Sri Lanka and China’s Indian Ocean Strategy


February 22, 2017

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Number 372 | February 21, 2017

ANALYSIS

Sri Lanka Suffers from China’s Indian Ocean Strategy

By Shiyana Gunasekara

Amidst local protests against the Chinese presence in the southern Sri Lankan town of Hambantota, Beijing insists that the town’s port project has been discussed in the “spirit of equality and mutual benefit, and follows market rules.” China’s activity in the Indian Ocean – particularly in Sri Lanka, which is a focal point in China’s One Belt One Road (OBOR) plan – appears to be predatory lending under the guise of economic development.

India needs to recalibrate its strategy towards the other South Asian countries for its own security, if not regional stability; however, Delhi has yet to offer a comparable alternative to doing business with China. Instead, India has taken its asymmetric power in the region and the de facto allegiances of its much smaller neighbors for granted.  With China’s recent track record of placing military vessels in traditionally commercial docks, India must take its role as the South Asian hegemon seriously.

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80% share of  Sri Lanka’s Hambantota Port goes to China

In October 2016, Sri Lanka’s Prime Minister Ranil Wickremesinghe announced that the China Merchants Holdings (International) Company Ltd. would hold an 80% share of the Hambantota Port in exchange for over USD $1 billion in the country’s debt.  This should be of particular concern to India, since China has used the Colombo South Container Terminal, owned by the same Chinese firm, to dock submarines, as opposed to the Sri Lanka Port Authority’s mooring designated for military vessels.  Previously, Colombo intended to hide visits of two other Chinese naval vessels from the media. With the majority of the Hambantota Port sold to China’s semi-private sector, India should be prepared for another visit by the People’s Liberation Army (PLA) Navy – perhaps for a much longer period of time.

The complete details of Chinese loans and other financial assistance have not been disclosed to the public, notably including details of the loan interest rates. China leads the country’s foreign inflows, with 98% of Chinese assistance to Sri Lanka being loans and only two percent as grants. China’s Export-Import Bank accounts for 77% of these loans, with 14% coming from the China Development Bank, and five percent from interest-free loans. China’s Export-Import Bank has notoriously given loans to countries on its OBOR initiative with strict self-serving procurement and contracting regulations: Chinese companies must be awarded the contract, both for the project itself and for procurement, and at least 50% of project procurement must be services, equipment, technology and materials from China.

Foreign direct investment and other forms of financial engagement from a G2 country to an emerging economy should be focused on market-friendly approaches to supporting economic development in the latter. Chinese investment in Sri Lanka, and other countries along China’s visionary trail would be a true boost to the local economy if the loan money were staying in the country through greater local employment and project procurement. Instead, Sri Lanka borrows money from China, which China requires to be used to contract largely state-owned Chinese companies. These companies provide salaries to Chinese employees who come to Sri Lanka to build infrastructure projects using mostly Chinese materials and technology.

The Mattala Airport and the Hambantota Port are prime examples of large-scale infrastructure projects financed by China that did not promote local economic development.These projects were purely gambles by the former Sri Lankan government, for which there was no guaranteed return on investment – a risky move for an economy coming out of an expensive three-decade war.

Sri Lanka, undergoing vast economic reforms outlined by the International Monetary Fund (IMF), might not be the only South Asian state that will have to be bailed out due to crushing Chinese-owned debt.  An IMF report on the Chinese-Pakistan Economic Corridor (CPEC), noted that import requirements of the project “will likely offset a significant share of inflows, such that the current account deficit would widen.” While the IMF acknowledges that the long run benefits may help mitigate said costs, such success is not guaranteed, as seen in Sri Lanka.  Hence Pakistan too should take into serious consideration the equity-for-debt swap that Sri Lanka was forced into due to the island nation’s ill-advised decisions and China’s over-eagerness to offer self-serving loans.

India is the largest power in South Asia in essentially every measure, and should continue to initiate deeper maritime collaborations with its neighbors for its own interests as well as for the benefit of the region. India can accomplish this goal by providing fiscal alternatives for its smaller neighbors to develop their infrastructures and human capital that are more favorable than Chinese-financed loans with unclear intentions.

China is a pragmatic power, and most likely foresaw Sri Lanka’s economic decline that resulted in Chinese ownership of the Hambantota port. China’s actions of fostering questionable loan conditions and blurring the line between commercial and military objectives do not correspond to its purported aim of establishing a positive public image. Ultimately, if China commits to increased transparency, its ambition to become a re-emerging global power will be better received.

