Category Archives: Stratfor

Articles reposted from Stratfor, with their generous permission.

Stratfor: European unification – they’ll live unhappily ever after

Summary: Here’s an essay about the European Union from one of Stratfor’s more perceptive analysts. It provides a unusual and insightful perspective on Europe’s long quest for unification, and the bumps along the way.

Stratfor

Europe, Unhappily Ever After
By Reva Goujon.
Stratfor, 20 September 2016.

The scene at Bratislava Castle last week was a familiar one: European leaders gathered for another summit in a typically idyllic setting, where the natural beauty of their surroundings belied the deep imperfections of the union they were struggling to salvage. But now, in the wake of Britain’s vote to leave the Continental bloc, delusion steeped in the ideals of an “ever-closer” union is wearing thin, and the realists in the room seem to be gradually gaining ground.

The shift in the summit’s tone was to be expected; closet Euroskeptics can no longer hide behind the United Kingdom as they assert national rights and tamp down Brussels’ principles. They realize that the longer Europe’s leaders avoid the hard questions, opting instead to continue extolling the “spirit” of the European Union as a way to survive, the more the bloc’s guardians will have to react to — rather than shape — the enormous changes bubbling up from their disillusioned electorates.

As Italian Prime Minister Matteo Renzi (who has tied his own political fate to a referendum in October) testily noted, the Bratislava gathering amounted to little more than a “boat trip on the Danube” and an “afternoon writing documents without any soul or any horizon” on the real problems afflicting Europe.

Tempering Ideals With Realities

The same frustration was palpable in several conversations I had during a recent trip to Slovenia, a country that tends to stay below the radar in Europe but is nevertheless highly perceptive of ground tremors. Slovenia lies, often precariously, at the edge of empires. Under the weight of the Alps, the former Yugoslav republic has one foot lodged in the tumultuous cauldron of the Balkans while its other foot toes the merchant riches of the Adriatic Sea. All the while, its arms are outstretched across the Pannonian Plain toward Vienna, the seat of the Austro-Hungarian Empire.

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Stratfor: China builds a new Silk Road for the 21st century

Summary: As we watch the candidates babble in the Campaign2016 circus, we can look across the Pacific to see a rational geopolitical strategy, something America has not had for decades. Here’s a note about China rebuilding its fabled Silk Road — revised for the 21st century.

Stratfor

The Grand Design of China’s New Trade Routes
Stratfor, 24 June 2015.

Forecast

  • Over the next several years, China will devote significant resources to the construction of Eurasian trade routes under its Belt and Road Initiative.
  • As transit routes come online, the proportion of Chinese maritime trade passing through South China Sea chokepoints will shrink.
  • The new infrastructure built as part of the Belt and Road Initiative will support China’s economic rebalancing by opening new markets, generating demand for higher value-added Chinese goods and helping China build globally competitive industries.
  • Improving transit routes will lead to new security and political risks, and China’s efforts to mitigate these threats could create frictions in the very areas where Beijing is trying to diversify its trade routes.

Analysis

In 2013, China’s President Xi Jinping proposed a plan to stimulate development in Eurasia by constructing what he called the Silk Road Economic Belt and the 21st Century Maritime Silk Road — revivals of the overland and maritime trade routes that once connected China and Europe. Since then, the “Belt and Road Initiative” has become a fixture in official Chinese discussions on both foreign and domestic policy. Nonetheless, the initiative is still loosely defined. Beijing claims there are about 60 Belt and Road countries, but there is no public listing of these countries.

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Stratfor: Is the West Being Overrun by Migrants?

Summary: People often compare today’s waves of immigration with those that played a large role in the destruction of the Roman Empire. Here Stanford Professor Ian Morris describes, the similarities, the differences, and the lessons this history holds for us. Morris focuses on the danger of migrants as organized military forces; he gives little attention to their disruptive domestic effects. For another perspective see America isn’t falling like the Roman Empire. It’s falling like Rome’s Republic.

