by Pepe Escobar for RT
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for the discussions, President Xi Jinping went straight to the point also geopolitically, as he set the tone: “The outdated Cold War mentality should be discarded.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.
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.”
I personally believe that BRICS is effectively dead as a grouping.
Brazil : Coup
SA : Was never a significant one
India : Now strongly in the US camp
The concept of the “BRICS” was invented as an advertising strategy by Goldman-Sachs to promote emerging market investment. The idea should certainly be taken with a grain of salt.
Typical western short term thinking, whereas China/Russia are invested in the long game. Brazil is too big to be stable under crooked US friendly oligarchs, and that will be apparent in a year. India will come to its economic senses when the time comes to decide if it really wants SCO membership and insider silk road permanence like Pakistan, or US led vassalage, like Europe. That is ironical considering that its only a matter of time before German big business forces the political class to unshackle themselves from US colonialism and pivot to Eurasia where the riches are waiting. South Africa will be upstaged by East Africa, a crucial maritime Silk road node already rapidly expanding.
“Brazil is too big to be stable under crooked US friendly oligarchs, and that will be apparent in a year. ”
Are you still unable to see that it was a US supported coup ?
“India will come to its economic senses when the time comes to decide if it really wants SCO membership and insider silk road permanence like Pakistan, or US led vassalage, like Europe.”
Google the recent India-US logistics sharing deal and Indian meddling in SCS. Moreover, I have been to India and people there are friendly BUT lacks the grand view. To them, everything is centered on Pakistan/China. Most importantly they are the new hegemon (which MSM clearly doesn’t show you). Look at it’s action regarding Nepal and Balochistan. I am not even talking about their puppets in Bhutan and Maldives.
Reprint from RI of commentary by Ishchenko who posits a 2025-2030 timeline before the economic basis for the political situation stabilizes:
Amazing, the president of the Philippines, Rodrigo Duterte, during a press conference, went on a furious tirade about Obama’s meddling in their affairs, and said: “son of a whore, I will curse you in that forum” . I wonder how long he is going to last at the job.
The more one learns about China the more impressive it’s colossal achievements appear.
Obama is reported to have said the US is powerful because it obeys international law.
I guess the delegates attending the G20 were just too polite to laugh out loud at this nonsense.
Even small countries historically unable to challenge US bullying can now see the utter hollowness of everything the regime says and seem more confident in challenging it.
We all have good reason to be grateful that Russia/ China not only exist and are strong but reject the global domination of the megalomaniac, murderous US regime.
Interestingly on RT’s Max Keiser show, his guest was Dan Collins (TheChinaMoneyReport.com) and this was a very informative about Chinese development worth catching.
Dan Collins also said that China is believed to be sending 5000 troops (Siberian Tiger Force) plus ship(s) to Syria.
No confirmation on this from other news sites. Any readers got more information?
You know what Pepe, that article said nothing new and didn’t need to be written.
At least this time the title sounds right.
The greedy wile chinese will consume the whole planet :)
The US is likely to try to derail OBOR. This will mean war. The only other alternative for the US is to try to enter OBOR by entering China via an economic agreement on trade and investment. But the US is too arrogant to negotiate with China as an equal, much less be seen as a supplicant like Duterte of the Philippines. China should leave a door wide open for the US to negotiate and not make them lose face. But will the US even consider an olive branch now? If not watch the South China Sea. Xi seems to have just crossed the red line set by the neocons by allegedly beginning to build on Scarborough Shoal. If the US fail to stop China at Scarborough Shoal militarily, it will be exposed as being as weak as the USSR when China ‘taught a lesson’ to then Soviet-client Vietnam and the Soviet dared not move! The signs of war are there and exhibited in unison by the other members of the Anglo-saxon fraternity – ‘Great’ Britain by ‘delaying’ the agreed Hinkley project and Australia by the clumsy abortion of the takeover of Ausgrid by Chinese and Hong Kong companies due to ‘security’ reasons. If war, all bets are off! I just pray that I am wrong.
The US can’t derail OBOR though there is a real possibility they will use their terrorist mercenaries to try to.
In the west dealing with today’s crises is so difficult that nobody can think beyond tomorrow.
