Turkey’s President Recep Tayyip Erdo?an, his nation’s currency in free fall, on Friday criticized “unilateral actions against Turkey by the United States, our ally of decades.” In an op-ed in The New York Times, he said that if such actions continue, Turkey will be required “to start looking for new friends and allies.”

China is surely one of those potential “new friends,” as evidenced by the fact that economic relations between the two countries, fueled by increasing expectations triggered by the Belt and Road Initiative, have been on a significant rise recently.

PetroChina Co. may temporarily halt purchases of U.S. liquefied natural gas spot cargoes through the winter to avoid potential tariffs amid a trade conflict between the U.S. and China, according to people with knowledge of the strategy.

Under the plan, PetroChina would boost buying of spot cargoes from other countries or swap U.S. shipments with other nations in East Asia to avoid paying additional tariffs, said the people, who asked not to be identified because the information isn’t public. PetroChina, a unit of the state-owned China National Petroleum Corp., couldn’t immediately comment when contacted by Bloomberg.

A U.S. Navy P-8A Poseidon reconnaissance plane, which was carrying a CNN news team on board Friday, flew past a series of artificial islands known as the Spratly Chain in the South China Sea. The plane reportedly received at least six separate warnings from the Chinese military to leave the area.
“U.S. military aircraft, papa 8 alpha, this is Chinese military. China has sovereignty over Nansha islands including the reef and its adjacent waters. Leave immediately and keep out so as to avoid any misunderstanding,” an unidentified voice said, according to recordings provided by CNN.

“I am conducting lawful military activity beyond the national airspace of any coastal state and exercising these rights as guaranteed by international law,” the U.S. Naval pilot operating the aircraft said. “I am operating with due regard to the rights of all states.”

Relations between the US and Turkey — a key American ally and home to NATO’s second-largest army — hit a new low on Friday, with the presidents of both countries rhetorically declaring economic war on each other. And over the course of a single day, the Turkish lira lost 17 percent of its value.

Within hours, early signs of panic spread to world financial markets. A European currency trader, who asked that his name not be published, told WhoWhatWhy on Sunday that he had never seen so much trade and volatility over a weekend, blaming it on the Turkey events.

When it comes to the Middle East, China has not been shy about its recent ambitions to expand its geopolitical influence in the Gulf region: Just last week we reported that the Chinese Ambassador to Syria, Qi Qianjin, shocked Middle East pundits and observers by indicating the Chinese military may fill the void left in the wake of the collapse of ISIS - and most regional armies - and directly assist the Syrian Army in an upcoming major offensive on jihadist-held Idlib province.

The "[Chinese] military is willing to participate in some way alongside the Syrian army that is fighting the terrorists in Idlib and in any other part of Syria," the ambassador said in an interview with the pro-government daily newspaper Al-Watan, subsequently translated by The Middle East Media Research Institute (MEMRI).

Like the fall of the Ottoman Empire after World War I, Turkey’s present financial collapse has been expected for years. The sloth of credit rating agencies and the laziness of bank credit committees allowed Turkey to struggle on a year or two longer than it should have, but the collapse of the Turkish lira this week after a long, sickening decline surprised no-one.

Turkey’s volatile president Recep Tayyip Erdogan might have put off the crisis, but instead decided to butt heads with US President Trump over the arrest of an American Protestant minister for alleged terrorism.

Asia is at risk of descending into a region-wide crisis with global implications, a leading expert in Asia-Pacific affairs has warned.

Dr Brendan Taylor, Associate Professor at ANU Coral Bell School of Asia Pacific Affairs, argues Asia is at a dangerous crossroads in his new book The Four Flashpoints: How Asia Goes to War.

A lot is happening in the northeast. China is set to overtake the United States as the world’s dominant power over the next decade. Questions remain over Kim Jong-un’s supposed dismantling of his nuclear arsenal. Japan is building up its military power again, and regional battles for ownership of lucrative oceans are intensifying.

Dr Taylor argues there are four key “flashpoints” — politically unstable areas with the potential to erupt into sudden conflict — and all are situated within the continent.

Turkey President Recep Tayyip Erdogan hit back Saturday at US "threats" over detained American pastor Brunson which has escalated tensions between the two NATO allies, sent the Turkish currency into a historic nosedive on Friday and crashed Turkish capital markets.

