WHAT does China’s One Road One Belt (OROB) initiative and the United States’ America First policy have in common?
They are both geo-economic tools designed to advance a particular strategy.
For Trump and his supporters, America First means putting American interests ahead of multilateral and international interests; a resurgence of American nationalism and an end to what they see as unfair alliances/relationships. MAGA, or Make America Great Again, therefore, is opposed to the United States’ traditional role in the global economy, and such opposition will inevitably change that very same global economy.
For the Chinese, the OROB is a simpler plan. It is an attempt by the People’s Republic of China to sustain Chinese growth while at the same time expanding Chinese power. It also means securing the trade lanes that sustain the flow goods to and from China.
These are simple enough concepts to understand but geo-economics, like its sister geopolitics, is a complex discipline. Identifying certain policies or phenomenon is easy, but predicting their long term effects can be quite difficult. Thus, the ongoing trade war between China and the United States as well as the growing populism in many parts of the world are changing not only political realities, but economic ones as well.
Free trade – once a dominant ideology – is now under attack. Consider, for example, the Bretton Woods system, which has been in place for decades and is now close to expiration date. Furthermore, the Western economies, once in seeming solidarity, are now engaged in harsh rhetoric. And this is only the beginning.
The take away for this essay is this: Geo-economic trends are becoming unstable, unpredictable and their true effects will not be felt until years have passed. And of course, there are the unintended consequences, and they will bleed into politics.
The trade war between the US and China is one of the consequences of a rising China and an increasingly nationalistic Western World. No one could have seen this prior to Trump’s victory; the world believed that “business as usual” would go on forever; and yet here we are./PN
