EIR Daily Alert Service, FRIDAY, JANUARY 12, 2018

FRIDAY, JANUARY 12, 2018

Volume 5, Number 9

EIR Daily Alert Service

P.O. Box 17390, Washington, DC 20041-0390

EDITORIAL

Big Implications in the Trans-Atlantic from Macron’s France-China Belt and Road Commitments

Jan. 11 (EIRNS)—French President Emmanuel Macron is now back home from his eventful state visit in China, and a Jan. 10 stopover in Rome for the Med-Seven Summit of EU Mediterranean countries. There are signals of the big implications across the trans-Atlantic, of Macron’s Belt and Road Initiative (BRI) commitments for France and China, despite the attempt by Western media to either play down the news of the trip, or continue to attack China.

Helga Zepp-LaRouche said today, on her weekly Schiller Institute webcast, that the Macron trip, “is a real breakthrough. I know that many people have different opinions about Macron, but I must say, if somebody goes in the right direction, one should be positive about it. What he did, is he went on a three-day visit to China. He was the first European leader after the [October] 19th Party Congress of the Communist Party of China; and he went to Xi’an first, which is the place where the ancient Silk Road started from the Chinese side, and he made a very remarkable speech. And I would urge all interested political people, people who are really trying to get to the truth of the matter: don’t believe what you read in the media, just read the speech. It’s a 1 hour and 15 minute speech, and the fact that he admits some of the most horrible mistakes of Western policy is a reason why I tend to believe that he really is making a change in French policy.

“For example:  He not only fully endorsed the New Silk Road of China, he called it a ‘treasure to civilization;’ he said we must never repeat the mistakes of the past, like Iraq, Libya; and then he also said he wants to invite China to cooperate with France in projects in Africa, so that France would not make the same mistakes of the past of imperial unilateralism in Africa. He also said that one must make sure that one does not create new dependencies politically and economically under the pretext of development aid, but that therefore he invites China, because if China and France are working together on development of Africa, these mistakes can be avoided.”

(President Macron’s Xi’an speech at Daminggong Palace on Jan. 9 is available in video and as transcribed on the official French Elysée website.)

Zepp-LaRouche drew out some of the positive implications for Washington, Brussels and Berlin, including that a signal is sent for how President Donald Trump can look to set up a credit system to get his intention for a U.S. infrastructure drive in motion. She said, “there is a lot going on, and I think this is very positive, because this can only be an inspiration for President Trump. Because if even the EU, which has been really against this [Belt and Road] initiative, they tried to block it out entirely for years, if even they move now, one has to see obviously what they do about financing this. Because the famous, or infamous ‘Juncker Plan,’ which supposedly had €350 billion, never materialized, because it was all based on the idea of private investments which never came. Because obviously this kind of infrastructure cannot be financed by private capital, but this is something which needs a credit system. And that would mean the EU has to change. They would have to abandon their debt brake, which is now in the constitutions of all member-states, and they would have to, in Germany—if they would ever join [the Belt and Road]—to abandon the policy of the so-called ‘black zero.’

“I mean Germany just had a budget surplus, I think of $38 billion, which is quite a bit. So they could already start investing some of this money in these projects, because the infrastructure in Germany is also in a very pitiful condition, let alone other European countries.

“This is a breakthrough and all the various opponents of the New Silk Road, I think they will realize that the Silk Road is there, it’s coming, it’s spreading, and it is a new paradigm. And I think it’s the victorious one, as compared to the outdated neoliberal model.”

THE NEW GLOBAL ECONOMIC ORDER

China and Italy Discuss Belt and Road in Milan

Jan. 11 (EIRNS)—While EU Mediterranean Seven leaders were arriving in Rome yesterday, a major conference on “Belt and Road: Building a Concrete Roadmap with Italy and China’s Joint Growth,” was taking place in Milan, sponsored by the Italian Industry Ministry and the Chinese Trade Ministry and by the Lombardy Association of Industry (Assolombarda), and organized by the Italy-China Business Forum.

