Trump, Xi and the siren song of nationalism


November 28, 2017

Trump, Xi and the siren song of nationalism

A new generation of world leaders is embracing nationalist themes

by Gideon Rachman@www.ft.com

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I will not dignify any event that disrespects our soldiers. . . or our national anthem.” So said Mike Pence, the US Vice-*resident, after walking out of a football match  — when some players had “taken a knee” during the playing of the “Star Spangled Banner”. The Trump administration’s row with high-profile athletes might seem like an “only in America” moment. But similar arguments about national anthems are taking place in China, India and Europe.

These anthem rows are a symptom of a global ideological struggle between nationalist and internationalists. In the US, China and India, the militant defence of national hymns is justified by the new nationalists as simple, healthy patriotism. But a shrill focus on national anthems also has a disturbing side — since it often goes hand in hand with illiberalism at home, and aggression overseas.

Earlier this month, China’s National People’s Congress passed a law, making “insulting” the country’s national anthem an offence, punishable by up to three years in prison. The move is part of a growing vogue for displays of patriotism in China, as part of what President Xi Jinping calls the “great rejuvenation” of his people. It also reflects rising tensions between the government of mainland China and semi-autonomous Hong Kong. At recent football matches in Hong Kong, the Chinese anthem has been booed by anti-Beijing protesters.

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The Indian version of this dispute was triggered by a supreme court ruling last year, directing that the national anthem be played before any film shown in a public theater. Supporters of the ruling argue that the anthem is an important glue in a multi-religious country that speaks hundreds of languages. Indian liberals worry that it reflects a rise in intolerant nationalism under Prime Minister, Narendra Modi — which is making life tougher for religious minorities and critics of the government. They also point to incidents of vigilantism in which cinema-goers, who failed to rise for the anthem, have been attacked.

A different kind of anthem controversy took place in France, when Emmanuel Macron celebrated his election victory, last May. The background music when the new president strode on stage was not the Marseillaise but Beethoven’s “Ode to Joy” — the EU’s anthem. This was a deliberate rebuke to his defeated opponents in the nationalist and anti-EU, National Front.

The fact that Mr Macron and Mr Trump have taken very different positions in the anthem rows is significant. For the US and French presidents are currently the two most important spokesmen for rival visions of international politics.

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In his speech at the UN in September, Mr Trump made the case for an international order based around “strong sovereign nations” — a phrase that he used repeatedly. The US president has also often attacked “globalism”, defined by his campaign as — “An economic and political ideology which puts allegiance to international institutions ahead of the nation state.”Ten days after Mr Trump’s speech, Mr Macron offered a very different worldview. In a lecture in Paris, he said that — “We can no longer turn inwards within national borders; this would be a collective disaster.” The French president saw his enemies as “nationalism, identitarianism, protectionism, isolationism.”

It would be easy to assume that Mr Macron’s internationalist message has more global support. But the Trumpian vision also has international adherents — from a network of politicians and intellectuals that can be termed the “nationalist international”.

Mr Trump’s nationalism is fired by a sense that America is in decline and can only recover, by getting tough with the outside world. Mr Xi’s nationalism is fuelled by a sense that China is on the rise, and can finally avenge historic humiliations. Those two rival visions could easily lead to US-China clashes in the Korean Peninsula, the South China Sea or at the World Trade Organisation.--Gideon Rachman@www.ft.com

In a recent article , Eric Li, a Shanghai-based commentator, argued that Xi’s China and Trump’s America, “have more in common than it appears”. Both leaders emphasise national sovereignty and are intent on pushing back against an “overly aggressive, one-size fits all universal order”. Mr Li argues that Mr Xi and Mr Trump have many potential soulmates in the anti-globalist camp — including leaders such as Vladimir Putin in Russia, Rodrigo Duterte in the Philippines, Viktor Orban in Hungary, Mr Modi and Abdel Fattah al-Sisi in Egypt, as well as Britain’s Brexiters. It is quite a list — underlining the extent to which nationalism is resurgent. The new nationalists argue that “strong sovereign nations” should be the basis of a stable, international order that rolls backs the excesses of a utopian and elitist “globalism”.