"It is wrong to dare bring Turkey to its knees through threats over a pastor," Erdogan lashed out during a rally in the Black Sea town of Unye.

"I am calling on those in America again. Shame on you, shame on you. You are exchanging your strategic partner in NATO for a priest."

"They are threatening us. You cannot tame our people with threats" but perhaps a collapse in the stock market will suffice: the Turkish lira crashed as much as 20% against the dollar on Friday, its biggest drop on record, after President Trump announced he would double steel and aluminium tariffs on Turkey, adding to pressure to Turkey's troubled economy. The White House has said the newly-imposed sanctions would take effect from August 13.

A group of United Nations experts have produced a figure which puts a price tag on seven years of war in Syria in terms of overall destruction to the country: nearly $400 billion.

The UN just concluded a two day meeting of over 50 Syrian and international experts in Lebanon who met under the aegis of the Economic and Social Commission for Western Asia (ESCWA).

According to the AFP, the group of economic analysts concluded that the "volume of destruction in physical capital and its sectoral distribution" is estimated at more than $388 billion (334 billion euros).

A breaking report based on findings of a United Nations human rights panel accuses China of holding up to one million ethnic Uighurs in what the report says resembles a “massive internment camp that is shrouded in secrecy”.

The minority ethno-religious group concentrated in the western Chinese province of Xinjiang has found itself under increased persecution and oversight by Chinese authorities of late as their collective Sunni Islamic identity and separatist political movements have resulted in historic tensions with the Communist government.

Most notable is the ethnic Uighur-founded and led East Turkistan Islamic Movement (ETIM, also commonly called the Turkestan Islamic Party, or TIP), a Muslim separatist group based Xinjiang known to have conducted dozens of terror attacks in Chinese cities like Shanghai and Yunnan, but also in places like Afghanistan, and as far as Syria, where it's believed up to 5,000 Uighurs fight alongside al-Qaeda.

Dianne Feinstein - vice chair of the Senate Judiciary Committee and a ranking member on the Senate Intel Committee, was an "easy mark" for the Chinese spy who operated within her inner-circle for two decades, reports journalist Paul Sperry in the New York Post.

A Chinese-American who doubled as both an office staffer and Feinstein’s personal driver, the agent reportedly was handled by officials based out of the People’s Republic of China’s consulate in San Francisco, which Feinstein helped set up when she was mayor of that city. He even attended consulate functions for the senator. -New York Post

According to Feinstein, the staffer was fired "immediately" after the FBI warned her five years ago that Chinese intelligence had infiltrated her office. Feinstein claims he had "no access to sensitive information" and that he was never charged with espionage.

A new video produced by China's military that features the People’s Liberation Army (PLA) showing off a wide range of the country's latest military technology has gone viral after its publication to social media on August 1st, the day China commemorated 'Army Day'.

The just over two-minute video, called "I am a Chinese soldier" is an over the top patriotic tribute emphasizing a combination of personal sacrifice, loyalty, and a sense of esprit de corps in belonging to an elite, modernized military.

The National Interest has provided a translation of the popular Chinese language footage, which is described as follows:

The video is brimful with the grandiosity that is now associated with the military under Xi Jinping: a lot of ammunition is fired, and the very latest in China’s military technology — combat aircraft, a carrier battle group, long-range ballistic missiles, submarines and armored vehicles — is on full, proud, active display.

In the third serious flare-up of violence in the last month, a major escalation began between Israel and Hamas militants in Gaza overnight, which involved approximately 180 projectiles fired towards Israeli territory, and more than 150 Israeli airstrikes on targets inside Gaza, according to statements by the Israeli Defense Forces (IDF).

Reports citing Israeli sources say of about 180 projectiles launched from Gaza overnight, the Iron Dome defense system intercepted over 30, while most hit open fields. However, official statements also noted strikes on playgrounds, houses, cars, and factories.

The BBC reports up to seven Israeli civilians wounded by the rocket and mortar fire, with Palestinian health officials confirming the death of a pregnant Palestinian woman and a toddler. The AFP identified the victims as 23-year old Enas Khammash and her 18-month-old daughter Bayan, killed in the Jafarawi area of central Gaza.

Satellite imagery published by Kanwa Defense Review shows that Taiwan has positioned a land-attack cruise missile toward mainland China that is capable of targeting several cities along the country's southeast coast.

