Daily Note – Playing chess or monopoly?

China PakistanSummary:

China pockets Pakistan, where’s America?

CPI Data Meet Yellen’s Condition for Rate Hike

United States: Earnings make a good start

Eurozone: Euro group meeting to discuss Greece: no formal deadline on 24 April

 

Good morning,

By far the biggest news today is the announcement by China’s President Xi Jinping that China has just signed agreements with Pakistan promising investment of $46bn (£30.7bn). The focus of spending is on building a China-Pakistan Economic Corridor (CPEC) – a network of roads, railway and pipelines between the long-time allies. They will run some 3,000km (1,800 miles) from Gwadar in Pakistan to China’s western Xinjiang region. The projects will give China direct access to the Indian Ocean and beyond.

Why is this important?

Because it reveals the geopolitical game that is being played out in Asia at the moment and the way in which America is being out spent. If you look east from Lebanon, the US has no trustworthy allies until you get to Indonesia. This is not good news for the Americans and it explains why the US is trying to get a deal with Iran and is cozying up to India.

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Global Macro-Daily Note 21st April 2015

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