Monday, 17 October 2016

President Xi Jinping visibly demonstrates China's growing geo-economic power.

          It is said that the post Cold War consensus on world order rested on the premise that the US would underwrite international peace and advance democracy, the EU would be seen as a model for regional integration and that both China and Russia would recognize national advantage to find accommodation in this new system. However none bargained that the rise of China would make such rapid strides, nor that the US intervention in Iraq would demonstrate the limitations of its power, rather than its potency. The financial crisis of 2008-09 exposed the weaknesses of the western ordained international economic order and further put paid to the concept of total western dominance of global financial institutions.
       But what concerns us the most is the rapid rise of China and the implications that follow. Some of these "new realities" were on full display, when President Xi Jinping visited Cambodia and Bangladesh; just prior to the BRICS summit at Goa.
       Both Cambodia and Bangladesh, not in the very distant past, were totally anathema to the Chinese state for reasons that are well recognized. The Cambodian PM Hun Sen rode to power supported by Vietnamese tanks, against considerable opposition both from the west and from China. The Chinese were totally hostile to and stiffly resisted the birth of Bangladesh as an independent state. Both Cambodia and Bangladesh, should therefore, normally not only be expected to remain conscious of the role played by the Chinese, but were expected to retain a certain amount of reticence and a healthy distance. But in actual fact, the ground realities are so very different today.
      PM Hun Sen's Cambodia today is one of the staunchest supporters of China and resolutely resisted any combined ASEAN attempt to corner China after the PAC [UNCLOS] ruling on the South China Sea [SCS] dispute. It has been well rewarded. During his visit, President Xi has cancelled US$193m of Cambodian debt. Further, soft loans of US$237m and military aid of US$14m were announced. President Xi also promised to double the imports of Cambodian rice from the present 200,000 tons/year, as this is vital for the Cambodians who have seen the international price of rice plummet from US$250/ton to US$193/ton ; thus severely cutting into their foreign exchange earnings. No other state is in a position to bail out the Cambodians and therefore they are wholly dependent on Chinese goodwill and largess. The Chinese leadership knows this and are not averse to playing the economic card to further their strategic ambitions.
      Realizing the strategic location of Bangladesh, the Chinese are aware of the pivotal role that it can play in furthering their ambitious concept of OBOR. President Xi again showed his acumen and signed 27 agreements, funding infrastructure projects worth US$20 billion. It is Bangladesh's largest foreign credit line. In addition, Bangladesh and Chinese private firms signed US$13.6 billion in trade and investment deals. China is Bangladesh's largest trading partner. An economic zone is expected to be set up near Chittagong specifically for Chinese firms. It is not for nothing that the Bangladesh PM Sheikh Hasina characterized China as a "trusted friend".
     In present times as the US remains convulsed in domestic political agendas, with strident internal opposition to the TPP and the desire to severely limit any foreign military entanglements; the shadow of Chinese economic prowess pervades over South and South-East Asia. The PCA ruling on the SCS dispute seems all but forgotten. The EU seems overwhelmed in trying to maintain internal cohesion, following Brexit and faces the danger of being swamped by ever greater numbers of refugees leading to the rise of extreme right wing political fanatics. It is hard to see the EU, bereft of political cohesion, playing a sterling role again so soon.
     Have other Asian states also seen the writing on the wall? The Philippines President is seen to be moving towards seeking an accommodation with the Chinese leadership. Recently, a Vietnamese official, Tran Truong Thuy stated that Vietnamese foreign policy would consist of three "noes". These were [1] No ally [2] No go with any country to oppose a third country and [3] No foreign military bases. In other words, the Vietnamese were not interested in opposing China.
    It is not for nothing that there is a sense of hardening of Chinese positions on various issues, particularly of those in the Asian region. They sense that the time is ripe for them to play an even more robust role in the affairs of Asia.

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