About the Author

Shiyana Gunasekara is a masters candidate at Johns Hopkins School of Advanced International Studies focusing on international economics and Asian affairs, and was a Fulbright Scholar to Sri Lanka in 2014-2015. She can be contacted at Shiyana.Gunasekara@jhu.edu

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

APB Series Editor: Dr. Satu Limaye, Director, East-West Center in Washington
APB Series Coordinator: Peter Valente, Project Assistant, East-West Center in Washington

The views expressed in this publication are those of the authors and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

Donald Trump–The Reluctant Multilateralist (?)


February 21, 2017

Donald Trump–The Reluctant Multilateralist (?)

by Barry Eichengreen

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Barry Eichengreen is Professor of Economics at the University of California, Berkeley, and a former senior policy adviser at the International Monetary Fund. His latest book is Hall of Mirrors:The Great Depression, the Great Recession, and the Uses – and Misuses – of History.–www.project-syndicate.org

FLORENCE – Donald Trump did not assume the US presidency as a committed multilateralist. On that, partisans of all political persuasions can agree. Among his most controversial campaign statements were some suggesting that NATO was obsolete, a position that bodes ill for his attitude to other multilateral organizations and alliances.

Last week, however, Trump stepped back, reassuring an audience at US Central Command in Tampa, Florida (the headquarters for US forces that operate in the Middle East). “We strongly support NATO,” he declared, explaining that his “issue” with the Alliance was one of full and proper financial contributions from all members, not fundamental security arrangements.

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This more nuanced view presumably reflects a new appreciation, whether born of security briefings or the sobering fact of actually occupying the Oval Office, that the world is a dangerous place. Even a president committed to putting “America first” now seems to recognize that a framework through which countries can pursue shared goals is not a bad thing.

The question now is whether what is true for NATO is also true for the International Monetary Fund, the World Bank, the World Trade Organization, and the Basel Committee on Banking Supervision. Trump’s record on the campaign trail and Twitter is not heartening. Back in 2012, he tweeted criticism of the World Bank for “tying poverty to ‘climate change’” (his quotation marks). “And we wonder why international organizations are ineffective,” he complained.

Likewise, last July, he mooted the possibility that the United States might withdraw from the WTO if it constrained his ability to impose tariffs. And he vowed repeatedly during the presidential campaign to withdraw from the Paris climate agreement. But the evolution of Trump’s position on NATO suggests that he may yet see merit to working through these organizations as he comes to recognize that the world economy, too, is a dangerous place.

Following the election, Trump acknowledged having an open mind on the Paris climate agreement. His position seemed less to deny the existence of global warming than to insist that policies mitigating climate change not impose an unreasonable burden on American companies.

The way to limit the competitive burden on US producers is, of course, by ensuring that other countries also require their companies to take steps to mitigate climate change, thereby keeping the playing field level. And this is precisely what the Paris agreement is about.

The real test of Trump’s stance on multilateralism will be how he approaches the WTO. Persuading the US Congress to agree on corporate and personal income-tax reform, a $1 trillion infrastructure initiative, and a replacement for Obama’s signature health-care reform won’t be easy, to say the least. Doing so will require patience, which is not Trump’s strong suit. This suggests that he will feel pressured to do what he can unilaterally.–Barry Eichengreen

The same can be said of the Basel Committee’s standards for capital adequacy. Holding more capital is not costless for US banks, as advisers like Gary Cohn, formerly of Goldman Sachs and now the head of Trump’s National Economic Council, presumably tell the president morning, noon, and night. Leveling the playing field in this area means requiring foreign banks also to hold more capital, which is precisely the point of the Basel process.

Trump may similarly come to appreciate the advantages of working through the IMF when a crisis erupts in Venezuela, or in Mexico as a result of his own policies. In 1995, the US Treasury extended financial assistance to Mexico through the Exchange Stabilization Fund. In 2008, the Federal Reserve provided Brazil with a $30 billion swap line to help it navigate the global financial crisis. But imagine the outrage with which Trump’s supporters would greet a “taxpayer bailout” of a foreign country or Mexican officials’ anger over having to secure assistance from the same Trump administration responsible for their country’s ills. Both sides would surely prefer working through the IMF.

