5 December 2016
Not so much a shift in policy but a growing trend
There has been so much discussion of the United States pivot to Asia that few people have stopped to consider the implications or the success of China’s own pivot to America.
China already wields enormous influence in Asia through its size and its adroitness at negotiating, buying or bullying its way to goodwill among its partners – much like every other player on the geopolitical landscape. It has or is part of free trade agreements that include just about every country in the region.
The all-but-certain death of the Trans-Pacific Partnership (TPP) opens another door for China to step in with its own Regional Comprehensive Economic Partnership (RCEP) that includes India, Japan and most countries in Southeast Asia. China also has plans to push for the Free Trade Area of the Asia Pacific (FTAAP), that would include some 21 countries in Asia and America.
Meanwhile, the U.S. pivot has been one of the key shifts in global economics and policy over the last couple of decades. It had the promise of helping the world continue along the path towards greater globalization.
22 November 2016
The “man on the street” will be the biggest loser
All the talk that has erupted in the past couple of weeks about possible trade wars between the United States and China has been interesting in the way that a soap opera is interesting: lots of drama with little link to reality.
Sure, it is easy to use China as a scapegoat. A place that is conveniently far away and too big to understand. It is easy to say “look, it is China’s fault and we will put the hurt on them and things will be lovely all around”. If only that were true.
For once, it has been China that has responded with a measure of restraint. An editorial in the reactionary Global Times newspaper outlined the likely response from what is now the second largest economy in the world: “A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US.”
Multinationals would certainly lose in a trade war but so would people in the US and possibly elsewhere by paying a lot more for items that are now treated as disposable commodities.