When President Xi Jinping visited the United Nations in Geneva last month, before his landmark pro-globalization speech in Davos, he said China’s proposition to the world was to “build a community of shared future for mankind and achieve shared and win-win development.”
Then came the astonishing numbers. “In the coming five years, China will import US$8 trillion of goods, attract US$600 billion of foreign investment, make US$750 billion of outbound investment, and Chinese tourists will make 700 million outbound visits.”
For most of the “community of shared future,” it didn’t take long for the implications to sink in.
Then came the threat of a US-China trade war. The possible ending of the One China policy. The threat of a blockade in the South China Sea.
Then came The Letter. From Trump to Xi, sending good wishes to “the Chinese people.” Too little, too late – over a week after the start of the Year of the Rooster. Still, with great tact, the Foreign Ministry in Beijing stressed communication was always on, “led by China’s top diplomat, State Councillor Yang Jiechi, who outranks the foreign minister.”
Then, finally, came The Phone Call. The first time they ever talked. Trump told Xi he plans to respect the One China policy. Game on.
What’s next?
Exit ‘borders’; enter ‘corridors’
It’s open to debate whether any of Trump’s China hands – in fact, they are virtually non-existent – have written him a memo laying out the magnitude of what Beijing is trying to accomplish, business-wise. That won’t last long because Trump eventually will wake someone up with a 3am phone call wondering, “How come we’re not part of the action?”
Inbuilt in the New Silk Roads, aka One Belt, One Road, is a new transpolitical concept; territoriality is extrapolated from national borders towards belts and roads – in fact, supply chains. This goes way beyond mere technicalities: supply-chain management; inter-modality; inter-operability; a new approach to logistics; you name it. It’s posing the foundation of a transnational new geoeconomic model, and, if successful in the long run, a new geopolitical model.
The model implies that China is proposing through all these corridors – across the upgraded high-speed Trans-Siberian rail route, across Southeast Asia, across Pakistan – whole new layers to the notion of multinational cooperation; political, economic, financial (as in the role of the Asia Infrastructure Investment Bank and the Silk Road Fund). No wonder a group of Chinese researchers recently published a groundbreaking essay in Monthly Review titled
One Belt, One Road: China’s strategy for a new global financial order.
Add to this the progressive interpolation of OBOR with the Russia-led Eurasian Economic Union. The EEU is fully institutionalized, complete with bureaucratic layers, while OBOR is still a loose experiment in progress. As Xi and Vladimir Putin have stressed, OBOR and EEU are ultimately complementary – and that adds an extra dimension to the Russia-China strategic partnership.
Beijing’s advance across Central Asia is essentially geoeconomic, as an infrastructure provider; Moscow for its part is not paranoid that Beijing harbors political hegemonic designs. The light at the end of the (high-speed rail) tunnel is always Eurasia integration, with regional powers Iran and eventually Turkey also on board for the long haul.
Time for dialectic hostility
Klaus Baader, chief Asia-Pacific economist at Societe Generale in Hong Kong, recently told Bloomberg: “How many times did Trump say he would label China a currency manipulator on his first day in office? It was pure rhetoric … Rhetoric that cannot be implemented.”
That does not mean that after the Trump-Xi call all the rhetoric will vanish. The folks in Trump’s internal audience/electoral base have eagerly entertained the desire – or illusion – that they deserve a better distribution of wealth since they’re right at the heart of the “indispensable nation”; and that this may happen mostly at the expense of a China that has profited immensely from globalization. That’s what Trump’s rhetoric has been emphasizing.
For its part, China is embarking on a much more ambitious path – albeit one fraught with danger. It needs to stop depending so much on exports to the US. It must also continue to invest in its internal market, transferring wealth and opportunities from the eastern seaboard to central provinces and the west. But most of all, Beijing is focused on paving the way for a new geoeconomic Pax Sinica down the road.
Vast sectors of the US deep state though remain committed to the pivot to China – as in, its outright containment. Trump may have already understood that a trade war is a lose-lose proposition. In the absence of an Asian economic version of NATO (the dead-in-the water Trans-Pacific Partnership trade deal), the emphasis will be on “vigilant” allies/semi-disguised vassals such as Japan, South Korea and Australia (after “that” phone call to Prime Minister Malcolm Turnbull, Canberra will be a tough proposition).
In a nutshell: the pivot to Asia will survive in some shape or form. Notice the set of “recommendations” to the president by a
task force on US-China policy organized by the Asia Society and the University of California San Diego.
