China has a record of making extravagant offers of credits abroad that are then underutilized. The devil is always in the details, but if China's vision is realized in any significant respect, in time all roads in Eurasia will lead to Beijing. It will be shaped in large measure by what happens under China's Silk Road initiatives and in the institutions China is organizing to support them. In any event, while Washington works itself into a lather over Chinese pave-overs of reefs in the South China Sea, Beijing is focused on much bigger things. It is not taken seriously by many within the Beltway. ). So now, as the US approaches an important presidential election on 3 November and questions about its wider future abound, the New Statesman Media Group is joining forces to tell that story. Chinese firms got the message: there has been a precipitous fall in Chinese investment in the US, and while US investment in China remains flat overall, it has fallen in crucial areas such as information and communications technology, machinery and financial and business services. This crisis is about China’s economic future and whether or not it can manage the structural transformation necessary to propel the economy into the … And on Investment Monitor, there are features exploring whether Covid-19 has delivered a death blow to US-China FDI, and how drops in Chinese investment have a bigger impact on Trump-voting states. The availability of credit does not guarantee the availability of financially attractive projects, however desirable they may be in terms of their overall impact on China's economy and its relations with the other societies in Europe and Asia. Meanwhile Beijing too is pursuing the logic of decoupling: recent manoeuvres by the People’s Liberation Army suggest Beijing may be mulling an invasion of Taiwan in the event of an inconclusive result at the US election on 3 November. Next year, China will launch five years of collaborative strategic planning with foreign partners about projects to be carried out under its "one belt, one road" concept. In Tech Monitor, Ed Targett reviews the growing impact this shift is having on technology supply chains. Others may be more problematic. Now, as then, there are lots of China specialists who dismiss China's aspirations as unlikely to produce much. Chinese investment abroad exceeded $100 billion for the first time in 2014. Having won the 2016 election in Midwestern states whose economies have been particularly affected by the economic integration of the two countries, the president imposed tariffs on Chinese goods in 2018, on some $250bn of imports. So the nice ideas of the 1990s and 2000s can be put to rest. The old model based on integration of trade with global markets but with limited financial linkages has reached the end of its useful life. Investment Monitor has dug into the numbers to explain the declining trade and investment flows between the US and China, and individual US states' tortured relationship with China. individual US states' tortured relationship with China, factor in the presidential election campaign, Why a Joe Biden win is unlikely to improve relations between the US and China, whether Covid-19 has delivered a death blow to US-China FDI, Devi Sridhar: The UK needs a zero-Covid strategy to prevent endless lockdowns, Ban Donald Trump’s Twitter account – for good, "The social movements of our time are explosive": Aaron Benanav on robots and revolution. They believe that their vision has the potential to be as transformative as Deng's "reform and opening" has been over the past thirty-seven years. More to the point, the United States has recently shown neither the will nor the political capacity to muster the means to adapt the Bretton Woods institutions to this century's economic realities and development requirements. Tech Monitor, a new sister publication of Investment Monitor focusing on the tech industry, has reviewed the growing impact this shift is having on technology supply chains. Some elements of the process are the result of political choices, notably Donald Trump’s trade war, but many are structural; some play into the narrative of looming, near-inevitable conflict between the two superpowers as China’s rise continues; others point in different directions. Third, deeper integration, and the concomitant acceleration of domestic economic reform, also increases the likelihood that China will be able … China Eyes Further Northeast Asian Economic Integration in RCEP When the Obama administration focused its efforts on a pivot to Asia, the Trans-Pacific Partnership (TPP) served as a key economic pillar of the strategy. It is often assumed this began in the US with the election of Donald Trump. Elsewhere on the New Statesman, Emily Tamkin reports on its impact on the US election, and Ido Vock and Michael Goodier chart the social ties between the two countries. Chinese growth is weaning itself from dependence on domestic fixed asset investment and transitioning to reliance instead on the expansion of the services and domestic consumption. #imports_exports_indexed iframe { width: 100%} Hence the importance of the international consultations and strategic planning efforts that are about to get underway. The same, for other reasons, is true of China and Russia, and of China and Iran. The theory rested on the assumption that highly integrated countries with sizeable middle-class populations capable of sustaining branches of the US fast-food chain had too much to lose by entering into conflict. China is every country in TPP's biggest trading partner and greatest potential source of future foreign investment. Some projects envisaged for the "one belt, one road" program will be financially attractive or made so. This article is part of a wider special New Statesman Media Group feature on the US-China decoupling. Also, the institutional integration of East Asia needs the effort of all the players in the region. This website uses cookies to help us give you the best experience when you visit our website. It produced half of global GDP and held seventy percent of the world's gold reserves. China is now near the heart of the global capitalist economy. This would reduce oversupply in the Chinese steel industry from 22 percent to 8 percent. Having won the 2016 election in Midwestern states whose economies have been particularly affected by the economic integration of the two countries, the president imposed tariffs on Chinese goods in 2018, on some $250bn of imports. China joining CPTPP would boost Asia-Pacific economic integration. Chinese consumption overtook investment as the main driver of growth in 2011. Obama had encouraged the reshoring of manufacturing from China to the US and took aim at unfair Chinese subsidies for industries that threatened American jobs. And below are my reflections on the geopolitics of US-China decoupling, and what it means for global affairs in the coming years and decades. They are more concerned by Beijing’s human rights abuses, especially against the Uighurs in Xinjiang, than the Trump administration has been. City dwellers are heavy consumers. US capital streamed into Shenzhen and other manufacturing centres and the output of their factories streamed back across the Pacific and into the hands of US consumers, a process particularly accelerated when China joined the World Trade Organisation in 2001. China is in the process of becoming the world's preeminent economy. A third trunk will go through Kazakhstan and Russia to Western Europe. The US remains the world’s dominant military power and largest economy, but wants to pull back from some of its commitments and focus on the contest with the rising power.