Daily Times

China has been emerging as a superpower in the recent years. Already it is the second largest economy in the world and global powers like US are feeling its increasing clout in the international politics. The US presently is deploying every possible strategy to contain the influence of China’s cheaper goods and its impact on the US economy. Recently, Donald Trump announced the imposition of tariffs on Chinese exports of aluminium and steel to contain its economic influence. In this respect, the US has forged a strong economic and political alliance with India. The question arises: would the imposition of tariffs on imports of Chinese steel and aluminium result in increasing jobs in the US labour market?

The real economic competition between the United States and China is in industries of the future – robotics, artificial intelligence, biotech and more. The Trump administration appears to believe that the trade war will prompt Beijing to abandon the Made in China 2025 initiative – aimed at upgrading its technology to compete with the United States. The opposite is more likely. Losing access to the US market and US technology, China will aim to build its own technological base even more rapidly, and will then start subsidizing and selling its products to markets the United States previously dominated.

The United States and China also have effective procedures for resolving disputes and avoiding the costs of war. The World Trade Organization, for all its flaws, has clear rules on trade and a mechanism for adjudicating complaints of unfair practices. Other issues, especially investment and forced sharing of technology, are not covered by the current WTO rules and will have to be negotiated directly with China.

Russia is among the world’s leading exporters of oil and natural gas. China consumes vast amounts of these commodities. At a moment when the US has slapped Russia with sanctions and China with tariffs, it must send signals to Washington that the harder these two countries are pushed, the more they are incentivized to work together

Recently Russia and China have allied together to conduct joint military exercises in eastern Siberia. Both also have a natural commercial partnership in energy. Russia is among the world’s leading exporters of oil and natural gas. China consumes vast amounts of these commodities. At a moment when the US has slapped Russia with sanctions and China with tariffs, it must send signals to Washington that the harder these two countries are pushed, the more they are incentivized to work together.Bob Woodward rightly observes in his book ‘Fear’ that Donald Trump has neither any idea of foreign policy nor deep insight of economics.US trade actions against China will not work as China has ample fiscal and monetary policy tools to cope with the impact.

Yet Russia and China remain incompatible partners, and over time they’re more likely to compete than cooperate. First, each country wants to establish pre-eminence in Central Asia. China has invested heavily in infrastructure, transport and energy in former Soviet republics like Kazakhstan, Uzbekistan and Turkmenistan via its Belt and Road Initiative, and Russia doesn’t have the economic clout to compete. As a result, China dominates a region that Russia considers its security underbelly.

China’s multibillion dollar Belt and Road Initiative is a stimulus package for a slowing economy, and a massive campaign for something that was already happening: Chinese investment around the world. Over the five years since President Xi Jinping announced his grand plan to connect Asia, Africa and Europe, the initiative has morphed into a broad catchphrase to describe Chinese engagement abroad. From South-east Asia to Eastern Europe and Africa, Belt and Road Initiative includes 71 countries that account for half of the world’s population and a quarter of global GDP.This rising influence of China is a cause of concern for superpowers like US, Russia and India, which perceive China as a threat. However, the common threat posed by US to Russia and China will increase the incentive for both China and Russia to become allies.

The writer is a human rights activist, teacher and a constitutional lawyer. He can be contacted at sheraz.zaka@gmail.com

Published in Daily Times, October 6^th 2018.