But there is something a little naive about the idea of peaceful coexistence between nationalists. Strongmen leaders may have a shared contempt for international bureaucrats and human-rights lawyers. But nationalism is often associated with disdain for the views and interests of foreigners. So, sooner or later, rival nationalisms are liable to come into conflict — and that is particularly the case with the US and China.

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The New China 7 Leadership

Mr Trump’s nationalism is fired by a sense that America is in decline and can only recover, by getting tough with the outside world. Mr Xi’s nationalism is fuelled by a sense that China is on the rise, and can finally avenge historic humiliations. Those two rival visions could easily lead to US-China clashes in the Korean Peninsula, the South China Sea or at the World Trade Organisation.

In his Sorbonne speech, Mr Macron warned that rising nationalism could “destroy the peace we so blissfully enjoy”. Sadly, it seems unlikely that anybody in Washington or Beijing was paying much attention.

gideon.rachman@ft.com

Toward a People-Centered ASEAN Community


November 19, 2017

Toward a People-Centered ASEAN Community

by Moon Jae-in
http://www.project-syndicate.org

In the 50 years since the founding of the Association of Southeast Asian Nations, almost all of Asia has been utterly transformed. ASEAN’s contributions to harnessing and spreading economic dynamism have been essential to the region’s success.

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ASEAN TIES. South Korean President Moon Jae-in speaks at ASEAN-South Korea 2017 Summit in Manila recently.

SEOUL – I am delighted that my first meeting with the leaders of the Association of Southeast Asian Nations comes at a historic moment: the 50th anniversary of ASEAN’s founding. During those 50 years, not only my country, the Republic of Korea, but almost all of Asia has been utterly transformed. ASEAN’s role in harnessing and spreading economic dynamism has been essential to the region’s success.

For Korea, ASEAN has undoubtedly been a special and valued friend. Last year alone, some six million Koreans visited ASEAN member states, both as tourists and for business. Approximately 500,000 citizens of ASEAN member states now live and work in Korea, while roughly 300,000 Koreans live and work in ASEAN countries.

This is one example of why Korea’s ties with ASEAN are more than just intergovernmental relations. Our relationship is deepened in the most personal way possible, through the intertwining of so many individuals’ lives.

This fact should not surprise anyone. ASEAN 2025: Forging Ahead Together, which was endorsed by ASEAN leaders at their 27th Summit in November 2015, states that the group strives to be a “people-centered, people-oriented community” that seeks to build a caring and sharing society which is inclusive and where the well-being, livelihood, and welfare of the people are enhanced.

“People first” has been my longstanding political philosophy as well, and it is a vision in line with the spirit of Korea’s “candlelight revolution” that lit and heated up the winter in Korea a year ago. Korea and ASEAN share a common philosophy that values people, and that shared outlook will set the path that Korea and ASEAN take together in the years and decades ahead.

Since 2010, Korea and ASEAN have made significant strides together as strategic partners. Korea-ASEAN cooperation so far, however, has remained focused mainly on government-led collaboration in political, security, and economic affairs. I intend to help advance Korea-ASEAN relations while placing a high priority on the “people” – both Koreans and the people of ASEAN. My vision is to create, in cooperation with ASEAN, a “peace-loving, people-centered community where all members are better off together.” This can be summed up in “three Ps”: People, Prosperity, and Peace.

To realize this vision, I will pursue “people-centered diplomacy.” So, from this point onward, cooperation between Korea and ASEAN will be developed in a way that respects public opinion among all of the peoples of our association, gains their support, and invites their hands-on participation.

To this end, and in commemoration of ASEAN’s 50th anniversary, we have designated this year as “Korea-ASEAN Cultural Exchange Year,” and actively promoted various cultural and people-to-people exchanges. Last September, the ASEAN Culture House (ACH) opened in Korea’s southern port city of Busan. The ACH is the first of its kind to be opened in an ASEAN dialogue partner country, and it is expected to serve as a hub for cultural and people-to-people exchanges between Korea and ASEAN members. The Korean government will spare no effort to expand these exchanges, especially among the young people who will lead Korea-ASEAN relations in the future.

