Tuesday, September 6, 2016

Made in China - G20 and its geoeconomic significance by Pepe Escobar

"We urgently need to develop an inclusive, comprehensive, cooperative and sustainable new security concept.” Xi Jinping 
Published time: 5 Sep, 2016 15:11
China's President Xi Jinping speaks at a news conference after the closing of G20 Summit in Hangzhou, Zhejiang Province, China, September 5, 2016. © Damir Sagolj
What has just taken place in Hangzhou, China, is of immense geoeconomic importance. Beijing from the start treated the G20 very seriously; this was designed as China’s party, not the declining West’s. And much less Washington’s.
Outlining the agenda for the discussions, President Xi Jinping went straight to the point also geopolitically, as he set the tone: “The outdated Cold War mentality should be discarded. We urgently need to develop an inclusive, comprehensive, cooperative and sustainable new security concept.”
Compare it with Xi’s so-called “four prescriptions” – “innovative, invigorated, interconnected and inclusive” – necessary to re-boost the world economy.
Acting like the de facto World Statesman-in-Chief, Xi then proceeded at the summit opening to introduce a quite ambitious package – the result of excruciating planning for months in the run-up to Hangzhou.
The package is designed to propel the global economy back to growth and at the same time install more made in China-friendly rules for global economic architecture and governance.
The target could not be more ambitious: to smash mounting anti-trade and anti-globalization sentiment, especially across the West (from Brexit to Trump), simultaneously pleasing his select audience - arguably the most significant gathering of world leaders in China’s history – yet at the same time, in the long run, aiming at prevailing over US-led Western dominance for good.
That’s a predictable but still remarkable turnaround for China, which benefited like any other nation from globalization – with growth over the past three decades mostly propelled by foreign direct investment and a deluge of exports.
Yet now geoeconomics has reached an extremely worrying zone of turbulence. Since the end of the Cold War in 1989 – and of “history” itself, according to academic simpletons – it's never bee so dire. Greed led globalization to be “defeated”by inequality. In a nutshell, low inflation - due to global competition – led to the proverbial “expansionary” monetary policies, which inflated housing, education and health care, squeezing the middle class and allowing unlimited wealth flowing to a 1 percent minority of asset owners.
Yet even in de-acceleration, China was responsible for more than 25 percent of global economic growth in 2015. It remains the key global turbine – while at the same time carrying the self-attributed burden of being the representative of the Global South in global economic governance.
China’s outbound investment surged 62 per cent to a record US$100 billion in the first seven months of 2016, according to China’s Ministry of Commerce. But there’s a problem, which economists have dubbed “asymmetric investment environment”: China remains more closed than other BRICS members to foreign investment, especially in service sectors.

BRICS Building

The BRICS-dedicated meeting on the sidelines of the G20 was not spectacular per se. But that’s where Xi detailed China’s G20 agenda and set the tone for their 8th annual summit in Goa next month. According to a report by the BRICS Economic Think Tank at Tsinghua University in Beijing, China must improve these multilateral connections to “have a bigger say and push the West to step back on international rule making”.
It’s a long shot – but it’s already in progress. Zhu Jiejin, from Fudan University in Shanghai, sums it all up; “BRICS is a test of China’s new philosophy in international relations – although the fruit will take a long time to ripen.”
Interconnect or die
Everything in Hangzhou was calculated to the millimeter.
Take, for instance, the seats at the G20 table; classic Ming dynasty tai-shi chairs (“the seats for imperial grand masters”) with soft grey cushions; paper scrolls with light green jade paperweights at either end; a pottery plate with a pen; a green porcelain teacup; a square jade “seal” - almost as large as an imperial seal – which was in fact a microphone switch.
And take the geopolitics of the official picture; Merkel and Erdogan stood close to Xi because Turkey hosted the G20 last year, and in 2017 it’s Germany; perfect symmetry for Putin and Obama; perfect symmetry for two other BRICS members, India’s Modi and Brazil’s Temer The Usurper – at the extremities, but still first row; Japan’s Shinzo Abe in the second row – as well as Italy’s Renzi and Britain’s Theresa “we’re open for business” May.
And why Hangzhou, for that matter? This being China, it all starts with a historical analogy. Hangzhou has been described as “the Homestead of Silk” even before the development of the ancient Silk Road. Now connect it to Xi’s immensely ambitious New Silk Roads - or One Belt, One Road (OBOR) in their official denomination – which some Chinese analysts revel in describing as “a modern symphony of connectivity.”
OBOR is in fact Xi’s “four prescriptions” in practice; economic growth driven by a frenzy of “inclusive” connectivity, especially among developing nations.
The Beijing leadership is totally committed to OBOR as the ultimate geoeconomic transformative drive in Asia-Pacific, tying most of Asia to China – and to Europe; and all of this of course totally intertwined with Xi’s turbo-charged reinterpretation of globalization. That’s why I argue that this is the most overreaching project for the young 21st century: the competing “project” by the US is more of the chaotic same. 
Even before Hangzhou, the G20 Finance Ministers and Central Bank Governors met in Chengdu on July 23-24, to discuss global infrastructure connectivity. The communiqué had to state the obvious; greater interconnectivity is a defining demand of the 21st century global economy and the key to promoting sustainable development and shared prosperity.
This is what OBOR is all about. Chinese consultancy company SWS Research estimated in an OBOR report that the overall investment needed for infrastructure construction is close to an astonishing $3.26 trillion.
Showcase projects include the China-Pakistan Economic Corridor (CPEC), defined by Chinese foreign minister Wang Yi as "the first movement of the symphony of the Belt and Road Initiative". And then there’s the high-speed railway bonanza - including everything from the China-Thailand railway within the Trans-Asia Railway network as well as the Jakarta-Bandung high-speed railway in Indonesia.

