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Has the mantle of global leadership passed from the US to China?

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Has the mantle of global leadership passed from the US to China?
MAY 16 2017 - 12:15AM

Barack Obama last year told his fellow Americans: "If we don't write the rules, China will write the rules out in that region," the Asia-Pacific. And that's exactly what's happening.

Obama was speaking of trade rules in particular, but it's increasingly clear that China has an historic opportunity to write the rules for much more than just trade. While Donald Trump is busy trying to shrink the US down to the size of his myopic vision, he has handed China an invitation to become the leader of Asia.

It's already one of the leaders of the world. It is the second biggest economy on earth, it's a nuclear power and a veto-wielding permanent member of the UN Security Council. With Trump taking America out of the global leadership business, is the time at hand where we declare that the mantle of global leadership has passed?

Even before Trump, China's President Xi Jinping had already decided that the time was right for an ambitious expansion of Chinese power. China's overarching strategic mantra since the 1970s was Deng Xiaoping's famous dictum that China must "hide your brightness, bide your time".

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But in 2013 Xi relegated that to history with his new edict. No more waiting. China was now rich. It was time for China to "strive to achieve," said Xi.

Ignoring US objections and overriding the claims of China's neighbours, Xi directed the island-building program that has now given China a series of bases in the South China Sea. The region's feeble efforts to resist have failed. Obama's vaunted "Asia pivot" proved irrelevant. Trump has come as a bonus for Xi's ambitions.

First it was trade. As Trump tore up the US-led, 12-nation Transpacific Partnership agreement, China's President Xi Jinping declared in pointed contrast: "China will not shut the door to the outside world but will open it even wider." China already dominates world trade by its sheer scale; its work on new regional and bilateral deals will make it an active rule-maker, as well.

"The gravity of power in East Asia's regional [trade] architecture appears to be tilting towards the centre, especially in view of China's rise," says a scholar at the Economic Research Institute for ASEAN and East Asia in Jakarta, Ponciano Intal.

Then it was climate change. Trump ranted that climate change was a "Chinese conspiracy". When he signed an executive order in March undoing much of Obama's work to cut carbon emissions, Trump opened the way for China to lead. Beijing, the world's biggest carbon emitter, didn't have to do much to look like a leader. It recommitted itself to its Paris agreement undertakings.

But China is also investing more in renewable energy than any other nation, $US88 billion last year, as it strives for global dominance of the sector. And this year it plans to create the world's biggest emissions trading system.

"The world is looking for a climate champion," said Nicholas Stern, the famous British climate economist and co-chair of the Global Commission on the Economy and Climate. "In China, it has one," he concluded.

Then there was North Korea. Trump specifically asked Beijing to take the lead in crafting a plan to curb North Korea's relentless nuclear missile program. After realising there are no easy options on this problem, Trump announced Xi is "a very good man" and that "I believe he is trying hard" to solve the problem in Pyongyang.

This isn't necessarily an assignment that Beijing would have relished. But it is an implicit acknowledgement that the Korean peninsula is part of China's sphere of influence and a concession that US diplomacy is exhausted.

Finally there is China's "Belt and Road" plan. Xi opened a meeting in Beijing on Sunday to discuss the proposal, with 100 countries including 28 heads of state in attendance. He declared this vast visionary infrastructure concept as "the project of the century".
The plan has a "belt" running across land and a "road" running across the seas.

On land, Beijing aims to connect China's hinterland to Europe through Central Asia. This route has been dubbed the Silk Road Economic Belt. On water, a 21st Century Maritime Silk Road is proposed to connect Southeast Asia to southern China through a system of ports and railways.

Sixty-five countries have formally signed up as participants, with many others, including Australia, circling on the periphery. As conceived by Xi, this will be far bigger than the US Marshall Plan for the postwar rebuilding of Europe, adjusting for inflation.

Estimates of the ultimate scale of investment range from $US1 trillion to $US4 trillion and beyond. If realised, it could be the biggest international infrastructure program since the Roman Empire. To date, China has committed about $US100 billion.

The leaders in attendance weren't just tinpot supplicants. They included Indonesia's Joko Widodo, Turkey's Recep Erdogan and Russia's Vladimir Putin. Even the US sent an official, the White House director for East Asia, in the hope that US companies might pick up some of the business.

