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Russia and China build bridges together, successfully fulfill MAJOR infrastructure projects

Russia has certainly been bridge building these past few years, figuratively and literally.

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Russian President Vladimir Putin and Chinese President Xi Jinping exchange documents at the signing ceremony in the Kremlin in Moscow, Friday, May 8, 2015. Russian and Chinese leaders have signed a plethora of deals in Moscow, giving Russia billions in infrastructure loans. (AP Photo/Alexander Zemlianichenko)

In writing about several projects such as the Crimea Bridge, the Russia-Sakhalin Bridge, The Sakhalin-Japan bridge, and the dreams of the Bering Strait bridge/tunnel.

I have yet to discuss the two new bridges under construction over the Amur River between Russia and China, which are now close to completion stages.

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The Chinese name for the Amur River, Heilong Jiang, means Black Dragon River, and its Mongolian name, Khar Mörön, means Black River. The eastern border section is over 4,000 kilometers long.

Presently, three railway lines cross the entire Russo-Chinese border. The two railway border crossings at Zabaikalsk/Manzhouli and Suifenhe/Grodekovo are over a century old, brought into existence by the original design of Russia’s Trans Siberian Railway that took a shortcut across Manchuria (the Chinese Eastern Railway). The third railway crossing, near Hunchun/Makhalino, operated between 2000 and 2004, was then closed for a few years, and only recently was partially reopened.

Construction has started a while ago on a cross-border Amur River railway bridge near Tongjiang/Nizhneleninskoye, which will become the fourth and the key railway border crossing of the Russian Far East. In fact, it is the only one so far in that vast region.

Not a lot has been reported in our English language press, nonetheless these bridges are key insofar as they represent the first that connect Russia and China by road and rail in what was previously an unbroken 3,000+ kilometer transportation void.

The only ways to cross along this border-defining river was either by ferries, or over the winter ice by truck at one of the few border checkpoints along that huge expanse. The choices did not leave much room for freight or serious recurring trade.

Numerous metaphors arise from the concept of bridge building, not all of which concern bricks and mortar. For example Isaac Newton famously said, “We build too many walls and not enough bridges”, or Nikita Khrushchev who observed, “Politicians are the same all over.

They promise to build bridges even when there are no rivers”. There are many such sayings; even fortune cookies have a “wise men build bridges but fools build walls”. Perhaps the best I heard here in Moscow is “Build a bridge and get over it” which seemed to me to be especially apt given our times and  the geopolitical reality show once called diplomacy.

The bridges over the Amur between Russia and China are economic game changers. The Amur is the biggest shipping artery in the Far East of Russia. It has little spring flooding because of the limited snowfall in its basin; and in summer, the high-water mark is reached due to monsoon rains.

When it is ice free, which is seven months of the year (May to November); the entire Amur is open to navigation. The rest of the year, it is largely impassable, unless one risks traveling over river ice that even locals do not recommend.

Grain, salt, and manufactured goods are the most important cargoes moving downstream; oil, fish, and timber are the chief products moving upstream. The two bridges, one rail and the other road, will allow significant time, efficiency and distance savings as well as trans-shipment savings. Not to mention linkage to the “one belt, one road” Eurasian Economic vision while allowing pent-up investment demand to flourish dynamically.

The Nizhneleninskoe – Tongjiang Bridge over the Amur in the Jewish Autonomous Region (EAO) is scheduled to open shortly (September/October 2018). This will be the first railway bridge that will directly connect China and Russia along the eastern border.

The planned capacity is 20 million tons of cargo per year; the maximum train speed is 100 km/h. The bridge is designed for both trains of Russian and Chinese standards, which means a difference in rolling stock wheel widths. The length of the bridge is 2,209 m, of which the Russian side is building 309 m (4 pillars and three spans). The Chinese part is quite efficiently already complete (17 pillars and 16 spans).

