Chinese President Xi Jinping (L), U.S. president-elect Donald Trump (R). © / Reuters

By Pepe Escobar

Beijing and Moscow have arrived at the conclusion that President-elect Donald Trump is not an ideologue in the neocon sense of the term; he’s a pragmatist. Therefore, resets are inevitable, as well as surprises.

In yet another spectacular chapter of his running Marco Polo in reverse saga, Chinese President Xi Jinping made a strategic stop in Sardinia, Italy, on his way to the Asia-Pacific Economic Cooperation (APEC) summit in Lima, Peru.

Why beautiful Sardinia? Certainly not for a yacht cruise in the Costa Esmeralda. This is all about, once again, the Chinese-driven New Silk Roads.

Huawei is building its largest European HQ in Sardinia. The Chinese want to buy the port of Cagliari, together with its fabulous pecorino sardo – serious contender for best goat cheese on the planet. In powder form, it is already feeding millions of Chinese babies.

As a casual extra bonus “Marco Polo” Xi, on Chinese national TV, exhorted his compatriots to invest in a massive tourist invasion of Sardinia. Now this is what a stimulus package in Europe is all about.

Meanwhile, lame duck President Obama, also on his way to APEC, is in Germany passing the caretaker “leader of the free world” baton to a deer-caught-in-the-headlights Angela Merkel. The headlights go by the name Donald Trump.

TPP six feet under

The sight of an ebullient Xi side-by-side a dejected Obama, against the background of South America’s Pacific coast, will be priceless. Those were the days, in the go-go 1990s, when Bill Clinton ruled APEC, hammering home the American agenda. Now Asia-Pacific has to come to grips not only with protectionist Trumponomics, but also the fact that Obama’s cherished TPP – the mercantile arm of the “pivot to Asia” – is, for all practical purposes, dead.

Trump’s transition team, led by Mike Pence, has advised him to bury TPP (grouping the US, plus 11 Pacific Rim nations) for good within his first 100 days in office. And the road map goes still further, advising him to drop out of NAFTA as well if a long list of “concessions” is not agreed on.

Dejected US allies – mostly Japan, Singapore, Australia and New Zealand – who had all been counting on the ascension of Hillary and the enthroning of TPP, are bound to conduct “secret” meetings in Peru aiming at a revised deal. That would have to assume that the Republicans on Capitol Hill might agree with Trump having a go at some sort of renegotiation.

Then there’s the – far-flung - possibility of a cut rate TPP excluding the US. The US and Japan account for roughly 60 percent of the combined TPP group’s GDP. A TPP without the US is another beast entirely.

And that leads us to Beijing’s subtle counter-offensive; promoting the anti-TPP along the lines of the still-under-discussion Regional Comprehensive Economic Partnership (RCEP), which groups East Asia. Japan and Malaysia, as well as non-Asian Australia - three key players – all support RCEP.

As much as the Trump-China relationship may eventually land on the proverbial stormy seas, Beijing can now be confident that the China-excluding trade arm of the pivot to Asia is history.

Here’s the official spin, via Chinese Vice-Foreign Minister Li Baodong; “China believes we should set a new and very practical working plan, to positively respond to the expectations of industry and sustain momentum and establish a free-trade area in Asia-Pacific at an early date.”

By Pepe Escobar

Source Russia Today

By Sultan M Hali - Source Pakistan Today

An unfortunate display against our sole “all weather friend”  

Dr. Stephen P. Cohen — famous American political scientist, prominent expert on Pakistan, India, and South Asian security and a senior fellow in foreign policy studies at the Brookings Institution – was asked by a journalist during an interview if there is any example in the world (in his knowledge) where the cordial relations between the states are not entirely based on the mutual interests. Dr. Cohen replied that in his recollection, China-Pakistan relations can be described as the states’ relations which are above their personal interests.