Of course, the project would be a tremendous flexing of Chinese economic sinews across half the earth. It is a positive platform for Chinese influence into scores of countries.

Xi took pains to assure leaders that he was not interested in "outdated geopolitical manoeuvrings" and sought only "win-win" cooperation.

Yet we know China has used economic coercion of smaller countries whenever it suited. South Korea and Taiwan, for instance, are suffering undeclared Chinese sanctions right now.

And not everyone is happy with the Belt and Road. India opposes it as an intrusion. Japan is very uneasy at the implications.
Nonetheless, is the mantle of global leadership passing to China? Rory Medcalf of the ANU National Security College says it's "too early to call".

A true world leader provides public goods to the international system, even when it comes at some difficulty and expense. The US is allowing its traditional management of some global public goods like trade liberalisation and climate change mitigation to lapse.

But China's initiatives to date fail to meet this high standard, argues Medcalf. China is too narrowly nationalistic, he says. "The world is more likely to go through a phase without a clear leader than to go into Chinese leadership," he says. Global leadership, quite suddenly, is up for grabs. China is grasping for the mantle and it's not yet clear that it can win it. Can the US recover it? Or is history leaving Trump's America behind?

http://www.smh.com.au/comment/has-t...sed-from-the-us-to-china-20170515-gw562l.html
 
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China is the biggest creditor to US.and I dont think you need any other reason to believe why not.
 
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As of last month... China's export to US was about 500 Billion USD... till the time that situation persists and China depends on US to make money... No the mantle will continue to stay with US ...
 
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Wait, a country that has not even developed to be called a "developed nation" is taking our mantle away?

China is a regional power that's all.

Hilarious!
 
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The world now catches a cold if China sneezes, not the US
Economically, China accounts for 32 per cent of total regional trade and its economy is nearly half of Asia’s GDP, excluding Japan
PUBLISHED: 2:15 PM, MARCH 1, 2017
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BEIJING — “When the US sneezes, the world catches a cold” is a common phrase used to describe the significance of the US economy in the global macro system.

But in recent years, more and more people have applied the same metaphor to China, as the latter grows in size and influence, and starts to project its economic power globally.


There is nowhere that China’s influence is better manifested than in Asia.

Economically, China accounts for 32 per cent of total regional trade and its economy is almost half of Asia’s GDP — excluding Japan.

For many countries, China is now their largest trading partner and a growing source of foreign direct investment.

China’s rising middle class, with a strong desire to spend, has unleashed a flood of tourists, helping to revive tourism and retail industries in countries like Thailand and Korea. Finally, financial market ties have been strengthened as China opens up its capital account and liberalises the yuan.

The close economic integration with China has brought clear benefits to many Asian countries by allowing them to access the biggest consumer market in the region.

But at the same time, it also makes Asia vulnerable to China’s economic slowdown. Slowing demand from China since 2011, when headline growth started to decelerate, was a key contributor to the sluggish export performance of many Asian countries in recent years.

One silver lining, however, is that not every sector in China is slowing at the same pace. As the economic rebalancing got underway, China’s consumption growth has outperformed investment handsomely, and will continue to do so in the years to come.

Such an economic transformation will create new winners and losers among China’s trading partners, depending on the parts of the economy to which they are exposed.

A detailed analysis of value-added exports suggests that some economies, such as Hong Kong, Thailand and India, will stand to benefit from China’s growth rebalancing, as their exports are more geared towards consumption than investment.

This gain from rebalancing can help to offset some of the first-round impact from slowing Chinese demand. For others, noticeably Taiwan, Malaysia and Korea, their exposures are tilted more towards investment, creating more pain for these economies.

In financial markets, China’s influence on the rest of Asia has also grown. Asset price correlations have risen across all markets, to the extent that Asian equities were more correlated with A-shares than the S&P 500 since mid-2015.

Our event study analysis confirms that such co-movements were driven by unique China-shocks, with the results being more pronounced in equity and currency markets.

Another channel of influence is via commodity prices. China accounts for more than half of global demand in some industrial metals, and its economic slowdown in recent years have depressed their prices.

Being a net importer of commodities, Asia as a whole has benefited from these price declines by ways of improved current account balances and increased scope for monetary and fiscal easing.

But for a few commodity exporters in the region – Malaysia and Indonesia – falling commodity prices have only added to their economic malaise.