The image shows Taiwan's Hsiung Feng IIE land-attack cruise missile stationed at a base in Taoyuan, less than 200 miles from Fuzhou, the capital city of China's Fujian province, the South China Morning Post reported. The pictures were snapped earlier this year in March.

In what would mark an abrupt and serious escalation of the US-China trade and currency war - if true - is a report from the NY Post according to which the Trump administration, as part of a crackdown on certain US investments made by Chinese companies, is set to seize a majority stake in 850 Third Ave. The stake is owned by HNA, the reeling, quasi-insolvent Chinese conglomerate whose Chairman died in a freak accident in Italy one month ago, and its US partner in the building is desperate to save it.

As the new commander of US Submarine Forces took the reins Friday, he stressed that America will continue to dominate beneath the waves.

Vice Adm. Charles A. Richard relieved Vice Adm. Joseph E. Tofalo as head of US Submarine Forces and Allied Submarine Command Friday at a ceremony aboard the Virginia-class attack submarine USS Washington, according to a Navy release.

"The mission of our Submarine Force today is clear," Richard said. "We are back in a world in the midst of major power competition. In that competition our strength undersea is a key advantage that we have. That will not change on my watch. With so much at stake, we cannot let up and must execute our mission with a continued sense of urgency."

Following revalations from Politico that Senator Dianne Feinstein (D-CA) employed a Chinese spy for 20 years - identified as her driver by the San Francisco Chronicle in a subsequent article and filed under "no big deal" by the MSM, the Daily Caller's Peter Hassan has a new theory; descriptions fit longtime aide and former Feinstein office director, Russell Lowe.

All the details of a former, longtime Sen. Dianne Feinstein staffer who’s accused of relaying information to Chinese intelligence services while working for the California Democrat point to Russell Lowe, a Daily Caller News Foundation investigation has determined.

Lowe worked for 20 years in Feinstein’s San Francisco office, where he was a staff liaison to the Asian-American community before leaving approximately five years ago. All those details match up with the descriptions of the Chinese spy Feinstein reportedly employed. -Daily Caller

Completing the latest round of tariffs pledged against China, the US Trade Representative announced on Tuesday (after the close of course) it will impose 25% tariffs on $16 billion-worth of Chinese imports starting August 23. The new round of tariffs completes Trump's previously disclosed threat to impose $50 billion of import taxes on Chinese goods. The first $34 billion-worth went into effect on July 6th.

According to the USTR statement, customs will collect duties on 279 product lines, down from 284 items on the initial list; as Bloomberg notes, this will be the second time the U.S. slaps duties on Chinese goods in about the past month, overruling complaints by American companies that such moves will raise business costs, tax US consumers and raise prices.

On July 6, the U.S. levied 25% duties on $34 billion in Chinese goods prompting swift in-kind retaliation from Beijing.

The hostile American market is of no importance to Russia next to the opportunities offered by the booming Middle Kingdom

China's 'petroyuan' oil futures contract spiked tonight by 5% (their daily limit) to a new record high, coinciding with the re-imposition of US sanctions on Iran.

The first of two rounds of US sanctions kicked in at 12:01 am (0431 GMT), targeting Iran's access to US banknotes and key industries, including cars and carpets.

This is the biggest daily move in China's oil futures since the contract's inception in March to a new high of CNY537.2...

But I do believe the Chinese are managing the price of gold priced in CNY. They have in essence provided a floor at which they are willing to accumulate gold. They don’t bother selling it when it rises above that level, but when the gold price descends into their buy zone, they are there with stacks of blues.

So why is the price of gold going down recently? Well, if we assume that China is one of the biggest buyers of gold, when their currency depreciates, their bid for gold priced in US dollars falls.

The price of gold has not been pegged in CNY, it is merely being bought in that currency. The Chinese have fundamentally changed the way they look at gold. Instead of pricing it in US dollars, they are pricing it in CNY. And they are bid. For size.

Chinese state media: Apple could be used as a 'bargaining chip' in the trade war
1 Hour Ago | 01:05
Apple has benefited from cheap labor and a strong supply chain in China and needs to share more of its profit with the Chinese people or face "anger and nationalist sentiment" amid the ongoing trade war, an article in the state-backed People's Daily warned Tuesday. The article originally appeared in another state-backed publication, Global Times, last week.