Indeed, often described as “iron brothers”, China and Pakistan fit the bill of having ties which are beyond the realm of ethnocentrism or selfish, national interests. When China achieved its independence on October 1, 1949, it was battered and worn after a prolonged struggle to rid itself of foreign occupation and an internal struggle to defeat the “Kuomintang” (KMT). After suffering defeat at the hands of Chairman Mao Zedong’s Chinese Communist Party, the KMT retreated to Taiwan (formerly “Formosa”) in 1949, where it established an authoritarian one-party state under Chiang Kai-shek. Ironically, the West ignored the 583 million Chinese and genuine “People’s Republic of China” (PRC) and instead recognised Taiwan comprising 1.2 million KMT and some aborigines as “Republic of China” and even granted it a permanent seat at the UN Security Council – complete with veto power.

For 22 years, PRC was treated as a pariah state barred from any exposure to western technology, trade and commerce links. During this bleak period, Pakistan stood by China. For decades it was the only window for the recluse state, when Pakistan International Airlines (PIA) was the sole international air carrier operating to and from China to the outside world. Pakistan fought the case for PRC’s recognition at the United Nations and international forums and also facilitated the rapprochement between PRC and USA. Henry Kissinger’s clandestine visit to Beijing in 1971 was organised by Pakistan. This trip became the precursor of US President Richard Nixon’s historic visit to China, which finally thawed Sino-US relations.

China never forgot the gestures and, continuing to acknowledge Pakistan’s munificent support in those bleak years, has always stood by Pakistan in its every moment of trial and tribulation. Whether it was wars with India, natural calamities or manmade disasters, China has always been the first to reach its distressed brother Pakistan. During prolonged periods of sanctions imposed on Pakistan by the Occident, China continued to support Pakistan’s genuine defence requirements. Similarly, Pakistan has also endeavoured to provide all out support whenever PRC or its people faced any catastrophe.

On May 2, 2011, US Navy SEAL’s clandestinely stormed a residential compound in Abbottabad and eliminated the mastermind and creator of Al-Qaeda, Osama bin Laden. The whole world was chastising Pakistan, claiming that Pakistan had been harbouring the world’s most wanted terrorist for over a decade. The whole nation was morose and depressed owing to the serious allegations being hurled against Pakistan. It was only PRC that not only stood by Pakistan in its moment of agony but challenged the world to stop harassing Pakistan and instead acknowledge Pakistan’s sacrifices and efforts in combating terrorism. China’s unstinted support for Pakistan brought cheer to the people of Pakistan.

Whenever India has tried to have the United Nations or other international organisations declare Pakistan or any of its outfits blacklisted on the charge of terrorism, China has vetoed it. If this is not support and friendship beyond personal interests then what else is?

Over the years, astute planning and judicious use of its resources have propelled PRC to become the world’s second most powerful economy while on the other hand, Pakistan has sunk into a deep abyss of economic grief, compounded by acute power shortages and incessant terror attacks. Political wrangling and poor law and order situation have exacerbated the environment. International sports and trade teams have stopped visiting Pakistan, foreign investors have deserted the terror stricken country and to make matters worse and further isolate it, Pakistan is being accused of sponsoring terrorism by its arch rival India.

In this desolate milieu, China has chalked out development projects to enable Pakistan to climb out of the quagmire of economic dependency. President Xi Jinping has envisioned a mega project “One Belt, One Road” (OBOR), which is a revival of the ancient Silk Route and also has a maritime component. One of the constituents of the OBOR is the China Pakistan Economic Corridor (CPEC), which commences from the deep seaport of Gawadar (also constructed by China) and meandering through various parts of Pakistan, including the under developed provinces of Balochistan and Khyber Pakhtunkhwa, concludes at Kashgar in China. The OBOR fans out from Kashgar into Central Asia and reaches Europe. The OBOR and CPEC are not mere highways but comprise special economic zones envisaging industrial, commercial, trade, health, educational, energy, and information centers. Train, oil, gas, data, marine and air links complement the OBOR.

Cognizant of the outcome of the mega project in bringing prosperity to Pakistan, India is bent upon sabotaging the CPEC along with the deep sea port of Gawadar. Besides fomenting strife and insurgency in Pakistan’s province of Balochistan and wreaking havoc through terror attacks, India and some other countries backing it for their vested interests are bribing or influencing some Pakistani politicians to oppose CPEC and the ingress of Chinese investment in Pakistan.