The initially envisioned purpose for this bridge was to transport iron ore from the Kimkano-Sutarsk Mining and Processing Plant to refineries in northern China. Since then, the vision has expanded and grown remarkably. The construction project also includes road approaches to the bridge, a new “Leninsk-2” train station with a checkpoint, and logistics terminals.

The Blagoveshchensk – Heihe vehicular bridge will also be a key artery when it is finished come December 2019. It is a steel-reinforced concrete bridge on bored pillars (5 pillars on the Chinese side and 5 on the Russian side). The bridge will be two lane, with a total length of just over one kilometer.

Construction started in late 2016. The project cost is 18.8 billion rubles, of which 13.6 billion is Russia’s share, while the Chinese side financed 5.2 billion rubles. More than 1,400 people are involved in its construction. A joint Russian-Chinese company will regulate the operation and maintenance of the bridge.

As an aside, work on a cable car spanning the Amur in Blagoveshchensk has now also been resumed. In the words of some officials, it will be a highlight and attract a goodly amount of cross-border tourism, especially among residents on both sides of the border.

A trip to China by car for many Russians living in the region can finally become a reality as besides freight trucks and tourist buses; the bridge will be open to personal transport once the rules of the road are figured out and agreements on effective cross-border auto insurance are in place. Both are apparently in works and should be viable in fairly short order.

Just the other day I said goodbye to a Russian business friend who was heading out to Blagoveshchensk (the automobile bridge) with the purpose of buying finished properties, both commercial and residential, and seeing what he can similarly buy up in China’s Heihe across the river. I have known him for many years, and he is a successful, conservative, serious long-term investor.

The last time I saw him this excited was during and post-perestroika when he made his millions. That should be an indicator, and that he has set aside 9 months to be located in the Russian Far East to “give birth” to his vision.

He also plans immediately afterwards to go to Sakhalin and scout for properties at the southern end of the island where the future bridge/tunnel to Japan will be.

His reasons are the same, and have a long time horizon. One comment he made was that since the politico’s of the west has seen fit to sanction their own investors out of these opportunities, he has only to deal with local Russian and Asian investor competition.

This is a huge relief for him as he is now unconcerned by the often over-the-top US Dollar or Euro investor/developer world which wields advantage club of cheap costs of money relative to Ruble and the Yuan. He told me that his grandchildren and great grandchildren will no doubt bless his memory and foresight fondly in the decades to come.

He even semi-jokingly said he might even take a flight to the coastal areas of Chukotka, just opposite Alaska on the Bering Strait and plop down some rubles for land to be given to his yet unborn great-great grandson or daughter. I guess that is ultimate forward planning, and the truly long game.

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Donald Trump open to lifting Russian sanctions

Comments in interview with Reuters indicate that the doors are not entirely slammed shut between the US and Russia regarding sanctions.

Seraphim Hanisch

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On Wednesday August 22, the latest sanctions set against Russia by the US go into effect. These sanctions have already exacted a toll on the Ruble sending it into the high sixties against the dollar last week. At the time of this writing the ruble has only slightly improved from the worst level since the announcement, and this round of sanctions is the most painful since the Ruble hit a crippling level of 83 to the dollar in late 2015.

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However, US President Trump indicated once again that the US is open to working with Russia and to making a deal which would ease sanctions in place.

This report, by both RIA Novosti and TASS offer some detail:

President of the United States Donald Trump would be ready to consider the possibility of lifting the US sanctions on Russia if Moscow begins taking joint steps with Washington, including on Syria and Ukraine, he said this on Monday in an interview with Reuters.

Trump said that the question of lifting US sanctions on Russia was not brought up during his recent meeting with Vladimir Putin, however, he stated a condition for its possible withdrawal. “I would consider it if they do something that would be good for us. But I wouldn’t consider it without that,” he said.

Trump added that at the meeting the parties talked about Israel, Syria, Ukraine, Crimea, and the Nord Stream 2 pipeline project.

