All China Review April/May 2017 by EBR MEDIA

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CHINA REVIEW

April - May 2017 www.allchinareview.com

Mutual Gains, The New Normal In International Relations? China Steps Up as U.S. Steps Back from Global Leadership Opportunities and Limits of China’s Role in Afghanistan Food and Identity in Contemporary Perspective

Moving from Washington to Beijing Consensus

ISSN: 2044-9305

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APRIL - MAY 2017

China Steps Up as US Steps Back from Global Leadership p.18

10 15

International Relations Mutual Gains, Not Shared Values: The New Normal In International Relations? Lucio Blanco Pitlo III

Outlook Moving from Washington to Beijing Consensus Ume Farwa

China Steps Up as US Steps Back from Global Leadership Flynt Leverett and Robert Sprinkle

The Coming War on China John Pilger

Opportunities and Limits of China’s Role in Afghanistan Angela Stanzel

Economy 32

Can China’s Belt and Road Initiative Successfully Lead to a New Eurasian Economic Zone? Jeremy Garlick

The TTP is Dead. What Happens Next? Kavaljit Singh The Rise and Decline of Four Little Dragons Dan Steinbock

Can the “Great Wall” Hold Back a Technological “Tsunami”? Christopher Lim and Tamara Nair

Culture 50

2017: Three Great Expectations Tommy Koh

World Politics

Technology 45

Authentic, Ethnic, and Fusion: Food and Identity in Contemporary Perspective Ishita Banerjee-Dube

Olympics 54

Beijing 2022 and China’s Second “ComingOut Party” Dan Steinbock

China-US 57

China and Trump: A New Mega-narrative Zha Daojiong

World 59

Trump and the New Iran Gambit Peter Koenig

Paul Krugman is Right Here – The Danger of Trumps’ Trade Plans is the Reverse China Shock Tim Worstall

Philippines 65

The Philippines “BRIC” Plan: From Regime Change Ploys to Accelerated Economic Development Dan Steinbock

Production & Design: Angela Lamcaster Print Strategy: Stefan Newhart Production Accounts: Lynn Moses Editors: Elenora Elroy, David Lean Managing Editor Europe & Americas: Yetunde Olupitan Group Managing Editor: Jane Liu Editor in Chief: All China Review Publishing Oscar Daniel READERS PLEASE NOTE: The views expressed in articles are the authors' and not necessarily those of All China Review. Authors may have consulting or other business relationships with the companies they discuss. All China Review: 3 - 7 Sunnyhill Road, London SW16 2UG, Tel +44 (0)20 3598 5088, Fax +44 (0)20 7000 1252, info@allchinareview.com, www.allchinareview.com No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording, or any information storage and retrieval system, without written permission. Copyright © 2017 EBR Media Ltd. All rights reserved. ISSN 2044-9305

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International Relations

Mutual Gains, Not Shared Values: The New Normal In International Relations? BY LUCIO BLANCO PITLO III

Much talk about the evolving global political and economic landscape largely ignores the major underlying factor driving this transformational shift, namely the growing emphasis on mutual gains rather than shared values as a fundamental basis for state relations. Shared values is losing its appeal and several reasons account for it.

ecent talks about the changing nature and character of global political and economic institutions tend to emphasise the role of certain emerging powers, notably China, as active players intent on pushing the envelope, encouraging if not compelling such institutions to reform lest they be challenged by the creation of parallel or competing institutions. Much space was also given exploring the geo-economic or geopolitical agendas behind this push. However, though this focus seems to provide a convenient lens by which to examine evolving international dynamics, it overlooks a major underlying factor driving this transformational shift, namely the growing emphasis put on mutual gains rather than shared values as a fundamental basis for state-to-state interaction. Furthermore, stress on the agency

paradigm overly assumes a passive and pliant role for non-rival states. Shared values, like commitment to democracy, human rights and free market capitalism, used to define the foreign policy conduct of many states but later developments suggest significant change. For long, states that share similar political and economic values, developed comprehensive, deep-seated and robust relations, while interface with states that harbour different values were severely constrained, if not virtually nonexistent. This is most acute during the Cold War where political values determined state allegiance and alignment, putting states into a tight bind ready to enter war to promote political causes or counter the spread of a rival ideology. Since then, developmental impetus took center stage and has come to reshape the landscape of international relations in ways unthinkable in the past with states crossing political lines to obtain economic gains. Democratic and authoritarian states of varying levels of economic development expanded and deepened trade and commerce with one another. China has become the largest trading partner of the US and Japan and second largest trading partner of the EU. The US and Japan, in turn, had become the first and second (discounting Hong Kong) largest

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International Relations

Mutual gain, particularly economic, is becoming a crucial criterion, if not determinant, in the relations of states. BRICS, for instance, groups emerging regional economies across the political line; the Belt and Road connectivity initiative passes by more than 65 states with varying forms of government and political traditions and; the 57-strong Asian Infrastructure Investment Bank includes established European democracies as members.

A hub is needed to facilitate the growing market for natural gas in Asia. Photo: AP

trade partners respectively of China. Russia is the third largest trading partner of the EU, while the EU is Russia’s biggest trade partner. From a closed economy pre-reform, China became the world’s largest recipient of foreign direct investments (FDI), attracting capital from democracies in Asia, the US and Europe. The US and Australia, in turn, have become the top two destinations of Chinese outbound investments. Economic stimulus, thus, accelerated the dismantlement of walls that long bar East-West contact. Indeed, mutual gain, particularly economic, is becoming a crucial criterion, if not determinant, in the relations of states. BRICS, for instance, groups emerging regional economies across the political line; the Belt and Road connectivity initiative passes by more than 65 states with varying forms of government and political traditions and; the 57-strong Asian Infrastructure Investment Bank includes established European democracies as members. Several factors could help explain this. One is that

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April - May 2017

socio-cultural idiosyncrasies facilitated varying degrees of indigenisation of foreign-inspired politico-economic models which made for significant differences in the nature and dynamics of institutions among states that are supposed to share similar values. The US and Nigeria are both democracies and China and North Korea are both authoritarian states, but tremendous disparities between these pairs exist despite being in the same camp. This made the appeal of shared values hollow and superficial. In fact, today, the absence of shared political values no longer serves as an effective impediment in expanding economic ties with states across the political fence. Second is the frustration with some elements of borrowed models and fascination with the success of states harbouring different versions. While democracy was praised for representativeness and inclusiveness, it became susceptible to decision inefficiency and political stagnation arising from wrangling between and among different government branches e.g. executive, legislative and judiciary. For instance, while the Obama Administration strongly pushed for the so-called high standard Trans-Pacific Partnership (TPP), US Congress seem unenthusiastic. Authoritarian states, on the other hand, though criticised for lack or limited popular political participation, constrained public space and market intervention, were recognised for their decisiveness, continuity and relative stability. China’s decisive stimulus package sustained the country’s economic growth in the aftermath of the 2008 financial crisis. The apparent shortcomings of the liberal democratic model against the context of China’s rise as the world’s second largest economy despite still being a developing country made many democracies receptive to engage China. For democracies in the developing world, it even triggered interest in exploring the adoption of certain aspects

of alternative or counter models. For transitioning states, it gave reason to pause accelerating democratic and market reforms. Furthermore, the economic rise of non-democracies is prompting a rethinking on the utility and universality of certain values and concepts as suffrage, uncensored press, and free market. Interestingly, democracies with more advanced economies are in the forefront of expanding economic ties with emerging non-democracies, notably China. But while the West and Japan have deepened economic linkages with China, several developing and underdeveloped states are still shaking decades of fostered inhibitions in cultivating commercial contacts with China. Eager to sustain or speed up their economic growth, these states are taking the leap of faith with the hope of improving their fortunes despite attendant uncertainties. A good case in point is the Philippines’ weaning away from longstanding US dependence and warming relations with China and Russia – a critical departure for one of Southeast Asia’s most Western-leaning states. Third, because emphasis on shared values tend to highlight differences, it lends to an us-versus-them prism which echoes Cold War thinking. The changing times make reference to this logic less appealing for many states. The serious backlash of externally-induced or supported regime change further dampened the salience of promoting such shared values in regions with starkly unique historical and socio-cultural underpinnings. As economic interaction across political lines deepens, engendering greater familiarity and mutual benefit, all the more this commonality of values as a bedrock of foreign policy will be challenged. For shared political values to regain its luster, it has to work in conjunction with strong economic fundamentals. Fourth, economic priorities are taking greater ascendancy over traditional security and defense concerns. If defense and security pacts (Warsaw Pact, NATO) within blocs dominated the Cold War period, the flurry of bilateral, regional and mega-regional trade and economic agreements (e.g. TPP and Regional Comprehensive Economic Cooperation) intensely negotiated by states across the political line characterise the 1990s to the present. In fact, interestingly, a possible role reversal could be in the offing with forecasts of the US becoming more protectionist and inward-looking under President Trump, while China continue to push for reforms

MOREOVER, “ALLIANCES”, WITH THEIR STRONG SECURITY GROUNDING, ARE BECOMING LESS FASHIONABLE, WHILE “PARTNERSHIPS”, WITH THEIR PROMINENT ECONOMIC ORIENTATION, ARE NOW BECOMING THE BUZZWORD. and advocate dismantling of trade and investment barriers. Moreover, “alliances”, with their strong security grounding, are becoming less fashionable, while “partnerships”, with their prominent economic orientation, are now becoming the buzzword. Even longstanding military alliances are being redefined to factor in greater cooperation in addressing crossborder non-traditional security challenges e.g. maritime piracy, humanitarian assistance, disaster preparedness. This could give them a new meaning and relevance in an entirely different post-Cold War environment. Nevertheless, it remains to be seen whether mutual economic gain can eventually marginalise shared values and serve as an enduring basis for foreign relations. For one, democracies do not lose or diminish their identity as they expand trade with non-democracies. In addition, democracies remain cautious in dealing with non-democracies and criticisms over limited civil and political rights and state interference in market affairs remain, though no longer as vocal as before. Finally, that economic interaction may eventually breed political synergy remains to be established.

Lucio Blanco Pitlo III is a Lecturer at the Chinese Studies Program of Ateneo de Manila University, Board Member of the Philippine Association for China Studies and is a Contributing Editor (Reviews) for the Asian Politics & Policy Journal. He obtained his Master of Laws from Peking University and his Bachelor degree in Public Administration from the University of the Philippines. He writes on China-Southeast Asia-US affairs.

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Global Outlook

Moving from

Washington to Beijing Consensus BY UME FARWA

In the era of globalisation, Ume Farwa elaborates on the failures of the Washington Consensus and the hopes and promises that the Beijing Consensus brings, not only to China but also to smaller nations around the globe. “After 75 years of US leadership on the world stage, the Mar-a-Lago Summit might mark the beginning of a handover of power from the United States to China.” Fareed Zakaria, Author of the Post American World 1

ow that the question of the shift of power from the East to the West has settled, the time demands a global outlook markedly in contrast with the previous one. Along with the American Dream, Washington Consensus has also proved to be an illusion. The United States couldn’t live up to its own socio-economic proposals according to the Washington Consensus, both at home and abroad. Since 2003, when the world famous economist, Joshua Cooper Ramo floated the term Beijing Consensus, a Chinese model of development and progress had begun to attract attention across the nations with American global influence shrinking and Populist forces compelling it to back off from its global responsibilities, the Beijing Consensus could never have been more relevant. Here a critical question arises: What can the Beijing Consensus offer to the world,

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April - May 2017

In his Bowling Alone, Robert Putnam pens the details of how American elites have been building an empire at the expense of their nation, all in the name of neo-liberalism.

in terms of ideas, initiatives and institutions, which Washington Consensus failed to deliver? In 1989, John Williamson proposed ten policy proposals, based on the themes frequently used in Washington-based international institutions, to set an economic model for other nations. Centred in financial liberalisation, private entrepreneurship and political opening, these policy proposals were as much social as they were economic. It shifted development thinking to neo-liberalism. During the Cold-War era, its inherent tensions between democracy and capitalism remained bubbling under the surface resurfacing at the time of the Great Recession of 2007. Since then, the world has been losing confidence in it. However, it suffered setbacks from its very outset. It is because it manifested itself as “one-size-fits-all” approach. When Williamson tried to apply it to Latin American, he was surprised to know it was not applicable to even America’s immediate neighbourhood.2 In 30 years of trade with Latin America, the consensus helped grow the region less than one percent in terms of per capita income. It constituted a system of monopoly of global and national elites in which the rest suffered. In his Bowling Alone, Robert Putnam pens the details of how American elites have been building an empire at the expense of their nation, all in the name of neo-liberalism.

Conceptualising mainly on equality and development, it had been benefiting only the few elites of the societies. J.D. Vance penned down the painful detail of alienation and anger of America’s working class and of how Americans stood against their own system. In his book, Hillbilly’s Elegy: A Memoir of Family and Culture in Crisis, he explained that Americans believed that their governments robbed them of their hopes, shattered their dreams and their cities crumbled. This is the utter failure of the Washington Consensus in its very home. The Washington Consensus lost its charm because its spirit was devoid of any consensus. From the very outlook, it appears a diktat carried out through Bretton Woods Institutions. For decades, the Global South has been looking for “opportunityfor-all” but it found itself marginalised in global economy and, at times, burdened by the fiscal policies, with the stringent conditions of reforms from US perspective only. In comparison with the Washington Consensus, the Beijing Consensus is the Chinese model of progress which is a fusion of Chinese thinking and learning on a development model and globalisation. It interpreted growth and development as a function of political control in economic sector, state-ownership of firms and innovation in state sectors. Joshua Cooper Ramo describes it as a composite of three theorems: Repositioning the values of innovation to reduce the friction-losses of reforms; a development model of sustainability and equality; and the theory of selfdetermination.3 China’s innovation with caution was the flip side of “cross the river by groping the stones”. Therefore, it can offer flexible ideas of development of experimenting while gauging a state’s own suitability. From 1980 to 2015, it reduced poverty by 94 percent, which is no mean feat.4 It, thus, sets a successful practical application of bottom-up sustainable development approach. It is the approach that China figured out for its progress and development when the Washington Consensus (Washington-knows-best) was the global norm. Therefore, it is attractive to other nations because they think, just like China, they can write their own story of success and development, keeping their culture and national pride intact, in a world where they might not be a significant power. Lurking behind it is the idea of a free world: freedom from foreign oppression; striving for a path to be independent while staying interdependent with

other states. This idea along with developing countries is the strength of China in furthering the Beijing Consensus. It is time for China to add intellectual charisma and accelerate the momentum of China-led initiatives and institutions based on consensus, suitability, wide-ranging applicability, and economic equality. With the US backing off from TransPacific Partnership, it is time for Regional Comprehensive Economic Partnership (RCEP). Here, China is reluctant to give a regional free trade agreement, which excludes the US. Instead of waiting for the Trump’s protectionist US, China should take lead and further RCEP. It would strengthen Beijing’s influence in the region if it starts negotiations on RCEP on the basis of ASEA Free Trade Area. In Asia only, there is need of $1.4 trillion to invest in infrastructure annually between 2017 and 2030 to sustain its growth momentum, according to the latest Asia Development Bank report.5 One Belt One Road (OBOR) is one such initiative. It used an investment-aid-grant-loan model to back the projects of these initiatives. In Asia, particularly, inadequacies and different socio-political systems are some of the challenges which China needs to steer clear of. For instance, in the China-Pakistan Economic Corridor (CPEC), it has used this model, which is making the country a darling of foreign investors. These investments are the soft and concessional loans, which are given to the companies involved.

The Beijing Consensus is the Chinese model of progress which is a fusion of Chinese thinking and learning on a development model and globalisation.

It is time for China to add intellectual charisma and accelerate the momentum of China-led initiatives and institutions based on consensus, suitability, wide-ranging applicability, and economic equality. Nonetheless, there are certain confusions popping up. The most significant became apparent when the Global Times published an article whether Pakistan would be able to return loans as its fiscal debt increased to around 2.4 percent.6 To dispel

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Global Outlook

In the short run, state-controlled capitalism may work but in the long run, due to its inherent short falls, China needs to bring a paradigm shift in market economics and offer an alternative to free-market capitalism in an all embracing manner.

The 16th Meeting of The Regional Comprehensive Economic Partnership Trade Negotiating Committee and Related Meetings held in Indonesia December 2016. Photo courtesy by www.royalindo.com

the misperceptions, if any, and allow no room for misunderstandings, Chinese state entities will have to work in collaboration with the host country and its people. Before launching any mega-investment project, it needs to conduct a survey among different strata of its society to analyse how the host country views China’s approach. In a today’s multi-polar word, the likelihood of the South-South Development Cooperation has been expanding. It will resolve the longstanding issue of the North-South gap in terms of economy and industrialisation. Since its initiatives in developing countries are based on the South-South Cooperation Development Cooperation Model, it needs to expand its development finances, not in terms of volume but in its scope as well. Therefore, a Sovereign Wealth Fund should be established. China has created a network of multilateral regional and international institutions. Asian Infrastructure Investment Bank, Shanghai Cooperation Organization and Association of South East Asian Nations +3 are the few of such influential entities. These fora can be used effectively to enhance influence of Beijing in the region. However, it shouldn’t stand aloof from existing

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internal financial institutions rather it should increase its influence within these institutions. It should develop a culture of consensus rather than dictation, the old practice in these institutions. Gradually, it should increase joint ventures of Bretton Woods Institutions and China-led institutions in order to expand its sphere of influence. Intellectual charisma of the Beijing Consensus is its strength. It is anchored in learning from the West’s failures without leaving its own ground. This adds gravity to the idea of Globalisation. In the short run, state-controlled capitalism may work but in the long run, due to its inherent short falls, China needs to bring a paradigm shift in market economics and offer an alternative to free-market capitalism in an all embracing manner. It is of paramount significance as the nations which lead the world create a “Weltanshauung”, the global outlook, which then becomes a central piece of their global supremacy. The US created the global outlook on the basis of liberalism, which charmed the world. Though this global outlook is fading away, China still needs to work for a global outlook with its own characteristics. The Beijing Consensus is but a part of this outlook. Beijing will have to proportionate its increasing influence with acceptance of its ideas.