We should also work to build a community of peace where people are safe. In Asia, we all are facing the threat posed by North Korea’s nuclear weapons and missiles, as well as non-traditional security threats, including terrorism, violent extremism, and cyber-attacks on our businesses, our social and civic infrastructure, and our official institutions. The Korean government will strive to ensure that both Koreans and the people of ASEAN are able to lead happy and safe lives, which means cooperating with all ASEAN member states, at both the bilateral and multilateral level, to overcome the security challenges that we jointly face.

Finally, I will endeavor to promote greater mutual prosperity, which benefits citizens of both ASEAN and Korea. To ensure the sustainability of people-centered cooperation, all countries in the region must grow and develop together. Creating a structure for mutual prosperity requires lowering regional and transnational barriers to facilitate the flow of goods and promote people-to-people interactions. In short, ASEAN’s dynamism must now be tied to its inclusiveness.

That is why Korea will actively support the “Master Plan on ASEAN Connectivity 2025” and “Initiative for ASEAN Integration (IAI) Work Plan,” both of which call for enhancing the connectivity between ASEAN economies and citizens. We will also accelerate the pace of negotiations for the further liberalization of a Korea-ASEAN Free Trade Agreement (FTA), in order to pave the way for freer and more inclusive growth in the region.

Korea is now preparing for yet another “hot” winter: the PyeongChang Olympic and Paralympic Winter Games, to be held in February 2018. Our preparations are focused on ensuring that these Games deliver a message of reconciliation, peace, mutual understanding, and cooperation throughout the world.

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I happily invite you all to discover a peaceful and joyous winter in PyeongChang, and experience the dynamism sweeping through Korea and ASEAN. Don’t miss an opportunity to find out and enjoy what Korea and ASEAN share in common.

Moon Jae-in is President of the Republic of Korea.

Regional Comprehensive Economic Partnership (RCEP) is the way forward for ASEAN


November 2, 2017

Regional Comprehensive Economic Partnership (RCEP) is the way forward for ASEAN

by M. Chatib Basri, University of Indonesia

http://www.eastasiaforum.org

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The success story of the East Asian economy was about the connection between trade and industrialisation — look at the cases of Japan, South Korea, China, Taiwan and Singapore. Trade-oriented industrialisation drove regional economic integration in through trade and investment — and integration into the world economy that was made possible by conducive global economic growth and a relatively open global economy.

 

Unfortunately, the party is now over. Many economists are beginning to talk of a ‘new normal’ global economy with slower growth and trade. Brexit, the ascendency of US President Donald Trump and anti-immigration sentiment all point to a growing resistance to globalisation. At the March 2017 G20 meeting in Germany, even finance ministers and central bank governors backed away from agreement on support for free trade and investment.

It’s premature to conclude that the world has fully embraced protectionism, but the conditions for trade liberalisation and negotiating trade agreements are tougher than they were. Economic recovery in the United States and some parts of Europe remains fragile, and China’s growth though robust is also on the wane. Against this ‘new normal’ backdrop, what can ASEAN countries do to counter this trend and mitigate its impact? What role can regional cooperation play in addressing these emerging challenges in the global trade and investment environment?

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Slowing economic growth will impact on job creation, and ASEAN nations cannot afford slow economic growth — more jobs are essential to win the fight on reducing poverty.

ASEAN and East Asia must continue to encourage economic growth to improve the socio-economic welfare of their citizens. Even though global growth  is sluggish, East Asian economies still have relatively high growth. The potential is there. East Asia must strive to achieve it growth potential.

Fiscal expansion is one possible solution for those countries that have the fiscal space — though that’s a luxury afforded to few countries in ASEAN. Room for monetary expansion is also limited due to the growing possibility of the normalisation of US monetary policy.