Unwittingly, these politicians are biting the very hand that is trying to feed Pakistan and help it overcome the morass and building infrastructure. Chinese philosophy is: “give a poor man a fish, he will not starve for a day; teach him how to fish and he will not starve for life.” Operating on the same principle, China has established factories, power plants assembly lines in Pakistan with soft loans and also provided transfer of technology to enable us to stand on our own feet. The advent of the Asian Infrastructure Investment Bank (AIIB) was established by China to help finance emergent countries institute development projects by setting up the infrastructure themselves.

Besides finding imaginary faults with CPEC, criticising the priorities, these detractors are also creating despondency by comparing the advent of CPEC to the British East India Company, which had come to the Indian Subcontinent during the Seventeenth Century in the reign of the Moghul Emperor Jahangir and became the precursor of three centuries of British Rule in India. This was stated by none other than Senator Tahir Mashhadi, chairman of the Senate Standing Committee on Planning and Development.

It is highly derogatory to draw parallels with the East India Company and must have hurt the sentiments of Pakistan’s sole benefactor. There is no doubt that OBOR and CPEC will benefit China but it had other options too besides Pakistan, yet it chose us because of our special relationship. To find imaginary faults with it and presuppose the honourable intentions of Pakistan’s Iron Brother, all weather friend and strategic partner, is tantamount to making holes in the platter we eat in. If China were to discontinue CPEC (God Forbid), Pakistan would be left in a lurch, fending for itself against the very sharks that want to disintegrate us and devour us. Pragmatism demands that Pakistan’s interests must be safeguarded but the true Sino-Pak bonds must not be sacrificed at the altar of vested interests.

By Sultan M Hali - Source Pakistan Today

The US and China are already working together on the clean-energy project Sapphire Wind in Pakistan, where Beijing and Washington want Pakistan to grow its economy and undermine extremism. PHOTO: SAPPHIRE WIND

By MARC GROSSMAN

With Mr Donald Trump’s election, China and the United States could be on a collision course. The US President-elect promised during the campaign to label China a currency manipulator, instruct the US Trade Representative to bring cases against China in the World Trade Organisation and threaten 45 per cent tariffs if China does not renegotiate trade agreements with the US. Meanwhile, China pursues a military build-up in the South China Sea designed to diminish US influence in Asia.

As Mr Trump addresses trade and the other issues on the US-China agenda as president and not candidate, he may find it useful to look for areas where the two countries could work together.

One opportunity ready to be explored is the vision promoted by both Beijing and Washington of the need for more economic and infrastructure connections between East Asia, South and Central Asia, the Middle East and Europe.

Two concepts are in play: China’s One Belt, One Road, or Obor initiative, a multibillion-dollar programme to build ports, railways, roads, power plants in and around 60 countries and the more modest, but still important, American New Silk Road initiative, or NSR.

In July 2011, then-Secretary of State Hillary Clinton spoke in India about the benefits of linking Central Asian economies with those in South Asia, with Afghanistan and Pakistan in the centre. Increased regional economic connectivity, she argued, would promote sustainable economic growth, a crucial part of the effort to defeat extremism.

In September, the US convened a NSR ministerial meeting in New York and China expressed enthusiasm for the project.

Turkey hosted the Heart of Asia Conference in November 2011 and, supported by the US and China, the concept became a touchstone for regional cooperation.

Obstacles then emerged. The Chinese said the name New Silk Road “belonged to China” and “Historic Trade Routes” would be a better name for the US initiative.

In 2013, Chinese leaders responded with a Silk Road initiative of their own: One Belt, One Road consists of two main components — a land-based Silk Road Economic Belt and a sea-based Maritime Silk Road — which Chinese leaders believe will together change the geostrategic and geo-economic face of the region.

BENEFITS FOR AFGHANISTAN AND PAKISTAN

In August this year, Chinese President Xi Jinping announced that more than 100 countries and international organisations had committed to participate in Obor.