Ume Farwa is a Research Fellow at the Institute of Strategic Studies Islamabad (ISSI) and Sub-editor at ISSI Quarterly Journal. Her area of research is the political economy of China and of Pakistan-China relations. References 1. Zakaria, Fraeed. (2017). Trump prepares to pass the leadership baton to China. The Washington Post, March 16. Also available at https://www. washingtonpost.com/opinions/trump-prepares-to-pass-the-worldleadership-baton-to-china/2017/03/16/c64ccee2-0a84-11e7-a15f a58d4a988474_story.html?utm_term=.b8face82e463 2. Ramo, Joshua. (2004). Beijing Consensus. Foreign Policy Centre, London. 3. Ramo, Joshua, “Beijing Consensus”, 2004, Foreign Policy centre, London, page 11-12. 4. Ghazanfar Ali Garewal. (2017). Shanghai: economic conduit for global south. Shanghai Daily, February. http://www.shanghaidaily.com/opinion /foreignperspectives/Shanghai-economic-conduit-for-global-south/shdaily.shtml 5. China Real Time Report. (2017). Building Binge: ADB Calls for More Infrastructure Across Asia. Wall Street Journal, February 8. http://blogs.wsj.com/ chinarealtime/2017/02/28/adb0228/ 6. Song Shengxia. (2017). China should ensure Pakistan doesn’t face financial crisis. The Global Times, February21.http://www.globaltimes.cn/content/1033997.shtml

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Outlook

2017 presidential election will be reserved for Malay candidates: PM Lee

2017: THREE GREAT EXPECTATIONS BY TOMMY KOH

In this article, the author discusses three events that will be important in 2017. These are Donald Trump’s inauguration as the 45th President of the US, Asean’s 50th anniversary and the next Singapore presidential election.

Third, the next Singapore presidential election will be held on or before Aug 26. I wish to discuss each of those three events and explain why they are important and how they will have an impact on our lives.

The Trump Presidency The US is the only superpower in the world. It has the world’s largest economy, the most powerful military and very attractive soft power. There is no other country like it. At the end of World War II, the US led the victorious allies in designing the

hen I think of 2017, three events dominate my mind. First, on Jan 20, Mr Donald Trump will be inaugurated as the 45th President of the United States of America. Second, on Aug 8, Asean will commemorate its 50th anniversary.

post-war order. The vision was to create a new world order based on the sovereign equality of states, the rule of law and collective security. On the economic side, the vision was to create an economic order based on free trade, stable currencies and cooperation to promote development. It was also part of the vision to promote democracy and human rights. To fulfil that vision, several multilateral institutions were established. They include the United Nations, the International Monetary Fund, the World Bank and the General Agreement on Tariffs and Trade (which has evolved to become the World Trade Organisation). Every US president since Franklin Delano Roosevelt has, to a greater or lesser extent, adhered to that vision and supported those institutions of global governance. The question is whether the 45th President of the United States, Mr Donald Trump, will do the same or depart from precedent and make a paradigm shift. Under his leadership, will the US become isolationist?

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Outlook

Individual Asean governments must have the wisdom to realise that Asean must remain united and neutral if it is to retain the central role it plays in the regional architecture.

ASEAN showcased a new brand logo for its Visit ASEAN@50 Golden Celebration 2017 tourism campaign at the ASEAN Summit held in Vientiane. © TTG Asia

Will the US continue to champion free trade and globalisation or will it become protectionist and pursue a mercantilist trade policy? Will the US pursue the goal “to make America great again” with or without regard to the interests of others? We do not know the answers to those questions. We can, however, take comfort from some of the individuals whom President-elect Trump has nominated. The Secretary of State and the Defence Secretary are two of the most important posts in the Cabinet. General James “Mad Dog” Mattis, the nominee to be the defence secretary, has a solid reputation in Washington. He earned his nickname in the Marine Corps as a charismatic and toughminded military commander. Mr Rex Tillerson, the nominee for the post of secretary of state, is well known to Singapore’s leaders. ExxonMobil, the company which he leads, is a major investor in Singapore and a good corporate citizen. Mr Tillerson is a free trader and has written in support of the Trans-Pacific Partnership. He has also testified in the US Congress in favour

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April - May 2017

of the US acceding to the UN Convention on the Law of the Sea. He is not an ideologue but a pragmatist. If confirmed, we are confident that he will be a successful secretary of state. Asean Turns 50 On Aug 8, Asean will mark its 50th birthday. It is an event which all of us in Singapore and in Southeast Asia should celebrate. When Asean was born in 1967, many pundits in the West predicted that it would die in its infancy. They pointed out that the region was too diverse and there were few commonalities among the founding five countries. This was a time when some commentators in the West had described South-east Asia as the Balkans of Asia. When the Cold War ended, the detractors of Asean in the West said that Asean was doomed. They described Asean as a creature of the Cold War. The reasoning was that with the end of the Cold War, Asean had lost its reason for being and would therefore fade away. Individual Asean governments must have the wisdom to realise that Asean must remain united and neutral if it is to retain the central role it plays in the regional architecture. Over the past 50 years Asean has overcome many challenges. It has grown from strength to strength. It is today one of the world's most successful regional organisations. I would highlight three of its most important achievements. Asean has transformed South-east Asia from a region of war and conflict to a region of peace and stability. It is not yet possible to say that war between Asean countries is unthinkable. However, when an armed conflict occurred along the Cambodian-Thai border, Asean intervened by trying to calm the situation and urging the two sides to show restraint. Indonesia offered to send observers to the border. The UN Security Council outsourced the management of the crisis to Asean. The second achievement of Asean is economic. The rise of Asean in the world economy is one of

the three biggest growth stories of human history. Asean has become an economic community. The ambition is to create a single market and production base by eliminating tariffs and other trade barriers. With 620 million consumers, Asean has a combined GDP of US$2.3 trillion (S$3.3 trillion), making it the seventh-largest economy in the world. The combined GDP is projected to increase by more than fourfold to US$10 trillion by 2030. This will make Asean the fourth-largest economy in the world. The third achievement of Asean is perhaps the most remarkable. The 10 member states of Asean have been able to unite and act as one. It has established fruitful relations with its 10 dialogue partners, which include all the major powers. It has established several forums to promote dialogue, mutual trust and cooperation, such as the Asean Regional Forum, Asean Plus Three, the East Asia Summit and the Asean Defence Ministers Plus. Asean chairs all these forums. Does Asean have a bright future? I think Asean has a bright future but it faces several important challenges. The first challenge is to ensure that it is securely anchored in the hearts and minds of the 620 million citizens of Asean. Asean must not be seen by the people as a project of the elite and of big business. The second challenge is for the individual governments of the 10 countries to take good care of the people who will be adversely affected by trade liberalisation and economic integration. This must be done in order to avoid a populist backlash of the nature we have seen in Britain and the US. The third challenge is to stay united in the face of intensified competition by the major powers, especially between the US and China. Individual Asean governments must have the wisdom to realise that Asean must remain united and neutral if it is to retain the central role it plays in the regional architecture. Electing Singaporeâ&#x20AC;&#x2122;s Eighth President The Singapore electorate will elect its eighth president on or before Aug 26. The Singapore Government has declared that the next presidential election will be reserved for Malay candidates. Singapore has not had a Malay president since Mr Yusof Ishak in 1970. I had expected my Malay friends to welcome the decision to have a reserved election for our eighth president. Much to my surprise, several of my Malay friends told me that they did not like the idea. They

explained that it would violate the principle of meritocracy. They said they would prefer a Malay president to be elected in an open competition and not in a reserved election. What is my attitude towards the issue? I hold the view that the highest office of our Republic, the presidency, should not be the monopoly or the duopoly of one or two ethnic groups. It should be held by worthy individuals from the different ethnic groups.

The Singapore Government has declared that the next presidential election will be reserved for Malay candidates. Singapore has not had a Malay president since Mr Yusof Ishak in 1970. I like the old system of the Parliament electing the president. Under that system, we had an excellent Malay president, Mr Yusof Ishak, and an excellent Eurasian president, Dr Benjamin Sheares. The Government is not confident that, in an open election, we will ever elect a Malay or a Eurasian to that high office. This is the rationale behind the procedure of reserving an election for a particular ethnic group. Is it a violation of the principle of meritocracy? We have two competing principles at play: the principle of meritocracy and the principle of inclusiveness. In most situations, the principle of meritocracy should prevail over the principle of inclusiveness. However, in this case, I would like the principle of inclusiveness to prevail over the principle of meritocracy. I therefore look forward to voting for an eminently qualified Malay candidate next year to be our eighth president. This article was first published on The Straits Times on 3 January 2017 (http://www.straitstimes.com/opinion/ 2017-three-great-expectations).

Tommy Koh is the Chairman of the governing board of the Centre for International Law at NUS.

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World Politics

China Steps Up as US Steps Back from Global Leadership BY FLYNT LEVERETT & ROBERT SPRINKLE

Global leadership is shifting, not drifting, toward Beijing. As Washington greets a new administration disinclined to play a worldwide role, Beijing increasingly accepts opportunities to lead.

hinese President Xi Jinping’s appearance at the World Economic Forum earlier this year shows global leadership is shifting, not drifting, toward Beijing. The most vigorous defense of globalization and multilateral cooperation was mounted not by an American statesman, but by the president of the People’s Republic of China. “The problems troubling the world are not caused by globalization,” Xi declared. “Countries should view their own interest in the broader context and refrain from pursuing their own interests at the expense of others.” Speculation is mounting that the United States, with Donald Trump cast in the role of president, will ignore international challenges, renounce global responsibilities and abandon friends and allies. As Washington greets a new administration disinclined to play a worldwide role, Beijing increasingly accepts opportunities to lead. Xi and his colleagues understand that their country’s domestic

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Xi Jinping appeared at the World Economic Forum, a first for a Chinese leader, with a fullthroated defense of globalisation. © Gian Ehrenzeller / European Pressphoto Agency

China is already the world’s leading producer of renewable energy technologies. More remarkably, it is also the leading consumer.

development and global ascendance require steady engagement and honest efforts abroad. Yes, China has “done the right thing” before. It has restricted antibiotics in food-animal agriculture, created a new infrastructure-development bank for Asia, aided previously exploited African countries and promised to end its internal ivory trade. But never before has China so forthrightly stepped up when the United States appears to be stepping away. As scholars of Chinese strategy and the intersection of science and politics, we see how Beijing’s ambitions and interests will affect its engagement on a range of important international issues. The Case of Climate Change Climate change policy is one good example of this trend. Commentators warn that Trump’s pledge to withdraw the US from the Paris climate agreement would let China “off the hook” for curbing carbon emissions. In fact, China put itself “on the hook” in Paris for reasons having little to do with the United States. China’s most urgent atmospheric problem is not carbon dioxide. It’s combustion toxicity from burning coal, oil and biomass. The Chinese these days don’t look through their air; they look at it. And what they see, they breathe.

Combustion toxicity has degraded China’s air quality so much, by Chinese assessments, as to destroy 10 percent of GDP annually since the late 1980s and cause hundreds of thousands of premature deaths every year. And air pollution has become China’s single greatest cause of social unrest. In response, China is closing its old coal-fired power plants, and the new ones it’s building are much farther away from its prosperous and politically influential eastern cities. Other fossil-fueled industries are being put farther away, too. China has also contracted with Russia to buy huge amounts of natural gas, whose combustion emits lots of CO2 but not a lot of toxic air pollutants. These moves will expose fewer people, especially prosperous urban dwellers, to toxic air pollution. On their own, though, these moves will not do much to meet carbon targets and restrain warming. In an even better bet to clear its air, China is moving to add more nuclear, hydroelectric, solar and wind turbine generating capacity. Greenpeace estimates that during every hour of every day in 2015, China on average installed more than one new wind turbine, and enough solar panels to cover a soccer field. China is already the world’s leading producer of renewable energy technologies. More remarkably, it is also the leading consumer. And in January, it announced plans to invest an additional US$360 billion in renewable power between now and 2020. That’s $120 billion a year. These renewable power measures are being taken to fight China’s number one problem – air pollution – but they will also automatically cut China’s carbon emissions. If it can manage political rivalries among local power companies and upgrade its electrical grid to handle all that solar and wind capacity, then China is likely to meet its Paris commitments earlier than currently required. Defecting from Paris would not help China address its air pollution problem. Defection would, however, reinforce the

presumption that US leadership is indispensable – a presumption Beijing is loath to perpetuate. A savvier and more probable move is for China to assert – for the first time on a major global issue – moral authority. Chinese diplomats are already reassuring the world that China will keep and even expand its climate commitments. This message conveys Beijing’s resolve not to let multilateral greenhouse gas mitigation collapse, and show the way out of a crisis whose agreed solution is threatened by others’ malfeasance. National Interest in Global Leadership If sustained, such action will mark a critical inflection point in China’s global role. It will become less a challenger to an established order, and more a champion of a common cause. The United States will risk being regarded as aloof and unreliable and, following its 2016 election, even politically unstable. Likewise, Beijing is asserting greater leadership in other areas once led by Washington. With the demise of the Trans-Pacific Partnership, which Washington negotiated with 11 Asian countries excluding China, Beijing is promoting its own Pacific trade-and-investment framework excluding the United States. Even more grandly, Xi is articulating an alternative vision for global economic growth. The model focuses on physical investment, especially in transportation and IT infrastructure. In this, it is linked to the new Silk Road project, through which China is expanding linkages across Eurasia by integrating railways, ports and information networks into transnational corridors. The Chinese approach also does not rely on portfolio investment and central banks exertions to drive growth – a sharp contrast to Western policies. Ceding global moral authority to China would be a high price for America to pay for the pleasures of political posturing. Yet a China leading by example would have a greater stake in its own reputation, and the greater that stake becomes the more engaged China becomes. Such a China, we believe, could profoundly benefit the world. This article was first published on The Conversation on 24 January 2017. (http://theconversation.com/china-steps-up-as-us-steps-back-from-globalleadership-70962).

Solar panels in Jiangsu Province, China. © Reuters

Flynt L. Leverett (left) is Professor of International Affairs and Asian Studies at Pennsylvania State University. Robert Sprinkle (right) is Associate Professor of Public Policy at University of Maryland.

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World Politics

THE COMING WAR on China BY JOHN PILGER

The world is inexorably shifting east; but the astonishing vision of Eurasia from China is barely understood in the West. The rise of China as an economic power is declared an “existential threat” to the divine right of the United States to rule and dominate human affairs.

hen I first went to Hiroshima in 1967, the shadow on the steps was still there. It was an almost perfect impression of a human being at ease: legs splayed, back bent,

one hand by her side as she sat waiting for a bank to open. At a quarter past eight on the morning of 6 August 1945, she and her silhouette were burned into the granite. I stared at the shadow for an hour or more, unforgettably. When I returned many years later, it was gone: taken away, “disappeared”, a political embarrassment. I have spent two years making a documentary film, The Coming War on China, in which the evidence and witnesses warn that nuclear war is no longer a shadow, but a contingency.

The greatest build-up of American-led military forces since the Second World War is well under way. They are in the northern hemisphere, on the western borders of Russia, and in Asia and the Pacific, confronting China. The great danger this beckons is not news, or it is buried and distorted: a drumbeat of mainstream fake news that echoes the psychopathic fear embedded in public consciousness during much of the 20th century. Like the renewal of post-Soviet Russia, the rise of China as an economic power is declared an “existential threat” to the divine right of the United States to rule and dominate human affairs. To counter this, in 2011 President Obama announced a “pivot to Asia”, which meant that almost two-thirds of US naval forces would be transferred to Asia and the Pacific by 2020. Today, more than 400 American military bases encircle China with missiles, bombers, warships and, above all, nuclear

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weapons. From Australia north through the Pacific to Japan, Korea and across Eurasia to Afghanistan and India, the bases form, says one US strategist, “the perfect noose”. A study by the RAND Corporation – which, since Vietnam, has planned America’s wars – is entitled, War with China: Thinking Through the Unthinkable. Commissioned by the US Army, the authors evoke the cold war when RAND made notorious the catch cry of its chief strategist, Herman Kahn –“thinking the unthinkable”. Kahn’s book, On Thermonuclear War, elaborated a plan for a “winnable” nuclear war against the Soviet Union. Today, his apocalyptic view is shared by those holding real power in the United States: the militarists and neo-conservatives in the executive, the Pentagon, the intelligence and “national security” establishment and Congress. The current Secretary of Defense, Ashley Carter, a verbose provocateur,

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says US policy is to confront those “who see America’s dominance and want to take that away from us”. For all the attempts to detect a departure in foreign policy, this is almost certainly the view of Donald Trump, whose abuse of China during the election campaign included that of “rapist” of the American economy. On 2 December, in a direct provocation of China, President-elect Trump spoke to the President of Taiwan, which China considers a renegade province of the mainland. Armed with American missiles, Taiwan is an enduring flashpoint between Washington and Beijing. “The United States”, wrote Amitai Etzioni, professor of international Affairs at George Washington University, “is preparing for a war with China, a momentous decision that so far has failed to receive a thorough review from elected officials, namely the White House and Congress.” This war would begin with a “blinding attack

against Chinese anti-access facilities, including land and sea-based missile launchers … satellite and anti-satellite weapons”. The incalculable risk is that “deep inland strikes could be mistakenly perceived by the Chinese as pre-emptive attempts to take out its nuclear weapons, thus cornering them into ‘a terrible use-it-or-lose-it dilemma’ [that would] lead to nuclear war.” In 2015, the Pentagon released its Law of War Manual. “The United States”, it says, “has not accepted a treaty rule that prohibits the use of nuclear weapons per se, and thus nuclear weapons are lawful weapons for the United States.” In China, a strategist told me, “We are not your enemy, but if you [in the West] decide we are, we must prepare without delay.” China’s military and arsenal are small compared to America’s. However, “for the first time,” wrote Gregory Kulacki of the Union of Concerned

Left: American bases form a giant noose encircling China with missiles, bombers, warships all the way from Australia through the Pacific to Asia and beyond. © RT.com

China certainly does object by word and deed to what it perceives as U.S. abuse of the right of freedom of navigation and threats to use force © Airman Benjamin Dennis / US Navy