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Forcing the pace on continued structural reform is where progress is vital. But structural reform is much easier said than done. Further unilateral liberalisation is not easy when the rest of the world is consumed by creeping protectionism, and the progress of a multilateral agenda is still in limbo as the WTO’s Doha Round seemingly goes nowhere.

A more feasible way forward is a combination of structural reform and the revitalisation of regional cooperation.

Pursuing openness through regional economic integration will not be easy. The trend towards deglobalisation demonstrates that the original model of globalisation — rapidly reducing the barriers to trade of goods and services trade— does not have strong political backing. It’s clear that economic reform and trade liberalisation need now to be accompanied by policies that ensure that ‘losers’ in realising the overall gains from trade are effectively compensated. Where distribution of the gains from trade has not been attended to, globalisation’s positive impact has found less support among the people and political will for it has waned. A consequence is the pockets of deep political resistance to globalisation.

Restoring trust in globalisation is now a primary goal. This can be done by highlighting globalisation’s success stories and its direct and positive impact on people’s lives. The success of reform does not hang on the merits of the reform’s agenda, but rather on political support — an intrinsic dilemma of reform is that the cost is more immediate and concentrated and the benefit is more diffuse and long term. This makes it necessary to get ‘quick wins’ or success stories to ensure political support.

These circumstances underline the need for multi-stage regional cooperation. This can start slowly and then tackle more complex issues. For example, instead of negotiating over how to lower trade barriers, negotiations can start on issues related to connectivity and capacity building. These objectives are acceptable politically by nearly all member countries and can be economically beneficial. Revitalising the ASEAN infrastructure fund is another example of a ‘low hanging fruit’ in regional cooperation.

If this kind of cooperation can be carried out, people will feel its real impact of regional cooperation and ASEAN states can move forward with a more complex agenda for economic integration.

The Regional Comprehensive Economic Partnership (RCEP) fits the bill and can now be brought into play. The Trans-Pacific Partnership (TPP) is practically dead in the water since the United States withdrew. RCEP is the only way forward. RCEP provides an ongoing framework through which to promote open regionalism and an open international economy. RCEP is important for ASEAN as an initiative that was put forward when Indonesia was the chair of ASEAN in 2011 — not a Chinese initiative as some wrongly believe.

As the global economy and the support for globalisation both languish, ASEAN nations need to act immediately to preserve the economic order that gave East Asia such prodigious development. RCEP offers a practical way forward in global trade diplomacy — and ASEAN would be remiss not to pursue it fully at a time when it’s important to our global economic future.

Chatib Basri is a Senior Lecturer at the Department of Economics, University of Indonesia and formerly Indonesia’s minister of finance.

 

Be Prepared–An Assertive China Ahead


November 2, 2017

Be Prepared–An Assertive China Ahead

by  Yu Tao

https://thediplomat.com

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The Assertive Globalist– Chinese President Xi Jinping’s assertive defence of globalisation in his address to world economic and political leaders at the World Economic Forum in Davos, Switzerland in early 2017 surprised many. Few expected the Chinese President and head of the Communist Party to attend the spiritual home of global capitalism for the first time, and fewer still to hear such a forthright speech.

The Chinese Communist Party(CCP) concluded its 19th National Congress on October 24, and announced its new leadership on Wednesday morning. Unsurprisingly, this new central leadership team is headed by Xi Jinping, who has been China’s most powerful politician since the CCP’s last National Congress in 2012. After being re-elected as the general secretary of China’s only ruling political party and the chair of its Central Military Commission, Xi will lead the 89 million members of the Chinese Communist Party – and the 1.3 billion citizens of the People’s Republic of China – for the next five years, and possibly beyond.

The Assertive Dragon under Xi Jinging embraces globalisation and win win partnerships

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The America First Eagle under Donald Trump surrenders global leadership and antagonizes the rest of the world.