The house that Ma built 

These are the top Chinese players behind OBOR expansion and Xi’s vision of a reformed global economic architecture. It’s impossible to understand where China is heading without considering the role of each and one of them.
And of course there’s Hangzhou itself – a tech hub excelling in information economy and intelligent manufacturing.
Arguably the greatest star of this G20, apart from Xi, was Jack Ma, the founder of e-commerce giant Alibaba, established in 1999, listed in New York in 2014 and the embodiment of the several thousand Chinese companies that form the new “Chinese imprint”.
Alibaba’s HQ is in Hangzhou. And not by accident everyone - from Canada’s Justin Trudeau to Indonesia’s Joko Widodo - visited the company’s Xixi campus, guided by Ma, with an eye to promoting their nation’s products through the platform of Alibaba. Nearby there’s Dream Town - a center that helped spring up more than 680 Chinese startups in just a year.
Before the G20 there was a B20 – a business summit, focused on the development of small and medium enterprises (SMEs) – where wily Ma, admitting “we are living at a crucial time when people dislike globalization or free trade”, forcefully promoted the advent of an electronic world trade platform, eWTP. Ma described eWTP as “a mechanism for public-private dialogue in the development of cross border e-trade”, which will “help small and medium-sized enterprises, developing countries, women and the young generation participate in the global economy.”
Also not by accident, Indonesia’s Widodo invited Ma to be an economic advisor. Indonesia has no less than 56 million SMEs, as the President noted; so one of his priorities is to boost the cooperation between SMEs in Indonesia and Alibaba to help them enter the Chinese and global market.
Of course all it’s not a rose garden. Among the five task forces at the B20 we could find dodgy players such as Laurence Fink, head of mega-fund BlackRock, sitting at the finance committee, or Dow Chemical at commerce and investment. Still, the key – lofty - target was and remains to help SMEs in the developing world to go global. 
What was really decided at the G20 will only become visible long-term. Xi closed the summit stressing the G20 has agreed to promote trade multilateralism and go against protectionism (ample evidence to the contrary, as it stands), while at the same time developing the first framework rules for cross-border investment (will everyone implement them?)
He also said the G20 agreed to continue reform of the IMF and the World Bank to give more say to emerging markets (not with Hillary or Trump in power).
China’s “message” anyway was unmistakable; it has set a geoeconomic path for the future and it’s lobbying hard for scores of nations to join on a win-win framework. And whatever the future of the graphically confrontational “pivot to Asia”– the TPP “NATO on trade” arm included - Beijing won’t sit silent to US intimidation, or threats to what it considers China’s vital security interests.
The G20 in Hangzhou showed China is ready to show off its economic clout and to exercise a much more active role in geoeconomics. It’s clear that Beijing’s prefers to play the game in a multilateral trade system based around the WTO. Washington, instead, has been trying to rig the game with new “rules”; TPP and TTIP.
He Weiwen, from the China Society for WTO Studies, may have hit the nail on the (trading) head when he observed, “The US said earlier that it can’t let China set the rules, but it seems its own rule-setting isn’t wining hearts as it only sees its own interests.”