In 2014, under the rubric of “information dominance” – the jargon for media manipulation, or fake news, on which the Pentagon spends more than $4 billion – the Obama administration launched a propaganda campaign that cast China, the world’s greatest trading nation, as a threat to “freedom of navigation”. Scientists, “China is discussing putting its nuclear missiles on high alert so that they can be launched quickly on warning of an attack … This would be a significant and dangerous change in Chinese policy … Indeed, the nuclear weapon policies of the United States are the most prominent external factor influencing Chinese advocates for raising the alert level of China’s nuclear forces.” Professor Ted Postol was scientific adviser to the head of US naval operations. An authority on nuclear weapons, he told me, “Everybody here wants to look like they’re tough. See I got to be tough … I’m not afraid of doing anything military, I’m not afraid of threatening; I’m a hairy-chested gorilla. And we have gotten into a state, the United States has gotten into a situation where there’s a lot of sabre-rattling, and it’s really being orchestrated from the top.” I said, “This seems incredibly dangerous.” “That’s an understatement.” In 2015, in considerable secrecy, the US staged its biggest single military exercise since the Cold War. This was Talisman Sabre; an armada of ships and longrange bombers rehearsed an “Air-Sea Battle Concept for China” – ASB – blocking sea lanes in the Straits of Malacca and cutting off China’s access to oil, gas and

other raw materials from the Middle East and Africa. It is such a provocation, and the fear of a US Navy blockade, that has seen China feverishly building strategic airstrips on disputed reefs and islets in the Spratly Islands in the South China Sea. Last July, the UN Permanent Court of Arbitration ruled against China’s claim of sovereignty over these islands. Although the action was brought by the Philippines, it was presented by leading American and British lawyers and could be traced to US Secretary of State Hillary Clinton. In 2010, Clinton flew to Manila. She demanded that America’s former colony reopen the US military bases closed down in the 1990s following a popular campaign against the violence they generated, especially against Filipino women. She declared China’s claim on the Spratly Islands – which lie more than 7,500 miles from the United States – a threat to US “national security” and to “freedom of navigation”. Handed millions of dollars in arms and military equipment, the then government of President Benigno Aquino broke off bilateral talks with China and signed a secretive Enhanced Defense Co-operation Agreement with the US. This established five rotating US bases and restored a hated colonial provision that American forces and contractors were immune from Philippine law. The election of Rodrigo Duterte in April has unnerved Washington. Calling himself a socialist, he declared, “In our relations with the world, the Philippines will pursue an independent foreign policy” and noted that the United States had not apologized for its colonial atrocities. “I will break up with America,” he said, and promised to expel US troops. But the US remains in the Philippines; and joint military exercises continue. In 2014, under the rubric of “information dominance” – the jargon for media manipulation, or fake news, on which the Pentagon spends more than $4 billion – the Obama administration launched a propaganda campaign that cast China, the world’s greatest trading nation, as a threat to “freedom of navigation”. CNN led the way, its “national security reporter”

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One of the most important US bases is Pine Gap near Alice Springs. Founded by the CIA, it spies on China and all of Asia, and is a vital contributor to Washington’s murderous war by drone in the Middle East. reporting excitedly from on board a US Navy surveillance flight over the Spratlys. The BBC persuaded frightened Filipino pilots to fly a single-engine Cessna over the disputed islands “to see how the Chinese would react”. None of these reporters questioned why the Chinese were building airstrips off their own coastline, or why American military forces were massing on China’s doorstep. The designated chief propagandist is Admiral Harry Harris, the US military commander in Asia and the Pacific. “My responsibilities”, he told the New York Times, “cover Bollywood to Hollywood, from polar bears to penguins”. Never was imperial domination described as pithily. Harris is one of a brace of Pentagon admirals and generals briefing selected, malleable journalists and broadcasters, with the aim of justifying a threat as specious as that with which George W Bush and Tony Blair justified the destruction of Iraq and much of the Middle East. In Los Angeles in September, Harris declared he was “ready to confront a revanchist Russia and an assertive China …If we have to fight tonight, I don’t want it to be a fair fight. If it’s a knife fight, I want to bring a gun. If it’s a gun fight, I want to bring in the artillery … and all our partners with their artillery.” These “partners” include South Korea, the launch pad for the Pentagon’s Terminal High Altitude Air Defense system, known as THAAD, ostensibly

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aimed at North Korea. As Professor Postol points out, it targets China. In Sydney, Australia, Harris called on China to “tear down its Great Wall in the South China Sea”. The imagery was front page news. Australia is America’s most obsequious “partner”; its political elite, military, intelligence agencies and the media are integrated into what is known as the “alliance”. Closing the Sydney Harbour Bridge for the motorcade of a visiting American government “dignitary” is not uncommon. The war criminal Dick Cheney was afforded this honour. Although China is Australia’s biggest trader, on which much of the national economy relies, “confronting China” is the diktat from Washington. The few political dissenters in Canberra risk McCarthyite smears in the Murdoch press. “You in Australia are with us come what may,” said one of the architects of the Vietnam war, McGeorge Bundy. One of the most important US bases is Pine Gap near Alice Springs. Founded by the CIA, it spies on China and all of Asia, and is a vital contributor to Washington’s murderous war by drone in the Middle East. In October, Richard Marles, the defence spokesman of the main Australian opposition party, the Labor Party, demanded that “operational decisions” in provocative acts against China be left to military commanders in the South China Sea. In other words, a decision that could mean war with a nuclear power should not be taken by an elected leader or a parliament but by an admiral or a general. This is the Pentagon line, a historic departure for any state calling itself a democracy. The ascendancy of the Pentagon in Washington – which Daniel Ellsberg has called a silent coup – is reflected in the record $5 trillion America has spent on aggressive wars since 9/11, according to a study by Brown University. The million dead in Iraq and the flight of 12 million refugees from at least four

countries are the consequence. The Japanese island of Okinawa has 32 military installations, from which Korea, Vietnam, Cambodia, Afghanistan and Iraq have been attacked by the United States. Today, the principal target is China, with whom Okinawans have close cultural and trade ties. There are military aircraft constantly in the sky over Okinawa; they sometimes crash into homes and schools. People cannot sleep, teachers cannot teach. Wherever they go in their own country, they are fenced in and told to keep out. A popular Okinawan anti-base movement has been growing since a 12-year-old girl was gang-raped by US troops in 1995. It was one of hundreds of such crimes, many of them never prosecuted. Barely acknowledged in the wider world, the resistance has seen the election of Japan’s first antibase governor, Takeshi Onaga, and presented an unfamiliar hurdle to the Tokyo government and the ultra-nationalist prime minister Shinzo Abe’s plans to repeal Japan’s “peace constitution”. The resistance includes Fumiko Shimabukuro, aged 87, a survivor of the Second World War when a quarter of Okinawans died in the American invasion. Fumiko and hundreds of others took refuge in beautiful Henoko Bay, which she is now fighting to save. The US wants to destroy the bay in order to extend runways for its bombers. “We have a choice”, she said, “silence or life”. As we gathered peacefully outside the US base, Camp Schwab, giant Sea Stallion helicopters hovered over us for no reason other than to intimidate. Across the East China Sea lies the Korean island of Jeju, a semi-tropical sanctuary and World Heritage Site declared “an island of world peace”. On this island of world peace has been built one of the most provocative military bases in the world, less than 400 miles

from Shanghai. The fishing village of Gangjeong is dominated by a South Korean naval base purpose-built for US aircraft carriers, nuclear submarines and destroyers equipped with the Aegis missile system, aimed at China. A people’s resistance to these war preparations has been a presence on Jeju for almost a decade. Every day, often twice a day, villagers, Catholic priests and supporters from all over the world stage a religious mass that blocks the gates of the base. In a country where political demonstrations are often banned, unlike powerful religions, the tactic has produced an inspiring spectacle. One of the leaders, Father Mun Jeong-hyeon, told me, “I sing four songs every day at the base, regardless of the weather. I sing in typhoons – no exception. To build this base, they destroyed the environment, and the life of the villagers, and we should be a witness to that. They want to rule the Pacific. They want to make China isolated in the world. They want to be emperor of the world.” I flew from Jeju to Shanghai for the first time in more than a generation. When I was last in China, the loudest noise I remember was the tinkling of bicycle bells; Mao Zedong had recently died, and the cities seemed dark places, in which foreboding and expectation competed. Within a few years, Deng Xiopeng, the “man who changed China”, was the “paramount leader”. Nothing prepared me for the astonishing changes today. China presents exquisite ironies, not least the house in Shanghai where Mao and his comrades secretly founded the Communist Party of China in 1921. Today, it stands in the heart of a very capitalist shipping district; you walk out of this communist shrine with your Little Red Book and your plastic bust of Mao into the embrace of Starbucks, Apple, Cartier, Prada. Would Mao be shocked? I doubt it. Five years before his great revolution in 1949, he sent this secret message to Washington. “China must industrialise.” he wrote, “This can only be done by free enterprise. Chinese and American interests fit together, economically and politically. America need not fear that we will not be co-operative. We cannot risk any conflict.” Mao offered to meet Franklin Roosevelt in the White House, and his successor Harry Truman, and his successor Dwight Eisenhower. He was rebuffed, or willfully ignored. The opportunity that might have changed contemporary history, prevented wars in Asia and saved countless lives was lost because the truth of these overtures was denied in 1950s Washington “when the catatonic Cold War trance,” wrote the critic James Naremore, “held our country in its rigid grip”. The fake mainstream news that once again presents China as a threat is of the same mentality. The world is inexorably shifting east; but the astonishing vision of Eurasia from China is barely understood in the West. The “New Silk Road” is a ribbon of trade, ports,

This article was first published on counterpunch on 2 December 2016.

pipelines and high-speed trains all the way to Europe. The world’s leader in rail technology, China is negotiating with 28 countries for routes on which trains will reach up to 400 kms an hour. This opening to the world has the approval of much of humanity and, along the way, is uniting China and Russia. “I believe in American exceptionalism with every fibre of my being,” said Barack Obama, evoking the fetishism of the 1930s. This modern cult of superiority is Americanism, the world’s dominant predator. Under the liberal Obama, winner of the Nobel Peace Prize, nuclear warhead spending has risen higher than under any president since the end of the Cold War. A mini nuclear weapon is planned. Known as the B61 Model 12, it will mean, says General James Cartwright, former vice-chairman of the Joint Chiefs of Staff, that “going smaller [makes its use] more thinkable”. In September, the Atlantic Council, a mainstream US geopolitical thinktank, published a report that predicted a Hobbesian world “marked by the breakdown of order, violent extremism [and] an era of perpetual war”. The new enemies were a “resurgent” Russia and an “increasingly aggressive” China. Only heroic America can save us. There is a demented quality about this war mongering. It is as if the “American Century” – proclaimed in 1941 by the American imperialist Henry Luce, owner of Time magazine – has ended without notice and no one has had the courage to tell the emperor to take his guns and go home.

John Pilger has been a war correspondent, author and documentary film-maker. He is one of only two to win British journalism’s highest award twice, for his work all over the world. He received the United Nations Association Peace Prize and Gold Medal, and the prestigious Sophie Prize for “thirty years of exposing deception and improving human rights”. For his documentary films, he has won an American television academy award, an Emmy, and a British Academy Award, a BAFTA, and the Royal Television Society Award for documentary films. His 1979 documentary, the epic Cambodia Year Zero is credited with alerting the world to the horrors of the Pol Pot regime. Year Zero is ranked by the BFI as among the ten most important documentaries of the 20th century. His Death of a Nation, about East Timor, had a similar impact in 1994. He has made 58 documentary films. He is the author of numerous best-selling books, including Heroes and A Secret Country, The New Rulers of the World and Hidden Agendas.

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Opportunities and Limits of China’s Role in Afghanistan BY ANGELA STANZEL

China’s increasing engagement in Afghanistan reflects its interests in a stable immediate and wider neighbourhood, in particular since Beijing announced to revive the old Silk Routes. While tackling security remains a long-term goal there is scope for the Chinese government in the short and medium term to increase capacity and improve the situation in Afghanistan.

hina’s role in Afghanistan is gradually evolving towards more engagement in various areas, which reflects the Chinese government’s concerns about deterioration of security and the impact this could have on the region as a whole. In particular since China announced to revive the old Silk Routes, its “One Belt One Road” (OBOR) initiative, it has even more an interest in a fairly

stable immediate and wider neighbourhood. The Silk Road initiative has already given a new impetus to China’s infrastructure development in Pakistan, which had been promised Chinese investment of $45 billion in to construct a China-Pakistan Economic Corridor.1 This project, linking the deepwater port of Gwadar with the Chinese Western province Xinjiang, also includes cooperation to strengthen security – the greatest obstacle in Pakistan. There is some hope in Afghanistan to benefit too from China’s investment and its aim to transform the region into a major trading hub. OBOR is almost cut out for Afghanistan’s need of infrastructure on the one hand and potential vast natural resources on the other hand. The country, at the crossroads of Central and South Asia, between India

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Recently, China has signalled its willingness to cooperate multilaterally on security issues concerning Afghanistan – it has now an anti-terrorism alliance with Afghanistan, Pakistan, and Tajikistan, to tackle the threat of terrorism and extremism.

China's People's Liberation Army troops and Pakistani troops attend flag hoisting ceremony Photo: Reuters

in the South and Russia in the North, would have he potential to become a part of China’s trade and investment network. Beijing already sent a signal towards more cooperation: During Abdullah’s visit to China both countries signed a memorandum of understanding on the OBOR initiative. Since this summer, China started operating the first cargo trains to Afghanistan (Hairatan and Mazar-e-Sharif) in frame of its OBOR network.2 However, the precarious and uncertain security situation is one of the main obstacles for China to implement major projects on the ground. China has failed once before in its attempt to invest into a large-scale project in Afghanistan: A planned $3 billion lease of the Aynak copper mine in 2008, by a consortium of Chinese state-owned companies, never launched mainly due to security issues. Ever since, China has remained reluctant to make large

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investments in Afghanistan. Afghanistan is increasingly presenting a security concern to China, in particular since the large numbers of NATO forces had left the country by the end of 2014. Although this year the Taliban did not control as many districts as in 2015, they continued to carry out large-scale attacks throughout the country: In June, security guards at the Canadian embassy in Kabul were attacked; in July, Taliban militants drove a truckload of explosives into a foreign military facility; in August, militants stormed the campus of the American University of Afghanistan in Kabul; in September, the Taliban launched two major attacks in the capital within a couple of hours; in November, the Taliban stormed the German consulate in Mazar-e-Sharif. The Chinese government is concerned about the strengthening of the Taliban and other Islamist militant groups in Afghanistan due to possible links between these groups and the restless Muslim population in the neighbouring Xinjiang Province. In addition, Afghanistan’s instability might impact the stability of those countries that are key to China’s OBOR: Central Asia and Pakistan. The Chinese government traditionally refers to its principle of non-interference when it is reluctant to engage in security issues that carry too great risks to go wrong. Nevertheless, China gradually increased its security engagement globally, notably in Africa, although it is still limited to multilateral efforts, mainly UN peacekeeping missions, such as in Mali and South Sudan. Similarly, Beijing has viewed any active role of engagement in matters of security in Afghanistan as risk to becoming a target of terrorist groups such as the Taliban. But recently, China has signalled its willingness to cooperate multilaterally on security issues concerning Afghanistan – it has now an anti-terrorism alliance with Afghanistan, Pakistan, and Tajikistan, to tackle the threat of terrorism and extremism.3 The four countries agreed on establishing a “four-country mechanism” to share intelligence and training. In addition, Beijing is strengthening its bilateral security ties with the Afghan government. In February, the chief of the Chinese army, Fang Fenghui, announced roughly $70 million of military aid to support the Afghan government’s anti-terrorism efforts.4 Beginning of July, the Afghan forces received the first batch of

Chinese military equipment, and in August, both countries held their first strategic military dialogue.5 Allegedly Chinese security forces are also patrolling on the Afghan side near the border to China, although such reports have not been confirmed by the Afghan or Chinese government.6 Such efforts reflect Beijing’s growing worries about an eruption of insecurity that could endanger its security of its border province Xinjiang and its investments in the Central Asian region. However, China’s security role is unlikely to become crucial in order to turn around the situation on the ground in Afghanistan. Beijing has also made less typical diplomatic efforts to promote the Afghan peace process in frame of the Quadrilateral Coordination Group (QCG). China along with Afghanistan, the US, and Pakistan has been holding talks in Islamabad since early 2016 to engage the Taliban in a reconciliation process.7 But the QCG has not achieved any progress as the Taliban are refusing to negotiate so far. Nevertheless it is important to keep the effort alive, not least because it reduces mistrust between Afghanistan and Pakistan. And China’s role as a mediator and confidence-builder may be crucial, as it appears that only Beijing’s constant pressure has kept its long-time ally Pakistan relatively peacefully engaged. Beijing’s interest in benefiting from a reconstructed Afghanistan is also reflected in its evolving role in the area of economic and humanitarian development assistance – and it does have the means to increase its contribution. China is already evolving into a notable though not yet major player in Afghanistan in the area of economic and humanitarian assistance. China’s contribution is still small compared to that of the US or Europe and far from that the largest from donor of Afghanistan in the region – India, which has provided roughly $2 billion to date. But China has gradually increased its contributions to Afghanistan’s development in the last two to three years: it provided roughly $240 million in development assistance and aid between 2001 and 2013, and around $80 million in 2014 alone.8 During the visit of Abdullah Abdullah (the government’s chief executive) to China in May, both countries signed an agreement on technical cooperation (worth around $76 million) and on non-emergency humanitarian

aid. China further pledged $8 million of emergency relief to Afghanistan in July.9 In addition, China is beginning to develop training and education programmes as well as to provide housing projects in urban centres. The Chinese government announced in 2015 to provide 500 scholarships for Afghan students to study in China, and training for 3,000 Afghan professionals in fields including anti-drug trafficking, agriculture, counterterrorism, and diplomacy.10 Following a cooperation agreement last November, China announced to build 10,000 residential flats in Afghanistan, worth roughly $80 million.11 Housing has become an issue in Afghanistan since large numbers of internally displaced people moved in recent years primarily from rural areas to urban centres to escape fighting and seek a better livelihood.12 The urban population is growing on average 6 percent per year (one of the highest rates in Asia), which has put more pressure on cities such as Kabul, Herat, Mazar-e-Sharif, and Kandahar to provide resources and infrastructure.13 Because of its principles, China’s peace-building efforts could not include engaging in state building efforts, such as it is often the Western countries’ approach, but Beijing could increase its efforts in some areas that would support capacity-building of the Afghan government. The government, which is too preoccupied by the country’s worsening security situation to focus on solving its other problems, needs support in a range of areas, such as building capacities to fight corruption, drug trafficking, as well as to improve the weak institutional capacity. Afghanistan also still lags far behind many other low-income countries in social and physical infrastructure. Although China has increased its involvement in recent years, this still does not reflect the degree of its interest in Afghanistan and there is much potential to widen its scope of assistance. Joint training, professionalisation programs for Afghans, or infrastructure projects, for instance, could be areas for Western countries, the US and Europeans in particular, to further engage China. The US and China have already been engaged in moderate training for Afghan security forces and Afghan diplomats for several years, and agreed upon new joint training programs for Afghan medical and

Because of its principles, China’s peace-building efforts could not include engaging in state building efforts, such as it is often the Western countries’ approach, but Beijing could increase its efforts in some areas that would support capacity-building of the Afghan government. www.allchinareview.com

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veterinary professionals last year. Germany and China as well have taken first steps exploring this option: Both countries announced recently cooperation in third countries, notably in Afghanistan and agreed to establish a disaster management office and to cooperate on training Afghan personal in the mining sector.14 Any support by China to build the country’s infrastructure, to train Afghan professionals, or to keep an eye on stability and security, would help for what the international community as a whole has been trying to achieve ever since the Bonn Conference on Afghanistan in 2001. In sum, while tackling security remains a long-term goal, there are a number of steps the Chinese government could take in the short and medium term, possibly in cooperation with other countries, to increase capacity and improve the situation in Afghanistan. China might be willing to invest more in Afghanistan if prospects in the country to enhance infrastructure network (roads, railways, etc.) are good enough. It could invest in Afghanistan’s infrastructure, for example via its Silk Road Fund or via the newly-established Asian Infrastructure Investment Bank. In view to the insecurity and uncertainty however it appears unlikely for Afghanistan to become a key country in China’s OBOR plans in the near future, although Afghanistan could certainly benefit from the region’s improved infrastructure for trade and access to markets. In the short and medium term, Afghanistan might actually benefit more from China’s current approach to focus on smaller-scale projects rather than focusing on large-scale projects, as it became common for Chinese infrastructure investments. China could provide more funding to specific projects in Afghanistan, such as in the areas of health, education, and rural or urban development. For other actors in Afghanistan, in particular the US and Europeans, it is necessary to understand Beijing’s limits and choices in Afghanistan in order to further engage China and to pursue more cooperation.

