© 2018 by Robert Person.  The views expressed on this website are my own and do not represent the official policy of the U.S. Army, Department of Defense, or U.S. Government.

Mar 26

France to Seal Deals with China But Will Challenge 'One Belt One Road' Project

0 comments

 

Just one day after Italy became the first Western power to endorse China’s ambitious “One Belt, One Road” initiative, France and China agreed to sign trade deals worth billions of euros. The ties include opening up the Chinese market for some farm goods, such as poultry, and the potential for a multi-billion dollar deal for China to buy dozens of Airbus planes. Despite the opening of a trade relationship, Paris has also taken this opportunity to push back against Xi Jinping’s “One Belt, One Road” infrastructure initiative. The initiative consists of the Silk Road Economic Belt and the Maritime Silk Road, and comprises a multi-trillion dollar plan spanning 68 countries, which collectively account for 60 percent of the world’s population and up to 40 percent of global GDP. It essentially aims to link China by sea and land with Southeast and Central Asia, the Middle East, Europe, and Africa, through an infrastructure network on the lines of the old Silk Road. French President Emmanuel Macron hopes to forge a united European front to counter China’s advances. Such a move by Macron directly relates to some concepts in IPE.

One of the main critiques of the “One Belt, One Road” initiative is that it does not do enough to promote economic development in the countries that the project passes through. The nexus between regime type and sustained development has been a central theme of this block. The initiative is said to leave developing countries with large debt burdens that they can’t pay off, and thus are largely dependent on China. The enormous investments China has poured into OBOR countries have not occurred with a simultaneous growth in local governance. Because these countries lack institutions that strength accountability, transparency, and participation in the infrastructure projects, the OBOR will likely lead to any sort of long-term economic growth beyond the Chinese borders. Many of these countries lack a strong rule of law that protects private ownership rights, enforce the proper distribution and use of investment funds, and the crack down on cronyism. In other words, strong and inclusive local institutions are necessary prerequisites for sustained growth—and they are missing in the OBOR countries. What these problems elucidate is that the success of the OBOR lies in the hands of other nations, not in China’s. For Xi Jinping and his lofty goals of fulfilling a Chinese “dream” and rejuvenation, this will be his central challenge.

Perhaps this is part of the reason why France struggles to get behind the project.

 

Article found at: https://www.theepochtimes.com/france-to-seal-deals-with-china-but-will-challenge-one-belt-one-road-project_2852264.html

New Posts
  • In his article for Foreign Affairs David Cohen talks about the Trump administration's policy towards sanctions. He talks about how the conditional sanctions the Trump administrations has placed on Iran and now Venezuela will be ineffective because the changes the administration is trying to coerce will essentially mean regime change for the two nations. Cohen goes on to state that these will be ultimately ineffective because the relative cost of the sanctions is lower than the cost of losing power. This means that the leaders of Iran and Venezuela are more willing to bear the pain of the sanctions than lose the regime. This goes along with the lesson we had on sanctions in a couple of ways. First we learned that sanctions are used either as a method of deterrence or coercion. This means that the sanctions inflict financial and economic pain to make the target of the sanctions take or not take an action. These sanctions are meant to cause political changes that will in essence mean a change of regime which is why they will fail. They are effective in causing pain; however, there is not enough sanctions in the world to make it worth losing power. Article link: https://www.foreignaffairs.com/articles/united-states/2019-04-29/sanctions-cant-spark-regime-change
  • https://www.nytimes.com/2019/05/09/us/politics/china-trade-tariffs.html Just before a scheduled round of trade negotiations began on Friday, President Trump announced that he was still going to levy additional tariffs on Chinese imports valued at approximately $250 billion. President Trump claimed that these tariffs would bring billions of dollars back to US manufacturers, but the main focus seems to be inflicting pain on China, as opposed to bringing prosperity to the US. China and the US have not been able to reach an agreement that would minimize or end outright the "trade war" between the two, which stems from the Trump Administration's belief that China is not doing all it can to protect American investments and intellectual property in China, as well as the belief that a large trade deficit with China is inherently bad. The Trump Administration's use of tariffs as a negotiating tool is inelegant, but effective. Unilateral tariffs immediately affect the Chinese export industry, whose products become less competitive in US markets. While this inflicts pain on Chinese exports, whose largest market is the US, it also affects US consumers, who have to pay higher costs for consumer goods. Additionally, because China retaliates with target tariffs (on politically-relevant goods like Kentucky Bourbon and soybeans from the Heartland), US exporters are equally hurt by the trade war. The only immediate winner is the US, who collects revenue from the applied tariffs; however, long-term, US domestic industry should improve, as they will become more competitive when Chinese imports are more expensive. Slowly, we are starting to see this happen: Dan DiMicco, the chairman of a lobby group "Coalition for a Prosperous America," explained that American manufacturing is already experiencing gains in their domestic market shares.
  • https://www.washingtontimes.com/news/2019/may/8/feds-release-168k-illegal-immigrant-family-members/ In Stephen Dinan's article in the Washington Times, he explains the unforeseen immigration due to illegal border crossings. ICE border patrol has released 168,000 illegal immigrant family members this fiscal year, and the number is expected to increase as the border situation increases in volatility (Dinan). Dinan reports that 87% of families in this new pilot program skip their court hearings, and with an ill-equipted government to track them down judges deport them in absentia (Dinan). Dinan argues that this increase in illegal immigration in family units is caused by a 2015 court ruling that stated parents who travel with children must be released in 20 days. Since this is too little time try them in court, the families are set free (Dinan). This article is very relevant to this block in IPE as it highlights a crucial phase that the world is going through. As policies towards free and open borders begin to gain more and more traction, we can expect the number of border crossings into the country to continue. As we talked in class, this may actually be a good thing for the economy, as low skill labor is substituted due to a higher rate of college attenuation and graduation. Dinan says that most migrants interviewed are not criminals, they are just seeking jobs, and know that if they bring children they will find asylum in the US (Dinan). One of the unintended consequences is that some of these migrants are being used to smuggle drugs and weapons into the country, and in some extreme cases, children are being sold to impersonate children of felons migrants of south american countries to gain access with ease. As globalization brings countries closer together and as the trend for free an open borders continues incentivizing cheap labor, it will be interesting to see the effects of these policies 10-15 years in time.