The opinion piece highlights how Apple made $9.6 billion in revenues in China in the June quarter, which helped the U.S. giant to recently hit a $1 trillion valuation.

But the continuing trade war between the U.S. and China could leave Apple and other U.S. firms vulnerable as "bargaining chips" for Beijing, according to the article.

New details were released this week on how California Democrat Senator Dianne Feinstein had a Communist Chinese spy by her side for nearly 20 years.
Feinstein reportedly ‘found out’ that her staffer was a Chinese spy in 2013–while she was the Chairman of the Senate Intelligence Committee–RIGHT, OK.

The Chinese spy who worked for Senator Dianne Feinstein was identified on Monday night.

The Daily Caller reported the name of the spy is Russell Lowe.
Russell Lowe was Senator Feinsein’s office manager.

Dianne Feinstein and her 3rd husband Richard Blum whom she married in 1980 made MILLIONS off of their financial interests in China.
Richard Blum made millions of dollars off of his Chinese investments–his investments in China flourished after his wife, Dianne Feinstein became a US Senator in 1992.

New details were released this week on how California Democrat Senator Dianne Feinstein had a Communist Chinese spy by her side for nearly 20 years.
The San Francisco Chronicle claims none of her staff ever knew what was going on and just kept the story quiet.

Feinstein reportedly ‘found out’ that her staffer was a Chinese spy in 2013–while she was the Chairman of the Senate Intelligence Committee.

That’s right–the CHAIRMAN of the Senate Intel Committee had a Chinese spy working for her for 20 years and she supposedly didn’t know.

Another strange coincidence? Feinstein’s 3rd husband whom she married in 1980, Richard Blum is DEEPLY and PERSONALLY connected to China as a prominent investor.

A bipartisan group of senators is urging the Trump administration to block the International Monetary Fund from bailing out several underdeveloped nations victimized by predatory Chinese loans made through the Belt and Road Initiative infrastructure development plan.

"We write to express our concern over bailout requests to the International Monetary Fund (IMF) by countries who have accepted predatory Chinese infrastructure financing," the 16 senators stated in a letter sent last week to the secretaries of Treasury and State.

China's Belt and Road Initiative is a global infrastructure funding plan that Beijing is using to expand its power and influence around the world.

One of China’s largest oil companies, Sinopec, has suspended imports of 300,000 barrels per month by the end of the year, a company source has revealed to major international media.

At the same time, reports have confirmed that a number of other Chinese oil and gas companies have also joined in on refusing to purchase US oil.

Although China has provided political support to Damascus and is widely expected to play an important role in Syria’s post-war reconstruction, Beijing has so far shied away from offering direct military support to the Syrian Army.

Chinese Ambassador to Syria Qi Qianjin has suggested Beijing could soon deploy forces to assist the Syrian Army in its upcoming Idlib offensive, in addition to anti-terrorist operations in other parts of the country.

Speaking to Syria’s Al-Watan newspaper on Thursday, the Chinese diplomat said they are monitoring the conflict, adding that the Chinese military “is willing to participate in some way alongside the Syrian Army that is fighting the terrorists in Idlib and in any other part of Syria.”

As Iran’s auto industry is grappling with a multifaceted crisis, there are signs that China’s nascent carmakers may step in to become part of the solution.

The US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) and the impending reimposition of sanctions have not only caused a currency crisis in Iran but also led French automakers such as Peugeot and Renault to leave the Iranian market, creating a shortage of parts.

Last Friday's forceful intervention by the PBOC, in which the central bank hiked the reserve requirement for FX forwards trading from 0% to 20%, was a warning shot at the gathering yuan shorts who managed to briefly send the Chinese currency below 6.90 against the dollar last week, after losing 4% of its value in the past month, and bringing the cumulative decline against the dollar to 10% since April, a far steeper drop than seen during the 2015 devaluation.

The yuan slide had come amid growing speculation that Chinese authorities are more willing to let their currency weaken along with market forces and an escalating trade war, at least for as long as they felt any capital account leakages are contained and manageable.

Since 1991 and the formal end of the first Cold War between the United States and the Soviet Union, the world has experienced an American “unipolar moment” as the bipartisan US policy establishment sought to consolidate and perpetuate its hegemonic control over the entire plant. Doomed to fail even before it received its fullest articulation in 1996 by neoconservative ideologists William Kristol and Robert Kagan (misleadingly billed as “Toward a Neo-Reaganite Foreign Policy”), that misbegotten moment thankfully is coming to an end.