Angela Stanzel joined the European Council on Foreign Relations (ECFR) as a Policy Fellow for the Asia and China Programme in 2014. Before joining ECFR, Angela worked for the Körber Foundation in Berlin, for the German Marshall Fund of the United States in Brussels (Asia Programme) and the German Embassy in Beijing (cultural section). Alongside China’s history, politics and economics, her research work focuses on East and South Asia’s foreign and security policy. References 1. “China’s Xi Jinping agrees $46 bn superhighway to Pakistan”, BBC, 25 April 2015, http://www.bbc.com/news/world-asia-32377088. 2. Eltaf Najafizada, “China lays new brick in Silk Road with first Afghan rail freight”, Bloomberg, 11 September 2016, http://www.bloomberg.com/news/ articles/2016-09-11/china-lays-new-brick-in-silk-road-with-first-afghan-rail-freight. 3. “China joins Afghanistan, Pakistan, Tajikistan in security alliance”, Reuters, 4 August 2016, http://www.reuters.com/article/us-china-security-idUSKCN10F1A6 4. Divya Kishore, “China delivers its first shipment of military aid to Afghanistan”, International Business Times, 4 July 2016, http://www.ibtimes. co.uk/china-delivers-first-lot-military-aid-afghanistan-1568784. 5. “Inaugural Strategic Dialogue by China – Afghanistan militaries held in Beijing”, China Military News, 8 August 2016, http://english.chinamil.com. cn/news-channels/china-military-news/2016-08/08/content_7195557.htm. 6. “Chinese forces patrol deep inside Afghanistan: Report”, Afghanistan Times, 5 November 2016, http://afghanistantimes.af/chinese-forces-patroldeep-inside-afghanistan-report/. 7. Thomas Ruttig, “In Search of a Peace Process “ A ‘new’ HPC and an ultimatum for the Taleban”, AAN, 26 February 2016, https://www.afghanistan-analysts.org/ in-search-of-a-peace-process-a-new-hpc-and-an-ultimatum-for-the-taleban/ 8. Zhao Huasheng, “What is behind China’s growing attention to Afghanistan”, Carnegie, 8 August 2016, http://carnegie-mec.org/2015/03/08/ what-is-behind-china-s-growing-attention-to-afghanistan. 9. “China aids Afghan villages”, 26 July 2016, http://reliefweb.int/report/ afghanistan/chinas-aid-afghan-villages. 10. Zhao Huasheng, “What is behind China’s growing attention to Afghanistan”, Carnegie, 8 March 2015, available at http://carnegie-mec. org/2015/03/08/what-is-behind-china-s-growing-attention-to-afghanistan. 11. Akhtar M. Nikzad, “China to build 10,000 residential apartments in Afghanistan”, February 23, 2016, http://afghanistantimes.af/ china-to-build-10000-residential-apartments-in-afghanistan/. 12. Anne-Kathrin Glatz, “Afghanistan: New and long-term IDPs risk becoming neglected as conflict intensifies”, IDMC, March 2015, available at http://www.internal-displacement.org/south-and-south-east-asia/ afghanistan/2015/afghanistan-new-and-long-term-idps-risk-becoming-neglected-as-conflict-intensifies. 13. Budapest Process, “Afghanistan Migration Country Report”, International Centre for Migration Policy Development, 2013, https://www.budapestprocess.org/projects/silk-routes-project. 14. Press conference, Merkel and Li Keqiang, 13 June 2016, h t t p s : / / w w w. b u n d e s k a n z l e r i n . d e / C o n t e n t / D E / M i t s c h r i f t / Pressekonferenzen/2016/06/2016-06-13-merkel-mp-li.html;jsessionid=02E4169911C4DC6DDDF18A209C7C517A.s3t1.

Afghanistan might actually benefit more from China’s current approach to focus on smaller-scale projects rather than focusing on large-scale projects, as it became common for Chinese infrastructure investments. 30

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Economy

Can China’s Belt and Road Initiative Successfully Lead to a New Eurasian Economic Zone? BY JEREMY GARLICK

China’s Belt and Road Initiative, also known as “One Belt, One Road” (OBOR), is a grand plan to connect East Asia with Europe, the Middle East and Africa via Central and Southeast Asia by means of infrastructure projects. But what are the chances that this ambitious project can create a new Eurasian economic zone which will produce win-win synergies for the countries involved?

he OBOR initiative, officially launched in autumn 2013 by President Xi Jinping in a pair of speeches a month apart, sets out to connect the Eurasian landmass and East Africa by land and sea. This potentially game-changing project has two crucial nodes, both of which require a huge amount of work on the Chinese part, as well as a great deal of cooperation from the numerous potential partners along the way, if the initiative is to come to fruition. The first is Central Asia, which lies on the overland route from East Asia to Europe. The countries of this region, which include Kazakhstan, Tajikistan, Uzbekistan, Turkmenistan, Kyrgyzstan and others, are rich in natural resources such as oil and natural gas,

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The fact that President Xi chose to announce the advent of SREB while in Kazakhstan is indicative of the importance that Beijing places on Central Asia as the core of its overland route to Central and Eastern Europe.

but are also geo-strategically and geo-economically vital because of their position at the heart of China’s new “Silk Road Economic Belt” (SREB). Traditionally, having formed part of the Soviet Union up to 1991, the Central Asian nations have tended to fall under Russian influence. China has been trying to work out how to incorporate them into its ambitious plans while also maintaining good relations with Russia, primarily by seeking to encourage positive relations by means of the framework provided by the Shanghai Cooperation Organization (SCO). The fact that President Xi chose to announce the advent of SREB while in Kazakhstan is indicative of the importance that Beijing places on Central Asia as the core of its overland route to Central and Eastern Europe (CEE). In terms of railways, connections to Europe already exist, but these all pass through Russia on their way to Poland, Germany and beyond. Ideally, China would like to develop one or more routes which would bypass Russia (for instance by passing through Central Asia, Iran and Turkey, although work on such a route has not yet progressed beyond the drawing board), and to build new high-speed rail connections which would speed up transit times and encourage more trade. The second node is a nautical route termed the “21st century Maritime Silk Road” (MSR). This

attempts to connect the South China Sea with the Mediterranean via the Indian Ocean and the Red Sea. The route is vital because huge amounts of oil, liquid natural gas (LNG), raw materials and manufactured goods pass through the narrow chokepoint that is the Straits of Malacca on their way to and from China and other East Asian states such as South Korea and Japan. China is therefore attempting to exercise greater control over the route by creating a “string of pearls” of major new ports through the Indian Ocean region (IOR) and beyond. With Chinese construction and development ongoing at Piraeus in Greece, Kumport in Turkey, Suez in Egypt, Bagamoyo in Tanzania, Gwadar in Pakistan, Kyaukpyu in Myanmar, and Hambantota and Colombo in Sri Lanka, there is a clear potential to create a network of Chinese-funded commercial harbours which will, in the economic jargon, “float all boats”.

It therefore ought to be assumed that culture clashes and bureaucratic issues are likely to stymie at least some of the necessary cooperation entailed in advancing OBOR towards completion if both China and its partners do not take the time to do proper risk analysis before commencing individual projects. However, whether a new transport and infrastructure web of this type will succeed is as yet far from certain, due chiefly to logistical uncertainties arising from having to work with a wide range of partner countries run by regimes of assorted political backgrounds. China this year for instance suffered a setback when the Chinese plan for a deep-sea port in Bangladesh was this year shelved by the Bangladeshi government, knocking one of the pearls out of the proposed string. Doubts in Sri Lanka and Greece about the wisdom of allowing China to invest in major infrastructure in their countries also persist despite the fact that port construction has thus far been permitted to continue. Problems, Problems What are the odds of a potentially visionary and transformative project as OBOR being realised? At

first glance they appear to be less than ideal, given the incredible costs, potential for misunderstandings, and numerous other obstacles which undoubtedly need to be overcome in joining together 64 disparate nations (for such is the official head count of countries included by Beijing in the Belt and Road initiative) in a coherent network of trading states. Of course, the British managed to construct infrastructure such as railways, roads and ports to connect their empire in the eighteenth, nineteenth and twentieth centuries, so there is at least one precedent for a sprawling trade network covering half the world. However, the main difference between the empire on which the sun never set and China’s “New Silk Road” is that London exercised a high degree of geopolitical and geo-economic control via its armed forces (particularly its navy), advanced technology (such as guns and ships), and sophisticated trading instruments (such as its stock market and East India Company) of which Beijing can so far only dream. There is clearly therefore a danger of China taking on too much, too fast. Lack of global experience and local know-how may lead to failures such as the collapse of a highway construction project in Poland in 2011 due to misunderstandings between the Chinese constructor and Polish authorities. It therefore ought to be assumed that culture clashes and bureaucratic issues are likely to stymie at least some of the necessary cooperation entailed in advancing OBOR towards completion if both China and its partners do not take the time to do proper risk analysis before commencing individual projects. There is also the associated problem of China lacking both a sufficient number of genuine allies and the degree of soft power to make its grand scheme come to pass. Beijing has relatively good relations with a few influential neighbours such as Russia, South Korea and Pakistan (despite occasional hiccups even in these cases), but has managed to alienate (to one extent or another) most of Southeast Asia, as well as the US, by means of its island-grabbing actions in the South China Sea. Japan and India are notably also not exactly friends of the Middle Kingdom, since both are worried by territorial disputes, while Europe remains suspicious of Beijing’s human rights record and actions in Tibet. In terms of soft

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quarters concerning promises of funding that appear unlikely to materialise in full (such as the promise of $10 billion in loans for CEE in 2014). China will need to be sure that its partners not only believe its promises, but also that it can follow through financially.

18 Jan 2017: First freight train to make the 18day, 9-country, 12,000km journey from Yiwu in west China to Britain. Source:walizahid. com/

OBOR’s defenders can point to its record on the ground thus far in turning words into action.

power attraction, despite its ostensibly fat wallet China simply cannot yet get close to competing with Western countries such as the US and the UK, whose movies, music and sports still dominate global culture. Given that its authoritarian one-party political system does not appear to be much of a selling point either for most people in either the developed or the developing world, China clearly has a lot to do in terms of advancing the aims of its so-called “charm offensive”. Many observers also regard OBOR as vague and nebulous rather than representing a clear and coherent vision. It is true that there has been something of a lack of specificity so far on how individual infrastructure projects are intended to link up. So there are certainly doubts about whether Beijing can lift the Belt and Road initiative to a level beyond lofty rhetoric and establish it as a fully-integrated trade and infrastructure network. Finally there is a question mark concerning the depth of China’s pockets and the prospects for continuing growth in its economy. Are the nation’s coffers really capable of sustaining the spending necessary to connect the world’s largest contiguous land mass via masses of new infrastructure? There have already been questions raised in some

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The Rose-Tinted Version On the other hand, OBOR’s defenders can point to its record on the ground thus far in turning words into action. In early 2016 the Chinese shipping company COSCO completed its purchase of a majority stake in the port of Piraeus in Greece after rapidly establishing it as one of the top ten container shipping hubs in Europe since taking over on a lease in 2009. Three pipelines for natural gas already snake their way from Central Asia through to Xinjiang in northwest China, with a fourth (to connect the other three) in the planning stages. Work on the China-Pakistan Economic Corridor (CPEC) is progressing, with the intention of transporting Persian Gulf oil up from Gwadar through Pakistan to Xinjiang, thus bypassing the Malacca chokepoint. Further east, a similar corridor, Bangladesh-China-India-Myanmar (BCIM), is also being established. In East Africa, China is building dams (for hydroelectric power), roads, railways, ports and power stations, and this activity is beginning to impact local economies positively. Beijing can also point to the multilateral institutions it has set up to finance and enable OBOR projects. Apart from the SCO and the $40 billion Silk Road Fund, there is the $100 billion Asian Infrastructure Investment Bank (AIIB) which has 37 founding members including the UK, Germany and Australia: China has put up half of the initial funding for the bank, which is intended as an alternative to the US-based World Bank. In Central and Eastern Europe, China’s 16+1 forum for meetings between Chinese leaders and their counterparts from 16 CEE countries has rapidly gained traction since its inception in Warsaw in 2012, and is steadily improving Beijing’s relations with the region it sees as an OBOR entry point to Europe. China is also involved in a Regional Comprehensive Economic Partnership (RCEP) to create a free trade zone between 16 AsiaPacific states. So despite the doubts over financing, politics

China’s vision for a new Eurasian economic zone may well be the best long-term bet going, given that the Western powers such as the EU and the US have not come up with anything of equivalent breadth and ambition. and global know-how listed in the previous section, it is clear that China is putting both its money and the construction expertise of its companies where its mouth is. The question is whether the progress made so far can be maintained and accumulated into a coherent whole which will genuinely change Eurasia-Africa into an integrated, Chinese-led trade zone. Prospects for Success? Given China’s growing influence in Asia and in the world economy, and the nation’s more than $3 trillion in foreign exchange reserves, it would not appear wise to bet against its ability to make an increasing impact on the nations of Eurasia and Africa as it shifts its focus westwards. The European Union is already China’s biggest trading partner, so it is a natural progression for Beijing to seek further integration via a transport and infrastructure network. Geo-economically speaking, as Chinese scholars and officials repeatedly emphasise, making these connections via Central Asia, the IOR, the Middle East and East Africa makes sense if these regions can be properly linked. Nevertheless, the obstacles to establishing OBOR as a genuine whole appear massive. Culture, bureaucracy, local politics, terrorism, cash flow problems and many other factors could all play their part in derailing China’s grand plan. However, in the end, there are two compelling reasons for the world’s doubting Thomases to develop sufficient faith in OBOR to participate at least half-heartedly. The first is that it is better to be involved than not, just in case the vision does become reality. That way nations can be at the forefront of development rather than left behind. The second is that China’s vision for a new Eurasian economic zone may well be the best long-term bet going, given that the Western powers such as the EU and the US have not come up with anything of equivalent breadth and ambition. If the world’s economic geography is going to change in the 21st century, with a continuing

shift of the centre of geo-economic (and eventually geopolitical) gravity to East Asia (as seems likely), then OBOR may just represent a major chunk of this transformation, and therefore merits the investment of at least a bit of time, attention and money.

Jeremy Garlick lectures on the international relations of China at the Jan Masaryk Centre for International Studies, Faculty of International Relations, at the University of Economics Prague. He specialises in China-Europe relations, with a particular focus on China-CEE relations, and also on theories of China’s rise. His doctoral thesis explored China’s future through scenarios. He has spent six years teaching at universities in mainland China and South Korea.

Central Asia is a key area in China’s energy security strategy. Source: globalriskinsights. com

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Economy

THE TPP IS DEAD.

What Happens Next? BY KAVALJIT SINGH

In a video message outlining his policy plans for the first 100 days in the Oval Office, President Trump stated: “I am going to issue a notification of intent to withdraw from TPP, a potential disaster for our country. Instead, we will negotiate fair, bilateral trade deals that bring jobs and industry back on to American shores.” What should we expect to happen next?

he Obama administration was trying hard to seek US congressional ratification this year but it abandoned efforts after the victory of Trump. The TPP faced stiff political opposition cutting across party lines and ideologies. Both the major presidential candidates expressed their opposition to TPP and avowed to reject it once elected. Trump was very vocal in his opposition to TPP as well as NAFTA throughout his

campaign. Whereas Hillary Clinton flipflopped on the TPP pact. While serving as Secretary of State, she had praised TPP as setting the “gold standard in trade agreements” but reversed her position during the presidential campaign due to tough primary challenge from TPP critic Bernie Sanders. Japan is the only member-country which voted to ratify the TPP deal early January 2017. As per the rules laid out in the TPP, the agreement allows a two-year ratification period in which at least six original member-countries, representing 85 percent of the combined GDP of the grouping, should approve the text for the agreement to be implemented. The US accounts for nearly 60 percent of the grouping’s GDP. With the US announcing its withdrawal, the TPP agreement simply cannot enter into force even if all the remaining 11 member-countries ratify it. In simple terms, the TPP, in its present form, is effectively dead.