Pepe Escobar is an independent geopolitical analyst. He writes for RT, Sputnik and TomDispatch, and is a frequent contributor to websites and radio and TV shows ranging from the US to East Asia. He is the former roving correspondent for Asia Times Online. Born in Brazil, he's been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong. Even before 9/11 he specialized in covering the arc from the Middle East to Central and East Asia, with an emphasis on Big Power geopolitics and energy wars. He is the author of "Globalistan" (2007), "Red Zone Blues" (2007), "Obama does Globalistan" (2009) and "Empire of Chaos" (2014), all published by Nimble Books. His latest book is "2030", also by Nimble Books, out in December 2015.
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.

Philippines: Towards China And Away From USA by ANDREI AKULOV

Philippines: Towards China And Away From USA
 06.09.2016 | WORLD

Since the end of WWII, the power structure in Asia-Pacific has been primarily dominated by the United States. With the turn of the twenty-first century, the center of gravity of global balance of power has shifted from Europe to the Asia-Pacific, mainly caused by the rise of China. The longstanding American influence in the region has been faced with a severe challenge. The US Asia Pacific pivot appears to have failed as the America’s influence in the region is waning. The Philippines is a good example to illustrate this trend.

The Philippines has been considered a staunch ally of the United States and has supported many points of American foreign policy. The US and the Philippines are treaty allies, but under the previous Aquino administration, Washington and Manila signed a new bilateral defense pact in 2014 to make US security assistance to the Philippines rise markedly.
It is changing now. With a still robust relationship to the United States, the Philippine foreign policy has been going through changes since President Rodrigo Duterte came to power in June. There is growing reason to expect a potentially drastic shift in Philippine foreign policy under the new administration that has emphasized preference for a more independent  foreign policy with less reliance on America. With the election campaign won, the country’s new president said«I will be charting a new course for the Philippines on its own and will not be dependent on the United States».
The new president’s approach to the US has certainly evoked concern in Washington. Duterte has  put into doubt the US commitment to come to the Philippines’ aid in an event of conflict in the South China Sea. He has shown his discontent with perceived lack of US military support amid the maritime spats.
The Philippine president has publicly insulted the American ambassador.
Duterte has broached the issue of introducing new restrictions on the movement of American military personnel deployed in the country.
At the same time, he has extended an olive branch to China, deploying former president Fidel Ramos to conduct backdoor negotiations with the Asian powerhouse.
The parties are discussing a joint fisheries agreement in the Scarborough Shoal, which is consistent with The Hague ruling, a potential breakthrough to boost economic cooperation.
China has offered large-scale investments in Philippine infrastructure.
The Philippine president is expected to visit China later this year. With Rodrigo Duterte in power, the Philippines is going through gradual recalibration in relations with America and China.
The Philippines is not the only big regional country the US has problems with. For instance, the relationship with Thailand, an old US ally, has been flat-lined since the Thai military seized power in a 2014 coup.
Washington has so far lacked power to influence ASEAN member states and make them support its anti-China stance.
People across the Asia-Pacific think American clout is dwindling and that China will dominate the region over the next decade, according to a recent survey by the University of Sydney’s United States Studies Center.
Another survey says roughly six-in-ten Japanese (61%) say the US has declined in importance over the past 10 years.
Enthusiasm for a strong U.S. role in the Asia-Pacific is low in Australia.
The US administration plans to ratify the Trans Pacific Partnership (TPP) in the lame-duck session of Congress are hitting snags on the way.
The chances to ratify the agreement before the presidential election are slim. There will be hardly a chance afterwards as the deal is opposed by the Democratic and Republican candidates. The failure to push the deal through Congress will be a great setback undermining the US credibility in the region. «For America’s friends and partners, ratifying the trade pact is a litmus test for your credibility and seriousness of purpose», Singapore Prime Minister Lee Hsien Loong said during his recent visit to Washington, speaking in the name of Asia Pacific signatories.
In its turn, China, the country excluded from the TPP, is offering another pact – the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement comparable to the TPP, but led by Beijing. The RCEP does not include the United States. Besides, China is also pledging more regional loans through its new Asian Infrastructure Investment Bank (AIIB) and a $40 billion Silk Road fund. Without the TPP, the nations of the region will look to Beijing seeking foreign trade and investment. The Russia-led Eurasian Economic Union (EAEU) is expanding to Asia Pacific.
Moscow and Beijing are working at the trade and economic agreement between the Eurasian Economic Union (EAEU) and China.
The parties are in talks on the participation of the EAEU in the Chinese Silk Road project. The creation of a common economic space has been defined as the key target.
The Asia Pacific region is witnessing a shift to an emerging multipolar order to cause new security alignments and re-alignments among countries in the region. The US clout in the region is hopelessly waning while other actors are gaining strength.

