China rises | BusinessMirror

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AT the recent Asia-Pacific Economic Cooperation summit in Da Nang, Vietnam, President Donald J. Trump repeated his “America First” campaign rhetoric and said that the United States would no longer tolerate “chronic trade abuses.” For some, this clearly demonstrates the US’s decision to turn its focus inward and cede global leadership. 

In contrast, Chinese President Xi Jinping in his speech at Da Nang spoke about how the international community “worked in concert to steer the global economy back to recovery,” and how it “should uphold multilateralism, pursue shared growth through consultation and collaboration, forge close partnerships and build a community with a shared future for mankind.” 

If the US is indeed retreating from global leadership, that mantle seems to now fall on China. In the case of free trade and global investment, China now appears to be its foremost champion. Where the prospects of the Trans-Pacific Partnership have been all but scuttled by the US’s exit in January, the free-trade pact of choice now seems to be the Regional Comprehensive Economic Partnership (RCEP), actively backed by Beijing.

The RCEP is a proposed free-trade agreement between 16 countries—namely the 10 Asean members (Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam) and the remaining members of Asean Plus Six (China, Japan, South Korea, India, Australia and New Zealand).
Once finalized, the RCEP will cover up to 3.4 billion people, nearly 50 percent of the world’s population, and account for up to $49.5 trillion or nearly 40 percent of global GDP. 

The RCEP complements the even bigger “Belt and Road Initiative,” Beijing’s avowed push launched in 2013 to invest at least $1 trillion for highways, bridges, ports, trains, warehouses and even industrial parks to connect up to 68 countries across Asia, the Middle East and Europe.

This 21st century maritime and land-silk road will also include “soft infrastructure,” such as cross-country optical cable networks and enhanced satellite communications to ensure digital connectivity across the countries involved. 

To help realize the vision of the “Belt and Road Initiative,” China launched in 2013 the Asia Infrastructure Investment Bank, which started full operations in December 2015.  Starting with $50 billion in capital, the Asian Infrastructure Investment Bank aims to finance infrastructure projects—from road networks to mobile-phone towers—throughout the poorer sections of Asia. In 2014 the Economist described it as the “World Bank” for Asia. 

Leadership in the global fight against climate change is another void that China appears to be filling with the US’s apparent retreat.  As President Trump announced in June the US’s withdrawal from the Paris Accord, China quickly forged an alliance with the European Union focused on helping the world reduce carbon emissions. 

In January Beijing announced it would invest up to $361 billion in renewable energy, as it transitions away from its dependence on dirty fossil fuels like coal. In fact, according to a forthcoming World Energy Outlook report by the International Energy Agency, China is projected to install up to a third of the entire globe’s new installed capacity in solar and wind energy in the coming decades.

In witnessing the US’s retreat, one could repeat the refrain, “Goodbye, I hate to see you go,” as the Sue Thompson song goes. But while it appears China will act strongly for global trade, infrastructure and climate change—what song should the world sing as it takes up global leadership? 

 

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