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Jim Yong Kim–From Brown University to The World Bank

Trump can’t be pleased that the Obama administration rushed to push through the reappointment of its chosen World Bank president, Jim Yong Kim. But he clearly recognizes the benefits of development aid. While he has said that the US should “stop sending foreign aid to countries that hate us,” he has also observed that failure to help poor countries can foment instability.

This would appear to be an area where Trump will favor bilateral action, which would enable him to assuage his conservative critics by insisting that no US funds go toward family planning, while taking credit for any and all assistance. At the same time, minimizing the role of the US in the World Bank would create a vacuum to be filled by China, Trump’s bête noire, both in that institution and through the activities of the Chinese-led Asian Infrastructure Investment Bank.

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The real test of Trump’s stance on multilateralism will be how he approaches the WTO. Persuading the US Congress to agree on corporate and personal income-tax reform, a $1 trillion infrastructure initiative, and a replacement for Obama’s signature health-care reform won’t be easy, to say the least. Doing so will require patience, which is not Trump’s strong suit. This suggests that he will feel pressured to do what he can unilaterally.

One thing he can do unilaterally is slap duties on imports, potentially in violation of WTO rules. We’ll soon find out whether those rules will deter him.

https://www.project-syndicate.org/commentary/trump-nato-reluctant-mulitlateralist-by-barry-eichengreen-2017-02

HRH Sultan Nazrin Shah: Understand Malaysia better through its History


February 14, 2017

HRH Sultan Nazrin Shah:  Understand Malaysia better through its History

COMMENT: HRH Sultan Nazrin Shah, the Oxford and Harvard-educated political economist, is to be congratulated for publishing a monumental book on Malaysia’s economic history.

One cannot dispute His Royal Highness’ view that understanding the country’s economic, political and socio-cultural history is important since it enables us to appreciate the progress we have achieved since Independence in 1957 due to the contributions of our diverse communities, and learn from our policy failures, and follies and frailties of our past leaders and administrators.

Our achievements have been spectacular by any measure  to earn the respect of the world. The developing world used to look up to us for our economic success. But in recent years, while we enjoy continued economic growth (in GDP terms), albeit modest by comparison with our past attainments, the management of our economy has been increasingly disappointing and depressing. The level of corruption is now the worst I have ever witnessed in my nearly 45 years of public, corporate, academic and civil society life.

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It is obvious to me at least that our present generation of UMNO-BN leaders have not learned the lessons of history especially why nations can and have failed because of corruption, abuse of power and sheer incompetence. HRH Sultan of Perak would, therefore, be well advised to remind Prime Minister Najib Razak of the consequences of poor governance. Preaching to the converted like me and others is inconsequential since we are not in power.

Finally, I must add my disappointment with this piece by Hanis Zainal. While publicizing HRH Sultan Nazrin’s book, she chose not acknowledge that scholars and academics like James Puthucheary, Agoes Salim, Lin See Yan, Rais Saniman, Junid Saham, Jomo Kwame Sundaram, Edmund Terrence Gomez, Mohamed Ariff (formally with MIER),Kamal Salih (USM), Lim Teck Ghee, Johan  Saravanamuttu et.al have contributed immensely to our understanding of Malaysia’s political economy and history. They have, in fact, preceded HRH Sultan Nazrin Shah.–Din Merican

by Hanis Zainal@www.thestar.com.my

The key to understanding a country better is through its history, so it is logical to assume the key to studying a country’s economy is through studying its econo­mic history.

This was what Perak Ruler Sultan Nazrin Muizzuddin Shah set out to achieve in Charting the Economy: Early 20th Century Malaya and Contemporary Malaysian Contrasts which was launched yesterday.

The book charts the country’s economic activities under colonial rule and contrasts it with the economic growth and development in contemporary Malaysia.

During the launch at a hotel here, Sultan Nazrin said that lessons learned from history carry “great relevance” for overcoming the economic challenges of modern-era Malaysia.

 “To better understand contemporary economic performance, it is necessary for us to go back into history to understand long-term trends,” he said.

In his book, Sultan Nazrin charts the changes – from an economy based largely on agriculture and mining in the past to one that is more diversified and broad today.

One of the most important lessons he learned in his study was of people’s contributions to the economy, said Sultan Nazrin.

“The truly remarkable economic and social transformation that Malaysia has experienced is due to the outstanding contributions made by all of our diverse communities working together.”

