Monday, October 19, 2015

China vs. USA: when titans thud their feet on the war path

The Chinese response to TPP is called the maritime silk road or the  one belt one road project. This formidable infrastructure idea transverses the resource-rich  countries of Central Asia (e.g. Kazakhstan), comes up to Rotterdam, down to Venice, and then through the Med and Suez back to Asia. Countries involved are more or less known but ports, railways and pipelines are not. China dangles the carrot in front of investment-hungry countries, looking for the best concession terms possible (e.g. the sale of the port of Piraeus in Greece). I have little doubt that the silk road would eventually expand eastwards from China to the West Coast of the Americas, to connect to the Nicaraguan Canal that the Chinese are also planning. With a slowly growing middle class, saturated infrastructure and declining exports, China still has 4 trillion US$ of foreign currency reserves to spend. And it will do so. After all, investments need security protection and this, in its turn, requires a geopolitical defense presence. The role of the global policeman, so far played, thankfully I must admit, by the US, won’t be enough in the future, although, one might argue, when money comes in from the door, fundamentalism goes out from the window… In my eyes, the US-China arm-wrestling doesn’t have an obvious winner yet; or does it? HH