In China/ Russia they spend far more time actually thinking ( does any western politician ever actually think?) and planning and clearly take a long term view of world developments.
For example China’s quantum computers now in satellites which are hack proof will likely render obsolete old fashioned western digital machines. Not next week but maybe 5 years from now.
Recently in my town a very high multi storey building had to be demolished and everybody wondered how it would be done. As it was in a densely built up historical area of the town we all expected high drama around this event but in fact the way it was done was they simply physically dismantled the building a floor at a time from the top.
This is how I think the Chinese view the future – slow, steady and planned. They don’t want drama but instead very slowly they will dismantle the US empire.
They do not seek the destruction of the US, but simply require it to become a normal international-law abiding country. However if the US does implode it will have done this all by itself and the American people will need help to regain control over their country.
Don’t forget the regime is also abusing it’s own citizens.
I do see a closer Russia/ China interventionist military cooperation in fighting US terrorism but in a thought out and focussed way so that they prevail.
These terrorists can and will be defeated.
The US cannot see what next month holds never mind five years hence.
And Simon, you know, every time any country does anything the US doesn’t like western websites are full of shouts of “there’ll be war”
The resistance by the Eastern Ukrainians to the coup and Russia’s mobilising it’s forces within it’s own borders had the war paranoiacs almost hysterical in lockstep with the media “there’s going to be war”
The same for Syria. OMG they said if Mr Assad and his allies rid Syria of the US terrorists “there’ll be war”
And so when the US sticks it’s navy into China’s back yard to “contain” it ( one thing about the ludicrous USA – it’s arrogance knows no bounds) and China rightly seeks to extend it’s defensive zone to push the US missile ships further away, we once again hear “there’ll be war”.
People have become so brainwashed by US self promotion and propaganda that they genuinely think we all must submit to US diktat or “there’ll be war”
I do not think for a minute there will be a nuclear war except by accident. To me sick Hillary is a metaphor for the whole sick US hegemonic empire and it is too far down the hill to even prevail in the middle east nevermind fighting real adversaries.
Yes, the US elite have underground bunkers but the vast majority of Americans don’t and natures first rule is survival.
More likely to me is internal collapse of the USA and quite possibly Russia/China having to send food aid to the poor American people who in many cases are as sick of their regime as the rest of us.
It’s gonna be fine, Simon, but it will get very interesting !
Thanks. Hopefully it won’t get too interesting.
Monkberry, yours is an excellent comment containing many excellent points. I hope it gets Featured.
More than $3 Trillion will invest in OBOR. Things won’t come together well if there’s terrorism around every corner. Sooner or later, business will say, enough of this terrorism, kill everyone and stop it. And I imagine this kind of thinking is already on the table.
Thank you for thinking of the US population – it may yet see the truth someday, and find that its only friend all along has been Asia and the global south.
To Monkberry: What a great “comment” to the point… thanks
Glad to see somebody who is so optimistic. I’m not. Maybe the new generation with IPhone’s are also optimistic.
my two cents is on the purported militarization of Huangyan as the latest piece of Amerikan mischief to embarrass China just ahead of the Asean meet in Vientiane.
Though Southeast Asian leaders have agreed not to raise the SCS issue, the sneaky ‘ leak’ at this moment poisons the shaky amity of the members.
It also cranks up the domestic pressure on new Filipino president Duterte who has been leaning towards a negotiated settlement with Beijing.
China’ s neighbours are entitled to disquiet of its precipitate rise.
But all emerging Asian countries – China included- also have shared historic memories of Western ( and Japanese) colonial exploitation.
Washington’s divide- and- rule tactics in leveraging the SCS issue are clearly seen to be in its own interests, not for the justice of smaller claimants.
The resolution will be long and protracted, with extended Amerikan meddling to match.
For a supplicant, he sure is acting uppity, tho!
Latest 6th on Duterte.
But, is this a higher or lower insult than what blowhard BoJo called Erdo in that well-publicized rant this past year?
US President Barack Obama has cancelled a meeting with Philippine President Rodrigo Duterte, who had earlier called him a “son of a whore”.
Duterte was responding to the US president’s promise to raise the issue of drug-related extra-judicial killings in the Philippines at their meeting.