Quoting novelist Henri Fauconnier, who wrote the Soul of Malaya, Sultan Nazrin said the soul of Malaysia “is found in the country’s diverse people”.

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In his address, Harvard University’s Professor of Political Economy Prof Dwight Perkins noted the book’s importance to the economic literature of Malaysia.

Charting the Economy is published by Oxford University Press and retails at RM99 at all major bookshops in Malaysia.

 

Hoping for the Best Against Trump


January 30, 2017

Hoping for the Best Against Trump

By Ian Buruma

https://www.project-syndicate.org/commentary/hoping-against-trump-by-ian-buruma-2017-01

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Is there any reason for liberals to feel optimistic after a year of political disasters? Is there even a shred of silver lining to be found in the tatters of Brexit, Donald Trump’s election, and European disunity? Christians believe that despair is a mortal sin, so one might as well try to find a glimmer of hope.

In the United States, many liberals console themselves with the belief that the obvious dangers of being governed by an ignorant, narcissistic, authoritarian loudmouth backed by billionaires, ex-generals, peddlers of malicious fake news, and neophytes with extreme views will help to galvanize a strong political opposition. Trump, it is hoped, will concentrate the minds of all who still believe in liberal democracy, be they left or even right of center.

In this scenario, civil-rights groups, NGOs, students, human-rights activists, Democratic members of Congress, and even some Republicans, will do everything in their power to push back against Trump’s worst impulses. Long-dormant political activism will erupt into mass protest, with resurgent liberal idealism breaking the wave of right-wing populism. Well, perhaps.

Others seek comfort in the expectation that Trump’s wildly contradictory plans – lower taxes, while raising infrastructure spending; helping the neglected working class, while slashing welfare and repealing the Affordable Care Act – will suck his administration into a swamp of infighting, incoherence, and incompetence.

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All these things might happen. But protest alone won’t be of much help. Anti-Trump demonstrations in big cities will no doubt annoy the self-loving new president, and the moral glow of joining the resistance will warm the protesters. But without real political organization, mere protest will go the way of Occupy Wall Street in 2011; it will peter out into ineffectual gestures.

One of the most dangerous ideas of contemporary populism is that political parties are obsolete, and should be replaced by movements led by charismatic leaders who act as the voice of “the people.” By implication, all dissenters are enemies of the people. That way lies dictatorship.

Liberal democracy can be saved only if mainstream parties can regain voters’ trust. The Democratic Party must get its act together. “Feeling the Bern” (the mantra of Bernie Sanders’ leftist campaign) will not suffice to stop Trump from inflicting great harm to institutions that were carefully constructed more than two centuries ago to protect American democracy from demagogues like him.

The same thing is true of international arrangements and institutions, whose survival depends on the willingness to defend them. Trump has expressed his indifference to NATO, and US security commitments in East Asia. His election will further erode Pax Americana, already battered by a succession of foolish wars. Without the US guarantee to protect its democratic allies, institutions built after World War II to provide that protection would not survive for very long.

Perhaps there is a tiny ray of hope in this gloomy prospect. Europe and Japan, not to mention South Korea, have become too dependent on US military protection. The Japanese have fairly large armed forces, but are hampered by a pacifist constitution written by Americans in 1946. Europeans are completely unprepared to defend themselves, owing to inertia, complacency, and lassitude.

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It is just possible that Trump’s blustering “America first” rhetoric will galvanize Europeans and East Asians into changing the status quo and doing more for their own security. Ideally, European countries should build an integrated defense force that would be less dependent on the US. And the countries of Southeast and East Asia could construct a Japanese-led variant of NATO to balance the domineering might of China.

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But even if these arrangements came to pass (a huge if), it would not happen soon. Europeans are unwilling to pay higher taxes for their own defense. Germany has neither the wherewithal, nor the will to lead a military alliance. And most Asians, including many Japanese, would not trust Japan to lead such a coalition in Asia. The current Japanese government, under Prime Minister Shinzo Abe, would like to revise the pacifist constitution, as a necessary first step toward weaning the country off its total dependence on the US. But Abe’s revisionism is rooted in a nationalist ideology, which is prone to justifying historical atrocities instead of drawing lessons from them. This alone disqualifies Japan from leading others in a military pact.