The United States began imposing extensive sanctions against Russia in 2014 after the reunification of Crimea with Russia. Restrictions were subsequently expanded and updated many times, they concern both individuals and legal entities. In the following years, Washington found many other reasons for imposing sanctions against Moscow, including alleged interference in the presidential election of 2016, alleged involvement of Russian officials in violation of human rights. So far, there has been no substantive discussion on the removal of restrictions from Russia.

The Reuters interview had more to say about this:

ON HIS RECENT MEETING WITH RUSSIA’S PUTIN

“It was only Fake News that criticized. … We had a very good, I guess, close to two-hour meeting. We had another good meeting with a lot of our representatives there. We talked about Israel, we talked about insecurity for Israel, we talked about Syria, we talked about Ukraine.”

“I mentioned Crimea, sure. I always mention Crimea whenever I mention Ukraine. Putin and I had a very good discussion. It was a very — I think it was a very good discussion for both parties. I mentioned the gas pipeline going to Germany.”

ON WHETHER PUTIN ASKED TRUMP TO LIFT U.S. SANCTIONS ON RUSSIA

“No, he did not. He never brought it up.”

ON WHETHER HE WOULD CONSIDER LIFTING SANCTIONS ON RUSSIA

“No. I haven’t thought about it. But no, I’m not considering it at all. No. I would consider it if they do something that would be good for us. But I wouldn’t consider it without that. In other words, I wouldn’t consider it, even for a moment, unless something was go — we have a lot of things in common. We have a lot of things we can do good for each other. You have Syria. You have Ukraine. You have many other things. I think they would like economic development. And that’s a big thing for them.”

This interview was held the day before the new sanctions were to go into effect. President Trump actually made no direct reference to the new sanctions, but this series of statements brings up an interesting thought.

President Putin has been silent on the matter of sanctions, even though the lower level government officials have spoken out about the injustice that is a fact, given the nature and cause of the sanctions. But an anonymous observer offered the interesting thought that, contrary to appearances, the American president may be trying to project the image of “strength against Russia” that is vital for him to pass through the midterm elections without losing the House.

If he loses the House to the Democrat Party, the new House leadership would almost certainly bring impeachment proceedings against the President. While this, like Russiagate, would be an absolute farce, it would have the effect of severely impairing the President’s agenda. While the House remains in GOP hands, this at least will not happen. The source mentioned that with such a strategy in place, if the midterms went the GOP’s way then Trump would be able to lift the sanctions later.

While this seems to be a very speculative thought, it is interesting that it was suggested only hours before the Reuters interview became publicly known. It would seem possible that this was a very gentle signal of willingness on the part of the American President to continue seeking better relations with Russia.

One thing is certain: a lot of policy is riding on the outcome of the midterms. How they go will shape US policy and foreign policy very strongly. This is truly a critical election approaching – for the US and for the world.

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Denmark As A Model For American Socialists?

In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high.

The Duran

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Authored by Lars Hedegard via The Gatestone Institute:


Here are some facts to consider before American “democratic socialists” look to Denmark for guidance, as Senator Bernie Sanders did during the 2016 presidential campaign.

First of all, Danes actually pay for their brand of socialism through heavy taxation. In Denmark, everyone pays at least the 25% value-added tax (VAT) on all purchases. Income tax rates are high. If you receive public support and are of working age and healthy enough to work, the state will require that you look for a job or it will force a job on you.

The willingness of all the Danes to pay high taxes is predicated on the country’s high degree of homogeneity and level of citizens’ trust in each other, what sociologists call “social capital.” By and large, Danes do not mind paying into the welfare state because they know that the money will go to other Danes like themselves, who share their values and because they can easily imagine themselves to be in need of help — as most of them, from time to time, will be.

Whenever politicians propose tax cuts, they are met with vehement opposition: So, you want to cut taxes? What part of the welfare state are you willing to amputate? And that ends the debate.

Danes, in contrast to American socialists gaining ground in the Democratic Party, are increasingly aware that the welfare state cannot be sustained in conditions of open immigration. A political party agitating for “no borders” could never win a Danish election. Danes do not suffer from historical guilt: they have not attacked any other country for more than two centuries and have never committed a genocide.

