China’s rise continues to present tremendous strategic challenges and opportunities for the United States and its allies and partners. Today, Beijing aims to connect the majority of the world’s population under the Belt and Road Initiative, dominate high-tech industry, and forge a world-class military. Despite the sustained, structural momentum behind China’s growth, increasing economic uncertainty, paired with long-term demographic challenges and tightening domestic political control, have further complicated the trajectory of Chinese power and influence in the decades ahead.
The importance of the Shanghai-London Stock Connect suspension will depend on whether additional policy moves targeting large British firms will follow. In terms of tangible effects, this event causes little economic disruption, but is probably the most symbolically important use of Chinese financial sanctions thus far.
Overall, the three early 2020 agreements have started to transform the multilateral rule-based system into a largely bilaterally managed, outcome-based system. RTAs and their new practices accelerate the fragmentation of the world trading system into numerous trading zones with different overlapping memberships and trade coverage, tariffs, quotas, and quantitative trade targets, plus other rules such as local content and country of origin requirements as well as dispute settlement processes.
As Venezuela’s biggest creditor, China is carrying the burden of Venezuela’s economic collapse. The PRC has become increasingly aware of this unsustainable situation, and, behind closed doors, has been in communications with the interim government. Back in February, Chinese Foreign Ministry spokesman Geng Shuang said that China is open to working with a different government to ensure payment for the loans-for-oil deals. Strictly speaking, China’s relationship with the South American country is transactional, not ideological.
“Democracy under Siege: Advancing Cooperation and Common Values in the Indo-Pacific” examines challenges and opportunities for advancing cooperation and common values in the Indo-Pacific as the region faces an increasing challenge from China.
Americans have been the unconscious beneficiaries of a world order that would not exist without them. Just as we take for granted electricity and plumbing, so to we take for granted the peace and prosperity of our system.
So why shouldn’t the Trump administration consider expanding its bilateral trade cooperation with India to initiate joint efforts on China, which could parallel existing efforts with the EU and Japan and possibly merge with them over time? Might this approach even lead to a new plurilateral negotiation in the World Trade Organization (WTO) that positions it as the most likely venue for tackling Chinese practices over the longer term?
2020 will likely bear more resemblance to the 1930s, as some of the developments which did not reach a denouement in the past year cross the finish line. Several simmering conflicts, symptoms of a global system under strain from US President Donald J. Trump’s “anti-globalist” America First doctrine, could well reach breakpoints in 2020. This may include a shift from the mere corroding of multilateral institutions and US alliances toward total dysfunction.