So, while it might be time to rethink the world order built by the US on the ruins of WWII, the Trump presidency is unlikely to bring this about in a careful and orderly manner. His election is more like an earthquake, unleashing forces no one can control. Instead of encouraging the Japanese to think about collective security in a responsible way, Trump’s indifference is more likely to play to the worst instincts of panicky Japanese nationalists.

Europe is in no shape to rise to the challenge of Pax Americana’s erosion, either. Without a greater sense of pan-national European solidarity, European institutions will soon become hollow, and perhaps even cease to exist. But this sense is precisely what the demagogues are now undermining with such conspicuous success.

If there is reason for confidence, it is not in the liberal democratic world, but in the capitals of its most powerful adversaries: Moscow and Beijing. Trump, at least in the short term, seems to be good news for Russian President Vladimir Putin and his Chinese counterpart Xi Jinping. Without credible American leadership, or a strong alliance of democracies, there won’t be much left to restrain Russian or Chinese ambitions.

This might not lead to catastrophe in the next few years. Russia and China are more likely to test the limits of their power slowly, bit by bit: Ukraine today, perhaps the Baltics tomorrow; the South China Sea islands now, Taiwan later. They will push, and push, until they push too far. Then anything may happen. Great powers often blunder into great wars. This is no reason for despair, as we begin the New Year, but no reason to be optimistic, either.

Donald Trump’s Mexico Tantrum


January 28, 2017

The Opinion Pages | Editorial

Donald Trump’s Mexico Tantrum

By The Editorial Board–www.nytimes.com
 Credit Doug Chayka

Less than a week into the job, President Trump on Thursday raised the specter of a trade war with America’s third-largest partner, Mexico, as the White House warned that the United States could impose a 20 percent tariff on Mexican imports.

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This absurd threat, issued as a proposal to cover the cost of a border wall, came just hours after President Enrique Peña Nieto of Mexico canceled a visit to the United States. The visit was supposed to improve the relationship between the two countries, deeply strained by Mr. Trump’s relentless scapegoating of Mexicans during his presidential campaign. But Mr. Peña Nieto decided he’d heard enough after Mr. Trump issued executive orders on Wednesday to begin rounding up unauthorized immigrants and building his border wall.

The tariff tantrum was the latest in a head-spinning torrent of lies, dangerous policy ideas and threats from the White House since Mr. Trump was sworn in last Friday(January 20) . They have underscored just how impulsive and apparently ignorant the new occupant of the Oval Office is of international economic and security relationships that serve American interests. His advisers appear unwilling to rein in his impulses or, as in the case of the tariff, hapless as they struggle to tamp them down.

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It’s hard to tell whether the animus Mr. Trump has conveyed toward immigrants, particularly Mexicans, is deeply felt, or if he simply came to recognize how powerfully it would appeal to voters disaffected by an uneven economic recovery and the nation’s demographic changes.

But allowing this view to drive trade and foreign policy toward Mexico could have disastrous consequences for workers and consumers in both countries, given how tightly intertwined the two economies have become since the North American Free Trade Agreement went into effect in 1994.

Imposing a tariff on Mexico would mean pulling out of NAFTA, a move that would severely disrupt the flow of parts and goods across North America and stall production in factories in the United States and Canada. It also could lead to shortages of fresh vegetables and fruits in American grocery stores and drive up the cost of many other consumer goods from Mexico. Mexico’s economy, which is hugely dependent on American trade, would be devastated. But American businesses and workers would stand to suffer immediate harm as well. Mexico would retaliate with tariffs of its own. And no matter how Congress tried to structure the tariff, which would require legislation, it would probably still violate World Trade Organization rules.

Mr. Trump has pointed to America’s trade deficit with Mexico as a sign that the United States is being swindled. Trade with Mexico — imports to the United States totaled $296 billion in 2015 — benefits America by lowering the cost and increasing the availability of goods, like avocados and mangoes in winter. While the trade deficit with Mexico has resulted in job losses in some industries (possibly about 700,000 jobs in the first 16 years), a 2014 study estimates that 1.9 million American jobs depend on exports to Mexico. And trade, by raising wages and the standard of living in Mexico, is a big reason that illegal immigration from Mexico has dropped steadily over the years.

Sending the Mexican economy into a tailspin is the surest way to reverse that trend, which historically has been driven by market forces, and has never been deterred much by fences or walls. Besides, a tax on Mexican imports would be paid by American consumers and businesses that buy those goods. Americans would pay for the wall, not Mexicans.