An OBOR market economy of more than 5 billion people being integrated, developed and likely to grow at 5% or more per year, outside the hegemony of the USA. Will or can the USA take this lying down?!
There is no biography of Pepe Escobar anywhere on the net. Where did he come from? Born 1954, kidnapped by the Taliban in 2007, that’s about it. Flies around the world, poses everywhere from Waziristan to Hong Kong. I’d like to know more.
Pepe is Brazilian….
Pepe worked for the Brazillian equivalent of the Hearst newspaper chain, before moving to CIA bullshiting for a global audience.
Those are also my fears, in the near future we will witnessing two important elections : one in Russia, this month – the Parliamentary elections – which will be a very essential for Putin’s presidential election if he will run again, the second in the USA, where we have two different personalities, Hillary and Trump. The former will not change the actual american policy, the latter, being a business man, is more likely to do so. But what with the neocons behind the scenes ? will they allow a change even if Trump will won the race ? As for Britain, as always, will wait for the command from the other side of the Atlantic. ( I wonder what will they do if Trump will be elected)
is already “lying down”….
One thing noone seemed to have memtioned, namely, that the largest chunk of the so called “chinese economy” is creating profit for extrernal players – western investment and markets.
The chinese,(and frankly nobody in the world right now) do not have a liquid internal market to soak up the production, even if they were to use drastic measures.
We got each other by the tail.
OBOR should be able to do it i.e. soak up production.
Off topic, can someone comfirm this news… attempt on assassinating putin…
Why is no one talking about this? anyone in Russia to comfirm this?
Take it easy, only the car with his driver were involved in accident, Putin was not in.
One thing I don’t understand. If Russia is so chummy with China (Putin was Guest of Honour at the G20 summit), why is Russia arming India and Vietnam to the teeth? Is this a sort of insurance for the future? If so, isn’t Russia and China’s chumminess a bit overblown?
To Simon Chow… would you rather USA sells arms to Viet Nam and India?
Its a form of “business” more than anything else. It helps spread Russian influence in those countries as well (and lesson US influence as a side point). I think if China was upset about it we would have heard something. I think they don’t see it as a great problem for them. And would be more unhappy if the US gained that influence through arms sales there.
That would be OK if India would not purchase weapons from the US too not to talk about military cooperation. Good business indeed, just to keep the world on balance.
It all boils down to the same financial and corporate multinationals with their omnipotent control of money calling all the shots with the up take that the Chinese elites mean to have their share while continuing the status quo seen under neo-liberalism. When 144 LLCs,, mainly bank holding companies, control 40% of all commerce and 60% of all revenues world wide we know in advance that SME doesn’t stand a chance and that capitalism will continue in the perverted state it now finds itself in. Woe betide the average citizen and any claim to human rights. It will be difficult to see how the democracy loving western populations will be accepting in the long run of a status akin to the workers in the East. Among all this planning was one word given over to the labour economy and any fairness in dealing with labour? Did any voice of labour have a seat at the table? If not then we must assume the worst, that labour is to be disregarded and a final revolution is still in the offing as any injustice will always need to be resolved. This whole scenario stinks as the world’s apex elites carve up the world’s resources in their own interests and be damned the working classes. Kabuki theatre by the all the world’s Apex Elites, both western and eastern and all other points between, and by the politicos that serve them.
Yes, indeed, you pointed out the essential, which was left out.Thanks for your comment.
I typically like Pepe’s articles and perspective, and in many ways this one’s no exception, but I do wonder what’s going to happen when at some point this growth won’t materialize? There’re so few natural resources [sic] left anymore and vast problems with drying water sources, for example. In short, runaway and failing industrialism. Is growth the only way to challenge empire, or are there other paths to sovereignty and perhaps to a sort of refusal to commit a globalized suicide the way empire intends to?
Good point, overpopulation and a failing resource base have rendered the traditional measure of economic growth as a goal for a successful economy to be no longer achievable. The only alternative to the growth model is a sustainable economy based on recyclable inputs only.
Such an economy is, however, incompatible with Capitalism since accrual of profit is not possible in a steady-state economy. This fact is well known to economic theorists which is why they have fought bitterly against the reality of finite resource limits.