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What is TPP? Signed in February 2016, the TPP pact involves Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam. The idea of a Trans-Pacific Partnership was initiated by four countries – New Zealand, Singapore, Chile and Brunei – way back in 2002. Initially, the US was not interested in joining the negotiations but President Obama in November 2009 decided to take part in negotiations. Later on, many other countries such as Malaysia, Japan and Vietnam also joined negotiations. China did not join the negotiations. Although China officially maintained that it has an “open-minded attitude” towards TPP but it was not ready to meet the higher standards (particularly on the operations of state-owned enterprises) envisaged in the TPP. The TPP agreement is a 4,500page document which was prepared after seven years of negotiations. It is the world’s most ambitious free trade pact ever signed. It is much more than a typical free trade agreement which aims for reducing import tariffs in agricultural and manufactured goods. The reason being that the average applied tariff rates amongst most TPP member-countries are very low so there is little scope for further reduction. The TPP represents a new generation of 21st century trade agreements creating new mechanisms to govern cross-border economic activities with much higher standards than any existing bilateral, regional and multilateral trade agreements. As analysts have pointed out that the TPP is a kind of “economic constitution” governing cross-border trade and investment with greater emphasis on the removal of regulatory barriers. The TPP is touted as the “gold standard” of trade and investment agreements because it contains stringent rules on a wide range of issues such as

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cross-border investments, intellectual property rights, state-owned enterprises, government procurement, e-commerce, services liberalization, regulatory coherence, labor and the environment. One of the most contentious issues is the incorporation of Investor-State Dispute Settlement mechanism which would allow foreign investors from TPP member-states to bypass domestic courts of host states and sue a host state through international arbitration proceedings. With the US and Japan in the driving seat, the negotiating agenda of TPP was drastically reshaped to suit their core interests while other negotiating countries (particularly the developing ones) did the heavy lifting to meet the onerous demands put forward by these two countries. Concerned over the potential negative effects of TPP on jobs, economy and regulatory space, civil society groups and labor unions from both sides of the Pacific launched popular campaigns focused on the secret nature of the negotiations and sought greater public participation during the negotiation process. TPP: Obama’s Pivot to Asia-Pacific For the Obama administration, the TPP was not purely a trade and investment agreement. It foresaw huge strategic value in joining this pact. The TPP was a key component of Obama’s policy of “rebalance” toward Asia which rested on three pillars: economic, political and security. By 2011, the TPP had become the linchpin of the administration’s “pivot to Asia” strategy to contain the China’s economic and geopolitical influence in the Asia-Pacific region. President Obama repeatedly emphasized the importance of maintaining US leadership in crafting global trade rules and how TPP would strengthen US’s power to set rules of global trade. In an opinion piece on TPP in The Washington Post, Obama stated: “America should write the rules. America should call the

With the US and Japan in the driving seat, the negotiating agenda of TPP was drastically reshaped to suit their core interests while other negotiating countries (particularly the developing ones) did the heavy lifting to meet the onerous demands put forward by these two countries. shots. Other countries should play by the rules that America and our partners set, and not the other way around. That’s what the TPP gives us the power to do…The world has changed. The rules are changing with it. The United States, not countries like China, should write them. Let’s seize this opportunity, pass the Trans-Pacific Partnership and make sure America isn’t holding the bag, but holding the pen.” TPP (minus one) Pact? Some trade experts argue that it may be too soon to bury the TPP. Of course, the TPP agreement could possibly survive provided the remaining 11 signatory countries drastically modify the rules governing its entry of force. The so-called TPP (minus one) pact is theoretically possible. It is also conceivable that countries like Indonesia and Thailand may join TPP in future thereby expanding its membership. However, one is not sure whether all remaining member-countries of TPP would agree to modify rules governing its entry of force since only Japan has voted to ratify it. With the lead country pulling out of the pact before ratification process, the remaining member-countries (particularly the traditional allies of US) may lack motivation in ratifying and implementing the pact. For instance, Vietnam has already decided to shelve the ratification of TPP. In a statement issued on November 17, Vietnamese Prime Minister Nguyen Xuan Phuc said, “Vietnam has prepared adequate

Heads of State/ Government of the ASEAN Member States gathered on 8 September 2016 in Vientiane, Lao PDR. Source: asean.org

RCEP is ASEANcentered FTA as it seeks to harmonize and build on existing FTAs between ASEAN and its six trading partners.

conditions to join the 12-nation TPP. However, as the United States has announced to stop the deal, so Vietnam has not had enough basis to submit TPP participation to the National Assembly.â&#x20AC;? Moreover, many member-countries would not be keen to pursue a TPP (minus one) pact due to lack of exclusive access to US markets for which they accepted onerous conditions to join it. RCEP: The Next Best Hope In this fast emerging scenario, many TPP members (in particular Japan, Australia and New Zealand) who are also members of the proposed Regional Cooperation Economic Partnership (RCEP) will now shift their attention to this pact. These countries may further push for TPP-like provisions at RCEP to maximize the best possible outcome following the imminent demise of TPP trade deal. It is hard to deny that for many countries in Asia-Pacific region with a small domestic market, the export economy remains very important. Such countries would prefer a deal than no deal when it comes to joining a regional economic bloc. Of late, TPP member-countries like Peru and Chile have also shown interest in joining the RCEP. RCEP is a proposed mega regional free trade agreement between sixteen countries (10 ASEAN countries and their six FTA partners, namely, Australia, China, India, Japan, South Korea and

New Zealand. If accomplished, RCEP would pave the way to the creation of the largest free trade bloc in the world, covering 45 percent of the worldâ&#x20AC;&#x2122;s population with a combined GDP of US$22 trillion and accounting for 40 percent of global trade. The legally binding RCEP covers a wide range of issues including trade in goods, trade in services, investment, intellectual property rights, competition policy, dispute settlement and economic and technical cooperation. The negotiations were officially launched in November 2012 at the ASEAN Summit in Cambodia and the 16th round of negotiations was held in Indonesia during December 2016. RCEP: China-led or ASEAN-centric? Many commentators have described RCEP as a China-led trade pact. There is no denying that China is an export powerhouse in manufactured goods and has enormous economic clout in this region but it would be erroneous to view RCEP as a China-led trade pact for three important reasons. Firstly, RCEP is ASEAN-centered FTA as it seeks to harmonize and build on existing FTAs between ASEAN and its six trading partners. Secondly, having signed an FTA with ASEAN is the precondition for joining the RCEP negotiations. In other words, the US or any other country can also join RCEP negotiations provided they first conclude an FTA with ASEAN.

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It is equally important for lead countries like Japan, South Korea, China and Australia to understand that only a modest agenda would be politically feasible under RCEP as the public opinion worldwide is turning against FTAs. Thirdly, Japan has successfully pushed strong rules in the areas of investment and intellectual property rights into the RCEP negotiations despite opposition from India and other members. The leaked draft texts of RCEP reveal that TPP disciplines in areas such as investment, IPRs, services, e-commerce and telecommunications are currently under discussion at RCEP at the insistence of Japan and South Korea. Reshaping India’s FTA Strategy In many important ways, the imminent demise of TPP has eased pressure on India which is not supportive of an ambitious agenda on IPRs, investment and zero tariffs under the RCEP framework due to potential negative impacts on local producers and businesses. For India and many other developing countries, the pressure to sign bilateral and regional FTAs in order to counter other mega regional trade pacts (such as TPP) has subsided for the time being. Also the demise of TPP deal has weakened the negotiating position of countries like Japan and Australia at RCEP. At the forthcoming round of negotiations next month, India should forcefully argue that the “gold standard” TPP framework has lost its appeal and popular support and therefore a modest agenda based on diverse circumstances of the negotiating countries should only be pursued at RCEP negotiations. In the present context, when the world trade is slowing and protectionist tendencies are rising across the developed world, India should rethink its FTA strategy in the short- and medium-term. At the same time, it is equally important for lead countries like Japan, South Korea, China and Australia to understand that only a modest agenda would be politically feasible under RCEP as the public opinion worldwide is turning against FTAs. Any attempts to pursue an ambitious agenda at RCEP may provoke a strong political backlash thereby putting the future of entire agreement in jeopardy. What about NAFTA, TTIP and FTAAP? What will be the fate of America’s other regional

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FTAs? It remains to be seen whether Trump will renegotiate or altogether withdraw from NAFTA once he takes office. Since 2013, the US is negotiating Transatlantic Trade and Investment Partnership (TTIP) – another ambitious free trade agreement with the European Union. The future of TTIP has become highly uncertain in the wake of Brexit vote and Trump’s election victory. To a large extent, the prospects of Free Trade Agreement of the Asia-Pacific (FTAAP) would depend on how the negotiations proceed on the RCEP and other FTAs in the region. The idea of FTAAP was proposed in 2006 by APEC as a long-term, comprehensive FTA covering the entire Asia-Pacific region but no concrete steps were taken up by APEC members to turn it into a reality. At the APEC summit held in Beijing in 2014, China revived the idea of FTAAP by proposing a feasibility study but the US and other members did not support it. Given Trump’s stated preference to negotiate bilateral trade deals, attempts to launch negotiations on giant regional FTAs like FTAAP are unlikely to gather support during his presidency. This article was first published on Global Research on 7 December 2016 (http://www.globalresearch.ca/the-tpp-isdead-what-happens-next/5560781). Featured photo courtesy: Mark Kauzlarich / Reuters

Kavaljit Singh works with Madhyam, a policy research organization, based in New Delhi. His areas of specialization include international finance, foreign investments, regulatory affairs and global governance. He is the author of widely published books on international finance and globalization. His recent book is Fixing Global Finance: A Developing Country Perspective on Global Financial Reforms. He recently co-edited a book on investment treaties titled Rethinking Bilateral Investment Treaties: Critical Issues and Policy Choices. His forthcoming book is on G20 and Global Financial Reforms. He has contributed articles in leading Indian and international newspapers including The Hindu, Bangkok Post and Financial Times.

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Economy

THE RISE AND DECLINE OF

FOUR LITTLE DRAGONS BY DAN STEINBOCK

After a stunning growth performance, all four dragons are slowing and aging. In the absence of drastic policy changes, they are facing relative stagnation, says Dan Steinbock. © william-au.com

n The Four Little Dragons (1992), US academic Ezra Vogel argued that the four little dragons – Taiwan, South Korea, Hong Kong, and Singapore – were the newly-industrialized economies, which had followed Japan’s export-led growth model to prosperity. Unlike major advanced economies, which established their position in a century or two, the four dragons made their mark in just a few decades. Today, the dragons’ world looks very different. There is a common denominator behind Hong Kong’s economic and political malaise, Taiwan president Tsai Ing-wen’s effort to lean on the Trump White House, South Korea’s mass demonstrations to impeach President Park Geun-hye, and Singapore’s Future Committee’s attempt to accelerate economic growth. Political friction usually follows aging and slowing. That’s the common denominator. Rise of Dragons Some half a century ago, the four dragons began extraordinary rapid industrialization starting with Hong Kong’s textile industry in the 60s, followed by export-oriented industrialization in Lee Kuan Yew’s

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Today, dragons are steadily aging and slowing, as evidenced by steady and occasionally steep deceleration of growth in each.

Singapore, modernization and export expansion in Kuomintang’s Taiwan, and Park Chung-hee’s South Korea. From the early 1960s to the 90s, the dragons enjoyed high growth rates. In the process, they leapt “From the Third World to the First” within one generation, as Lee later put it. In 1960, Hong Kong, the first dragon to begin the catch-up, still led in average living standards; it was only 20 percent behind Japan, followed by Singapore, Taiwan and South Korea. But Hong Kong remained more than 30 percent behind US. In the weakest dragon, South Korea, living standards were barely 10 percent of those in America. As the toughest phase of industrialization was achieved by 1980, little dragons were still led by Hong Kong. Although trade-friction between the US and Japan was about to dominate headlines, living standards in Hong Kong were now only 25 percent behind those in Japan, but still 45 percent behind those in US. Usually, most economies’ internal engines decelerate after industrialization associated high growth. However, the four dragons were in the right place in the right time and made the right growth choices. As China – the ultimate dragon – began its economic reforms and opening-up policies, the

little dragons’ went overdrive that supported their growth another three decades. Today, living standards in all dragons, except for South Korea, are relatively higher than in Japan, which has been overwhelmed by economic stagnation. Intriguingly, living standards in Singapore are now on average 35 percent higher than those in America; which Hong Kong has caught up with as well. But easy catch-up growth is behind. Shaky Short-Term Prospects In 2017, Singapore hopes growth of 2-3 percent, although analysts expect it to stay below 2 percent. Despite a strong last quarter in 2016, it is coping with economic malaise. Trade outlook is uncertain, due to new protectionism and regional tensions. Like Hong Kong, Singapore must also cope with the Fed’s hikes amid a tight labor market and softening property sector. It is seeking new growth not just in China and emerging Asia but via economic integration with Malaysia and Riau. Despite improved prospects, Hong Kong’s growth is about 2.0 percent. Its future is overshadowed by political angst. Even more than Singapore, it is exposed to global liquidity swings, US trade protectionism and China’s rebalancing in the region. But unlike Singapore, Hong Kong has missed or continues to shun pro-growth integration opportunities. Failures in leadership are illustrated by the misconduct of former chief executive Donald Tsang and the weakness of his successor CY Leung. South Korea’s growth rate has been cut to 2.8 percent, but economic momentum has moderated. Neither foreign trade, which is constrained by international environment, nor domestic demand, which suffers from indebted households, has been adequate to support strong growth. While rising inflation may generate a hike by the Bank of Korea, Seoul must cope with Chinese deceleration and US protectionism and Washington could also target it for alleged currency manipulation. Despite improved forecasts, Taiwanese growth rate for 2017 is estimated at 1.8 percent. Like Hong Kong, it is struggling with economic and political malaise; the former derive from maturation, the latter are largely self-induced. Thanks to growing political uncertainty, investment contraction could follow in due time, especially if friction with China will weigh on trade and investment. Today, dragons are steadily aging and slowing, as evidenced by steady and occasionally steep deceleration of growth in each. Slowing Growth The four dragons are aging. With demographic transition, birth and death rates are slowing, as evidenced by rise of median age. Among major advanced economies, it is highest in

Japan and Germany (47), which are facing population decline. Among the dragons, it is highest in Hong Kong (43), followed by South Korea (41), Taiwan (40) and Singapore (40). Worse, average living standards tend to mask broadening income polarization in the four dragons. Among major advanced economies, income inequality, as measured by Gini coefficient, is the highest in the US (45), but significantly lowers in Japan (32), France and Germany (less than 30). Among the dragons, it is highest in the financial hubs of Hong Kong (54) and Singapore (46), as opposed to high-tech giants Taiwan (34) and South Korea (30). In the long-run, high living standards require solid growth and strong productivity, which usually rely on sustained innovation. Most dragons are driven by technology innovation, as reflected by their R&D per GDP. It is relatively highest in the world in South Korea (4.3%), and in the top league in Singapore (3.2%) and Taiwan (3%), which have bypassed the US and Western Europe. However, Hong Kong (0.7%) is the great laggard. All four dragons need great structural reforms and inclusive pro-growth policies, including greater productivity, innovation and R&D investments; more dynamic competition and new enterprises; higher retirement ages, accelerated skill-based immigration, drastically reduced policy barriers to female labor participation; and greater efficiency of public spending. A greater stress on human capital also requires more progressive taxation, aggressive measures to reduce income inequality; and adequate job protection legislation. Finally, as the dragons’ internal growth engines are slowing, they must aggressively seek greater integration opportunities, especially through greater economic integration regionally and international trading arrangements. In the absence of such changes, all four dragons could face creeping stagnation. The original, slightly shorter version was published by South China Morning Post on February 28, 2017

Dan Steinbock is the Founder of the Difference Group and has served as the Research Director at the India, China, and America Institute (USA) and a Visiting Fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more information, see www.differencegroup.net

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Technology

Can the “Great Wall” Hold Back a Technological “TSUNAMI”? BY CHRISTOPHER LIM & TAMARA NAIR China’s astonishing growth in the last three decades owes much to it being the “factory of the world”. However the rapid advancement of digitisation technology could affect China’s manufacturing and service sectors and stand in the way of its economic aspirations. China will need to reassess its economic policies to cushion the impacts.

ver the last three decades the world saw China’s transformation from a backwater third world country into the “factory of the world” and we witnessed its rise to become the world’s second largest economy. It is well established that manufacturing is one of the bedrocks of China’s success with the United States being the top destination for China’s exports where China contributes more than 40 percent of US trade deficit in goods.1 Under the Trump Administration the “America First” agenda will be the cornerstone of the US trade policy. This clearly has the potential of disrupting China’s status as the major trading partner of the US. This new agenda coupled with the likely appointments of Peter Navarro, Wilbur Ross, and Robert Lighthizer – all outspoken “anti-China” economic nationalists, as Trump’s trade advisers2 – a bilateral trade war is a very possible scenario in the future of global trade; unless of course if the US is able

We focus on three areas of digitisation – 3D printing, Artificial intelligence (AI) and the Human Cloud. Can China recalibrate its social economic plans in order to navigate through this new technological wave?

to extract sizeable concessions from China and/or China is willing to enter some forms of voluntary restraint agreements in its export to the US. China could cut back its production in the manufacturing sector but this would have dire consequence for its much needed employment-generating sector, especially given its slow annual economic growth. These are all equally likely scenarios, in the light of economic globalisation and in the interest of peaceful trade. However, China has something else to worry about; over and above Donald Trump’s trade agenda. The advancement of digitisation technology is an, as yet, undetected undercurrent in the labour employment scene in the world. This technological “tsunami” will come in fast and furious unless countries prepare to recalibrate their economic strategies. We take a new look at this technological wave and its potential impacts on China’s manufacturing and service sectors. Given China’s economic aspirations and its current position as a leader advocating free trade and globalisation, it would be prudent for China to deeply consider the implications of this technological wave that can “wash away” existing systems and structures that has served it well in the last three decades. We focus on three areas of digitisation – 3D printing, Artificial intelligence (AI) and the Human Cloud. Can China recalibrate its social economic plans in order to navigate through this new technological wave, and what possible strategies

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Given China’s economic aspirations and its current position as a leader advocating free trade and globalisation, it would be prudent for China to deeply consider the implications of this technological wave that can “wash away” existing systems and structures that has served it well in the last three decades. should this recalibration entail? Before we try and answer these questions, we briefly outline below the technologies we think will greatly impact China’s economy in the near future. We then conclude with our thoughts for responding to this change. 3D Printing and its Impact on Manufacturing 3D printing, also known as Additive Manufacturing, refers to processes where an object is put together by layering materials under programmed commands. Objects can be of almost any shape or geometry and are produced from digital model data or other electronic data sources, such as an Additive Manufacturing File. Charles W. Hull, co-founder of 3D Systems, invented 3D printing in 1986. While 3D printing did not really take off in the past, it is poised to be the new disruptive force influencing the future of the manufacturing sector. The introduction of 3D printing in manufacturing is more than just a change in the production process. It can also be viewed as a merger; integrating software and hardware. There is also the potential unleashing of a disruptive and hidden power, not necessarily a negative, embedded within the new production system that the world has yet to experience since the Industrial Revolution. This “disruption” will essentially turn the global supply chain and existing production processes – developed over 100 years ago with the Ford assembly – on its head. In terms of 3D printing’s impact, no industry will see as many changes and upheavals as that of manufacturing.3 While exactly what this impact will be may be difficult to predict now, regardless, there is no question that it will be deep and permanent.4 The unique property of 3D printing is the ability to produce objects that can be of almost any shape or geometry and are produced from digital model data or other electronic data sources.5 This implies that 3D printing could potentially displace the exclusive position of the incumbent business owner in bespoke products in manufacturing such as highly customised products in small quantities, such as prosthetic sockets. Over time, mass production could be displaced by 3D printing – a transition that could possibly be aided by decisions of the two largest industrial giants, GE and Siemens, to incorporate Additive Manufacturing for their mass production operations.6