Xi’s public speeches during and after the Party Congress were not merely a summary of what has been done in the last five years. Instead, through these speeches, Xi not only ambitiously set the tone for the politics of China in the next five years and even beyond, but also confidently declared that China had entered a “new era” under his leadership. One of the major policy shifts that we can expect to see in Xi’s China is that the country will become much more outward-looking in international politics, asserting more proactive roles in major global issues that go beyond the immediate relevance to China’s national and regional interests.

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“Observe calmly; secure our position; cope with affairs calmly; hide our capacities and bide our time; be good at maintaining a low profile; and never claim leadership.” Deng Xiaoping

For decades, China has been intending to become a “quiet achiever” in the arena of global politics. In the late 1980s, Deng Xiaoping instructed Chinese diplomats to keep a low profile, and this strategy is often translated into English as “hide our capabilities and bide our time.” Back then, the Chinese leadership believed that their priority was developing China’s domestic economy, and they were unwilling to get involved with international politics that had little direct relevance to China.

 

However, as China’s economy grows bigger, China’s weight on the international arena has increased extensively. China has demonstrated that it has the capacity to mobilize its military and economic resources to evacuate its nationals from Libya and Yemen, places that are not traditionally considered as within the reach of China’s sphere of influence. In the first six months of 2017, over 62 million Chinese citizens traveled to other countries as tourists – to illustrate, this figure is larger than the combined total populations of Australia and Canada. Since 2016, China has also been holding second place in the Elcano Global Presence Index, a widely-accepted measure that ranks 100 countries according to their economic performance, military capacity, and soft power.

With China’s influence in the world becoming more obvious, the expectation that China should play a more proactive role in international politics has increased from both within and outside China. The Chinese leadership has also become more confident in their commercial and military capacity over the years.

Since Xi became China’s top leader in 2012, as well as becoming more assertive in defending China’s key interests in regions surrounding the country, China has also started creating a more comfortable international environment for itself through grand global projects such as the “Belt and Road Initiative,” an ambitious plan to link China with Central Asia, the Middle East, Russia, Europe, and Africa through physical infrastructure, financial arrangements, and cultural exchanges.

Judging from Xi’s speech at the Party Congress, it is obvious that the current Chinese leadership is very happy with, and confident in, their way of doing things. As stated in his speech at the opening ceremony, Xi believes that China has “blaz[ed] a new trial for other developing countries to achieve modernization. It offers a new option for other countries and nationals who want to speed up their development while preserving their independence.”

With such a level of confidence and optimism, under Xi’s leadership in the next five years, China will not be shy about – in Xi’s own words – offering “Chinese wisdom and a Chinese approach to solving the problems facing mankind.” China is likely to achieve this by further pushing its flagship international development project, the Belt and Road Initiative, which many observers believe marks China’s push to take a more influential role in international affairs.

China’s transition from a “quiet achiever” to an “assertive player” in the global arena is also likely to be reflected by its changing approach in international communication and soft-power construction. In his Party Congress speech, Xi called his comrades to build “stronger confidence” in the Chinese culture. He also said clearly that China will “enhance its cultural soft power” through presenting “a true, multi-dimensional, and panoramic view of China.” That is to say, China will not be shy about telling its stories to an international audience, and it is determined to tell these stories in effective ways.

Xi made it clear that China will prompt “the building a community with a shared future to mankind,” also known as a “community of common destiny.” This new strategy for China’s foreign policies aims at pursuing “open, innovative, and inclusive development that benefits everyone.” Of course, this does not mean the Chinese Communist Party will compromise on what it considers key national interests. For example, Xi set a strong tone on the Taiwan issue, stating that the CCP has “the resolve, the confidence, and the ability to defeat separatist attempts for ‘Taiwan independence’ in any form.” This part of the speech attracted much applause from the Congress delegates. Indeed, as many China watchers have pointed out, a considerable amount of people in China believe that the Communist Party will lose its legitimacy to rule China if it loses Taiwan.