Reporting on the event, Formiche wrote that “The conference showed that already in 2014-2016, the [BRI], which is to connect Europe and China, sharply reducing transport time for freight, has created 180,000 jobs in infrastructure.”

“The New Silk Road plan will favor cooperation among more than 60 countries which, together, constitute 63% of the world population, 30% of GDP and 35% of international trade exchanges,” said Carlo Bonomi, chairman of Assolombarda. Bonomi pointed to the fact that Lombardy alone has a volume of over €15billion trade with China, almost half of the entire Italy-China trade (€38 billion).

Zhou Xiaoyan, general director of the European division of the Chinese Ministry of Economic Development, remarked that the Italian and Chinese economies can be complementary. In fact, in the first 10 months of 2017 trade has increased by 13.9%, while China’s imports from Italy have increased 22%. Chinese firms have invested over €11 billion in Italy over recent years.

Fabrizio Lucentini, a director of the Italian Ministry for Economic Development, said that Italian firms should increase contacts with all countries which are part of the BRI. Pirelli co-chairman Marco Tronchetti Provera called for changing views on China, which is not a threat for the European economy. Bank of China Chairman Chen Siqing stressed that in the next five years, 46% of global growth will come from regions involved in the BRI.

There were three panels: one on financing, with Italy’s Cassa Depositi e Prestiti, the Silk Road Fund, and Bank of China Holdings; and two on infrastructure.

New Paradigm Reflected Behind the Scenes at Med-Seven Meeting, Just Not Officially

Jan. 11 (EIRNS)—Although everybody noticed Emmanuel Macron’s upbeat mood coming back from China, the New Paradigm was not reflected in the official part of the summit of the Seven EU Mediterranean Countries (Med-Seven: Portugal, Spain, France, Italy, Greece, Cyprus, and Malta), which took place yesterday in Rome. It can be assumed, however, that the Belt and Road was the subject of bilateral discussions, dialogues in the hallways, and convivial gatherings. For instance, Italian Prime Minister Paolo Gentiloni spoke about it with Greek Prime Minister Alexis Tsipras, as Italy is interested in participating with its port of Trieste in the Maritime Silk Road, whose European pivot is currently Piraeus, Greece. Italy is also involved in the Balkan route, as the Greek railway company is now owned by Italy’s firm.

Otherwise, the final communiqué reflects Southern European complaints about EU integration and refugee policy. A major focus is the completion of the Banking Union, including the common deposit guarantee scheme which Germany and other countries oppose: “A common backstop to the Single Resolution Fund and a European Deposit Insurance Scheme should be established as soon as possible, in line with the need to combine the objectives of risk sharing and risk reduction. Discussions should be taken forward on the possibility of having a fiscal capacity with an investment and stabilization function within the EMU [Economic and Monetary Union] to foster long-term productivity, increase its ability to react to economic shocks and avoid long-term negative effects on our societies.”

The other major focus—and wishful thinking—is a call for a more integrated refugee policy. “The management of migration flows will be a fundamental challenge for the European Union in the years to come. The Southern EU countries are particularly concerned and affected as they are at the forefront of the EU external borders. Our fundamental role and burden of protecting those borders must be acknowledged and shared by the EU.”

Additionally, Macron and Gentiloni signed a bilateral treaty which is supposed to strengthen cooperation on the road to EU integration.

Japan’s Abe Promises ‘Proper Response’ to China’s Belt and Road on a Case-by-Case Basis

Jan. 11 (EIRNS)—Following his meeting with Toshihiro Nikai, Secretary General of the ruling Liberal Democratic Party, and Yoshihisa Inoue, Secretary General of the Komeito Party (the LDP’s coalition partner), Japan’s Premier Shinzo Abe said Japan will “properly respond to” individual cooperation programs related to the China-proposed Belt and Road Initiative (BRI), Xinhua reported. Nikai and Inoue have returned from China, where they had met Chinese President Xi Jinping on Dec. 28.

Inoue suggested to Abe that Japan should not miss the current opportunities to improve Sino-Japanese relations, and should try to realize exchanges of high-level visits between China and Japan, according to Kyodo News. Chinese President Xi Jinping, during his meeting with the Japanese delegation, called on China and Japan to enhance party-to-party exchanges and cooperation.