Contail Russia-China? A Dangerous Game outlined by Pepe Escobar

The Whole Game is to Contail Russia-China
EDITOR'S CHOICE | 05.09.2016

The Whole Game is to Contail Russia-China

Pepe Escobar is the roving correspondent for Asia Times/Hong Kong, an analyst for RT and TomDispatch, and a frequent contributor to websites and radio shows ranging from the US to East Asia. Born in Brazil, he’s been a foreign correspondent since 1985, and has lived in London, Paris, Milan, Los Angeles, Washington, Bangkok and Hong Kong
The next BRICS summit, in Goa, is less than two months away. Compared to only two years ago, the geopolitical tectonic plates have moved with astonishing speed. Most BRICS nations are mired in deep crisis; Brazil’s endless political/economic/ institutional  debacle may yield the Kafkaesque impeachment of President Dilma Rousseff.
BRICS is in a coma. What’s surviving is RC: the Russia/China strategic partnership. Yet even the partnership seems to be in trouble — with Russia still attacked by myriad metastases of Hybrid War. The — Exceptionalist — Hegemon remains powerful, and the opposition is dazed and confused.
Or is it?
Slowly but surely — see for instance the possibility of an ATM (Ankara-Tehran-Moscow) coalition in the making — global power continues to insist on shifting East. That goes beyond Russia’s pivoting to Asia; Germany’s industrialists are just waiting for the right political conjunction, before the end of the decade, to also pivot to Asia, conforming a BMB (Berlin-Moscow-Beijing) coalition.
Germany already rules over Europe. The only way for a global trade power to solidify its reach is to go East. NATO member Germany, with a GDP that outstrips the UK, Canada, Australia and New Zealand, is not even allowed to share information with the “Five Eyes” secret cabal.
President Putin, years ago, was keen on a Lisbon-to-Vladivostok emporium. He may eventually be rewarded — delayed gratification?— by BMB, a trade/economic union that, combined with the Chinese-driven One Belt, One Road (OBOR), will eventually dwarf and effectively replace the dwindling post-WWII Anglo-Saxon crafted/controlled international order.
This inexorable movement East underscores all the interconnections — and evolving connectivity — related to the New Silk Roads, the Shanghai Cooperation Organization (SCO), the BRICS’s New Development Bank (NDB), the Asian Infrastructure Investment Bank (AIIB), the Eurasia Economic Union (EEU).
The crux of RC, the Russia-China strategic partnership, is to make the multipolar, post-Atlantic world happen. Or, updating Ezra Pound, to Make It New.
Containing RC
Russia’s pivot to Asia is of course only part of the story. The core of Russia’s industries, infrastructure, population is in the west of the country, closer to Europe. BMB would allow a double pivot — simultaneously to Europe and Asia; or Russia exploiting to the max its Eurasian character.
Not accidently this is absolute anathema for Washington. Thus the predictable, ongoing no holds barred exceptionalist strategy of preventing by all means necessary closer Russia-Germany cooperation.
In parallel, pivoting to Asia is also essential because that’s where the overwhelming majority of Russia’s future customers — energy and otherwise — are located. It will be a long, winding process to educate Russian public opinion about the incalculable value for the nation of Siberia and the Russian Far East.
Yet that has already started. And it will be in full fruition by the middle of the next decade, when all the interpolated New Silk Roads will be online.
“Containment” of RC will continue to be the name of the exceptionalist game — whatever happens on November 8. As far as the industrial-military-security-surveillance-corporate media complex is concerned, there will be no reset.
Proxies will be used — from failed state Ukraine to Japan in the East China Sea, as well as any volunteering Southeast Asian faction in the South China Sea.
Still the Hegemon will be in trouble to contain both sides of RC simultaneously. NATO does not help; its trade arm, TPP, may even collapse in the high seas before arriving on shore. No TPP — a certainty in case Donald Trump is elected in November — means the end of US economic hegemony over Asia.
Hillary Clinton knows it; and it’s no accident President Obama is desperate to have TPP approved during a short window of opportunity, the lame-duck session of Congress from November 9 to January 3.