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Additive Manufacturing does not incur set-up and tooling costs; production costs are only incurred for the parts themselves, at the time they are manufactured. Tool-less production processes require less energy and raw materials than conventional manufacturing operations. Modified parts, upgrades and spare parts can be produced quickly when needed, obviating the need for storage. As the adoption of 3D printing expands manufacturers could significantly reduce today’s production chains. What requires a series of production stages today could be cut down to designer at one end, and the printer or “manufacturer” at the other. The middlemen would most likely become suppliers of raw materials or “ink”. These changes could enable consumers to receive the products directly from the manufacturer. This could transform the global supply chain from economies of scale to the economy of one or few. Such reductions in the manufacturing process would drastically contract existing domestic and international production and supply chain networks in China and enable consumers to receive the products directly from the manufacturer. Hence, jobs in manufacturing, transportation and logistics, in both bespoke and mass production, could be greatly reduced or even eliminated over time. The Codification of Knowledge and the Rise of Artificial Intelligence With the recent advancement in the development of Artificial Intelligence (AI) and related technologies such as sensors, semiconductors and computing power, the economic and business potential of AI has captured the attention of public policymakers and the C-suite executives in the corporate world. But what is AI and how does that compare to the definition of “intelligence”? The term “Artificial Intelligence” was coined by the late John McCarthy, one of the founders of the discipline of AI. According to McCarthy, Intelligence is: [T]he computational part of the ability to achieve goals in the world. Varying kinds and degrees of intelligence occur in people, many animals and some machines.”7 Whereas AI is, “the science and engineering of making intelligent

machines, especially intelligent computer programs. It is related to the similar task of using computers to understand human intelligence, but AI does not have to confine itself to methods that are biologically observable.”8 AI has evolved into an information system coupled with a range of technologies that is capable of sensing, comprehending and acting. In essence, the AI system is capable of perceiving the environment and collecting data; analysing and understanding the information collected, and making informed decisions and providing guidance based on analysis. Moreover, with the aid of machine learning technology, research in AI over the past decades has developed the capacity for experience-based self-learning instead of depending on hard coded rule-based algorithms. This is a vast improvement with respect to the AI of the past where applications were inflexible – that is, programme modifications were required whenever changes in scenarios happened. Codification Knowledge The rise of AI and the eventual replacement of workers in both manual and knowledge-based sectors is a result of the codification of knowledge. The codification of knowledge is essentially the process of grouping or documenting knowledge to ensure one can identify, store and retrieve it to address the questions “what”, “how” and “why” in any knowledge domain. To help explain this change, we have classified “work” into three axes, namely, types of work, nature of work, and types of knowledge as illustrated below in Figure 1. Under the Routine quadrant workers perform repetitive tasks that require some judgment vis-a-vis rules and procedures, and material or equipment usage, for example assembly line workers in factories. Workers in the Complex quadrant would use a wide variety of rules, processes, materials and equipment, from their own judgement of needs to complete jobs that require specialised knowledge or skills, for example, analytical chemists. The difference lies in the independence of workers in this quadrant to decide and access necessary elements to complete an assignment. With the current pace of technological development in AI systems, codified jobs will likely be replaced by AI in routine and complex types of work

as well as in the manual and cognitive nature of jobs in the future. Virtually a large portion of all jobs can be taken over by computers and robots as long as the work can be codified. Thus the portion of the pie remaining for human workers would potentially be limited to work that cannot be codified. Based on the 2015 employment profile in China, 42.4% and 29.3% of the total workforce are in the service and manufacturing sectors, respectively.9 AI could potentially affect all labour in both manufacturing and service sectors whose work is knowledge-based in nature and can be codified. In short, all the job markets in the non-codified portion – particularly for knowledge workers where the nature of the job is cognitive and the job type is complex, will be highly competitive as there will be literally countless professionals who are keen to compete; and this competition will be truly global. Figure 1: Work classification

Complex Type of work Non-codified

Routine

Type of knowledge Manual

Cognitive

Codified

Nature of work Source: Christopher H. Lim

Virtually a large portion of all jobs can be taken over by computers and robots as long as the work can be codified.

In considering potential scenarios for employment creation, policymakers may be lulled into a false sense of security since not all knowledge can be codified there will always be a niche opportunity available for the human workforce. However this potential niche opportunity is currently being eroded through the Uber-isation of work, i.e. the Human Cloud, which we turn to next. Human Cloud and Global Competition Precisely, what does Human Cloud entail? Human Cloud can be described as a type of workforce where particular tasks or projects, not jobs, are performed “remotely and

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Technology

on-demand by people who are not employees but independent workers” and the type of work ”stems from white-collar jobs – chopped into hundreds of discrete projects or tasks, then scattered into a virtual ‘cloud’ of willing workers who could be anywhere in the world, so long as they have an internet connection”.10 The combined digitisation technology effects of 3D printing, AI and Human Cloud, are disruptive game changers for businesses and job markets in both manufacturing and service sectors globally. Attention to this “forceful’ wave of technology is particularly urgent and critical, especially for the most populated nation, China, where the global economic outlook is anything but certain. However, not all is doom and gloom. Some quarters are of the view that technology, particularly AI, could potentially transform the economy and evolve into a new factor of production in the foreseeable future.11 The issue remains as to whether China can withstand the current technological “tsunami” before it can ride and harvest the economic dividends of future AI. What’s Next...? The impacts of this combined technological “tsunami” on employment will be a global phenomenon that will impact the international division of human talent. In light of this, we propose that China consider and explore some short term and long term policy measures to “soften” these impacts. At present, China could create a tech-unemployment insurance scheme by collecting x % as a form of insurance premiums from those who are currently gainfully employed. This would go into funding for future unemployment as a result of technological changes as mentioned above. China could also allocate a portion of their GDP for life-long learning and education for their workforce. In addition to these, China could look into deploying the technological unemployed workers to, for example, serve as caregivers for its ageing population, work on public projects to alleviate pollution problems, and even work in urban farming to promote food security and safety as well as reduce carbon emissions. In the longer term, China should re-assess the roles of government in the provision of housing, and healthcare, and re-examine the concept of retirement. In short, we propose that China study the feasibility of a universal income and consider adopting the Nordic socio-economic model.

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Christopher H. Lim is Senior Fellow, RSIS, Nanyang Technological University, Singapore. He read Pure Mathematics, Systems Engineering and Developmental Neuroscience and spent over 30 years in consultancy and research in demography; solar energy; systems & control engineering; and neuroscience. He has also been working extensively in national economic planning and strategy formulation. Tamara Nair is Research Fellow at RSIS, Nanyang Technological University, Singapore. Tamara read Geography and Political Science and has a Masters in Environmental Management and a Postgraduate Diploma in Education. Tamara was the Coordinator of the Food Security Research Programme and she now coordinates the Women, Peace and Security Research Programme. References 1. Amadeo, Kimberly. “U.S. Trade Deficit by Country: Current Statistics and Issues”. The Balance. February 21, 2017. [Available online] https:// www.thebalance.com/trade-deficit-by-county-3306264 (date accessed : Feb 17 2017) 2. Capri, Alex. “How Trump's Trade Advisers Are Planning To Shake Up China”. Forbes. January 19, 2017. [Available online] http://www.forbes.com/ sites/alexcapri/2017/01/19/how-trumps-trade-advisers-are-planning-toshake-up-china/#119bb1fb2f3b (date accessed:01 March 2017) 3. Alton, Larry. “3D Printing’s Impact on Modern Manufacturing”. 3DPrint. com. 27 December 2015. [Available online] https://3dprint.com/112633/ modern-manufacturing-impact/ (date accessed: 05 Jan 2017) 4. Lim, Christopher, H. and Tamara Nair. “How 3D Printing could Disrupt Asia’s Manufacturing Economies”. The Conversation. 10 January 2017. [Available online] https://theconversation.com/ how-3d-printing-could-disrupt-asias-manufacturing-economies-69633 5. Cummins, Kate. “The rise of additive manufacturing”. The Engineer. 24 May 2010 [available online] https://www.theengineer.co.uk/issues/24-may-2010/the-rise-ofadditive-manufacturing/ (date accessed:01 March 2017) 6. Grunewald, Scott, J. “GE is using 3D Printing and Their New Smart Factory to Revolutionize Large-Scale Manufacturing.” 3DPRINT.com April 4, 2016. [Available online] https://3dprint.com/127906/ge-smart-factory/ (date accessed: 02 March 2017); WWW3DERS.org. “Siemens invests EUR 21.4M to open first metal 3D printing facility in Sweden.” Feb 03, 2016. [Available online] http://www.3ders.org/articles/20160203-siemens-enters-industrialmetal-3d-printing-production-with-first-metal-am-facility-in-sweden.html (date accessed: 02 March 2017) 7. McCarthy, John. "What is artificial intelligence?" (2007), [Available online] http://www-formal.stanford.edu/jmc/whatisai.html 8. McCarthy, John. “Programs with Common Sense”. RLE and MIT Computation Centre, 1959, [Available online] https://web.archive.org/ web/20131004223822/http://www-formal.stanford.edu/jmc/mcc59/ mcc59.html 9. Statista. “Distribution of the workforce across economic sectors in China from 2005 to 2015” [Available online] https://www.statista.com/ statistics/270327/distribution-of-the-workforce-across-economic-sectors-inchina/ (date accessed: 02 march 2017) 10. The Financial Times. “Definition of Human Cloud”. [Available online] http://lexicon.ft.com/Term?term=human-cloud (date accessed: 28 November 2016) 11. Accenture. “Artificial intelligence is the future of growth”. [Available online] https://www.accenture.com/gb-en/insight-artificial-intelligence-future-growth (date accessed: 02 March 2017)

In short, we propose that China study the feasibility of a universal income and consider adopting the Nordic socioeconomic model.

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Culture

Authentic, Ethnic, and Fusion: Food and Identity in Contemporary Perspective BY ISHITA BANERJEE-DUBE

This brief essay considers varied and often contradictory developments in order to explore the many understandings of the “authentic” and of “fusion” – as well as to question the authenticity of the authentic and the newness of “fusion” -by pointing to food as a result of the confection of the “authentic” and the “inauthentic”. “Behind the assiduous documentation and defense of the authentic lies an unarticulated anxiety of losing the subject.” – Regina Bendix, In Search of Authenticity (10) “But what does authenticity really mean? And is authenticity really the right yardstick by which to judge an Indian meal?” – Lizzie Collingham, Curry: A Tale of Cooks and Conquerors (2)

ravel these days, commented a colleague with mirth and gloom, is measured by what you eat and where rather than what you visit and see. The exponential increase in consumption has brought in its trail food tourism, an upsurge in food shows, gourmet channels, and food competitions on television, and a surfeit of food bloggers and culinary groups in the social media along with the numerous

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food columns in newspapers and journals. Food and cuisine have suddenly emerged as vital elements of identity and personhood, being and belonging, nation and culture, desire and affect. Unsurprisingly, national governments and indigenous, “ethnic” and marginal groups now compete with each other to project food either as a key element of national culture, or to get “heritage status” in order to conserve the “authenticity” of “ethnic” cuisine. In tune with this, a recent trend of high-range “ethnic” restaurants abroad, the USA in particular, pride themselves on providing “authentic” fare of a particular region of say China or India as opposed to their run-ofthe-mill cheap counterparts that serve homogenised “inauthentic” pan-national “Chinese” or “Indian” food. Despite this disdain for the “inauthentic”, food served in cheaper restaurants has been the result of innovative blends and adaptation. Such innovations and adaptations, however, are not unique to restaurants in foreign countries; they are integral to cooking and cuisine and hence, happen in the home country at all times. In addition, there is a growing emphasis on “fusion” food within these countries, a tendency that reflects the desire of upwardly mobile social groups to belong to the global and the cosmopolitan.

If we pick up the story of Chinese food in the US at the end of the twentieth century, we see the same process of adaptation and innovation through which restaurateurs who run “consumption oriented” and “connoisseur oriented” restaurants, “fit Chinese food into market niches”. Such strategies highlight that “authenticity is not an objective criterion”; it is “socially constructed and linked to expectations” (Shun Lu and Fine 1995: 335). This brief essay takes into consideration these varied and often contradictory developments in order to explore the many understandings of the “authentic” and the “fusion”, and to question the authenticity of the authentic and the newness of the “fusion” by pointing to food as the result of confection of the “authentic” and the “inauthentic”. A quick look at the history of food and cooking opens a rich scenario of species migration and cross-cultural flows, colonial encounters and power-play, allowing an interrogation of essentialisms that often result in intolerance and the construction of rigid frontiers. In an incisive critique of notions of “indegeneity” and “alienness” tied to debates around the “trout” as an invasive species in South Africa, Duncan Brown argues that plant and animal species move, not just on account of human intervention such as transportation, planting and stocking, but also on account of habitat and climate change, a fact that upsets simple notions of indigeneity, endemicity and the right to belong (Brown 2016: 22-23). He advocates an understanding of biodiversity and belonging not in terms of simple origin or autochthony, which is “deeply problematic”, but in terms of (biological) interdependence and accommodation (Ibid: 35). A simple fact illustrates Brown’s point: it is possible to think of Italian food without tomatoes that came from the New world, or overlook the significance of potatoes, also from the New world, in the diet of the English, in particular, the working classes? From where does chingri (prawn/shrimp) malaikari, proudly projected as a “signature” dish of Bengal, eastern India, by food writers, derive its

name? From the thick coconut-milk gravy (malai) or from Malaysia (Malay in Bengali), with which Bengal has had long trade and other connections? What is typical or endemic or natural in this case? The second part of the name of the dish, kari (curry) brings us possibly to the most significant creation in India during British rule. Curry has no counterpart in any of the several Indian languages, and yet is emblematic of Indian food in most of the world. While one can argue that the case of India is particular and echo Collingham’s statement that authenticity is not the real yardstick to judge an Indian meal, is it correct to say that “authenticity” applies to Chinese, French or Italian food? How is it that Chop Suey, an (in) famous invention of Chinese immigrants to the United States, caused a craze in the US in the late-nineteenth century and has now become a “relic”, a “food fad that has ended up in the rubbish heap of culinary history”? (Coe 2009:160) It bears pointing out in this connection that chop suey or “za sui” (Mandarin) or “sap sui” (Cantonese) refers to “odds and ends” or a hash, a “hodgepodge stew” similar to the Indian “curry”, often defined as a “hot stew” with different ingredients and spices. While the thrashing of “Chop suey” has come in the wake of its categorisation as a “flavourless” hash, the ubiquity of curry rests on its constantly changing yet perennial blends. During its heyday moreover, the “Chop Suey” was far from standardised: its definition was anything but fixed, a fact that made it attractive and appetising. If we pick up the story of Chinese food in the US at the end of the twentieth century, we see the same

process of adaptation and innovation through which restaurateurs who run “consumption oriented” and “connoisseur oriented” restaurants, “fit Chinese food into market niches”. Such strategies highlight that “authenticity is not an objective criterion”; it is “socially constructed and linked to expectations” (Shun Lu and Fine 1995: 335). Hence, before we sneer at the Americans of the nineteenth century who identified Chinese food with Chop Suey, we might pause to think that the “authentic ethnic” food of high-range Chinese restaurants of today might be despised by “connoisseurs” of a later generation, another testimony to changing notions of food, identity and authenticity. Arguably, these examples indicate adaptation and combination through active human intervention in settings abroad. If we turn our attention back to China, a country notorious for its zeal to guard itself from the onslaught of foreigners till the seventeenth century, we can gainfully ask how the “traditions” of “regional” or “ethnic” cuisine

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Several factors contributed to the creation of this new “ethnic” food tradition: here, migration and change in taste, as well as the state’s effort to control mountain regions by introducing maize and other coarse crops from the mid-eighteenth century played vital roles. (caixi) – categorised differently into five, eight or 10 – were the results solely of innovative processing of “indigenous” ingredients or were affected by species migration and climate change in addition to human intervention. Xu Wu’s works on local and “ethnic” food of the Enshi prefecture in southwest Hubei, central China, has demonstrated how the food of this relatively young “ethnic” prefecture has undergone transformations in meanings and symbolism as well as standardisation as it has been incorporated in urban restaurant chains (Xu Wu 2016). Now well-known to urban consumers and “foreigners” as “hezha” food, a name derived from a common local dish, a soup with bean dregs and soybean liquid and vegetables, hezha food has effectively repositioned its symbolic status as coarse yet tasty and healthy ethnic food, including finding its way to the dinner table of the “foreigner” as a “delicacy” (Ibid: 151). The changing status and contradictory meanings of hezha food acquire particular significance if we remember that it did not exist in the early-eighteenth century. Several factors contributed to the creation of this new “ethnic” food tradition: here, migration and change in taste, as well as the state’s effort to control mountain regions by introducing maize and other coarse crops from the mid-eighteenth century played vital roles. It does not require pointing out that state strategies play an important role in the shaping of food cultures. To take a recent example, we are yet to see the full impact of the urban and rural Chinese consumers’ change from a “grain-based” to a “nutrition-based” diet that has not only resulted in a phenomenal increase in the intake of animalprotein but has also made marine fishery products compose a third of this protein intake. The average animal-protein intake in China is much higher than the global average (Zhang Hongzhou 2016). This change, of course, has been actively encouraged by the Chinese state and local governments: the “blue granary” concept or a “marine-based food security”

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proposed since 2007 has been accompanied by the official addition of fish to the “vegetable basket” in 2011 (Ibid). Together, state initiative and people’s change in taste and ideas of nutrition will make marine fish a major part Chinese diet and cuisine, slowly replacing pork and other forms of animal protein. If the trend continues, fish-based diet will stand for “typical” Chinese food in a decade or two. In sum, explorations of food, cooking and cuisine in different societies and cultures allow for a re-thinking of the “authentic” and the “ethnic” by underscoring the inherently mixed nature of food and cuisine, and the constructed and contingent nature of identities. A result of the “fusion” of ingredients, ideas, ideologies and imagination, inflected by relations of power and creative experiments, food and cuisine open spaces to think of “identities” as posited on the “inauthentic”, unsettling thereby the construction of an essential “other”.

Ishita Banerjee-Dube is Professor of History at the Centre for Asian and African Studies, El Colegio de México, Mexico City. Her research interests include religion, law and power; language and identity; caste and politics; food, gender and nation, and postcolonial studies, with special focus on eastern India over the 19th and 20th centuries. The most recent of her four authored books is: A History of Modern India (Cambridge University Press, 2015). Among her 10 edited volumes feature: Cooking Cultures (Cambridge University Press, 2016) and Caste in History (Oxford University Press, 2008). References 1. Brown, Duncan. 2016. “Indigeneity, Alienness and Cuisine: Are Trout South African”, in Cooking Cultures: Convergent Histories of Food and Feeling, edited by Ishita Banerjee-Dube, 21-28. Cambridge and New Delhi, Cambridge University Press. 2. Coe, Andrew. 2009. Chop Suey: A Cultural History of Chinese Food in the United States, New York, Oxford University Press. 3. Collingham, Lizzie. 2006. Curry: A Tale of Cooks and Conquerors, Oxford, Oxford University Press. 4. Shun Lu and Gary Alan Fine. 1995. “The Presentation of Ethnic Authenticity: Chinese Food as Social Accomplishment”, The Sociological Quarterly, 35, 3: 335-353. 5. Xu Wu. 2016. “Local Foods and Meanings in Contemporary China. The Case of Southwest Hubei”, in Cooking Cultures: Convergent Histories of Food and Feeling, edited by Ishita Banerjee-Dube, 139-157. Cambridge and New Delhi, Cambridge University Press. 6. Zhang Hongzhou. 2016. “China’s Growing Appetite for Fish and Fishing Disputes in the South China Sea”, All China Review, November.

