Friday 20 January 2017

XI emerges as globalisation champion (Pakistan Observer)

by M D Nalapat | Geopolitical Notes From India

ALTHOUGH the Democratic Party in the United States as well as the higher (ie politically connected) echelons ascribe the victory of Donald Trump in the 2016 Presidential polls to Vladimir Putin, even they know that such an explanation makes no sense. Indeed, by making it, the elite establishment of both the east and west coasts of the US are insulting the wisdom of tens of millions of voters in their own country, by claiming that they can be swayed by Moscow in the manner that is being claimed by the continuing cacophony of anti-Trump voices throughout both sides of the Atlantic.
The fact is that Hillary Clinton lost because she was regarded as the candidate of Wall Street. She was regarded as being in the pocket of financial and other vested interests contributing millions of dollars to the Clinton Foundation and to both Bill and Hillary Clinton, who often earned $ 500 and more for every word that was spoken at the meetings convened for them by large corporations in order to legally put money into the pockets and purses of Bill and Hillary Clinton. Wall Street has gobbled up thousands of companies across the globe and broken them up so as to sell the component parts at a substantial profit. All that Wall Street cares about is moneyman that too money for the few at the top of the financial conglomerates.
Fortunately for the Republican Party, the Democratic Party establishment (including the newly inducted Barack Obama) ensured that the will of the grassroots was thwarted and Hillary Clinton was made the nominee. From that moment onwards, unless an individual with zero appeal to mainstream US voters such as John McCain had been chosen, the Republican Party was on track to win the White House. Donald Trump came across as the most authentic anti-Politics As Usual voice, and in the primaries, he was chosen as the Republican Party nominee. Although it had been the US and the EU that had been pushing for “globalisation” since the 1980s, by the time the 21st century rolled by, it was clear that Asia and not Europe or the US was walking away with the prize. Over the past fifteen years, there has been a rise of anti-globalisation sentiment across the US and the EU, especially because of the rise of China and other Asian countries in the growth sweepstakes. Globalisation was supposed to carry forward the domination of the US and the EU for at least a generation more.
Instead, it saw even the US being challenged for the top spot by China, a country that had been derided as a “coolie power” not long ago. India too was improving its economic position, as also other Asian countries. East Asia was proving to be tough competition to the US and the EU. Even the market for modern industries such as telecom and its derivatives was being captured by companies headquartered in China, Japan or South Korea. In computer hardware manufacture, Taiwan set up a sizeable lead. Asian brainpower was proving itself the equal of brainpower from within even the most advanced members of the NATO alliance. It was not Asia or its companies that were responsible for the steady lowering of living standards of the lower and middle classes in the US and in large parts of Europe. Rather, it was because of the distortions in domestic policy that gave undue benefit to a few vested interests over the welfare of the people as a whole.
However, because of manipulation of the “free” media in the US and the EU, a perception was created that it was globalisation and Asia that was responsible for economic distress rather than domestic vested interests who were accumulating huge fortunes at the expense of the poor and the middle classes. President Donald Trump is going to have to face the fact that an anti-globalisation, anti-Asian manufactures and services stance will harm rather than help the US economy. However, the shrewd business baron has sought to solve this puzzle by focussing on Mexico and China rather than making a generalised attack on globalisation or on Asian economies. Indeed, Trump has welcomed better cooperation with some Asian countries. Now that the US has turned away publicly from globalisation, into the leadership vacuum created by such a shift has entered President XI Jinping of China.
At Davos, Xi surprised his audience by calling for a renewed emphasis on globalisation. This was in contrast to the anti-globalisation views expressed by several politicians in the EU and the US. Under Xi Jinping, China has been taking steps towards global leadership, most notably in the One Belt One Road (OBOR) plan. Once this becomes operational, there is expected to be seamless land connectivity between Asia and Europe, thereby serving as a boost mechanism for overland trade, both by rail and road. Indeed, OBOR would place China at the core of the global trading system. However, it would not be the only factor. The primary cause of a potential shift in the keystone role in the matter of global trade from Washington to Beijing would be the faster growth rate of China. Should Xi ensure that an average rate of growth of 6% be maintained over the next decade, it would follow naturally that China would emerge as the key driver of global trade.
Indeed, exports to China already account for a critical share of exports of key trading powers, including Germany and Japan. However, what would be of still greater significance to President Xi would be continued smooth access to major global markets for Chinese products. Given that there seems an increasing likelihood of a trade war between Washington and Beijing, progress in OBOR would have the effect of nudging several European economies into China’s corner, while coming down in favour of globalisation would appeal to several Asian countries. At Davos, President Xi was clearly looking at building useful alliances in Asia and Europe in the event of a trade war with a Trump administration. That was the significance of his unprecedented embrace of what till now has been seen as a US-EU concept, globalisation.

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