Moreover, there is an even deeper truth to ponder: Denmark is not really socialist but constitutes a sui generis fusion of free-market capitalism and some socialist elements. Denmark has no minimum wage mandated by law. Wages, benefits and working conditions are determined through negotiations between employers and trade unions. 67% of Danish wage-earners are members of a union, compared to 19% in Germany and 8% in France. Strikes and lockouts are common, and the government will usually stay out of labor conflicts unless the parties are unable to agree.

It is uncomplicated for enterprises to fire workers, which gives them great flexibility to adapt to shifting market conditions. To alleviate the pain, the state has in place a number of arrangements such as generous unemployment benefits and programs to retrain and upgrade redundant workers.

Danish companies must make ends meet or perish. They generally will not get handouts from the government.

Denmark is more free-market oriented than the US. According to the Heritage Foundation’s 2018 Index of Economic Freedom, Denmark is number 12, ahead of the United States (number 18). Venezuela is at the bottom, one place ahead of number 180, North Korea.

Mads Lundby Hansen, chief economist of Denmark’s respected pro-free-market think tank CEPOS, comments:

“Very high taxes and the vast public sector clearly detract in the capitalism index and reduce economic freedom. But Denmark compensates by protecting property rights, by low corruption, relatively little regulation of private enterprise, open foreign trade, healthy public finances and more. This high degree of economic freedom is among the reasons for Denmark’s relatively high affluence.”
Trish Regan recently claimed on Fox Business that Danes pay a “federal tax rate” of 56% on their income. This is misleading. The 55.8% is the levied on the marginaltax for the top income bracket, only on the part of their income above DKK 498,900 ($76,500). Any income under DKK 498,900 is taxed at lower rates. And the 55.8% marginal rate does not represent a “federal” or “national” rate. It represents the total of all taxes on income: national tax, regional tax, municipal tax and labor market tax. It does not, however, include Denmark’s 25% value-added tax (VAT), paid on all purchases.

Regan also claimed that Danes pay a 180% tax on cars. While it is true that there was once a maximum tax of 180% on care in Denmark, the vehicle tax rates have been lowered in recent years. Today, the first DKK 185,100 ($28,400) of the price of a gas- or diesel-powered car is taxed at 85%, and if the car’s price is above DKK 185,100, the remaining amount is taxed at 150% — which is of course bad enough.

Denmark’s total tax burden amounts to 45.9% of GDP, the highest of all countries in the Organisation for Economic Co-operation and Development (OECD).

As pointed out in the Fox Business segment, all education for Danes is tuition-free, all the way through to a Ph.D. Not only that; the state will, within certain time constraints, pay students to study. For students at university level no longer living with their parents, the monthly cash grant comes to almost $1,000 per month. No fewer than 325,000 students out of a total population of 5.6 million benefit from this generous arrangement setting the state back to the tune of DKK 20.9 billion or 1% of GDP (latest 2018 figures just in and supplied by Mads Lundby Hansen). Denmark even pays student support to 20,000 foreign students.

Attempts by fiscal conservatives to cut down on payments to students have been successfully resisted by the vociferous and influential student organizations; at present it would appear impossible to muster anything like a parliamentary majority to limit the student handouts.

Fox Business is right that a great many Danes are on public transfer payments. Government figures from 2017 indicate that 712,300 Danes of working age (16-64) — not including recipients of student benefits — get public financial support. But Regan’s claim that most Danes do not work is ludicrous. According to Statistics Denmark, 69.9% of Danes aged 16-64 are active in the labor market.

How can Denmark pay for its comprehensive welfare state, which includes free medical care regardless of the severity of your condition? Regan claims that Denmark is “heavily in debt.” Not so. As it turns out, Denmark is among the least indebted countries in the world, even when compared to other Western countries. The Danish government’s gross debt stands at 35.9% of GDP. Compare that to, e.g., The United Kingdom (86.3 %), The United States (108%), Belgium (101%), Canada (86.6%), France (96.3%), Germany (59.8%), The Netherlands (53.5%), Italy (129.7%), Spain (96.7%) and even Switzerland (41.9%).