Against China, the Hegemon alliance in fact hinges on Australia, India and Japan. Forget about instrumentalizing BRICS member India — which will never fall into the trap of a war against China (not to mention Russia, with which India traditionally enjoys very good relations.)
Japan’s imperial instincts were reawakened by Shinzo Abe. Yet hopeless economic stagnation persists. Moreover, Tokyo has been prohibited by the US Treasury Dept. to continue unleashing quantitative easing. Moscow sees as a long-term objective to progressively draw Japan away from the US orbit and into Eurasia integration.
Dr. Zbig Does Desolation Row
The Pentagon is terrified that RC is now a military partnership as well.
Compared to Russia’s superior high-tech weaponry, NATO is a kindergarten mess; not to mention that soon Russian territory will be inviolable to any Star Wars-derived scheme. China will soon have all the submarines and “carrier-killer” missiles necessary to make life for the US Navy hell in case the Pentagon harbors funny ideas.
And then there are the regional details — from Russia’s permanent air base in Syria to military cooperation with Iran and, eventually, disgruntled NATO member Turkey.
No wonder such exceptionalist luminary ideologues as Dr. Zbig “Grand Chessboard” Brzezinski — foreign policy mentor to President Obama — are supremely dejected.
When Brzezinski looks at progressive Eurasia integration, he simply cannot fail to detect how those “three grand imperatives of imperial geostrategy” he outlined in The Grand Chessboard are simply dissolving; “to prevent collusion and maintain security dependence among the vassals, to keep tributaries pliant and protected, and to keep the barbarians from coming together.”
Those GCC vassals — starting with the House of Saud — are now terrified about their own security; same with the hysteric Baltics. Tributaries are not pliant anymore — and that includes an array of Europeans. The “barbarians” coming together are in fact old civilizations — China, Persia, Russia — fed up with upstart-controlled unipolarity.
Unsurprisingly, to “contain” RC, defined as “potentially threatening” (the Pentagon considers the threats are existential) Brzezinski suggests — what else — Divide and Rule; as in “containing the least predictable but potentially the most likely to overreach.”
Still he doesn’t know which is which; “Currently, the more likely to overreach is Russia, but in the longer run it could be China.”
Hillary “Queen of War” Clinton of course does not subscribe to Brzezinski’s “could be” school. After all she’s the official, Robert Kagan-endorsed, neocon presidential candidate. She’s more in tune with this sort of wacky “analysis”.
So one should definitely expect Hillary’s “project” to be all-out hegemony expansion all across Eurasia. Syria and Iran will be targets. Even another war on the Korean Peninsula could be on the cards.
But against North Korea, a nuclear power? Exceptionalistan only attacks those who can’t defend themselves. Besides, RC could easily prevent war by offering some strategic carrots to the Kim family.
In many aspects, not much has changed from 24 years ago when, only three months after the dissolution of the USSR, the Pentagon’s Defense Planning Guidance proclaimed.
“Our first objective is to prevent the reemergence of a new rival…This requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power. These regions include Western Europe, East Asia, the territory of the former Soviet Union and southwest Asia.”
Talk about a prescient road map of what’s happening right now; the “rival”, “hostile” power is actually two powers involved in a strategic partnership: RC.
Compounding this Pentagon nightmare, the endgame keeps drawing near; the next manifestations and reverberations of the never-ending 2008 financial crisis may eventually torpedo the fundamentals of the global “order” — as in the petrodollar racket/tributary scam.
There will be blood. Hillary Clinton smells it already — from Syria to Iran to the South China Sea. The question is whether she — and virtually the whole Beltway establishment behind her — will be mad enough to provoke RC and buy a one-way ticket to post-MAD (Mutual Assured Destruction) territory. 4thmedia.org Source: http://www.strategic-culture.org/news/2016/09/05/the-whole-game-contail-russia-china.html

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