Stratfor

Is the West Being Overrun by Migrants?
By Ian Morris at Stratfor on 7 September 2016.

Are the barbarians at the gates? Marine Le Pen, the leader of France’s far-right National Front party, has no doubt that they are. “Without any action,” she told a rally at Amiens last year, “the migratory influx will be like the barbarian invasion of the fourth century, and the consequences will be the same.” That would be bad. According to St. Orientus of Auch, who lived through the original event, “Throughout villages and farms, throughout the countryside and crossroads, and through all districts, on all highways leading from this place or that, there was death, sorrow, ruin, fires, mourning.”

The Parisian political establishment turned up its collective nose at Le Pen’s analogy (being France, the newspapers concentrated on correcting her chronology: The invasions came mostly in the fifth century, not the fourth). And despite all his talk of building a wall to keep invaders out, Donald Trump has so far resisted likening himself to Emperor Hadrian. Not since Pat Buchanan, in fact, has an American presidential hopeful called Mexicans barbarians.

The internet, however, is full of comparisons between the end of ancient Rome and current events in the United States and European Union, and I find that when I give public lectures I regularly get asked how much the two periods have in common and how much we should worry about it. (Being both an immigrant and an ancient historian, I probably get this more than most people.)

The answer to both questions seems to be “not much.” But that said, they remain worth asking, because the details behind the answer are rather revealing. Just what was it about the Germanic migrations into the Roman Empire that made them so different from the contemporary Arab migration into Europe and Mexican migration into the United States?

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Stratfor: Hanjin’s bankruptcy reveals much about the world economy

Summary: This cycle’s combination of slow growth and widespread overcapacity have taken another victim – global shipping giant Hanjin. Those who like exciting news turn to Zero Hedge and read “Global Supply Chains Paralyzed” and “Supply-Chain Contagion Arrives – ‘Global Trade’ Roiled, Cargo-Owners Panic“. Those who like accurate news turn to this report from Stratfor.

Stratfor

Shipping Giant Hanjin Has Hit a Rocky Shoal
Stratfor, 3 September 2016

Buffeted by overcapacity in the global shipping market, South Korean giant Hanjin Shipping Co. appears to be sailing toward oblivion. In the past week, creditors pulled the plug after 1 trillion won ($900 million) in support failed to keep the company afloat, forcing Hanjin to file for bankruptcy protection. Seoul Central District Court, which will decide the eventual fate of the company, has set a Nov. 25 deadline for Hanjin to develop another restructuring plan, but many experts think liquidation will be the most likely outcome.

In the short term, the company’s demise has temporarily raised some shipping rates, which have remained persistently low industrywide thanks to the sluggish global economy. It likely will also cause some supply disruptions during the peak season for orders of holiday goods.

But even if the company, the eighth largest by capacity in the world, finds an unlikely way out of its predicament, the underlying problems of overcapacity and sluggish global demand growth will continue to hamper the industry. In addition, the collapse of Hanjin deals another blow to the South Korean economy, which faces stiff competition in the high-tech market from rivals Japan and China.

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Stratfor: China Is Building Its Future on Credit

Summary: China, like the US, has surprised the bears by the resilience of its economy. Here Strafor examines one source of its economic strength, one that might haunt its future — massive and imprudent accumulation of debt.

Stratfor

China Is Building Its Future on Credit
Stratfor, 20 July 2016

Summary

As China tries to overcome slowdowns in its industrial and trade sectors, the country’s banks have continued to increase the pace of lending, issuing 1.38 trillion yuan ($205.8 billion) worth of loans in June. The figure confirms some economists’ expectations that lending will keep rising as China’s central government attempts to revive economic growth and boost property markets that showed signs of another slump in May. It also indicates that despite Beijing’s repeated pledges to reduce the economy’s reliance on credit and state-led investment, the easy flow of financing from state-owned banks remains the country’s primary bulwark against widespread debt crises among corporations and local governments.

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