How China’s growing power and ambitions are burning the bridges of global cooperation


This op-ed originally appeared in the SCMP on 9/27/20.


Illustration: Craig Stephens

In the past few weeks, China’s decades-long relationship with Europe has taken a significant hit as negotiations stalled over investment and human rights issues. Chinese fighter jets have flown dangerously close to Taiwan. And talks with India over their border dispute have reached a stalemate after the deaths of soldiers on both sides.

Add to this the continued trade war with the United States and a clear trend emerges. At no time since China’s reform and opening up that began over four decades ago has its relations with the world been so strained. Beijing has alienated practically every major power in the Asia-Pacific – JapanAustralia and India – as well as most of Western Europe, Canada and the US all at the same time.

China’s growing ambitions are bumping up against its neighbours with increasing frequency, calling into question attempts by Beijing to establish itself as the leader of a new multilateral order. The backlash to this more aggressive approach has begun, and will only increase if Beijing continues down this path. China will increasingly feel more isolated, not by any grand Washington containment strategy, but by its own policies.

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US’ tougher stance on the South China Sea is part of Trump’s re-election campaign

This op-ed originally appeared on 7/20/20.

The United States finally said what the world already knew: China’s claims in the South China Sea have no legal basis. It took four years after an international tribunal ruled on the issue. This raises the question why, with only six months left in the current administration, US Secretary of State Mike Pompeo made this declaration now?

Two reasons stand out – US President Donald Trump campaign’s attempt to bolster its tough-on-China credibility ahead of the upcoming presidential election, and galvanising the growing regional distrust of China to reassert the US as a regional power. If Beijing misreads either of these powerful political forces and provokes a confrontation, its geopolitical overreach will face a backlash that has long been brewing in the region.With US election season in full swing, Trump attack ads air daily in battleground states with hundreds of millions of dollars in play. The campaign has decided to use China as one of several lines of attack against Trump’s opponent Joe Biden. It’s going to be a tough sell.

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China Guards the Keys to an Empire of Debt


This commentary originally appeared in Barron’s on 5/6/20


The coronavirus pandemic is bringing out the best and worst in political leadership. For China, it’s the latter. While first to confront the disease, the government initially failed to inform the global community, preferring instead to hoard supplies and information. By the time authorities gave the World Health Organization access to the country, it was too late. The virus had already spread around the world.

This pattern of official obfuscation also applies to China’s international lending practices. For years, the details of China’s bilateral deals have been closely guarded, including the terms of repayment and collateral required. Now developing countries that were eager for easy money are asking how they can possibly make debt payments amid a public health emergency. They’re not hearing answers.  

The Covid-19 outbreak will cripple their economies. And while the Chinese government wants to be seen as taking the lead in the global response to the pandemic, no amount of medical supplies will assuage concerns over economic collapse.

Many of these countries face an impossible choice: Enforce a lockdown they cannot afford to stem the spread, or remain open to sustain business activity that could drive further infections. Either way, they won’t be able to pay what they no longer have.

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China’s Loans at Risk as Coronavirus Spreads to Developing Countries

Illustration: Craig Stephens


A looming crisis in the developing world has caught the attention of major international lenders, including the Group of Seven, Paris Club and the World Bank, with a notable addition – China. For years, Beijing has resisted efforts to coordinate its lending with international financial institutions. And yet consensus has formed that temporary financial relief is essential for developing countries facing a mountain of debt, the spreading Covid-19 pandemic, and an impending global recession.

The larger G20 group of advanced economies, which China is a part of, have agreed to a debt moratorium for poorer countries in economic distress. Some finance ministers even insisted that their support for the relief package, which halts both principal and interest payments through at least 2020, was contingent on China agreeing to join in.

This is a sign, albeit limited, that not only is Beijing considered on par with the wealthy and powerful of the world, but that its interests coincide with a coalition of developed nations – at least for the moment. If China breaks ranks and pursues its own narrow interests, when many of these loans eventually default, it will lose the status it has long sought by developing its global soft power.

China has long preferred often secretive bilateral deals over coordinated lending efforts. These deals have included loose standards for projects of dubious utility, including transportation projects in Pakistan, Montenegro and Kazakhstan. National assets have been used as collateral. Actual loan amounts have often not been disclosed, making credit assessments by international institutions like the World Bank inaccurate.

This global lending spree, most recently through the Belt and Road Initiative, and China’s mishandling of the coronavirus outbreak, are largely responsible for the developing world’s recent economic dislocation.


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Trump’s China Trade War – Attack on Consumers

The next tranche of U.S. tariffs on $200 billion worth of Chinese goods are about to hit. Rather than being largely invisible to the public like the first $50 billion, round two includes seafood, bicycles, suitcases, bags, carpets, air conditioners, and sports gear (an exhaustive list of over 190 pages can be found as a USTR .pdf file here.)

(DoD Photo By Glenn Fawcett – Wikimedia Commons)

Other imports subject to tariffs this time around include auto glass, tires, engines, iron, steel, flooring, and construction tools. A visit to Lowe’s or a home improvement project will cost more, along with new cars that use China-made inputs.

This is the beginning of his attack on consumers, but not the worst yet. Some of the most popular consumer items including toys, cell phones, and pharmaceuticals, were not included. A consumer backlash is the last thing the Trump administration needs right now as polls continue to show Republican candidates struggling in the run-up to the midterms. The widespread business outcry would also be hard to contain.

Still, this latest round of tariffs and the failed recent trade talks suggest more problems ahead for the relationship as both Trump and Xi harden their positions. 

Some China policy advisors have concluded that Trump is hell-bent on weakening China. That view casts the tit-for-tat tariff struggle in a far more damaging political light. Xi Jinping will be easily backed into a corner where he has no choice but to fight and show his people how strong China has become.

Trump’s advisors meanwhile, including Larry Kudlow, are feeding him the false impression that China’s economy is on the ropes and ripe for disruption. With a “winner take all” approach Trump will have to keep ratcheting up the pressure, no matter how much he breaks in the process.

With so much distrust and misinformation flowing freely, expect this dispute to go well into 2019 and affect consumers far more than at present.

The U.S. can include almost $200+ billion more in traded goods. China, out of categories to include by then, can opt for a trade war by other means by restricting U.S. business operations and increasing scrutiny of foreign investment.

To be sure this is no easy win for Trump, no matter how many times he says it. Tariffs are a blunt instrument. Come January the domestic environment, including Congress, may not be so supportive of his “get tough” efforts, which will have done little except to increase consumer prices and the cost of doing business.