The message that Xi sent through his speech indicates that the Chinese leadership is ready to look beyond the regions and issues that are immediately related to their country, to move their country “closer to the center stage” of the world, and to lead their country to “make greater contributions to mankind.” By stating that “no country can alone address the many challenges facing mankind and no country can afford to retreat into self-isolation,” Xi also sets a clear, albeit in explicit, contrast to Donald Trump’s isolationism, portraying China as a responsible power that committed itself to major global affairs including peace, development and climate change.

If the blueprints outlined by Xi in the last few days are to be faithfully implemented, the world will be expected to see a fundamental switch in China’s diplomacy and foreign policies in the next few years. Under the leadership of the new Central Committee of the CCP, with Xi at the top, China is likely to transfer itself from a quiet achiever into an outward-looking, proactive, and probably rather assertive player that is not shy about telling the world what it sees as more appropriate and justifiable international order.

China adopted such a strategy once before, under Mao Zedong’s leadership between the 1950s and 1970s, intending to make itself the leader of the “third world” outside United States, the Soviet Union, and their allies. At that time, China offered enormous international aid to its followers and launched extensive propaganda wars, but the world was predominately shaped by the bilateral relations between the two superpowers. However, the game in the global arena has changed fundamentally between then and now. As China already emerged as the world’s Number Two in many aspects, the shift in its style, attitude, and behavior in global affairs is likely to have a profound impact on the international order in the years to come.

Yu Tao is a lecturer in Chinese Studies in the University of Western Australia (UWA), where he teaches contemporary Chinese society and language, and coordinates the Chinese Studies major.

 

China’s Xi Jinping–The World’s Most Powerful Man


October 17, 2017

THE ECONOMIST

China’s Xi Jinping–The World’s Most Powerful Man

Xi Jinping has more clout than Donald Trump. The world should be wary

Do not expect Mr Xi to change China, or the world, for the better

Print edition | Leaders

Oct 14th 2017

One-man rule is ultimately a recipe for instability in China, as it has been in the past—think of Mao and his Cultural Revolution. It is also a recipe for arbitrary behaviour abroad, which is especially worrying at a time when Mr Trump’s America is pulling back and creating a power vacuum. The world does not want an isolationist United States or a dictatorship in China. Alas, it may get both.

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Two Giants of Asia–Xi and Modi–Friends or Foes

AMERICAN Presidents have a habit of describing their Chinese counterparts in terms of awe. A fawning Richard Nixon said to Mao Zedong that the chairman’s writings had “changed the world”. To Jimmy Carter, Deng Xiaoping was a string of flattering adjectives: “smart, tough, intelligent, frank, courageous, personable, self-assured, friendly”. Bill Clinton described China’s then president, Jiang Zemin, as a “visionary” and “a man of extraordinary intellect”. Donald Trump is no less wowed. The Washington Post quotes him as saying that China’s current leader, Xi Jinping, is “probably the most powerful” China has had in a century.

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Mr Trump may be right. And were it not political suicide for an American president to say so, he might plausibly have added: “Xi Jinping is the world’s most powerful leader.” To be sure, China’s economy is still second in size to America’s and its army, though rapidly gaining muscle, pales in comparison. But economic heft and military hardware are not everything. The leader of the free world has a narrow, transactional approach to foreigners and seems unable to enact his agenda at home. The United States is still the world’s most powerful country, but its leader is weaker at home and less effective abroad than any of his recent predecessors, not least because he scorns the values and alliances that underpin American influence.

The President of the world’s largest authoritarian state, by contrast, walks with swagger abroad. His grip on China is tighter than any leader’s since Mao. And whereas Mao’s China was chaotic and miserably poor, Mr Xi’s is a dominant engine of global growth. His clout will soon be on full display. On October 18th China’s ruling Communist Party will convene a five-yearly congress in Beijing (see Briefing). It will be the first one presided over by Mr Xi. Its 2,300 delegates will sing his praises to the skies. More sceptical observers might ask whether Mr Xi will use his extraordinary power for good or ill.

