Chapter 1102 - Earth Defense Alliance
Chapter 1102: Earth Defense Alliance
On July 3rd, the two-day UN General Assembly ended.
Because of a lack of cooperation from Celestial Trade, this meeting didn’t make as much progress as most people expected. On one hand, it was because the United Nations had no right to directly interfere in the internal affairs of member states. On the other hand, it was because the representatives from Xin had no power to make decisions at all.
For example, Canada proposed that Celestial Trade should sell its space elevator to the United Nations at a premium of 20%. Ultimately, it would be jointly funded by all countries and the United Nations would lead the defense of extraterrestrial civilization.
Even though this proposal received a high number of votes, it wasn’t well-received by Xin.
In contrast, the negotiations between Xin and Hua, Frankberg and Russia made great progress.
With Zhang Yaping’s continuous efforts, the leaders of the four countries reached an agreement on the specifics. At the end of the UN General Assembly, all four countries held press conferences at the same time and announced the formation of the Earth Defense Alliance in Coro City, Shangjing, Moscow, and Ber…
When night embraced the Revolution Square in Coro City, the lights illuminated and dispersed the darkness. In front of the reporters, Jiang Chen solemnly gave the opening remarks of this defining ceremony.
In this darkest hour, people’s eyes looked over the fully-armed soldiers and quietly observed the center of the square, no one made a sound.
The protests and demonstrations swept the world in the past few days made everyone feel exhausted and confused. From the moment they learned about the existence of the extraterrestrial civilization, panic and fear were bred in everyone’s hearts and grew uncontrollably.
“There’s already enough evidence to prove that the tragedies in City K, Yoto, Somalia, and Finland were caused by the extraterrestrial civilization. They used lies to confuse our people. They used a conspiracy to split our people!”
A powerful voice echoed in the square, blowing away the fear in people’s hearts. In this square once filled with the blood of revolutionists, a monument stood tall in the center, people were revitalized, and their blood began to boil.
“Their behavior has already constituted aggression.” Jiang Chen paused as he looked around the crowd, then he said slowly, one word at a time: “An aggression against all of mankind.”
“The option of dialogue hasn’t existed from the beginning. All diplomatic means don’t have meaning; traditional borders are meaningless. What we can do is use blood to defend our homeland! No one, no country can stay out of this war!”
“So, we choose to stand up.”
“In this solemn and sacred moment, on behalf of Xin and the colonies of Celestial Trade, I declare to Xin, to our allies, and the world that the Earth Defense Alliance is formally established!”
Thunderous applause and cheers resounded through the square, and people waved the small national flag in their hands. In their pupils full of life, there wasn’t a hint of fear.
For most people, they were fearful not because of the unseen extraterrestrial civilization but because of the chaos before the darkness. If the whole world was united, Earth’s civilization would have a fighting chance. Although still young and weak, the establishment of the Earth Defense Alliance brought hope.
Amidst the deafening cheers, Jiang Chen read out the list of member states of the Earth Defense Alliance.
According to the “Coro City Agreement” signed the previous day, the major members of the Earth Defense Alliance were Xin, Hua, Russia, and Frankberg. The secondary members included a total of 21 Asian countries including Pakistan, Moro, Malay and so on.
Based on the consensus, the major member states would contribute 5-7% of GDP according to their territorial size and population size, and the secondary member states would contribute 3-4% of GDP. All contributions would fund the development of the aerospace industry.
Of course, obligation wasn’t without reward—although they had joined the Earth Defense Alliance to protect themselves, Celestial Trade would also treat its allies right.
In the Coro City Agreement, Celestial Trade promised to member states that its space resources would be tilted toward member states.
In addition, the agreement also stipulated that the Earth Defense Alliance would impose a 50% defense tax on all non-member states in outer space resources development. The money would be collected by Celestial Trade and used to establish an Earth Defense Fund. The purpose of the fund was to establish extraterrestrial fortifications and build a fleet and other defensive measures.
Since this was for the common interests of all people, everyone had to contribute somehow.
If they weren’t going to put in the effort, then it was fair to pay some money.
When this measure was released, it suddenly caused an earthquake, especially in the financial world. The aerospace companies listed on NASDAQ plunged.
The prospects of aerospace companies weren’t the only things that took a heavy blow. With light and heavy industrial raw materials increasingly dependent on outer space resources, pessimism began to spread from aerospace companies to manufacturing industries.
What was the concept of the 50% defense tax?
Taking iron ores as an example, as of July 1, 2019, thanks to the increase in the capacity of the space elevator, the industry-standard ore was quoted a price of 58 New Xin dollars per ton. Before the introduction of the defense tax, the UA could import iron ore from Xin at a price of 45 New Xin dollars per ton, but after the introduction of the defense tax, their cost skyrocketed to 67.5 New Xin dollars.
What’s more, the price of 67.5 New Xin dollars was still lower than the production cost of 76 US dollars per ton quoted by the former mining giant, Vale. In other words, no countries would be able to find a substitute at the same price!
It was impossible to underestimate the difference of 22.5 New Xin dollars.
Steel was the foundation of industry, and fluctuations in commodity prices would be reflected in the cost of manufacturing. If the global price experienced volatility, the effects might be invisible because of the exchange rate. But if this price volatility was confined to a certain part of the country, then the impact couldn’t be underestimated.
The same unit of industrial manufactured goods would be 22.5 Xin New dollars more expensive if produced elsewhere.
Not only iron ore but all metal minerals from iron ore to rare earth metals were impacted. Non-Earth Defense Alliance members would be forced to accept this “unequal treaty.” Unless they wanted to stop using the space elevator, they had to accept the 50% tax.
It was foreseeable that with gradual expansion in space resource development in the future, the defense tax would be an unavoidable burden on non-member states. In the long run, the market competitiveness of the Earth Defense Alliance members would only grow.
As a result, the foreign exchange in the global economy would exhibit a trend where the Xin New dollars would strengthen against other currencies.
For Wall Street, no news could be worse than this new reality.