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Global Trends by Martin Khor

Monday 22 May 2017

Last week’s big events in US and China

It was a week of dramatic contrasts.  While President Donald Trump faced serious political setbacks in Washington last week, President Xi Jinping launched his major Belt and Road initiative in Beijing.

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Last week had both dramatic and significant events that will mark the setting of “global trends” for a long time.

Most dramatic are the fast moving developments in the United States, where momentum is building to investigate President Donald Trump amidst speculation that he may not last his full term.

On the other side of the globe, was the significant event, a summit in Beijing of the Belt and Road Initiative, that boosted China’s credentials as an emerging world power.

The events in Washington are a prelude to a long and painful process by which the political establishment tames or disposes of the President, or else the President rides through the storm, emerging stronger to impose his will on Washington.

As the United States gets embroiled in its domestic crisis, it is an opportunity for China to strengthen its international status.

The Washington events took place at a bewildering pace:  Trump’s sacking of the FBI director James Comey; the news leak that the President gave confidential information on terrorism to the Russian foreign minister; media reports that Trump had asked Comey to drop investigations into the Russian connections of former national security Michael Flynn.

Then came news of the Justice Department’s appointment of a special counsel, former FBI chief  Robert Mueller, to oversee investigations of Russian interference in the US 2016 presidential elections including possible collusion between Trump’s campaign team and Russia.

A US senate committee chairman has asked the FBI to hand over documents reporting on meetings between the President and the agency, while Comey will probably be asked to testify to Congress on whether he was pressurised by Trump, which could build an obstruction of justice case against the President.

Through his actions, statements and tweets, Trump has offended his critics, the media and even his allies.

But he still enjoyed the “presumption of regularity”,  the idea that government officials are presumed to be acting lawfully and properly.

“Every elected official enjoys this presumption,” says Lawrence Douglas, law professor at Amherst College.  “It is meant to withstand errors in judgment and lapses in leadership. What it does not indulge is a clear pattern of abuse. Once the presumption collapses, the official is no longer fit for office.”

Writing in the Guardian (UK), Douglas commented:  “This is the position that Donald Trump now finds himself in. What took Richard Nixon more than five years, Trump has managed to accomplish in the narrow compass of four months. He has confirmed the worst fears of those who questioned his fitness for office.

“All the same, 10 days ago, his staunchest critics might have called Trump a national disaster but essentially unimpeachable. Now it seems like just a matter of time before he is removed from office.”

But these are early days yet and Trump should not be under-estimated.  He is confident the probe will show no Russian link, and he portrayed himself the victim of the greatest witch-hunt of a politician in history. He also retains considerable support among his voters.

In any case, it will be a long, heated summer in Washington.  The drama will reduce the President’s international stature, for instance when he visits Europe and the Middle East this week.

In contrast, the atmosphere was upbeat last weekend in Beijing when China’s President Xi Jinping hosted the Belt and Road Forum.  Participating were 29 heads of state or government and ministers of many more countries.

Since 2013, China has been highlighting the One Belt One Road initiative, but its details have been vague. The Forum threw more light on what China has in mind.

The Belt and Road is mainly thought of as a collection of infrastructure projects in many countries that lie across the old Silk Roads on land and at sea centuries ago. China has been increasingly involved in large infrastructure projects in Asia, Eurasia and Africa as well as South America, with Chinese companies constructing railways, roads and bridges, and Chinese banks providing the financing.

In his opening speech, President Xi painted a much more comprehensive picture of the Belt and Road.  Just like the ancient silk road, the new initiative will bring about peace, prosperity and a new type of international relations based on cooperation. 

On infrastructure, it will promote land, maritime, air and cyberspace connectivity, focus on key passageways, cities and projects and connect networks of highways, railways and sea ports.

   

There should be a revolution in energy technologies to develop global energy interconnection and achieve green and low-carbon development. The initiative will uphold an open world economy, with a fair, equitable and transparent system of international trade and investment rules.

Xi also pledged that China has no intention to impose its will on others and will not resort to outdated geopolitical manoeuvring.

He announced allocations totalling hundreds of billions of dollars for the initiative including through various Chinese funds and banks.  

The plans announced are big and bold, but there are also challenges ahead. Firstly, Can China and its companies and banks sustain the momentum and capability to make the initiative a going concern?

Secondly, not all countries are favourably inclined to the initiative.  For example, India is upset  about one of the Belt and Road’s major projects, the China-Pakistan Economic Corridor, as it involves projects in the contested area of Kashmir.  It is to be expected that some proposed projects that are considered beneficial to one country may be perceived to have adverse effects by another country.

Thirdly, since many of the projects will be financed through loans, the borrowing countries have to ensure that these are financially viable so as to enable sustainable debt servicing, especially if the projects and the loans are large.

There will be teething and operational problems when a scheme as big as Belt and Road is implemented.

This does not detract from the boldness and imagination of the initiative. If does succeed overall, it has the potential to change the prospect of development and nature of international relations for many countries.

So, we have the contrast of the gloomy developments in Washington and the official launching of a giant initiative in Beijing, in the same week.  Whether that week will be judged as game-changing by history remains to be seen.   

 


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