China is spreading its wings with its One Belt One Road initiative as an inward-looking U.S. turns the screws on trade. Will globalization be a victim?
By Claire Ji
In our last episode for Season One of The Kids Are Alright, reporter Savannah Jenkins meets up with China expert David Schlesinger to discuss Beijing’s One Belt One Road initiative in light of trade frictions with the United States.
While a shaky trade truce may now be in place, the relationship between China and the United States is under strain. “I don’t think China knows what to expect from the United States, but they certainly can’t rely on the U.S. as they have been able to in the past,” says Savannah.
After speaking with Schlesinger about One Belt One Road, Savannah turned to friend and former colleague Marco De Nobili. A recent graduate of Roskilde University, Marco completed his thesis on how the One Belt One Road initiative reflects domestic support in China for globalization. Savannah asks Marco if an increase in populist and protectionist sentiment in Western countries may encourage China to launch other such initiatives.
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I’m Nolwazi Mjwara. Originally from South Africa, I moved to Paris, France three years ago to pursue a master’s degree. I’m a news enthusiast and have always been interested in what young people think and are doing to address some of the things I read about in the news.
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Nolwazi Mjwara: “Openness has become a trademark of China,” said Chinese President Xi Jinping on November 5 during the opening ceremony of the first China International Import Expo in Shanghai.
But how is the ongoing trade war with the United States affecting Beijing’s efforts to show the world that China can be a positive force for global trade?
Reporter Savannah Jenkins explores the potential of the One Belt One Road initiative and how the Trump Administration’s “America First” strategy could be opening up a large space for China to fill in the future.
Savannah Jenkins: So I’m sitting at the American Library in Paris getting ready for my call with David, happening in about 20 minutes, just going over some notes here. David Schlesinger, besides being a correspondent for News-Decoder, is the Founder and Managing Director of Tripod Advisors. Before that, he was Chairman of Thomson Reuters China and by all means a China expert. So I’ve reached out to him to discuss the One Belt One Road initiative. It should be a good talk.
David Schlesinger: I think I’ll start by quoting a Chinese proverb which is “Tong chuang yi meng,” which means you share the same bed but you have different dreams. So that’s really the way I see One Belt One Road. I think there are so many different views of One Belt One Road, and what One Belt One Road is depends a lot on where you are and who are.
For Xi Jinping, China’s President, it’s his vision of a new Silk Road expanding out towards the West, into, into Central Europe, Central Asia, going all the way through to Europe, going down Southeast Asia, Africa, really everything but the kitchen sink is being thrown into it at this point, going all the way down to Latin America in some cases. So, way beyond what the original Silk Road ever was. So that’s Xi Jinping.
For Chinese propagandists, whether they work for state media or whether they are just real China boosters, One Belt One Road is this new re-rejuvenation of China, a way to put China back to the center of the world, to really show that China is a major world power, with both political and diplomatic and economic power to actually make investments and to change the world.
For investment-hungry neighbors, One Belt One Road is actually manna from heaven. It’s a way to get some investment into much-needed infrastructure, to actually get China to help build up their economies.
But there are also China-wary neighbors. like Malaysia, for example, India, who are really worried that One Belt One Road is the way for China to start asserting its power over the region and power over them. That if China gets them to sign up for lots of loans or starts taking huge stakes in their own country’s infrastructure, China will eventually have really unnatural and unnecessary and unwelcome power over them.
Then there are the financiers, people working in banks and brokerages, who are just drooling of the thought of new projects to finance and new ways for them, you know, to get involved in Asia. So they’re really very hungry for it.
And, finally, there are the cynical and China-weary academics and journalists, I must say, who look at One Belt One Road and just roll their eyes and say, “Oh, this is just another bunch of empty promises, empty dreams, empty investments.”
And then there’s reality — whatever reality is — and there’s looking to the future. And I guess for that I’ll switch from Chinese proverbs to American movies and go back to 1989 and Field of Dreams and James Earl Jones intoning “If you build it, people will come.”
And so I think, if you get beyond the immediate problems, you’re going to get to a point where One Belt One Road is actually quite transformative in a way that will make China very influential.
Savannah Jenkins: You know Xi Jinping says this is a win-win situation. But is it actually a win-win? I mean in some of these developing countries, is it necessary that they have a state-of-the-art airport? Some people are critical that this is, kind of, debt-diplomacy. You know, these countries are now indebted to China and at their whim. Do you see that as a real problem?
David Schlesinger: I think the answer is a “Yes, but.” Yes, of course. If you take Chinese money, if you take Chinese companies in to build your infrastructure, there is an indebtedness, not only in financial terms but also in political diplomatic terms.
But if China is not going to do it, who is? The U.S. is pulling back from its role in the world, Europe doesn’t have extra money to start building infrastructure, so if China doesn’t build roads and airports and freight depots and highways, who’s going to do it?
Nolwazi Mjwara: Hearing David lay out the half dozen or so interpretations of the One Belt One Road initiative, what did you learn?
Savannah Jenkins: It was interesting, and I think how one sees China influences how they perceive this plan. So I decided to reach out to a former colleague and China enthusiast, Marco de Nobili, to get his thoughts on the matter.