Olympics

Beijing 2022 and China’s Second “Coming-Out Party” BY DAN STEINBOCK

After a decade of huge international events, many Chinese people suffer from “gala-fatigue”. So has the case for Beijing Winter Olympics 2022 dimmed as well? Not necessarily.

hen the International Olympic Committee (IOC) awarded the 2022 Winter Games to Beijing, in a joint bid with the city of Zhangjiakou in North China’s Hebei province, the initial reaction of the international community was lukewarm.

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In the past 120 years, the costs of the Olympic Games have skyrocketed. Olympic Cost Overruns While cost overruns – the differences between initial projections and final costs – have been the rule since the 1960s, the best-known Olympic debacles occurred a decade later. In Montreal’s 1976 Summer Games, costs overruns proved so huge that the Canadian city almost went bankrupt and spent three decades to pay off the bill.

Over the past two decades, the cost overruns of hosting the Olympic Games have skyrocketed from a minimum of 35 percent (Beijing 2008) to over 1,260 percent (Sarajevo 1984). While Barcelona 1992 ($9.7 billion) and Athens 2004 ($3 billion) contributed to debt crises in both countries, London 2012 ($15 billion) boosted UK’s economic distress before the Brexit referendum and Sochi 2014 ($22 billion) added to Russia’s economic challenges amid the US-EU sanctions. The last nail in the coffin was Brazil 2016, where costs soared to $10 billion amid economic, political and security challenges. Thinking big is no longer the Olympic goal. Rather, the point is to think smart. Typically, South Korea’s 2018 Winter Games will take place in a small mountain town, Pyeongchang; the smallest to host the Olympics since Lillehammer 1994 in Norway. If Olympic cost overruns are a rule,

how can the Beijing 2022 Winter Olympics be a success? New Preconditions for Olympic Success Cost control is the first precondition. Unlike most hosts, China has a track record. In the case of summer games, only few hosts – most impressively Beijing in 2008 – have managed to keep the cost overrun reasonable. But Winter Games aim far higher. While Beijing’s Summer Games cost $44 billion, the official 2022 budget is barely $3.1 billion.

A CHINA WITH STEADIER GROWTH BUT HIGHER LIVING STANDARDS, GREATER INNOVATION AND CONSUMPTION WILL HOST THE 2022 WINTER GAMES. The second precondition involves damage control. In 2014, the IOC introduced the Olympic Agenda 2020, which promotes sustainability and cost control seeking to transform Olympics into a “plug-and-play” event with minimal economic and environmental damage. For instance, Beijing 2022 is adapting six venues that hosted the 2008 Olympic Games to minimize the cost of construction. Third, sustainability must be pervasive. Typically, the six new competition venues will be built using renewable technologies with energy saving and environmentally-friendly materials, while electricity for lighting, venue operations and transportation will come from solar and wind power. Fourth, to promote sports economy, China needs world-class athletes as well as ordinary people. So the mainland is rolling out a national campaign to encourage 300 million people to participate in winter sports by 2022. Moreover, the venues will be distributed in three zones which will maximize opportunities for post-Games use, fostering the development of winter sports in and around Beijing. Finally, local tourism needs sustained investment. While the current investment focuses for the 2022 Olympics, life will continue after the games. To avoid waste of resources, local governments and property developers could consider a sustained focus on local tourism and infrastructure, accommodations and environmental protection.

New China, New Olympics While the first Olympics took place in 1896, the first Olympics in an emerging economy took place in Mexico City only in 1968. In Winter Olympics, the torch is shifting from advanced to emerging economies, as evinced by Russia 2014, South Korea 2018 and China 2022. That reflects the shift of economic power from the West to emerging Asia. Gala-fatigue is difficult to avoid in an increasingly international mega city like Beijing. However, much of the cost controversy could be avoided if the Olympics can be organized with cost consciousness, damage control, sustainability, promotion of sports economy and sustained tourism and infrastructure investment. Since Beijing Summer Olympics were China’s “coming-out party”, skeptics say there is no reason for new Olympics. Yet, several advanced economies have hosted two or more Olympic Games. Moreover, by 2022 China may be ready for a second coming-out party. In 2008, Chinese GDP per capita was less than $7,900 and China accounted for 31 percent of the US economy and 7 percent of global economy, respectively. That was China of elevated growth but low living standards, cheap prices but high investment and overcapacity. In 2022, Chinese living standards could be more than 2.5 times higher, while China may account for more than 80 percent of the US economy and some 20 percent of the global economy, respectively. That means a China with steadier growth but higher living standards, greater innovation and consumption will host the 2022 Winter Games. It will also mean China’s second coming-out party. The original, slightly shorter commentary was released by China Daily on February 15, 2017 Featured photo courtesy: Reuters

Dan Steinbock is Research Director of International Business at the India China and America Institute (US) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). See http://www. differencegroup.net/

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THE TRUTH

China-US

CHINA AND TRUMP: A New Mega-narrative

BY ZHA DAOJIONG

Is the relationship between the United States and China destined to start off on a negative footing under President Trump? Such questioning seems hopelessly redundant. The persistent pattern of rhetoric from Mr. Trump and his foreign policy team sounds like a team of enraged bulls charging into a china shop.1 Pun intended.

iewed from Beijing, where I am based, it is important to bear in mind that during the entire US presidential campaign season, “Let’s get tougher on China” emerged as a consensus message across the entire US political spectrums. Voices for a reduction of confrontation were few and effectively cast aside. Mrs. Clinton, the Democratic

candidate, was reported to want to “ring China with missiles” if her campaign prevailed. Mr. Trump not only spoke of China in relation to the American economy and society in a mode that echoed America’s “Japan-bashing” fever of the 1980s, he also directly touched the most sensitive nerve of the Chinese government and the country’s citizens: America’s position on the status of Taiwan. China, in response, has repeatedly stated that its position on the basis for normal diplomatic ties – foreign governments accept the Chinese government’s positon on “One China” – is not for negotiation. By the way, Chinese appetite for satisfying the incoming Trump team’s demands on other matters may not be that high, either. Few expect Trump to switch his government’s recognition of “One China” from Beijing to Taipei. Under

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The time has come, however, for China to address Americans’ seemingly pervasive sense of vulnerability by stating that a harmonious, prosperous, powerful yet responsible United States constitutes part of the favorable external environment that China wishes to have. his leadership, the United States is more likely to pursue policies that come across as poking in the eye (or heart) of Beijing. Then, the extent of tolerance on the part of Beijing comes into question. Active conflict between China and the United States over Taiwan seems less distant a prospect. In my mind, the stakes are higher for China than for the US. An overwhelming majority of Chinese citizens were able to attain a life better than their parents, thanks to 40 years without a war between China and a major power, America included. War over Taiwan (or indeed the islands and rocks in the East Asian seas) would create at least a 50-50 chance of destroying hope of similar progress for our next generation. In the totality of foreign challenges facing the American society, is China being singled out by the US government? If one judges by mainstream commentaries in the Chinese media, the answer is an overwhelmingly “Yes”. In the American media, answers to such questioning amount to a resounding “No”. Media in both countries represent solid senses of self-righteousness. As such, it is nearly pointless to try to argue for joint efforts leading to common ground over what has caused the bilateral ties to come to the present stage. The time has come, however, for China to address Americans’ seemingly pervasive sense of vulnerability by stating that a harmonious, prosperous, powerful yet responsible United States constitutes part of the favorable external environment that China wishes to have. At recent academic conference sessions held in both China and the US, I tested this articulation and received mixed reactions. Yet, it may well help answer the justifiably salient question on the minds of many Americans: Now that China’s capacity to compete with the United States has risen in some areas and seems sure to rise further, what does China want?

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An alternative approach is to continue to urge each side to use history as a mirror – a reason against the use of force as a means of conflict resolution. The nagging challenge in this approach is that Americans and Chinese rarely agree on the causality of major conflicts in history. In addition, each side not only has a strong belief in its own reasoning but also tends to reinforce traditional beliefs when it feels to be the rightfully aggrieved party in the relationship. Skeptics about the possible impact of such phrasing – if only to substantiate the usual “winwin” formulation – correctly remind us that deeds, not words, matter. Furthermore, it is not for China to influence and change America. Yet since China has such a consequential relationship with the US at hand – not just with the incoming Trump administration but into the indefinite future – it is worth suggesting that China come up with a mega-narrative – like the one suggested just above – about the relationship. That mega-narrative should serve to guide competing interests at home and simultaneously speak to concern in American society. The article was first published in China-US Focus January 20, 2017. Featured photo courtesy: Aflo/REX/Shutterstock

Dr. Zha Daojiong is a Professor in the School of International Studies, Peking University. His areas of expertise include the politics of China’s international economic relations, particularly the fields of energy and natural resources, development aid and the economics-political nexus in the Asia Pacific region. In recent years his research extended to political and social risk management for Chinese corporations engaged in non-financial investments abroad, including the publication of an edited volume Chinese Investment Overseas: case studies on environmental and social risks (Peking University Press, 2014). Reference 1.www. chinausfocus.com/foreign-policy/donald-trump-a-bull-in-a-china-shop

World

Trump and the New Iran Gambit BY PETER KOENIG

Iran is the most important partner of Russia and Syria in fighting Islamic terrorism, made in USA. Iran is also in the long run, the stabilizing factor in the Middle East. Washington needs a big war to sustain its sick and faltering economy. For the Washington hegemon, the Middle East is not to become a stable region.

Donald Trump speaks at a rally organised by Tea Party Patriots on Capitol Hill in Washington, Sept. 9, 2015, to oppose the Iran nuclear agreement.

id Trump cheat us all with his campaign promises and his succinct “to the point” Inaugural Address? Or did he just deceive some of us, some of the time, and the rest will be taken care of by a more or less sophisticated trickery? – A gambit, one of which is Iran? After all, we know how he has been elected. Among the ruses used was a distinct scheme of mind manipulation, targeting specific voter groups in swing states, just as many as necessary to swing the state in his favor. This allowed him to capture a large majority of electoral votes, making him the winner, but running almost 3 million popular votes behind Hillary (“Mind Manipulations” to Influence Election Results – http://www.globalresearch.ca/mindmanipulations-to-influence-election-results/5566894). By no means is this a plea for Hillary. With her in the White House we might already be in WWIII, I mean the nuclear version of it. But it shows that the choice Americans were given was rigged from the

very beginning, as it usually is. It was either “business as usual” or “business as usual – plus”. I don’t dare guessing what we have now. But for sure it isn’t going to be peace for America and the rest of the world anytime soon. Not by a long shot. Not even near the prospects Trump put out when he said he would like to make peace with Russia, have Russia as a partner, rather than an enemy, and he would put an end to interventions in foreign countries. He specifically pointed to Syria, where he would not insist on a “regime change”, but rather fight efficiently and in collaboration with Mr. Putin, Islamic terrorism, i.e. ISIS, Al-Nusra, Al-Qaeda and whatever other names they give themselves. The picture today looks quite different. Although, Mr. Trump said from the very beginning he didn’t like Obama’s Nuclear Deal with Iran, and that he would like to rip it up. But why would he want to do this? First, he assured his electorate no more interfering in foreign countries – which for many Americans was the reason for voting Trump; and second, he knows that this deal is not just an “Obama Deal”. It is called the Joint Comprehensive Plan of Action (JCPOA), an international agreement reached in Vienna on 14 July 2015 between Iran and the five permanent members of the United Nations Security Council – China, France, Russia, UK, US plus Germany (5+1) and the European Union. It’s not so easy to undo. – Why did he say it? – Perhaps

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because he wanted the ultra-conservative neocon Jewish vote? – And even more so, express his alliance with superstar Zionist Netanyahu? During the campaign, when the controversies of Trump’s pleas and promises were so confusing, contradictory and chaotic, people laughed and didn’t take him seriously. The point is – nobody connected the dots. The departure dot increasingly looks like Netanyahu and his Zionist network, its extended arm in the US Homeland, AIPAC. The Zionist goal is Israel’s dominion over the Middle East from the Euphrates to the Nile. Trump amplified this commitment by his repeated statements that America will always defend and support her chief ally, Israel – Israel Über Alles – which sounded more like “Israel First”. America First is but a ruse to please the masses, utterly deceived by Obama’s “Yes We Can”. Then Trump appointed Steve Bannon as his personal advisor and White House Chief Strategist. Mr. Bannon is a neoliberal Zionist, the extended brain (sic) of Netanyahu, so to speak. Bannon was a Goldman Sachs banker (go figure!) and the chief editor of the ultra-conservative “Breitbart News”. And why did he sell out to Israel – even more so than his predecessors? – Perhaps because he is a businessman who knows where the money is and who manages it – from the FED, to Wall Street, to the Basle-based Bank for International Settlements (BIS) – the Central Bank of all Central Banks – those who manipulate the western monetary system and its banksters – and everything in between. Peace with Russia, is it still a priority? The Deep State handlers of the Pentagon and its multitrilliondollar military-security complex do not want peace with Russia. They want and need war for their milk-cow USA to survive. Trump knows that. In the meantime, he has already watered down his peace pledge with Russia. He still says he prefers a good relation with Putin than a bad one, but says also he doesn’t know whether he will get along with Putin; Putin was not a friend. Despite the many links Trump has to Russia, he makes sure the Putin haters understand that there is not going to be an alliance of roses with Russia. Though he did come forward in a half-hearted defense of Putin, when he replied to Bill O’Reilly

of Fox News, slandering Putin as a murderer, “We [the US] have many murderers. Do you think we are so innocent?” Trump wants to keep the door to Putin open. Remember, one of Washington’s brandmarks is always dancing on several weddings. Let’s see how this works. The next dot is Iran – like in Iranbashing to justify a war and to please the war industry. Defense Secretary James “Mad Dog” Mattis proclaimed without any evidence – or rather all evidence to the contrary - that “Iran is the single biggest state sponsor of terrorism”. State sponsored terrorism is a red flag for fear- and war-mongering, a propaganda tool not to be missed by the MSM. Trumps National Security Advisor Michael Flynn uttered similar lies on several occasions. Trump himself said that Iran is the number one terrorist state. Pentagon voices indicate that the White House is also considering listing Iran’s Revolutionary Guard Corps (IRGC) – Iran’s main defense entity – as a terrorist organisation. If this happens, any move of the IRGC may become a false flag, potentially justifying an all-out aggression on Iran. The presstitute will invariably pick-up on these “false news” and repeat them at nauseatum, so the public at large in America and the rest of the western world is indoctrinated and mentally prepared for an attack on Iran. A false flag could even trigger a nuclear attack, thus helping Israel to get a step closer to regional hegemony, and Washington to world hegemony. That’s their pipedream. Not so fast. There is the solid alliance of the axis Russia – China – Iran. Iran is the most important partner of Russia and Syria in fighting Islamic terrorism, made in USA. Iran is also in the long run, the stabilising factor in the Middle East. For the Washington hegemon, the Middle East is not to become a stable region. All to the contrary, it must be chaotic in order to be controlled. Russia and China would most likely not stand by idly, if Iran were to be attacked. This might be the moment of a direct confrontation between US/NATO forces with Russia and possibly also with China. With false accusations of China’s aggressive behaviour against Japan’s, Vietnam’s and the (alleged) Philippines territorial claims in the South China Sea, China is already framed for an attack. Remember, Washington needs a big war to sustain

Defense Secretary James “Mad Dog” Mattis proclaimed without any evidence – or rather all evidence to the contrary - that “Iran is the single biggest state sponsor of terrorism”. State sponsored terrorism is a red flag for fear- and war-mongering, a propaganda tool not to be missed by the MSM. 60

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its sick and faltering economy. WWIII, nuclear or not, triggered in the Middle East might expand north rapidly to engulf Europe in a devastating conflict, the third time in hundred years. This is exacerbated by a rapid and massive US military build-up. President Trump called on the Pentagon to expand US military power, step up violence in Syria, and to prepare the nuclear arsenal for war with “nearpeer competitors” – a reference to nuclear-armed China and Russia – and “regional challengers”, such as Iran. This despite his earlier promises for a future non-intervention policy in foreign lands. In addition, on the northern fronts, NATO’s ongoing and steadily advancing troop and armor movements along the Russian borders are encircling Moscow like a closing noose. Trump has asked Defense Secretary James “Mad Dog” Mattis, to come up within 30 days with a plan of a significantly expanded military strike force, including the renewal of the US nuclear arsenal – to be a fullfledged strike force by 2022. The cost is not clear, but roughly estimated at about US$100 billion per year, in addition to the current about US$600 billion official budget. This would be in line with Obama’s plan of renewing the nuclear arsenal at a cost of about 1 trillion in ten years. No doubt, the true cost of the US military-security spending with all the associated industries and services is already today in the trillions. Wars continue to be in the air over the coming years of the Trump Administration. In fact, looking back over the last 16 years – in 2000 Bush was the right man for the Deep State, those who pull the strings, to start the mess in the Middle East by wars in Afghanistan and Iraq; all under false pretenses, as we know in the meantime. But, by the time the public found out, it was too late. Then followed Obama, the smooth spoken, intelligent African American (by his looks only), who would bring change, as in “Yes, We Can”, convincing hundreds of millions around the world of a new era of peace. In anticipation of his peacemaking, he was bestowed the Nobel Peace Prize, before he even moved a finger towards peace. Following orders from above, disregarding the Nobel Committee, he stepped up the two wars left behind by George Bush and started new wars to end his Presidency on 20 January 2017 with seven active wars at his credit – and millions of people killed; tens of thousands by his personal drone-killing approvals.