Donald Trump could be the best thing that’s happened to China in a long time


January 15, 2017

Donald Trump could be the best thing that’s happened to China in a long time

by Fareed Zakaria*

https://www.washingtonpost.com

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Donald Trump has perhaps attacked no country as consistently as China. During his campaign, he thundered that China was “raping” the United States, “killing” us on trade and artificially depressing its currency to make its goods cheap. Since being elected, he has spoken to the leader of Taiwan and continued the bellicosity toward Beijing. So it was a surprise to me, on a recent trip to Beijing, to find Chinese elites relatively sanguine about Trump. It says something about their view of Trump, but perhaps more about how they see their own country.

“Trump is a negotiator, and the rhetoric is all part of his opening bid,” said a Chinese scholar, who would not agree to be named (as was true of most policymakers and experts I spoke with). “He likes to make deals,” the scholar continued, “and we are good dealmakers as well. There are several agreements we could make on trade.” As one official noted to me, Beijing could simply agree with Trump that it is indeed a “currency manipulator” — although it has actually been trying to prop up the yuan over the past two years. After such an admission, market forces would likely make the currency drop in value, lowering the price of Chinese goods.

Chinese officials point out that they have economic weapons as well. China is a huge market for U.S. goods, and last year the country invested $46 billion in the U.S. economy (according to the Rhodium Group). But the officials’ calm derives from the reality that China is becoming far less dependent on foreign markets for its growth. Ten years ago, exports made up a staggering 37 percent of China’s gross domestic product. Today they make up just 22 percent and are falling.

China has changed

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China has changed. Western brands there are rare, and the country’s own companies now dominate almost every aspect of the huge and growing domestic economy. Few businesses take their cues from U.S. firms anymore. Technology companies are innovating, and many young Chinese boasted to me that their local versions of Google, Amazon and Facebook were better, faster and more sophisticated than the originals. The country has become its own, internally focused universe.

This situation is partly the product of government policy. Jeffrey Immelt , the Chief Executive of General Electric, noted in 2010 that China was becoming hostile to foreign firms. U.S. tech giants have struggled in China because of formal or informal rules against them.

The next stage in China’s strategy is apparently to exploit the leadership vacuum being created by the United States’ retreat on trade. As Trump was promising protectionism and threatening literally to wall off the United States from its southern neighbor, Chinese President Xi Jinping made a trip through Latin America in November, his third in four years. He signed more than 40 deals, Bloomberg reported, and committed billions of dollars of investments in the region.

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Chinese global leadership on trade gaining support from ASEAN, Australia and New Zealand

The centerpiece of China’s strategy takes advantage of Trump’s declaration that the Trans-Pacific Partnership is dead. The trade deal, negotiated between the United States and 11 other countries, lowered barriers to trade and investment, pushing large Asian economies such as Japan and Vietnam in a more open and rule-based direction. Now China has offered up its own version of the pact, one that excludes the United States and favors China’s more mercantilist approach.

Australia, once a key backer of the TPP, has announced that it supports China’s alternative. Other Asian countries will follow suit soon.

At the Asia-Pacific Economic Cooperation summit in Peru in November, John Key, who was then New Zealand’s prime minister, put it simply: “[The TPP] was all about the United States showing leadership in the Asia region. . . . We really like the U.S. being in the region. . . . But in the end if the U.S. is not there, that void has to be filled. And it will be filled by China.”

Xi’s speech at the summit was remarkable, sounding more like an address traditionally made by an American President. It praised trade, integration and openness and promised to help ensure that countries don’t close themselves off to global commerce and cooperation.

Next week, Xi will become the first Chinese President to attend the World Economic Forum at Davos, surely aiming to reinforce the message of Chinese global leadership on trade. Meanwhile, Western leaders are forfeiting their traditional roles. Angela Merkel and Justin Trudeau announced last-minute cancellations of their plans to speak at the Swiss summit. Trump has only made sneering references to globalism and globalization, and no senior member of his team currently plans to attend.

Looking beyond Trump’s tweets, Beijing seems to have concluded that his presidency might well prove to be the best thing that’s happened to China in a long time.

*Fareed Zakaria writes a foreign affairs column for The Post. He is also the host of CNN’s Fareed Zakaria GPS and a contributing editor for The Atlantic. Follow @FareedZakaria