World, take note

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On his numerous foreign tours, Mr Xi presents himself as an apostle of peace and friendship, a voice of reason in a confused and troubled world. Mr Trump’s failings have made this much easier. At Davos in January Mr Xi promised the global elite that he would be a champion of globalisation, free trade and the Paris accord on climate change. Members of his audience were delighted and relieved. At least, they thought, one great power was willing to stand up for what was right, even if Mr Trump (then President-Elect) would not.

Mr Xi’s words are heeded partly because he has the world’s largest stockpile of foreign currency to back them up. His “Belt and Road Initiative” may be puzzlingly named, but its message is clear—hundreds of billions of dollars of Chinese money are to be invested abroad in railways, ports, power stations and other infrastructure that will help vast swathes of the world to prosper. That is the kind of leadership America has not shown since the post-war days of the Marshall Plan in western Europe (which was considerably smaller).

Mr Xi is also projecting what for China is unprecedented military power abroad. This year he opened the country’s first foreign military base, in Djibouti. He has sent the Chinese navy on manoeuvres ever farther afield, including in July on NATO’s doorstep in the Baltic Sea alongside Russia’s fleet. China says it would never invade other countries to impose its will (apart from Taiwan, which it does not consider a country). Its base-building efforts are to support peacekeeping, anti-piracy and humanitarian missions, it says. As for the artificial islands with military-grade runways it is building in the South China Sea, these are purely defensive.

Unlike Vladimir Putin, Russia’s President, Mr Xi is not a global troublemaker who seeks to subvert democracy and destabilise the West. Still, he is too tolerant of troublemaking by his nuke-brandishing ally, North Korea (see Schumpeter). And some of China’s military behaviour alarms its neighbours, not only in South-East Asia but also in India and Japan.

At home, Mr Xi’s instincts are at least as illiberal as those of his Russian counterpart. He believes that even a little political permissiveness could prove not only his own undoing, but that of his regime. The fate of the Soviet Union haunts him, and that insecurity has consequences. He mistrusts not only the enemies his purges have created but also China’s fast-growing, smartphone-wielding middle class, and the shoots of civil society that were sprouting when he took over. He seems determined to tighten control over Chinese society, not least by enhancing the state’s powers of surveillance, and to keep the commanding heights of the economy firmly under the party’s thumb. All this will make China less rich than it should be, and a more stifling place to live. Human-rights abuses have grown worse under Mr Xi, with barely a murmur of complaint from other world leaders.

Liberals once mourned the “ten lost years” of reform under Mr Xi’s predecessor, Hu Jintao. Those ten years have become 15, and may exceed 20. Some optimists argue that we have not yet seen the real Mr Xi—that the congress will help him consolidate his power, and after that he will begin social and economic reforms in earnest, building on his relative success in curbing corruption. If he is a closet pluralist, however, he disguises it well. And alarmingly for those who believe that all leaders have a sell-by date, Mr Xi is thought to be reluctant to step down in 2022, when precedent suggests he should.

Reasons to be fearful

Mr Xi may think that concentrating more or less unchecked power over 1.4bn Chinese in the hands of one man is, to borrow one of his favourite terms, the “new normal” of Chinese politics. But it is not normal; it is dangerous. No one should have that much power. One-man rule is ultimately a recipe for instability in China, as it has been in the past—think of Mao and his Cultural Revolution. It is also a recipe for arbitrary behaviour abroad, which is especially worrying at a time when Mr Trump’s America is pulling back and creating a power vacuum. The world does not want an isolationist United States or a dictatorship in China. Alas, it may get both.

This article appeared in the Leaders section of the print edition under the headline “The world’s most powerful man”

The Economic Case for China’s One Belt, One Road Initiative


October 14, 2017

The Economic Case for China’s One Belt, One Road Initiative

by Shang-Jin Wei*
https://www.project-syndicate.org/commentary/china-belt-and-road-economic-case-by-shang-jin-wei-2017-10

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In recent years, many of the world’s most influential countries have turned inward, with politicians promising protectionism, immigration restrictions, and even border walls. But, to achieve stronger economic growth and development, the world needs initiatives focused on building bridges – initiatives like China’s Belt and Road.