Follows Donald Trump, a businessman through and through, who promised peace and harmonious relations with Russia, non-intervention in foreign countries – and to bring back jobs to “Make America Great Again”: a new slogan, a new public deception, a new approach by a new king without clothes. Thus, has chosen the “Deep State”, or at least part of the Deep State. While Trump is seeking world dominion through his allies, the FED and Wallstreet banksters, he seems not to neglect the weapons industry – by preparing for an arms race that could go ballistic – and nuclear – anytime. An attack on Iran could well be carried out by Israel, backed by Washington. Under the arrangement between Washington and Israel, an Iranian retaliation against Israel would be equal to an aggression on the US, hence engaging the Pentagon, leading to a direct confrontation with Russia and possibly China; the beginning of WWIII, being played out initially in the Middle East, then extended northwards, where NATO is ready to attack Russia. Trump’s aggressive Executive Orders for the Pentagon, the stepped-up hostilities in Yemen and planned in Syria, plus putting Iran in the crosshairs with unfounded anti-Iran slander propaganda, increases the tension level throughout the world. But would Trump actually trigger an all-destructive WWIII? – One that would put the annihilation of humanity, as we know it, at stake?

Washington needs a big war to sustain its sick and faltering economy.

Peter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research, ICH, RT, Sputnik, PressTV, The 4th Media, TeleSUR, TruePublica, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.

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World

Paul Krugman is Right Here − The Danger of Trumps’ Trade Plans is the Reverse China Shock

BY TIM WORSTALL

China’s emergence as a great economic power has induced an epochal shift in patterns of world trade. Economists are all pretty certain that trade with China is beneficial trade deficit or not of course, but that’s not quite the point. It is the transition from one set of arrangements to another which causes the turmoil.

t should come as no great surprise that when Paul Krugman plays the trade economist, rather than the political commentator, he gets things right. His Nobel is, after all, for his part in the creation of new trade theory. So it is with his column today on the subject of Donald Trump’s supposed ideas about trade. It isn’t so much that trade with China, unbalanced trade, is damaging to the American economy, or that it is beneficial. Economists are all pretty certain that it is beneficial trade deficit or not of course, but that’s not quite the point. It is the transition from one set of arrangements to another which causes the turmoil – and this will be true of returning to a pre-China trade economy just as much as it has to one that starts to incorporate China trade. His blog makes the point:

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President Xi Jinping of China visited the World Economic Forum in Davos, where he hinted that with the United States in retreat, China was prepared to step up as a champion of free trade. © Credit Peter Klaunzer/Agence France-Presse / Getty Images

“That is, I’d argue, the way to think about the coming Trump shock. You can’t really turn the clock back a quarter-century; but even trying can produce exactly the kind of rapid, disruptive shifts in production that fed blue-collar anger going into this election.” The idea is expanded in the column: “What the coming trade war will do, however, is cause a lot of disruption. Today’s world economy is built around “value chains” that spread across borders: your car or your smartphone contain components manufactured in many countries, then assembled or modified in many more. A trade war would force a drastic shortening of those chains, and quite a few U.S. manufacturing operations would end up being big losers, just as happened when global trade surged in the past.” Just to set the scene here, I’m an unrepentant free trader. I see absolutely no difference whatsoever with my being allowed to buy, or not allowed to buy, as I wish from the guy in the same village and being able to do so with someone on the other side of the world. I do not see that those artificial lines called national borders make any difference at all to the gains from the division of labour, specialisation in it and the resultant trade driven by comparative advantage. The vagaries of history have meant that Oregon is part of the United States rather than the part of Canada it could have been. And I see no reason at all why such vagaries should mean that Oregonians

By trading with China we are making ourselves richer at the cost of the disruption, the Trump shock would make us poorer at the same cost of the same disruption.

should have free trade with the 49 states and not with the Provinces, nor that they would have been better off the other way around. So, just so you understand, I do not, in the slightest, believe that trade with China has been bad for the American economy nor its workers. Further, I hold to the standard economists’ line that trade makes no difference at all to the number of jobs in an economy – only to which jobs are done, not the number of them. In this quite clearly I disagree with large portions of the incoming administration. However, the shock which Krugman refers to is based on the recent paper about the China shock. While we (that is, all of us out here, not those in the administration) agree that trade is overall beneficial we do agree that some people are hurt by it. Who depends upon the pattern of trade and how much rather on the speed of the changes. Recent empirical research seems to tell us that such damages are more persistent than we had thought: “China’s emergence as a great economic power has induced an epochal shift in patterns of world trade. Simultaneously, it has challenged much of the received empirical wisdom about how labor markets adjust to trade shocks. Alongside the heralded consumer benefits of expanded trade are substantial adjustment costs and distributional consequences. These impacts are most visible in the local labor markets in which the industries exposed to foreign competition are concentrated. Adjustment in local labor markets is remarkably slow, with wages and

labor-force participation rates remaining depressed and unemployment rates remaining elevated for at least a full decade after the China trade shock commences. Exposed workers experience greater job churning and reduced lifetime income. At the national level, employment has fallen in U.S. industries more exposed to import competition, as expected, but offsetting employment gains in other industries have yet to materialize. Better understanding when and where trade is costly, and how and why it may be beneficial, are key items on the research agenda for trade and labor economists.” The full paper is here and do note that even after all of that they do regard the overall effect as beneficial. The gains to everyone else are greater than the losses to these workers. In that sense trade is just like a technological change. The point being that it is the unravelling of the current arrangements and the time it takes to adjust to the new which causes the losses. For the adaptation is not as fast as we thought it was nor as quick as we would like. Krugman’s point, and one with which I fully concur, is that unravelling the present arrangements is going to cause exactly the same problems all over again. It will take years, if not decades, for the system to stabilise. The Trump trade shock would be just like the China trade shock itself. Except, of course, that by trading with China we are making ourselves richer at the cost of the disruption, the Trump shock would make us poorer at the same cost of the same disruption. That is, even as Autor et al are correct about the China shock to US employment patterns, trying to return to the previous pattern will just give us the same shock all over again and to no good end. Thus, of course, we shouldn’t do it. This article was first published in Forbes on December 26 2016

The US president, Donald Trump, has signed an executive order formally withdrawing the country from the Trans-Pacific Partnership (TPP) trade deal © Ron Sachs/Pool/EPA

Tim Worstall is a Senior Fellow at the Adam Smith Institute in London. He is the author of Chasing Rainbows: Economic Myths, Environmental Facts and is one of the global experts on the metal scandium.

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British Columbia, Canada District of Kitimat I Economic Development Rose Klukas I 250.632.8921 I rklukas@kitimat.ca I www.kitimat.ca

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The Philippines “BRIC” Plan: From Regime Change Ploys to Accelerated Economic Development BY DAN STEINBOCK © ABS-CBN News

While the Obama White House prepared plans for regime change in the Philippines, President Trump is working on an assertive strategy in Asia. Meanwhile, President Duterte is accelerating the country’s economic growth – dramatically.

fter the election triumph of President Rodrigo Duterte, the Philippines has initiated a series of economic reforms to accelerate development, decentralise governance and a tough but controversial struggle against corruption and drugs. The early economic signals are promising. Recently, Finance Secretary Carlos Dominguez III announced that the government is set to sustain growth at close to 7% in 2017, despite “political noise”, by banking on higher infrastructure spending, tax and other reforms, improved peace and order. The big question is President Trump’s strategy for the region. With his keen interest in history, Duterte knows only too well that, while the US is a powerful regional ally, American security state and imperial

dreams, including torture, originate historically from the Philippines. Yet, few expected the Obama State Department to respond as palpably as it reportedly did. Regime Change Plan After the controversial US Ambassador Philip Goldberg left the Philippines, he wrote a “blueprint to undermine Duterte within 18 months”. According to the document, which was leaked to The Manila Times early in the year, Goldberg advocates fostering public discontent with Duterte by isolating the Philippines through military assistance and economic “blackmail” relative to other ASEAN member countries. While Goldberg thinks that “(deposing Duterte) would be a challenge for the opposition”, his goal is imperial “rule and divide” among Philippine congressmen and senators; the ASEAN states; and international multilateral organisations. Moreover, the pro-US opposition should be strengthened through aids and grants. The plan calls on Washington to deploy economic, political and military strategies against Duterte “to bring him to his knees and eventually remove him from office”. According to Daniel Russel, State Department’s assistance secretary for East Asian affairs, the allegations

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In geopolitics, human rights and non-governmental organisations (NGOs) have only too often been used as geopolitical instruments. The Philippines is no exception. of a blueprint are false. However, Russel himself is a key figure in the US pivot towards Asia. US-based sources have also tried to discredit the blueprint as coming from China’s Philippine Ambassador Zhao, which the executive editor of The Manila Times Dr. Dante Ang calls a “fantasy”. It is not the first time Goldberg is associated with regime change efforts. In 2008 President Evo Morales and the Bolivian government gave him 3 days to leave the country after declaring him persona non grata – following efforts to fund the opposition leaders, separatists

and think-tanks with millions of dollars. Yet, President Obama rewarded Goldberg by appointing him assistant secretary of state for Intelligence and Research; one of the 16 elements of the US Intelligence Community. That made Goldberg the middleman between US intelligence and US diplomacy. Thereafter he was sent to the Philippines, which he left in less than three years after efforts to intervene with the election outcome. Exploiting Opposition, Human Rights and NGOs The regime plan ensued after election last May, when President Aquino’s designated successor – former interior minister Manuel Roxas, an ex-investment banker and Liberal Party leader – failed to deliver a democratic victory. Known as “Mr. Market”, Roxas appealed to elites in Manila and Washington but Duterte got almost 40% of the national vote, nearly twice as much as Roxas.

MEETING IN CHINA. Philippine President Rodrigo Duterte shakes hands with his Chinese counterpart Xi Jinping after they witness the signing of documents on cooperation in trade, agriculture, tourism, maritime security, and infrastructure. Photo by Toto Lozano/PPD

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Since elections, there remain nagging questions about the rise of a “narco state” and “drugs generals” during Roxas' watch as interior minister. One of them is a vocal Roxas supporter, retired national police chief general Marcelo Garbo Jr., a “protector of drug syndicates”. To set such perceptions aside, Goldberg’s plan argues that the political opposition “would need all the political weapons in their arsenal to replace Duterte”. The plan advises “restraint in expressing public support for former President Fidel Valdez Ramos and Vice President Leni Robredo, and other opposition leaders “so as not to alarm the Duterte administration of an impending destabilization or a coup”. These plans rely on the center-right Philippine Liberal party, which is known for its market-friendly neoliberal policies and firm support of the US pivot to Asia. Ramos was trained at US West Point in 1960. In the 1980s, he was in President Marcos’s inner circle of national police and military. Following the fall of Marcos, he served as President Corazon Aquino’s military chief. In turn, Leni Robredo is a lawyer and social activist, who the Duterte administration sees more loyal to opposition and possibly the Goldberg plan. Her relationship with the Cabinet fell apart in December, when she was informed “to desist from attending all Cabinet meetings”. In geopolitics, human rights and non-governmental organisations (NGOs) have only too often been used as geopolitical instruments. The Philippines is no exception. In the Benigno Aquino III era until mid-2016, complacency with drug lords and narco politicians went hand in hand with the rise of 3.7 million addicts. International media was quiet about both. However, when Duterte started his war against drugs and corruption, which has cost over 6,000 lives, international concern escalated rapidly. In the public debate, the point person has been Senator Leila de Lima,

Aquino’s former Secretary of Justice, who chaired a senate inquiry into the extrajudicial killings of drug suspects. She has been glorified by the BBC as “the woman who dares to defy Philippine president Duterte” and as an outspoken advocate of “justice". For the same reason de Lima was invited to and awarded in the US as one of the “leading 100 global thinkers” by the Democrats’ Foreign Policy. In the Philippines, many see her awards as perversions of justice, however. Last August, de Lima was found to have a 7-year affair with her lucratively-rewarded driver Ronnie Dayan who served as her money collector for drug protection and campaign financing. When she was still Justice Secretary, the Discovery Channel presented an unsettling documentary Inside the Gangster’s code on ruthless gangs exerting control over the notorious New Bilibid Prisons, while being coddled by the Aquino administration. Oddly enough, de Lima was removed from the Senate committee last September, but her international accolades ensued after the disclosure of her activities. International media has largely ignored her abuse of public office and public funds. Non-governmental organisations (NGOs) also play a role in US-Philippines geopolitics, along with wealthy US Filipinos linked with the Aquino circles, such as billionaire philanthropist Loida Nicolas-Lewis, who served as an attorney for the US Immigration and Naturalization Services in 1979-90. Her sister is former chairwoman of Commission on Filipinos Overseas, Imelda Nicolas. Both are Robredo supporters. A more influential source of funds is billionaire George Soros, who Duterte says has bankrolled local NGOs against him as he has been portrayed as a “mass murderer” in the West. International media has relied on these NGOs and think-tanks in their demonisation of Duterte. Last November, the US-based Millennium Challenge Corporation (MCC) did not renew its $430 million aid grant to the Philippines. While the Duterte's criticism about “aid conditions” was reported as “tirades against America” in the West, the MCC is hardly independent. It is chaired by State Secretary John Kerry and Treasury Secretary Jacob Lew. It also deploys indicators that precondition aid on neoliberal policies. The MCC debacle is overshadowed by the economic implications of US-Philippine military ties. Until 2010, the country’s military expenditures decreased two decades from 1.6% to 0.8% of GDP. During the Aquino era, which coincides with the US pivot to Asia, the expenditures soared to almost 1.4%

of GDP, according to SIPRI – which in dollar terms is over five times the proposed aid package in just one year. Ambitious, Transformational Economic Efforts Under Duterte’s leadership, Manila’s economic development has been dramatically accelerated. Again, international media has largely ignored the story. According to Ernesto Pernia, director general of the National Economic and Development Authority (NEDA), the Philippines must ramp up its total investment spending to some 30% of GDP to achieve its development goal. The effort is to become an upper middle-income economy by the end of Duterte’s term in 2022, which would pave the way for a high-income economy by 2040. If peaceful conditions prevail in Southeast Asia and the Philippines remains united, such ambitious objectives could be viable. Last July, I argued in the Philippines Foreign Service Institute (FSI) that, in order to accelerate growth, the country should drastically increase both its domestic and foreign investment, seek funds not just from the Asian Development Bank (ADB) but from the Asian Infrastructure Investment Bank (AIIB); and not just from US and European multinationals but from Chinese companies. Nor can the Philippines any longer afford to export its people, I added. Although some 10% of the GDP can be attributed to remittances, no BRIC-like emerging economy can misallocate its human capital in such a manner. Even the most favourable demographics will be wasted, if there are not enough jobs. It is this “BRIC-like” transformation that Manila is now trying to achieve. As a result, the public share of investments would have to climb from 5.4% of GDP in the ongoing year to 7% onward until 2022. As private and public investment is expected to contribute 18.6% and 5.4% of GDP, respectively, that would boost total investment to 24% of GDP. The Duterte administration is intent to restore the kind of growth track that the Philippines enjoyed in the early postwar era when its living standards were still second to those of Singapore in Southeast Asia. However, even the ambitious infrastructure program will not be enough to eradicate poverty and become a highincome economy by 2040. To achieve its ultimate objective, the Philippines needs to raise total investments from the hoped-for 24% this year to 30% of GDP, of which only 7% would be contributed by the public sector. Additionally, Manila needs to implement broad and deep

The Duterte administration is intent to restore the kind of growth track that the Philippines enjoyed in the early postwar era when its living standards were still second to those of Singapore in Southeast Asia. www.allchinareview.com

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Despite the controversial drugs war, Duterte's approval and trust ratings in the Philippines remains 83%. Only 5% of the nation disapproves of Duterte.

reforms in tax policy and administration to raise enough revenue to fund the government’s huge spending plan. According to ASEAN, in 2015 FDI in the Philippines was around $5.7 billion, significantly behind Indonesia, Thailand and Vietnam, which attracted FDI of $16.9 billion, $8.0 billion and $11.8 billion, respectively. As real GDP growth rate is accelerating, Manila is pushing for legislative reform, which would streamline the regulatory environment, and the pivot to China, which translates to the participation of AIIB in Philippine projects and has already led to $24 billion in aid pledges. At the same time, the longstanding maritime dispute has been set aside. At the same time, Japan, a historical investment partner, is planning to raise its FDI in the Philippines with $1.8 billion in business deals plus a pledge from conglomerate Marubeni to invest $17.2 billion in water, power and infrastructure. Unlike his predecessors, Duterte has little interest in exporting more people. “We have to improve the economy so you will not come back here”, said Duterte during his recent visit in Japan to migrant workers. “If ever you will return to Japan, it will be for a vacation.” Finally, in my FSI presentation, I also argued that the Duterte administration’s efforts to negotiate sustained peace deals with its Communist and Islamist insurgents could be seen as part of the new economic strategy. A “no-conflict” approach within and around the country would boost stability and thus increase the potential for prosperity. And that precisely has been Duterte’s objective, particularly in the troubled regions and islands in the south; particularly in Mindanao, whose natural resources hold great potential for future economic development.

ratings of opposition figures have fallen. At the same time, the legal battle about vice-presidency is heating. Leni Robredo won vice-presidency with a narrow margin against former senator Ferdinand “Bong Bong” Marcos, former President Marcos’s son. In his electoral protest, Marcos says that the Liberal Party rigged the 2016 elections in favour of Robredo. That kind of fraud would no longer be surprising. The stakes in the Philippines are no longer just domestic. Today the country’s stability is strongly supported by Beijing as well. Amid the news about the “ouster plot”, foreign ministry spokeswoman Hua Chunying said China was confident on Duterte’s leadership and would continue to support his policies. Soon President Trump’s administration must reassess Goldberg’s regime-change scenarios in light of his own pledge to redefine “America First” policies in Asia and China. Before the US elections, Trump and Duterte had a brief but friendly phone conversation. While Duterte may get better along with Trump than former President Obama, the new White House’s Philippines plans are subject to its broader Asia and China strategy which – as secretary of state Rex Tillerton’s confirmation hearings suggest – could mean greater assertiveness in the region. In the Philippines, any US-led regime change effort would face firm domestic, regional and international opposition. Only the Philippines can determine its own future. Unipolar regime change plans should have no role in the multipolar 21st century – especially in Asia which is critical to global growth prospects.

From Obama’s Regime Changes to Trump Uncertainty In the Philippines, the alleged plan of Vice President Robredo’s supporters to create dissent against Duterte has become a national issue. If a Ramos-Robredo scenario were to fail, Golberg advises exploiting possible rifts “among Duterte supporters”, or assisting “Robredo led opposition groups” coupled with the Catholic Church, business sector and NGOs. Despite the controversial drugs war, Duterte’s approval and trust ratings in the Philippines remains 83%, according to the Pulse Asia survey. Only 5% of the nation disapproves of Duterte. However, the

Dr. Dan Steinbock is an internationally recognised expert of the nascent multipolar world. Dan Steinbock is the founder of the Difference Group. He has also served as the research director at the India, China, and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). In the Philippines, he has addressed leading foreign policy, economic and climate change, as well as competition and innovation institutions. For more information, see www.differencegroup.net

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