Nestled among platitudes on human rights and the need to “reaffirm US commitments,” there’s the same misleading emphasis on “freedom of navigation” – which China reads as US naval hegemony meant as a law of nature – and the proverbial need to “maintain an active US naval and air presence” to “respond resolutely to China’s use of force against the United States or its treaty allies.” (Note the premise is always Chinese aggression.)
Wishful thinking – already debunked by reality – is also the norm, as in “changes are needed in the Trans-Pacific Partnership to gain bipartisan ratification in Congress.”
This is all too predictable. Kurt Campbell, at the moment part of the Pentagon’s Defense Policy Board, among other roles, is a key member of the task force. Campbell was the conceptualizer of the pivot to Asia, which he sold to Hillary Clinton who then sold it to Obama. For the Pentagon, the categorical imperative remains the same: China must not be allowed in any circumstances to contest US “access” or escape from its geostrategic containment in the South and East China Seas.
Add the chilling message delivered by former CIA director James Woolsey, who until recently was advising Trump on national security: “The US sees itself as the holder of the balance of power in Asia and is likely to remain determined to protect its allies against Chinese overreach.” Crude translation: it’s our way or the highway (rather, bottom of the ocean).
So welcome to the overall guidelines of Trump’s China pivot. Dialectic hostility, anyone?
Note: Commentary like Mr. Escobar’s is near impossible to find in most US media outlets, so thanks to all who make it available.
My take: It’s interesting to consider the ‘players’ in terms of game theory. Trump is a throw back to pre-cold war, "winner take all" coupled with an unsustainable ‘deep state’ –Full Spectrum Dominanace’ – through chaos plan. Putin is an educated cold war warriror – ‘keep the ball in play with your opponent lest there be a big bang’ and a leader who struggles with enlightening Russia’s geography between East and West. Xi Jinping, probably has read Sun Tsu, "the best generals can win by manuever alone", and who seems to be a leader who wants to advance China with a modern concept of more cooperation, less antagonism.
As far as predicting the future; I will defer to Pepe!
That’s a really special photo – Trump with his right thumb up with President Andrew Jackson’s portrait behind him. Posed to send a message?
I am shocked to see how many people just do not get it. The "globalist" speech at Davos was not your "father’s Oldsmobile". China is essentially approving of Trump’s view of globalism. It is a REJECTION of block mentality, and embrace of dealing with nations as the fundamental units of international order. How many times have these principles been talked about in every gathering of Shanghai Cooperation Organization. How many times have they been explained? They essentially deny the usefulness of multilateral trade institutions, as a means of creating new blocks. Globalism, under neoconservative leadership in US for much too long, has essentially created a Trotskyite concept of global revolution, a concept of a block of the "progressive" societies vs. the oppressive. Every time blocks are created, world gets polarized, and instead of each country working on bettering itself, it becomes subsumed into the supposedly "greater" good of sacrificing itself for the block. Each country and their elites are compteting for a sugar daddy, and the protection that comes with it — economy be damned.
While once upon a time block-based organizing priciple may have had a value, in modern era of interconneced wold, it has become a losing proposition. To mask the failures, the block mentality was just transformed into the concept of mulilateral trade agreements. Again, a block that benefits elites, and neglects their own peoples and economies. But the proof is already out — the system does not work. Look at EU. A very promising concept for collaboration on major infrastructure projects, standardization to insure easier movement of goods, services and people. What happened? Once a block was formed, other agendas were pursued. Stronger states started dictating the weaker ones what they can or cannot do. In fact, poorer countries got considerably poorer. Once these countries realized that they cannot sell all they want on the Union market, without quotas, they realized also that the miriad of rules started to choke their production, flooding their own market with the surplus production from the more developed countries. Then other disasters followed. Greece was "advised" by EU to drop their "dirty" industries, and focus on tourism and services. Sounds good, except that tourism and services had been voefully insuficient for any sort of sustainable economic develoment, and the borrowing was encouraged. Now, with the key industries and once thriving commercial ports rusting, they have turned to China to sell their port. EU was appopleptic — how can you look for a salvation outside our block! You have to die for your block solitarity — that is that. And other countries figured it out, and signed up with China for a wide range of projects, mostly infrastructure, mining, and metal production. Russia is investing too, but the petty block mentality is even more afraid of Russia, and many investments — not approved! They have just done this to Hungary, denying expansion of their existing nuclear power plant that was built by Russia. And by now, while Europeans need jobs, the pundits are telling them that they need — immigration! That Europe is aging, and needs new blood — from refugees. In fact, it was to dilute "nationalism". While in Spain, young people under 25 are struggling with over 50% unemployment! Hey, Germany — let EU Spanish youth, have jobs, you need not increase your "diversity" by importing anyone.