NEW YORK – Since 2013, China has been pursuing its “Belt and Road” initiative, which aims to develop physical infrastructure and policy linkages connecting more than 60 countries across Asia, Europe, and Africa. Critics worry that China may be so focused on expanding its geopolitical influence, in order to compete with the likes of the United States and Japan, that it may pursue projects that make little economic sense. But, if a few conditions are met, the economic case for the initiative is strong.

As a recent Asian Development Bank report confirms, many Belt and Road countries are in urgent need of large-scale infrastructure investment – precisely the type of investment that China has pledged. Some, such as Bangladesh and Kyrgyzstan, lack reliable electricity supplies, which is impeding the development of their manufacturing sectors and stifling their ability to export. Others, like Indonesia, do not have enough ports for internal economic integration or international trade.

 

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The Belt and Road initiative promises to help countries overcome these constraints, by providing external funding for ports, roads, schools, hospitals, and power plants and grids. In this sense, the initiative could function much like America’s post-1945 Marshall Plan, which is universally lauded for its contribution to the reconstruction and economic recovery of war-ravaged Europe.

Of course, external funding alone is not sufficient for success. Recipient countries must also undertake key reforms that increase policy transparency and predictability, thereby reducing investment risk. Indeed, implementation of complementary reforms will be a key determinant of the economic returns on Belt and Road investments.

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President Xi Jinping’s One Belt, One  Road Initiative  aims to knit together Asia, Europe and Africa through land and maritime corridors that collectively encompass a set of countries representing about 65 percent of the world’s population and one-third of its total economic output. China plans to spend roughly $150 billion a year to advance the initiative through infrastructure projects ranging from railways and roads, to ports and pipelines, to power plants and telecommunications networks.

For China, the Belt and Road investments are economically appealing, particularly when private Chinese firms take the lead in carrying them out. In 2013, when China first proposed the Belt and Road initiative, the country was sitting on $4 trillion in foreign-exchange reserves, which were earning a very low dollar return (less than 1% a year). In terms of China’s own currency, the returns were negative, given the expected appreciation of the renminbi against the US dollar at the time.

In this sense, Belt and Road investments are not particularly costly for China, particularly when their far-reaching potential benefits are taken into account. China’s trade-to-GDP ratio exceeds 40% – substantially higher than that of the US – owing partly to underdeveloped infrastructure and inadequate economic diversification among China’s trading partners. By addressing these weaknesses, China’s Belt and Road investments can lead to a substantial increase in participant countries’ and China’s own trade volumes, benefiting firms and workers substantially.

This is not to suggest that such investments are risk-free for China. The economic returns will depend on the quality of firms’ business decisions. In particular, because efficiency is not the primary consideration, Chinese state-owned enterprises (SOEs) might purse low-return projects. That is why China’s SOE-reform process must be watched carefully. Nonetheless, while the Belt and Road initiative is clearly driven partly by strategic objectives, a cost-benefit analysis shows that the economic case is also very strong – so strong, in fact, that one might ask why China didn’t undertake it sooner.

Even the United States and other countries may reap significant economic returns. A decade after the global financial crisis erupted, recovery remains weak and tentative in much of the world. Bold, large-scale infrastructure investments can provide much-needed short-run stimulus to global aggregate demand. The US, for one, is likely to see a surge in demand for its own exports, including cars, locomotives, planes, and high-end construction equipment, and financial, accounting, educational, and legal services.

In the longer term, the new infrastructure will ease logistical bottlenecks, reducing the costs of production inputs. The result will be higher productivity and faster global growth.

If Belt and Road projects are held to high environmental and social standards, significant progress can also be made on global challenges such as climate change and inequality. The more countries choose to participate in these projects, the better the chance of achieving these standards, and the greater the global social returns will be.

In an era when some of the world’s most influential countries are turning inward, talking about erecting trade barriers and constructing border walls, the world needs initiatives focused on building bridges and roads, both literal and figurative – initiatives like the Belt and Road strategy.