“Xi spoke highly of the role of the China-Japan ruling party exchange mechanism in promoting bilateral relations, and hailed the efforts made by Nikai and Inoue to promote exchanges between the ruling parties of China and Japan, saying they have strengthened bilateral practical cooperation and friendship. For their part, Nikai and Inoue said Japan’s ruling coalition stands ready to enhance communication and exchange with the Communist Party of China (CPC) and make greater contributions to the development of Japan-China relations,” reported Xinhua.

Lancang-Mekong Cooperation Organization Offers Five-Year Development Plan

Jan. 11 (EIRNS)—The Lancang-Mekong Cooperation (LMC) organization completed its second leaders summit in Phnom Penh, Cambodia on Jan. 10, passing a Five-Year Development Plan for regional development. (The Mekong River is called the Lancang when it flows through China.) The list of projects put forth is not yet available. Chinese Premier Li Keqiang and Cambodian Prime Minister Hun Sen co-hosted the meeting, and held a bilateral summit after the LMC meeting.

Premier Li announced an $1 billion in concessional loans and a $5 billion credit line “for supporting production capacity and equipment manufacturing cooperation among Lancang-Mekong countries,” according to Xinhua.

The first meeting of the LMC, comprising China, Myanmar, Laos, Thailand, Cambodia and Vietnam, was held in Sanya, China in 2016. They will meet again in 2020 in Laos.

Xinhua notes that Japan has had a similar organization with the five Southeast Asian Mekong countries since 2009. Sok Siphana, advisor to the Cambodian government who is in charge of both schemes, said: “Both Japan and China are greatly contributing to infrastructure and capacity building, among others, to Mekong countries, especially in Cambodia. They are really committed and deliver what they have said or promised.”

Since the LMC founding in 2016, China has supported 45 projects including water resource research centers and cooperation on connectivity projects, industrial capacity, border trade, agriculture and poverty alleviation, writes Xinhua.

China’s Foreign Minister Wang Yi said before the summit: “The LMC is not a talk shop, but a bulldozer moving forward steadily and firmly to make the cooperation become true.”

At the bilateral summit today between Premiers Li and Hun Sen, the two leaders signed nearly 20 agreements worth several billion dollars, to develop Cambodia’s infrastructure, agriculture and health care. These include building a new 200 km highway from Phnom Penh to Sihanoukville on the coast, costing about $2 billion, and a new Phnom Penh International Airport.

COLLAPSING WESTERN FINANCIAL SYSTEM

Is the EU Drafting Its Own Belt and Road Policy?

Jan. 11 (EIRNS)—Under pressure, the European Union is drafting its own “interconnection blueprint for the Eurasian continent,” which is to dovetail with the Belt and Road Initiative. This was stated by EU Ambassador to China Hans Dietmar Schweisgut at a press conference yesterday, according to Xinhua. While little else is known about that press conference, it was held within hours of French President Emmanuel Macron’s wrapping up his state visit to China, where he recommended for Europe to embrace the Belt and Road Initiative.

In response to a question on this announcement of an EU “blueprint,” Chinese Foreign Ministry spokesman Lu Kang said at his regular news briefing: “The European side is welcome to participate in the Belt and Road Initiative, and we are ready to work with them for win-win cooperation in interconnection and other fields.”

Based on the principle of achieving shared growth through discussion and collaboration, China will join the EU in the promoting prosperity and stability of the Eurasian continent and building a community of shared future for mankind, Lu said.

This “blueprint” stems from a meeting of the leaders of China and the EU in Brussels in 2015, where it was agreed to enhance cooperation in the infrastructure field and establish an “interconnection and cooperation platform.” The EU and China jointly formulated guidelines, including “opening-up, transparency, and financial and environmental sustainability,” during the major summit of the Belt and Road Forum for International Cooperation in Beijing in May 2017. This blueprint will be issued in the coming months.

The EU will have a good framework to facilitate its cooperation with China and other Asian and European partners and adapt to the Belt and Road, Schweisgut said.