According to Chinese press reports, Obor is supported by US$40 billion (S$56.7 billion) from China’s Silk Road infrastructure fund, US$100 billion in Asian Infrastructure Investment Bank pledges, and an initial US$50 billion commitment from the New Development Bank of the Brics countries — Brazil, Russia, India, China and South Africa — with a promise to increase that to US$100 billion.

The US and Chinese projects are currently on separate trajectories. American officials maintain that they support Obor, though the US is rightly wary of projects that enhance China’s military capacity. And the US cannot match the dollars or yuan pledged or spent.

That said, there are several strategic, regional and commercial benefits to additional US-China cooperation around the Obor and NSR initiatives.

For example, the US-China Summit in Hangzhou in September highlighted Afghanistan as an “area of cooperation”.

The two countries share an interest in an Afghan state in which Al Qaeda and Islamic State find no havens, drug exports shrink and private sector–based economic activity increases.

A coordinated Obor-NSR effort to create what Afghan officials once called an “Asian Roundabout” to encourage a sustainable Afghan economy would promote these shared goals. The recent opening of a rail line from the eastern coast of China to the northern Afghan city of Hairatan, offers Afghan exporters an alternative route to Asia with dramatically reduced transit times.

Another area of potential cooperation is Pakistan, where China and the US want Pakistan to grow its economy and undermine extremism.

China’s US$51 billion commitment to the China-Pakistan Economic Corridor is designed to build highways, railways and energy generation in Pakistan, including a proposed rail link and highway between Pakistan’s port at Gwadar and China’s north-western region of Xinjiang, which would also connect the Obor to China’s Maritime Silk Road project.

Pakistanis hope the corridor will create 700,000 jobs by 2030 for some of Pakistan’s 190 million people, a majority of whom are under the age of 22.

Washington and Beijing are already working together in Pakistan on the clean-energy project Sapphire Wind.

The US Overseas Private Investment Corporation has provided US$128 million for this 50MW wind project, which uses General Electric turbines.

Under the umbrella of the US-Pakistan Clean Energy Partnership, the US will invest US$70 million on transmission lines to connect a 680MW wind project in Sindh to the national grid. China is also an investor.

Collaborative NSR-Obor efforts between the US and China can benefit US companies. The Wall Street Journal reported in October that General Electric, Honeywell and Caterpillar are already focused on the possibilities. According to the Journal, GE’s orders in Pakistan are more than US$1 billion today, compared with less than US$100 million five years ago.

Connecting US firms to Obor and keeping them aware of NSR opportunities require a concerted effort by the US government, including the Departments of State and Commerce, the US Overseas Private Investment Corporation and the Export Import Bank.

POTENTIAL CHALLENGES

Despite the obvious benefits, there are many challenges to creating an NSR-Obor nexus. China may be pursuing Obor to control rising wage rates at home by exporting employment and soaking up overproduction in industries like steel.

The Chinese might decide to go it alone, with the enormous resources they have promised against a small US investment in NSR. The number of American firms interested in Obor may be too small to reach critical mass and those that seek engagement may stand no real chance to work with Chinese companies, especially state-owned enterprises.

In September, representatives of 10 Chinese state-owned enterprises visited Washington and New York to promote US commercial interest in Obor opportunities, but more needs to be done by Beijing to welcome US private-sector participation and protect US commercial interests.

Another challenge is managing Indian anxieties about Obor. Many analysts in Delhi see Obor not as a development initiative, but as a strategic effort by Beijing to surround India with naval facilities in Gwadar in Pakistan, Colombo in Sri Lanka and Kyaukpyu in Myanmar.

The possibilities of joint efforts inspired by Obor and NSR present the incoming Trump administration with a strategic opportunity to improve US-China ties, advance common security interests and create economic opportunities for American business.

Success would bring tangible benefits to a region where further state failure would surely fuel extremism, a threat to both the US and China.

And, not least, there would be something positive on President-elect Trump’s already contentious agenda with China when he takes office in January.

Ambassador Marc Grossman is a Vice Chairman of The Cohen Group. A US Foreign Service Officer for 29 years, he was the US Special Representative for Afghanistan and Pakistan (2011-2012) and a Kissinger Senior Fellow at Yale in 2013. This article was first published in Yale Global Online.