Comparing Denmark to the US, Madsen notes that the latter has a problem with fiscal sustainability that may necessitate tax increases. Denmark enjoys what he labels fiscal “oversustainability” (“overholdbarhed”).

At a time when socialism appears to be popular among certain sections of the American population, its proponents would do well not to cite Denmark as a model. The Danish fusion of free-market capitalism and a comprehensive welfare state has worked because Denmark is a small country with a very homogeneous population. This economic and social model rests on more than 150 years of political, social and economic compromises between peasants and landowners, business-owners and workers, and right- and left-leaning political parties. This has led to a measure of social and political stability that would be hard to emulate in much larger and more diverse counties such as the United States.


Lars Hedegaard, President of the Danish Free Speech Society, is based in Denmark.

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Ron Paul: Protectionism Abroad and Socialism at Home

One of the most insidious ways politicians expand government is by creating new programs to “solve” problems created by politicians.

Ron Paul

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Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity:


One of the most insidious ways politicians expand government is by creating new programs to “solve” problems created by politicians. For example, government interference in health care increased health care costs, making it difficult or even impossible for many to obtain affordable, quality care. The effects of these prior interventions were used to justify Obamacare.

Now, the failures of Obamacare are being used to justify further government intervention in health care. This does not just include the renewed push for socialized medicine. It also includes supporting new laws mandating price transparency. The lack of transparency in health care pricing is a direct result of government policies encouraging overreliance on third-party payers.

This phenomenon is also observed in foreign policy. American military interventions result in blowback that is used to justify more military intervention. The result is an ever-expanding warfare state and curtailments on our liberty in the name of security.

Another example of this is related to the reaction to President Trump’s tariffs. Many of America’s leading trading partners have imposed “retaliatory” tariffs on US goods. Many of these tariffs target agriculture exports. These tariffs could be devastating for American farmers, since exports compose as much as 20 percent of the average farmer’s income.

President Trump has responded to the hardships imposed on farmers by these retaliatory tariffs with a 12 billion dollars farm bailout program. The program has three elements: direct payments to farmers, use of federal funds to buy surplus crops and distribute them to food banks and nutrition programs, and a new federal effort to promote American agriculture overseas.

This program will not fix the problems caused by Tramp’s tariffs. For one thing, the payments are unlikely to equal the money farmers will lose from this trade war. Also, government marketing programs benefit large agribusiness but do nothing to help small farmers. In fact, by giving another advantage to large agribusiness, the program may make it more difficult for small farmers to compete in the global marketplace.

Distributing surplus food to programs serving the needy may seem like a worthwhile use of government funds. However, the federal government has neither constitutional nor moral authority to use money taken by force from taxpayers for charitable purposes. Government-funded welfare programs also crowd out much more effective and compassionate private efforts. Of course, if government regulations such as the minimum wage and occupational licensing did not destroy job opportunities, government farm programs did not increase food prices, and the Federal Reserve’s inflationary policies did not continuously erode purchasing power, the demand for food aid would be much less. By increasing spending and debt, the agriculture bailout will do much more to create poverty than to help the needy.

Agriculture is hardly the only industry suffering from the new trade war. Industries — such as automobile manufacturing — that depend on imports for affordable materials are suffering along with American exporters. AFL-CIO President Richard Trumka (who supports tariffs) has called for bailouts of industries negatively impacted by tariffs. He is likely to be joined in his advocacy by crony capitalists seeking another government handout.

More bailouts will only add to the trade war’s economic damage by increasing government spending and hastening the welfare–warfare state’s collapse and the rejection of the dollar’s world reserve currency status. Instead of trying to fix tariffs-caused damage through more corporate welfare, President Trump and Congress should pursue a policy of free markets and free trade for all and bailouts for none.

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