vertentes com que estamos trabalhando no Governo.
Primeiro, a prioridade da qualificação da educação básica, a Pátria Educadora, projeto prioritário do Governo.
Em segundo lugar, um conjunto de ações que chamamos de produtivismo includente, destinado a qualificar e a democratizar o impulso produtivo no Brasil.
E em terceiro a política regional. Estratégia nacional só se efetiva no Brasil quando traduzida em política regional.

PHA: Eu tenho acompanhado as suas propostas à frente da Secretaria de Assuntos Estratégicos e percebo uma lacuna: o senhor não trata do bloqueio que a grande imprensa impõe ao Governo. O Governo não consegue sair de trás das grades que a mídia construiu no Palácio do Planalto. O senhor não acha isso relevante, estratégico?
Mangabeira: Eu sou um defensor pessoalmente de democratização da propriedade nos meios de comunicação. Não se trata de regular, de vigiar a imprensa como ela se organiza hoje. Trata-se de multiplicar os passos para o debate coletivo. É disso que o Brasil já precisa. E isso não é nenhum devaneio. Eu venho andando o país, Estado por Estado, e eu vejo que, de forma geral, a mídia regional é relativamente muito mais aberta do que a grande mídia do Sudeste.
Agora, isso não é um projeto do Governo. Não falo em nome do Governo, falo como cidadão e pensador.

PHA: Isso também não seria um objetivo a perseguir para quem quer uma Pátria Educadora?
Mangabeira: Pode ajudar muito, mas o meu foco é o conteúdo e o método da educação. Vou dar um exemplo: estamos com a tarefa de definir um novo currículo nacional, a chamada Base Nacional Comum. No mundo em geral, os currículos nacionais costumam ser uma especie de infantilização das ortodoxias que prevalecem na cultura universitária. Projetam para baixo aquela ortodoxia.
A economia, por exemplo, como se estuda nas universidades no mundo. Não é o estudo da realidade econômica. É o estudo de um método que os teóricos desenvolveram no fim do século XIX. Há então em cada área do conhecimento há o casamento do método com a matéria. Aquele casamento é naturalizado. E há a tentativa de fazer com que os jovens confundam as ideias predominantes com a natureza das coisas. E, como isso, cheguem à universidade emasculados e já preparados para uma vida de servidão intelectual.
O que seria melhor para nós seria fazer diferente no Brasil e introduzir em cada área do conhecimento pontos de vista contrastantes. Para  formar uma nação de rebeldes e assegurar que os jovens cheguem à universidade imunizados contra o servilismo intelectual. Isso é o mais importante, a nossa auto-formação.

PHA: O senhor disse recentemente no Instituto Lula: “Proponho ousadia, não copiar currículos de ensino estrangeiros; proponho nos colocar na vanguarda”. Eu lhe pergunto, falta dinheiro?
Mangabeira: O problema maior não é nem dinheiro nem competência. O problema maior é a visão. É definir o outro rumo na educação brasileira e nos organizar de acordo. Nós estamos acostumados no Brasil a resolver todos os problemas com dinheiro. A verdade é que ideias, traduzidas em inovações audaciosas, são recursos mais escasso do que dinheiro.
A necessidade é a mãe da invenção. Agora, sim, na hora do aperto fiscal, da queda econômica e da confusão política podemos começar a persuadir o Brasil a se reinventar. Essa é a hora, esse é o momento mágico da transformação estrutural.
Eu estou andando o Brasil e vejo que o país, fora da cultura política envenenada das elites, se move, quer aprender, construir, inventar e se reinventar.
Agora, é a hora de dar asas, olhos e braços a essa vitalidade assombrosa, anárquica e quase cega que se movimenta no país.
Eu vi isso em todo o país.
Os governadores do Centro-Oeste se reuniram em julho em Goiânia e decidiram organizar uma instituição deles, chamada Brasil Central, para começar a formar uma estratégia de baixo para cima. A concepção da política regional no Brasil tem que mudar radicalmente.

Fonte: Conversa Afiada

Yuan spreads to world’s biggest $15tn metals bourse

Published time: 28 Jul, 2015 15:08

Traders and clerks work at the London Metal Exchange (LME) in London. © Paul Hackett
The London Metal Exchange (LME) on Tuesday started accepting yuan as collateral against contracts after getting permission from the Bank of England.

“The renminbi [yuan – Ed.] is on its way to becoming one of the world’s most widely-used currencies. We are pleased to be able to help our members take advantage of the opportunities arising from the renminbi’s internationalization,” Trevor Spanner, chief executive of LME Clear, said in a statement.

There are now five currencies used at the LME: US dollars, euro, British pounds, Japanese yen and offshore renminbi.

The LME was acquired by Hong Kong Exchanges & Clearing Ltd. (HKEx) for $2.2 billion in 2012, and yuan trading is another stepping stone for China. The country accounts for about 70 percent of iron ore consumption, and more than 40 percent of the demand for copper, aluminum and nickel, according to the data provided by Bloomberg

“This is an important development for the LME and LME Clear, and it highlights the stronger ties and synergy between Hong Kong and London since the LME became part of the HKEx Group,” said Charles Li, Chief Executive of HKEx.

The LME is the world centre for the trading of industrial metals with more than 82 percent of all the non-ferrous metal futures business transacted on the exchange. In 2014 this resulted in $15 trillion worth of business, in 4 billion tons of metals, in 177 million lots, according to its website.

The Chinese expansion comes at the time when the national stock exchange is suffering its most dramatic fall in 8 years, down 8.5 percent on Monday. Despite the stock crisis the yuan has made another stride towards becoming an international reserve currency.