Europe has become an experiment in social engineering, ridiculous rules in everything from schools to running farms. It is a financially and socially a mess, with unaccountable bureaucracies running the show.
Trump understands the principles that are slowly shaping the post-block global economy. It is a nework of EQUALS IN RESPONSIBILITY. No models of democracy are imposed, no attempts of changing regimes, no interfering to alter cultures, no prescribed models of economic development or governing. In the name of "human rights" the pompous fools have bombed, staged revolutions, imposed satraps on societies. And created chaos. Trump’s words, not mine.
The complementary nature of China’s OBOR and Russia’s EEU, has been there from the start. Eurasian Union is essentially an infrastructure of tarrifs and taxes, that incorporates WTO classifications of goods, allowing the transit among members to be litterally seamless. From China, across Kazakhstan, Russia and Belorus, all the way up to EU border in Poland, a number of contrainer trains is increasing all the time, bound to the landport of Duisburg in Germany. The land port is a major hub for rail transit throughout Europe. The key is win-win. Or translated, each country is to take responsibility for THEIR OWN DEVELOPMENT. They can participate, or not. Russia and China do NOT compete for the favors of other countries — but do not connive to harm them.
Pepe’s always 2 steps ahead, can’t go wrong there.
Wonder whether that’s the actual conversation photo, any info?
…have to add, when Syria first broke a few years ago, Pepe’s analysis mapped out what has since transpired, different actors and their motivations, all within the conceptual "Pipelineistan".
Enrique Reyes – Found a couple of articles about the Andrew Jackson portrait after a quick search – Trump has ordered it for the oval office, perhaps at the advice of Steve Bannon. The photo was taken last Saturday. No further details yet.
Andrew Jackson’s greatest achievement was killing the private central bank – the Second Bank of the United States.
Trump has not shown any sign of following Jackson’s foot steps and go after the Federal Reserve. I don’t think he (and his team) ever will, either out of ignorance, or cowardice.
I would like to know Pepe’s opinion about how deep will dive America in the well known predictible and about to begin what is known as The Great Coming Collapse that possibly will start secessionism within America and give origin of new independent countries like California, Alaska, Texas, Vermont, etc.
Very interesting comment, Branka. Indeed, the globalist bloc suffered a major blow with the nationalist rhetoric coming from Trump´s White House. The west has a tradition of viewing the world order based on bipolar concepts, that´s how the post-second world war international order was organized. However, since the collapse of the Soviet Union, Russia has adopted a different approach, based on flexible multilateral cooperation instead of fixed blocs. China´s approach is all laid out in the Brics group. It´s multilateral cooperation based on the pursue of national interests and the principle of sovereingty.
Shawn Napper , there was a lot of Jacksonian Democracy ideias in Trump´s inauguration speech, the idea that the president´s power comes from the people, not the parties, for example. Jackson also tried to appoint businessmen instead of party members to his cabinet. Another point in common, Jackson was an advocate of high tariffs to protect American industry(which caused the nullification crises). Jackson was also the president responsible for the removal of the indians, which is quite similar to Trump´s policies of expelling immigrants.
As for the issue regarding the Second Bank of the United States, what Jackson did was to promote inflationary policies, by allowing the unfettered spread of credit by local banks, which caused the Panic of 1837, a major economic crisis. Trump´s deregulation of the american financial system, despite all that happened in 2008, seems to be following the same path.
Netto Júnior – Andrew Jackson killed the Second Bank of the United States because of the nature of private central banking, not to promote inflation, which was (and still is) a built-in feature of the bank and the fractional reserve banking system.
The Panic of 1837 was engineered by the banking cabal (as Biddle had threatened to stop Jackson’s plan to veto extension of the bank’s charter ) in an attempt to cause public revolt.
When you have a private bank of issue like the Federal Reserve, you cannot stop inflation even if you want to. The US dollar has lost over 96% of its value since 1913.
Andrew Jackson had committed a grave error (to put it lightly) with his Indian Removal Act of 1830. It was extremely disgraceful. It’s a policy I’d condemn without the slightest reservation, notwithstanding my admiration of Jackson’s courage in his fight against the private banking cabal of the era.