Will Pres. Trump Lead the US Into Cooperation With China’s Silk Road?

by: Lawrence Freeman

Despite the controversies surrounding President Trump, if he leads the United States into closer cooperation with China’s New Silk Road, a keystone policy of President Xi, then the potential for global economic development will be advanced. It appears from the meetings between Presidents Trump and Xi last week in China that there was progress in this direction.

{Global Times} Op-Ed Proclaims, ‘U.S. Participation in Belt and Road Inevitable’

November 14, 2017– This is the headline of an op-ed yesterday by Wang Yiwei, director of the Institute of International Affairs at China’s Renmin University, writing in {Global Times}. He says that the trade deals from President Trump’s official visit to China “will enable the U.S. to better grasp the potential and prospects for economic cooperation. Against this background, it is time for the U.S. to reconsider joining the Belt and Road Initiative, which offers wider space for cooperation.”

“Sino-U.S. cooperation on the Belt and Road Initiative will not only benefit economic and trade ties, but also shape the trajectory of a new mode of major-country relationship and the world in the next 50 years,” he writes.

“Although the U.S. has not announced it will take part in the Belt and Road, it already has connections with it,” he continues. This is the case in part because standards, rules, capital, technology, and personnel in projects are global, and also because U.S. companies are already involved.

He recommends that the two countries could work together on infrastructure, perhaps first in developed countries, such as regional cooperation in in the U.S. Midwest, and also on military resources; a challenging proposal. Defense Secretary Mattis has said that 19% of U.S. military facilities are idle, Wang reports.

These facilities could be developed by Chinese enterprises, he suggests. Cooperation could also be strengthened in the Maritime Silk Road context, regarding navigation, logistics, and maritime industry.

The U.S. and China could establish a “global infrastructure investment bank,” alongside global interconnection and global development programs. He concludes that such initiatives “will serve the two nations’ interests and benefit the world. What’s more, functional participation and constructional cooperation has always been what Trump aims for.”

Progress Report on the Chinese Economy: High-Tech Manufacturing Is Growing at 13.4% Per Year

Xinhua reported Nov. 13 on third quarter 2017 results for the Chinese economy, as presented by Zhang Liqun, researcher with the State Council’s Development Research Center.

Although the reported growth rates are for GDP measured in monetary terms, in the case of China these numbers undoubtedly track closely with actual physical economic processes–which is emphatically {not} the case in the trans-Atlantic sector, where GDP includes every form of speculative insanity, drugs, and whatnot.

The year-on-year overall growth rate in China for the first three quarters of 2017 was 6.9%, which was higher than expected.

Most interesting is that “the high-tech and equipment manufacturing sectors posted stellar growth in the first three quarters, with output up 13.4% and 11.6% respectively,” Xinhua reported. Investment in high-tech manufacturing rose even more dramatically, by 18.4%, up from 11.7% for the same period in 2016.

Job creation is correspondingly strong: China created almost

11 million jobs in the first three quarters of 2017–300,000 more than the same period last year. Official unemployment in Chinese cities stands at 3.95%, the lowest level since 2008.

The Xinhua article also quoted the chief economist at the Bank of China, Cao Yuanzheng, who said that it is of vital importance to contain financial risks, including “countering debt, shadow banking and asset bubbles.” Even Moody’s had to admit, in a recent research note, that “a stronger policy focus on financial sector regulation should continue to restrain the growth of shadow banking activities, help mitigate asset risks for the banks, and address some key imbalances in the financial system.”

On poverty reduction, which is the central concern of President Xi Jinping and the entire national leadership, Vice Premier Wang Yang presided over a meeting of the State Council’s group on poverty reduction on Nov. 13. Wang emphasized that they had to be focused on “enhancing a sense of mission and crisis awareness, and targeting problems to fulfill the Party’s promise to the Chinese people and the international community,” Xinhua wrote. (The fact that Wang presented this policy as a commitment to {the international community} is especially notable.) Wang added that to meet these goals it was necessary to train local authorities, “stressing the importance of carrying out research and investigation, and averting formalism.”