Fonte: RT

Russian President Vladimir Putin: ‘Europe should be more independent, defend own interests’

European countries should be less beholden to military blocks and the US when considering issues concerning their own national interests, Russian President Vladimir Putin told the Swiss RTS TV channel. Putin also talked FIFA scandal and Islamic terrorism.

“It would be great to see Europe show more independence and sovereignty, and the ability to stand up for its national interests – the interests of its peoples and countries,” Putin said in an interview with RTS published on Monday.

He added that he “hopes” another war in Europe is not in the cards.

The Russian leader added that a certain level of sovereignty is undoubtedly lost when joining any “any military-political organization [or] military-political bloc.” Putin noted that “France withdrew from NATO in order to preserve its sovereignty to a greater extent than would have been possible had it been part of the organization,” referring to the French withdrawal from NATO in the 1960s. France fully returned to the military bloc only in 2009.

US marines take part in a joint military exercise with NATO members, called "Agile Spirit 2015" at the Vaziani military base outside Tbilisi, Georgia © David Mdzinarishvili

Putin stressed that “it is not our business to analyze the foreign policy of European countries. But you must admit that if we have to discuss inter-European affairs with European partners in Washington, this is not very interesting.”

He also mentioned that the US has been “pursuing an imperial policy for a long time.” In addition, he cited the opinion of some American political analysts who “believe that this imperial angle hurts the US.”

Putin explained that Russia’s stance on US foreign policy “has nothing to do with anti-Americanism,” adding that Russians“have respect and great love for the USA, and especially for the American people.”

Europe fighting terrorism: ‘Better late than never’

When answering a question about Russia’s earlier efforts to fight terrorism and the lack of Western support at the time, Putin said that European governments had ignored abundant evidence of terrorist activity, such as Al-Qaeda affiliates fighting in the Russian North Caucasus.

“When I asked my colleagues, including Europeans: ‘You see what is happening?’ they used to respond: ‘Yes, we do, but due to various domestic, international circumstances, we cannot support you.’ I would tell them then: ‘If you cannot support us – at least don’t hinder our efforts.’”

Putin, however, noted that the situation has substantially changed. “Europe and the United States have realized the real dangers of extreme manifestations of radicalism and joined in the fight. As the Russian people say – it is better late than never.”

French police special forces evacuate local residents on January 9, 2015 in Porte de Vincennes, eastern Paris © Martin Bureau

The Russian leader also said he hopes that cooperation with the West will go beyond counter-terrorism, adding that he looks forward to resolving the situation in Ukraine as well several economic issues: “We will engage in dialogue and work out a solution acceptable to all.”

Putin criticized the US government’s self-perceived right to pressure other countries around the world, acting from a policy of “who is not with us, is against us.” Still, with enough patience it is possible and necessary to work with the American side on solving global issues, Putin said, praising international efforts that have led to a recent deal on Iran’s nuclear program.

‘EU’s right wing not supporting me, but national interests’

Asked to comment on the “ironic” turn in European politics, which has seen right-wing political parties gain public support, and seemingly speak out in favor of Putin’s statements as opposed to politicians on the left, the President said the underlying reason was Washington’s troublesome interference into the domestic affairs of other nations.

Putin did not agree that ‘surprise’ endorsements of his policies or words from the likes of Marine Le Pen of France’s National Front or Swiss Democratic Union of the Centre (UDC) had anything to do with him personally. He described it as a“tectonic shift in Europeans’ public conscience” in the direction of protecting national interests, including from foreign political interventions.

According to Putin, a number of issues Europe is facing now, including the influx of migrants from places such as war-torn Libya, have to do with “decisions taken over the [Atlantic] ocean.” In fact, Europe is now paying for decisions it did not make, he stressed.

Russian President Vladimir Putin (R) shakes hands with Greek Prime Minister Alexis Tsipras © Alexander Zemlianichenko

‘Are UK, US failed FIFA bids behind corruption scandal?’

After several questions from Swiss media on the FIFA corruption scandal, Putin said he doesn’t believe it had anything to do with actions of the organization’s head, President Sepp Blatter, hinting that he views the allegations as politically motivated.

“We all know the situation developing around Mr. Blatter right now. I don’t want to go into details but I don’t believe a word about him being involved in corruption personally,” Putin stressed.

The statement comes days after Blatter pledged FIFA’s “full support” of Russia in hosting the 2018 World Cup at the opening ceremony of the preliminary draw in St. Petersburg.

FIFA's President Sepp Blatter shakes hands with Russia's President Vladimir Putin (R) © Stringer

READ MORE: FIFA passes resolution assuring ‘full support’ of 2018 World Cup in Russia – Blatter

Blatter announced his resignation in June amidst a bribery scandal pursued by US, Swiss and other authorities. While several FIFA officials have been indicted, Blatter has denied any misconduct and will continue to serve as the group’s acting president until a new extraordinary session can elect a new head. The scandal coincided with preparations for FIFA World Cups in Russia and Qatar, which are to be held in 2018 and 2022 respectively.

Putin questioned whether the efforts to pursue the investigation stemmed from failed attempts of the US and its key ally, the UK, to secure bids to host the 2022 and 2018 World Cups: “The way this fight against corruption looks makes me wonder if it isn’t a continuation of the bids for 2018 and 2022.”

“If someone is suspected for committing a crime, then evidence is collected and transferred to a prosecutor of the country the alleged person resides in. But this is in no way connected to one country – big or small – going around the world, dragging to jail individuals that it wants.”

Putin praised “people like Mr. Blatter” – the heads of big international sporting federations or those organizing the Olympic Games –for actually bringing nations from around the world closer together and improving the ways they interact. “If there is anyone who deserves the Nobel Prize, it’s those people,” he stressed.

Fonte :RT

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