The impact on developed-market economies is smaller, up to 0.2 per cent, but still statistically significant for the US and EU. These results tend to underscore the popular view that “when China sneezes, the chill does spread, at least in Asia.”

A number of implications can be drawn from this analysis.

First, China’s economic rebalancing is important. If an orderly economic transition can be achieved, coupled with successful reforms, the end result will benefit China, Asia and the world at large.

Second, China’s spillovers in trade and financial markets could spread the impact of Trump’s protectionist policies, even if they were targeted directly at China.

Finally, as asset prices become more correlated between China and the rest of Asia, the dominance of the US in the region will gradually give away to a dual influence, whereby both the US and China exert their appropriate weights.

For a global investor, this means that avoiding China will become increasingly difficult, and understanding China will become more of a necessity.

At the same time, as the Asian market “decouples” from the US, and “couples” with China, the diversification benefit for a developed-market-centric portfolio will rise.

The last point is key to underpinning our constructive view on Asia on a long-term basis, provided that investors maintain a selective mindset.

http://www.todayonline.com/business/world-now-catches-cold-if-china-sneezes-not-us
 
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China wasn't even dominating her immediate regional area (Asia) how can they be the global leader? China virtually have zero political influence on other part of the world outside Asia.

On the other hand US have absolute dominance on South and North America, Europe and Oceania. Both militaristically and politically. The influence is worldwide, I don't see how the mantle of global leadership have pass on from US to China.

Or am I missing something?
 
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China wasn't even dominating her immediate regional area (Asia) how can they be the global leader? China virtually have zero political influence on other part of the world outside Asia.

On the other hand US have absolute dominance on South and North America, Europe and Oceania. Both militaristically and politically. The influence is worldwide, I don't see how the mantle of global leadership have pass on from US to China.

Or am I missing something?

The PDF hyper nationalist fantasy bubble is a wonderful thing to live in.
 
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Trump,s isolationist tendencies will help China in the long run
 
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On the other hand US have absolute dominance on South and North America, Europe and Oceania. Both militaristically and politically. The influence is worldwide, I don't see how the mantle of global leadership have pass on from US to China.
For how long,the way things are going?

The PDF hyper nationalist fantasy bubble is a wonderful thing to live in.
Its hard to find realists from both sides isnt it?
 
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For how long,the way things are going?

Forever.

US does not only have financial concern in the world's pie, but actual real estate all over the world. For US to be declining in world platform, one thing is important is that US have to lose the real estate (oversea territories) and China have to be able to gain ground. I am not talking about foreign bases (like in Djibouti) or lease bases (like USFK in Korea) but actual overseas territories. Like Guam in Asia, Samoa in South Pacific/Oceania and Puerto Rico in Central America and Caribbean.

The problem with money is, you pay good money, people follow you, but one day someone comes up and throw them more money, then they will follow that guy instead of you. But real estate stayed forever.

Unless China is in the mood of world conquering, we can never ever see China would have any domination to world politics. You can only influence a world OUTSIDE your own domain when you make it yours. That's how Colonialism started. Without Overseas Chinese Territories. The influence China can exert is zero.

The PDF hyper nationalist fantasy bubble is a wonderful thing to live in.

lol, in my dream, I am dating hot model, driving Ferrari and living in a 2 acre villa. It's good to live in a dream...
 
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Forever.

US does not only have financial concern in the world's pie, but actual real estate all over the world. For US to be declining in world platform, one thing is important is that US have to lose the real estate (oversea territories) and China have to be able to gain ground. I am not talking about foreign bases (like in Djibouti) or lease bases (like USFK in Korea) but actual overseas territories. Like Guam in Asia, Samoa in South Pacific/Oceania and Puerto Rico in Central America and Caribbean.

The problem with money is, you pay good money, people follow you, but one day someone comes up and throw them more money, then they will follow that guy instead of you. But real estate stayed forever.

Unless China is in the mood of world conquering, we can never ever see China would have any domination to world politics. You can only influence a world OUTSIDE your own domain when you make it yours. That's how Colonialism started. Without Overseas Chinese Territories. The influence China can exert is zero.



lol, in my dream, I am dating hot model, driving Ferrari and living in a 2 acre villa. It's good to live inside a dream...
And what if China makes countries economic,financially dependent on China,like it does with most ''Black'' African countries,most of the neighbourhood and South American countries?
Even Russia and some Arab countries are under Chinese influence.
 
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