State Department is considering deploying US Marines to the American Institute in Taiwan, the de facto US Embassy in this South Asian country. Yang Xiyu, senior fellow at the China Institute of International Studies think tank, told Sputnik that if taken, the step will be fraught with far-reaching regional repercussions.

Washington and Taipei do not have official diplomatic relations, so the American Institute in Taiwan (AIT) actually represents US interests in the island. The AIT's activities in Taiwan are informal and the security of the building is provided by the Taiwanese.

But in February, Stephen Young, former head of the AIT's Taipei office, said that US Marines will be deployed to a new AIT compound in Taipei to safeguard US personnel there.

According to the United States, the Democratic Peoples’ Republic of Korea (DPRK or North Korea) is violating United Nations Security Council (UNSC) restrictions concerning their nuclear testing and missile development programs. These accusations come from a six-month report released last week by the UN which claims Pyongyang is violating restrictions on both of these programs according to new intelligence gathered.

Besides the alleged violations of the UNSC restrictions on the DPRK’s arms development, Korea has also been accused of violating economic sanctions “through a massive increase in illicit ship-to-ship transfers of petroleum products, as well as through transfers of coal at sea during 2018.” The UNSC also claimed that the DPRK was assisting the governments of Syria with weapons as well as attempting to sell arms to the Ansarullah movement (Houthis) in Yemen.

Imagine this….You are listening to an interview with a Communist Chinese government critic. All of sudden, he’s no longer there. Nobody has heard from him. How did the communists get to him so quickly? You can thank Google’s police state technology.. Here is the story.

Both China's ambassador to Syria as well as its military attache in the country have raised the possibility of Chinese military operations in Syria alongside the Syrian government. Chinese Ambassador Qi Qianjin reportedly stated that the Chinese "military is willing to participate in some way alongside the Syrian army that is fighting the terrorists in Idlib and in any other part of Syria," while military attache Wong Roy Chang reportedly said the Chinese military could participate in an operation to retake rebel-held Idlib if Beijing made the political decision for it to do so.

It is important to stress that neither statement is a confirmation that China is about to send military forces to participate in combat operations in Syria. However, the comments, if true, would mark the closest confirmation we have had of such a possibility.

On Aug. 1, 2008, the Beijing-Tianjin high-speed train service opened China's first high-speed railway line. The length of high-speed railway lines in China increased from zero 10 years ago to 25,000 km by 2017, accounting for 66 percent of the world's total.

A recent New York Times piece has sounded the alarm over what Washington perceives as China's "expanding reach into Latin America," related to a space mission control center located in the heart of the Patagonia region of Argentina.

The underlying perspective of the New York Times report over what is otherwise ostensibly a peaceful Argentine-Chinese space communications partnership is presented bluntly in the third stanza: "The isolated base is one of the most striking symbols of Beijing’s long push to transform Latin America and shape its future for generations to come — often in ways that directly undermine the United States’ political, economic and strategic power in the region."

The alleged Trump-Kissinger plan to "box in" China with Russia's assistance is unlikely to turn into a reality due to a number of reasons, observers say, citing the fact that the world has drastically changed since the Cold War.

Henry Kissinger, former US secretary of state, political scientist and geopolitical consultant has reportedly advised US President Donald Trump to work with Russia to contain China's rise. However, the alleged strategy might not work.

Within Google, knowledge about Dragonfly has been restricted to just a few hundred members of the internet giant’s 88,000-strong workforce, said a source with knowledge of the project. The source spoke to The Intercept on condition of anonymity, as they were not authorized to contact the media. The source said that they had moral and ethical concerns about Google’s role in the censorship, which is being planned by a handful of top executives and managers at the company with no public scrutiny.

“I’m against large companies and governments collaborating in the oppression of their people, and feel like transparency around what’s being done is in the public interest,” the source said, adding that they feared “what is done in China will become a template for many other nations.”

At some point China and the US will negotiate. When they do, the key to whether a real trade war emerges thereafter—and that will only be with China—will depend whether Trump follows through with his threats to impose another $200 billion in tariffs on China imports to the US and whether the Pentagon and US defense industry lobby agrees to soften its demands on US technology transfer. US-China negotiations have already reached tacit agreement on China purchases of US exports and more US banker-corporate access to China markets in the future. How China will respond to more US tariffs and technology transfer is the crux of any US-China trade agreement—or trade war.