SCIENCE AND INFRASTRUCTURE

France and China Extend Space Cooperation during French President Macron’s Visit

Jan. 11 (EIRNS)—French National Center for Space Studies (CNES) Administrator Jean-Yves Le Gall and Acting Administrator China National Space Administration (CNSA) Wu Yanhua signed a Memorandum of Understanding on space science, technology, and exploration on Jan. 9. Both visiting French President Emmanuel Macron and his host Chinese President Xi Jinping attended the signing. Le Gall characterized the agreements as taking a “spectacular step forward.”

France and China have nearly completed the China-France Oceanography Satellite (CFOSat), and in the new memorandum, they agreed that there will be a wide dissemination of the data collected by the satellite. CFOSat will study waves and wind over the ocean surface for three years, to improve understanding of marine meteorology, ocean dynamics, and climate variability, Andrew Jones reported on GBTimes website today. Such data will be applied to forecasting and tracking extreme weather events such as storms, and increasing understanding of complex ocean systems. It is scheduled for launch later this year from China.

The following day, President Macron visited the AIT Center of the China Academy of Space Technology, where CFOSat is being assembled and tested.

China and France will also collaborate on a space science mission, the Space Variable Objects Monitor, which will study gamma ray bursts, and is scheduled to launch no earlier than 2020.

China and France have a history of collaboration, particularly in space science, but this is being broadened. French astronauts, along with others in the European Space Agency, are learning the Chinese language, and training with Chinese colleagues in China. This, in preparation to participate in China’s space station. CNES head Le Gall told President Macron that France will be supplying medical instruments for the Chinese space station, according to Reuters.

Uganda To Double Its Power Generation Capacity This Year

Jan. 11 (EIRNS)—Uganda is getting ready to double its existing installed power generation capacity by completing two major hydropower dams—Isimba (183 MW) and Karuma (600 MW)—this year. Both dams are more than 70% complete. In addition, a few smaller hydropower dams, adding another 50 MW, are also expected to be completed.

Proscovia Njuki, who chairs the board at the Uganda Electricity Generation Company Limited (UEGCL), told the Independent Uganda magazine on the sidelines of the launch of the company’s five-year strategic plan on Dec. 15, that they are optimistic that the timelines for the launch of the two power dams would be met.

Last September, addressing the Future Energy Uganda conference in Kampala, Energy Minister Irene Muloni said: “In the next two years, we shall double our current capacity, which is at about 950 MW. If we generate that power and want it to reach end users who are industries and our homes, both in cities, towns, and trading centers, we must have the transmission network upgraded so that it is able to transmit huge volumes of electricity,” Power magazine reported. Only about 22% of Uganda’s population is now connected to the country’s national power grid.

STRATEGIC WAR DANGER

Trump Open To Direct Talks with North Korea ‘Under the Right Circumstances’

Jan. 11 (EIRNS)—U.S. President Donald Trump spoke by phone with South Korean President Moon Jae-in yesterday, and said afterwards that he was open to the possibility of direct U.S.-North Korea talks “at the appropriate time, under the right circumstances,” the White House said in a statement, Reuters reported. According to the South Korean side, Trump also told Moon that there would be no military action while North-South talks were going on, thus rejecting the Wall Street Journal report of Jan. 8, advocating the “bloody nose” strategy of limited military strikes on North Korea.

As for the Pyongyang-Seoul talks, “Who knows where it leads?” Trump said afterwards. “Hopefully it will lead to success for the world, not just for our country, but for the world. And we’ll be seeing over the next number of weeks and months what happens.”

All of this is “raising hopes” for a thaw on the Korean Peninsula, reports the Korea Herald. “The two leaders assessed that inter-Korean talks could go beyond the PyeongChang Olympics, and lead to U.S.-North Korea talks on denuclearization,” Yoon Young-chan, press officer for the South Korean presidential administration said in a statement.