I thought people might like to see what our rulers saw at the end of the G20 summit. I think the Chinese may have surpassed the Russians “this time” with a spectacular show. If not they are surely matching them:
“overall investment needed for infrastructure construction is close to an astonishing $3.26 trillion”
Compare it to the 6 plus trillion vanished in the pentagon accounting.
I would think that China should concentrate on a two pronged approach. First to develop its internal market of 1.3 billion people. To help sustain its enormous production of goods. And secondly to help develop trade with neighbors and other Eurasian friends.That would develop their economies and tie their trade to China’s.In the event of serious problems with the US,its important for China to not be overly dependent on the US market. And to have firm secure trading routes that don’t include shipping on the seas. The US at present could block a lot of China’s trade going by ship.They need the land routes to be able to not have to worry about that harming their economy.Which is certainly where having firm secure access to Russian resources,especially energy resources, is vitally important for China.And “should” be seen as a first priority by China (and Russia) in economic policy.
The theme of Eurasia i.e. China, Russia (Swan Lake – Tchaikovsky), France (Debussy) and Germany (Beethoven’s Ode to Joy) is there for all to ‘see’. Not a single inclusion from Anglo-Saxon culture.
China is keeping quiet about the Xinjiang basis which was once an inland sea and which potentially is another Persian Gulf. Not including shale oil and especially gas in Szechuan Province and South-West China. China can be self sufficient in energy if she wants to. I think not exploiting her own energy resources and using forex – consisting mainly of USD fiat currency – to buy oil and gas is her present energy strategy.
I know Sinkiang does have some resources like that. But I think you vastly overstate the amounts.I know China does (or can) produce a lot of their own energy resources. But still the enormous amounts they use. And if the current plans to cut down drastically on coal come to pass, they will need even more.Hence the constant search for a secure energy supply. Russia and Central Asia has just that supply. And if sent through pipelines,its secure from the US’s ability to blockade the sea routes.
Shale gas in China’s South-West is estimated to be the world’s largest. Oil reserves in Xinjiang is estimated to be almost 150 billion barrels!
I’ll need some links to that. This is what I see:
“Oil reserves in Xinjiang total 23.4 billion t, and gas resources are roughly 13 trillion m3, accounting for 23.3% of the entire onshore gas resources in China (Table 1). Among them, the Tarim, Junggar and Turpan-Hami basins contain 20.9 billion t of oil and 10.9 trillion m3 of gas, respectively, accounting for 25.5% and 27.9% of the total onshore oil and gas resources in China. Xinjiang is considered by geologists to have the most potential of all provinces for oil and gas exploration in China.”
Just convert from tonnes to barrels. One tonne of oil is equal to 7.1475121 barrels. So at a reserve of 23.4 billion tonnes of oil, this means that Xinjiang has 167 billion barrels of oil. It seems that they are still making new discoveries. Your figure for gas, does it include shale gas from the shales of South-Western China especially of Szechuan province?
You might be interested in this. It seems to be the newest:
“The oil industry consistently deploys ingenuity and technology to break through many geological and economic barriers. China has large potential shale oil reserves, as many as 32 billion barrels of which are technically recoverable, according to the EIA. However, above ground barriers created by politics and local legal, regulatory, and ownership systems constrain development.”
So OBOR and Eurasian integration including the integration of Africa has all the oil and gas resources required for success!
Short answer would be yes. Within Eurasia is all the resources needed.
coming up in a few days.
China and Russia are expected to hold joint patrols in the South China Sea this month from Sept. 11 to 19, Russian news agency TASS reported. Captain Vladimir Matveyev told TASS that the war games will take place “on the coast and in the water area of the South China Sea.” According to Matveyev, the joint military exercises have occurred four times previously and are aimed at “consolidating practical cooperation and counteraction to various threats out in the sea.”
Washingtons biggest fear is the link-up in trade between Europe and China via the New Silk Roads, which will accelerate the demise of the US dollar as reserve currency
The wars in the Middle East and Ukraine are part of that disruption
I’m very proud of the Belorussian Paralympic organization. They kept their word. And even though the IPC threatened them with sanctions,they carried the Russian flag as well as their own during the opening ceremonies of the Paralympic in Rio.They acted like true brothers should.
Refreshing not to have mentioned Obama, scandal nor much of anything American!