A column in China’s Communist Party People’s Daily newspaper commended President Donald Trump on Monday for allegedly exhibiting “disdain” for NATO, calling for the eradication of the military coalition entirely.

The People’s Daily lamented that NATO continues to exist, demanding the group “should be relegated to the dustbin of history.” In particular, the publication appeared disappointed that American foreign policy experts condemned Trump for criticizing the current state of NATO rather than urging him to dismantle it entirely.

The newspaper compared NATO unfavorably to global agreements that the Chinese regime prefers, like the Iran nuclear deal and the Paris Agreement on climate change, suggesting these were worth keeping but the agreements that bind NATO together are not.

The key take away from the BRICS summit in Johannesburg is that Brazil, Russia, India, China and South Africa – important Global South players – strongly condemn unilateralism and protectionism.

The Johannesburg Declaration is unmistakable:

“We recognize that the multilateral trading system is facing unprecedented challenges. We underscore the importance of an open world economy.”

Closer examination of Chinese President Xi Jinping’s speech unlocks some poignant details.

Xi, crucially, emphasizes delving further into “our strategic partnership.” That implies increased BRICS and Beyond BRICS multilateral trade, investment and economic and financial connectivity.

And that also implies reaching to the next level;

GOOGLE IS PLANNING to launch a censored version of its search engine in China that will blacklist websites and search terms about human rights, democracy, religion, and peaceful protest, The Intercept can reveal.

The project – code-named Dragonfly – has been underway since spring of last year, and accelerated following a December 2017 meeting between Google’s CEO Sundar Pichai and a top Chinese government official, according to internal Google documents and people familiar with the plans.

Teams of programmers and engineers at Google have created a custom Android app, different versions of which have been named “Maotai” and “Longfei.” The app has already been demonstrated to the Chinese government; the finalized version could be launched in the next six to nine months, pending approval from Chinese officials.

Hours after Bloomberg reported that Beijing and Washington are working towards a resumption of trade talks, the Wall Street Journal reports that the two countries have "yet to make meaningful progress" moving forward from an impasse, as the next wave of US tariffs are set to hit as soon as Wednesday.

With the next wave of US tariffs set to hit as soon as Wednesday, and with trade negotiations stalled for weeks, Beijing and Washington are said to be eager to trying talks in order to avert a full-blown trade war, according to Bloomberg, citing two people familiar with the effort.

According to Bloomberg sources, representatives of Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they look for ways to reengage in negotiations. However, they have cautioned that a specific timetable, the issues to be discussed and the format for talks aren’t finalized, but at least there is agreement among the principals that more talks need to take place.

If US Marines are sent to guard the de facto US embassy in Taiwan, the American Institute in Taiwan (AIT), it could be treated by Beijing as “severe subversion” and “even an invasion of the US military on Chinese soil,” a Sunday op-ed in Chinese state media warned.

A new report indicates US military personnel are set to deploy to the large new AIT building in Taiwan to safeguard US personnel there. Beijing would consider such a move a "subversion of the one-China policy," the Global Times op-ed warned, and grounds for Beijing to deploy "an increasing number of countermeasures which Washington will have to confront."

We have been documenting the demise of the dollar hegemony for the past several years and the past two years the pace of the demise seems to be moving like a rocket.

All the little details being handled since the global financial meltdown in 2008 are now converging and one of the biggest pieces is now showing its teeth – the Chinese oil futures contract priced in yuan is growing in such a way that by the years end, at the current pace of growth, this contract will present a real challenge to the petrodollar.

A spate of articles appeared in late 2015 in Chinese that discussed in reasonably detailed terms the opportunity to build the long anticipated canal across the Isthmus of Kra in Thailand. It seems widely held among Chinese sources that the project may “become an international golden waterway”

If built, the new canal could have a major impact on both the commercial and strategic landscape of the entire region. At a minimum, the canal could move the locus of dynamic regional and global maritime trade hundreds of miles to the north, but it could also serve as a major enabler for China’s ambitious “one belt, one road” strategy as well. This edition of Dragon Eye will examine some Chinese perspectives on this possibility.