Savannah Jenkins: Hey, Marco! How are you? Thanks for taking the time to speak with me.
Marco De Nobili: Hey, Sav! Nice to see you.
Savannah Jenkins: Thanks for taking the time to speak with me.
Savannah Jenkins: I guess we can say specifically the U.S., you know, the U.S., unlike China, will put sanctions, will refuse to work with countries who do not respect certain norms, especially in terms of no-interference policy.
Marco De Nobili: Yeah, exactly, and that’s because, you know, usually as you said the U.S. has always tried to use the good governance technique where you say, “Ok, if you do these kind of things, then we will help you economically.” But what China does on the other side —China doesn’t really care about these things. It just gives the money and invests in infrastructure. And that’s why it’s something different that no one ever did before, let’s say, because China is investing in these countries, which are seen as risky in the sense that their investments, the investments in these countries, are not certain to give back the, the —
Savannah Jenkins: The return on investment.
Marco De Nobili: The return, yes. So, yeah, this is the big difference between the U.S. as a donor and China as the new donor in —
Savannah Jenkins: And in your observations and research, how would you say developing countries are reacting to this? Are they quite open to the idea of this investment?
Marco De Nobili: Of course, yeah. Because they’re in big need of finances, of infrastructure, to make their economy jump start, let’s say. So, of course they are very willing to accept these investments, and China needs to start also outsourcing some production, so it’s — you see them going to One Belt One Road countries, where supposedly the wages and the trade unions are lower, like they have less trade unions, have less power, let’s say, in these countries. So it’s trying to build its own global value chains in these areas and this is why also – I read an article a week ago saying that Africa is China’s China because it’s actually doing what, let’s say, American firms, Japanese firms, Korean firms did with China 20 years ago: outsourcing their low value-added production to China. And now it’s China doing the same to Central Asian countries or Africa or you know.
Savannah Jenkins: So the U.S. right now has taken this stand, so to speak, against China, in line with President Donald Trump’s own, specific promises during his 2016 campaign. He’s promised to ensure that the U.S. and Americans are no longer engaged in unfair trade deals. Would you say that the ongoing trade war with the U.S. is more of a hurdle rather than a full-blown obstacle?
Marco De Nobili: This could hurt China but it could hurt even more, let’s say, the U.S. because, a quote that I read says that Apple, Apple can’t build an iPhone without China, but China can build hundreds of millions of devices approaching the iPhone quality without Apple’s help.
The fact is that Trump, the election of Trump, resembles the American society nowadays, whereas basically what happened, and this is what I write in my, in one of my papers, is that basically in the 2000s we had China reaching its, let’s call it the Lewis turning point, that’s when wages, the cheap labor, dries up and wages start increasing. At the same time, you have the financial crisis of 08/09, and what that meant was that Western economies were not importing as much from China. So China started looking somewhere else to sell their stuff basically. And they started seeing their neighbors and their internal market. And in these markets, China has actually had an advantage compared to, let’s say, Western companies because they have what I call frugal innovations — like you know the $300 laptop, which is perfect for low-wage societies and countries, which, you know, Western firms could not do.
Savannah Jenkins: That’s super interesting. That quote is quite insightful and, I think, telling of how powerful brands can be and also, I would argue, American culture. When people buy an iPhone, they’re consuming American culture. You know, there are plenty, like you said, of massive Chinese companies that just have not made it in the U.S. — one because they haven’t been opened up in that market and there might not be interest either on the Chinese side when they have such a massive national market already and regional. But I think at the – in certain instances it comes down to buying the American Dream. And I think it’s fascinating hearing you speak about the Chinese Dream, because this is kind of what, from what I’ve gathered, from what I’ve learned today speaking with you, Xi Jinping is doing. He’s trying to make his own Chinese Dream.
Marco De Nobili: It’s a complete open street for China to to drive in if the U.S. decides to retreat.
Savannah Jenkins: My conversations with David and Marco really made it clear for me that the trade spat between Washington and Beijing should be seen as an early episode in an inevitable geopolitical confrontation.
And with that, I’d like to close with some predictions made by David.
David Schlesinger: I think in the short-term, both countries will probably have to find a way forward. It’s clearly already having an effect on the Chinese economy.
But long-term, I think it will have some very serious affects. I think the message has been received loud and clear in Beijing that you cannot count on the U.S. as a partner. That it can turn on you in ways that they hadn’t expected, so therefore they will re-double efforts, like One Belt One Road, to find other friends and to make sure that they have influence and friends and trade elsewhere.
Within the U.S., we’re in a cycle where there is a pulling back, and globalists, like myself I must say, are definitely on the run. We’re not popular! I think Trump has really tapped into a feeling that globalism is bad. And so how that will play out in terms of being much more isolationist, much more “U.S. First,” yet still finding ways to get the goods that people in the U.S. want at a reasonable price, that’s a really tricky equation to solve. And I don’t think the U.S. had made even the first steps for finding an answer for that.
Nolwazi Mjwara: You’ve been listening to an episode of The Kids Are Alright. It was a production from Podium.me and News Decoder. Tell us what you thought of this episode by tweeting us @kidsalrightnews.
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