Chinese President Xi Jinping, following his own telephone conversation with President Moon today, expressed full support for inter-Korean dialogue. Currently, challenges and opportunities co-exist on the Korean Peninsula, Xi said, expressing the hope that the PyeongChang Winter Olympics will not only bring about opportunities for inter-Korean dialogue, but also help improve the situation on the peninsula, reported Xinhua. Xi said China is willing to enhance communication and cooperation with all sides concerned, including South Korea, to pursue a positive outcome of the situation.

Moon told Xi that South Korea attaches great importance to China’s important role in solving the dilemma on the Korean Peninsula, and appreciates China’s support for inter-Korean dialogue, and efforts to push for settlement through dialogue and safeguard peace and stability on the peninsula.

U.S. and Russian Military Chiefs of Staff Communicated Regularly over the Last Year

Jan. 11 (EIRNS)—Yesterday, U.S. Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford and Russian Chief of the General Staff Gen. Valery Gerasimov spoke by phone as part of a regular exchange by the two generals over the past year. “The conversation focused on issues of mutual interest, to include the situation in Syria,” Col. Patrick Ryder, Dunford’s spokesman, told TASS. Ryder said that the two men had spoken about a dozen times over the past year. “Both leaders recognize the importance of maintaining regular communication in order to avoid miscalculation and to promote transparency in areas where our militaries are operating in close proximity. In keeping with past practice, both have agreed to keep the details of their conversations private.”

U.S. POLITICAL AND ECONOMIC

Trans-Atlantic Media Twist and Turn after French Head of State’s Official China Visit

Jan. 11 (EIRNS)—The Washington Post sneered at Macron’s visit to China, in an “analysis” titled, “China’s Inexorable Rise Is Helped by Trump’s Retreat,” which opines that, “The French President was deliberately pandering to China’s sense of its past.” It quotes an ostensible expert that “Of the global powers that dominated the 19th century, China alone is a rejuvenated empire.”

Echoes have appeared in Germany. The editor of Germany’s Frankfurter Allgemeine Zeitung writes to the effect that China is becoming a police state which dwarfs George Orwell’s 1984.

However, the French newspaper Le Monde violated its long-standing anti-human policy by republishing a Dec. 29 Project Syndicate analysis by Simon Johnson and Jonathan Ruane on “China, the Innovation Dragon,” which said that, “The pace of China’s transformation over the last 40 years is unprecedented. The country’s GDP grew by nearly 10% per year on average, while reshaping global trade patterns and becoming the second-largest economy in the world. The success lifted 800 million people out of poverty, and the mortality rate of children under five years old was halved between 2006 and 2015. The question now is whether China, well positioned to become the world’s innovation leader, will realize that opportunity in 2018 or soon after … unprecedented manufacturing boom … massive infrastructure investment…. In less than a decade, China built the world’s largest bullet train system….

“Building on its 13th Five Year Plan (in May 2016) the authorities established objectives for China to become an ‘innovative nation’ by 2020, an ‘international innovation leader’ by 2030, and a ‘world powerhouse of scientific and technological innovation’ by 2050.”

France’s premiere Sorbonne University has announced a series of 11 seminars on the New Silk Road, the first one to be led by former Prime Minister Dominique de Villepin.

Aged Hackensack River Bridge Jams Again, Halting Manhattan Rail Traffic—Needs Gateway Project

Jan. 11 (EIRNS)—The 118-year-old bridge spanning the Hackensack River, which carries the main Eastern Seaboard rail traffic for Amtrak and NJ Transit, into and out of Manhattan, jammed its swing mechanism for two hours this morning, halting all rail transit. The aged bridge swings open for river vessels, but periodically something gets stuck. Amtrak said that today’s outage came from a signal problem.

This latest bridge breakdown incident occurred mid-morning; train service was resumed by about 1 p.m.

Breakdowns are a recurring problem that the proposed Gateway Project would eliminate, by replacing the old bridge altogether, with a new, higher-clearance bridge that would be safe and accommodate high-speed trains. As well, new, safe tunnels would be bored under the Hudson River.

Today’s incident shows the wrongfulness of the latest move by the Federal government to pull out of support for the Gateway Project through grants and loan guarantees.

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