The pundits and politicians generally take it for granted that President Trump lacks a coherent foreign policy. They believe that he acts solely out of spite, caprice, and political opportunism -- lashing out at U.S. allies like Germany’s Angela Merkel and England’s Theresa May only to embrace authoritarian rulers like Russia’s Vladimir Putin and North Korea’s Kim Jong-un. His instinctive rancor and impulsiveness seemed on full display during his recent trip to Europe, where he lambasted Merkel, undercut May, and then, in an extraordinary meeting with Putin, dismissed any concerns over Russian meddling in the 2016 American presidential election (before half-walking his own comments back).

A potential trade war with the U.S. that threatens growth, simmering tensions on the Korean peninsula and this year’s slump in gold prices are reasons to buy. But People’s Bank of China data show the country’s gold reserves haven’t risen since Donald Trump was elected President in 2016. Still, this wouldn’t be the first time the central bank has kept silent while adding to its stash.

“The strategic imperative is probably still there to add some gold to reserves quietly bit by bit,” said Philip Klapwijk, managing director of Precious Metals Insights Ltd., a consultancy based in Hong Kong. “The reason to own gold as a portfolio diversification is even better given the rather strained relations with the U.S.,” said Klapwijk, who has tracked precious metals for nearly 30 years.

The brief rebound in the Yuan is over as a barrage of headlines from China and US spark renewed concerns at Beijing's ability to withstand Washington's war.

Just when you thought the trend had reversed, Yuan has started tumbling back towards cycle lows...

Take your pick of what is driving this yuan weakness:

1. Trump's 'deal' with Juncker, as Goldman notes, seems likely to give the Trump Administration more political flexibility to impose additional tariffs on imports from China...

2. The failure of Chinese regulators to agree to the Qualcomm-NXP deal has prompted notable reactions with NXP CEO confirming his view that "the China decision was absolutely political," and prompting broad-based concerns that all China-related M&A is off the table for now.

The Pentagon is worried that Israel could become a backdoor through which China could acquire capabilities that it could not get in the US… Israeli-Chinese deals could cause artificial intelligence capabilities to find their way into a new generation of Chinese weapons that would threaten American troops. “If an American pilot were ever shot down by a Chinese missile powered by Israeli technology, it would be a real problem for the Israeli government.”

Who’s winning the US-China trade war? When it comes to soybeans, the answer is Brazil. The South American nation is capitalising on the strife caused by US President Donald Trump’s trade war to profit from both China and America in soybean trade.

China has been the biggest buyer of US soybean in recent years, but as imports have become caught up in Beijing and Washington’s tit-for-tat tariffs, Chinese purchasers are now looking to to Brazil to make up the shortfall.

As a result, US soybean prices have fallen by 20 per cent since April to their lowest price in nearly a decade, while the Brazilian crop is being sold at a premium, according to industry watchers.

So again, let's be perfectly clear about this. Though other factors such as headlines and the dollar index can affect price on a minute-by-minute basis, the primary driver of the gold price in the summer of 2018 is the yuan-dollar exchange rate. Though the PBOC has long-maintained a "peg" in the relative valuation of the yuan versus the dollar, the past 90 days have seen a steady devaluation of this peg to the tune of nearly 8%.

Over that same time period, the price of COMEX gold has fallen by more than 10%:

This is not a correlation searching for a cause, nor is it a simple act of "traders" reacting to a falling yuan by selling digital gold. No, in a market the size of global gold, this type of sudden and direct correlation can only be accomplished through massive interventions, the size and scope of which is only possible at the state/sovereign level. And which state/sovereign would have a direct interest in linking the dollar price of gold to the yuan? China, of course.

China and Bhutan share a 470 kilometer long border. Territorial disputes have been a source of potential conflict, the most contested area being the Doklam plateau, where China allegedly tried to build a road last year, resulting in military intervention by India, Bhutan’s all-weather friend.

New Delhi (Sputnik): China and Bhutan have discussed the border issue at length during a three day trip of Chinese Vice Foreign Minister Kong Xuanyou to the Himalayan nation, according to the Chinese Foreign Ministry, which has claimed that China holds its traditional friendship with Bhutan in high regard.

"Both sides should continue to promote border talks, abide by the principles and consensus already reached, and jointly protect peace and tranquillity in the border region to create positive conditions for a final resolution," the Chinese Foreign Ministry statement cited Kong as saying.