The trade-war saga continues, regardless of the pandemic and its aftermath. Here is a brief overview of recent events, as illustrated in several sources from the past week.
The recently deceased Chinese ambassador in Israel may put the Israel-China relationship in troubled waters, which could have ramifications for the BRI in the Middle East, i.e. usage of the Port of Haifa [Haifa port in Israel, Darwin port in Australia, Hambantota in Sri Lanka – The 3 ports that China will soon lose]. Australia is ‘playing a hard cricket ball’ with China over amongst others the Port of Darwin. The ‘secret’ MoU with the State of Victoria favors the BRI. Some believe that the outcome of this arm-wrestling match may have a spill-over effect on the port of Hambantota, whilst others have the impression that Australia has a weak position in its geographical periphery, which favors China [Australia’s Beef with China: Turning into More Than Just A Trade Spat].
European policymakers are favoring the US over China, but for how long? [Europe’s position in the US-China trade conflict: It’s the exports, stupid]. The pending economic hurdle might speed up the process. A not unimportant detail is the internal demand of China, which is not as strong as that of the US [Playing with fire: Italy, China, and Europe]. Italy is already openly flirting with China via their MoU, and consequently forces the EU to achieve a more coherent approach. The quarrel amongst EU-member states for building a safety net for the pending economic hurdle can’t be qualified as an ‘Ode of Joy’. China already has a foothold on European soil, or harbor (in Greece) to be exact and is gaining traction in Scandinavia, whilst connecting itself with the 16+1 framework. In short, the clock is ticking for the EU. And do EU-member states still have aligned interests?
The RAND-corporation summarizes and analyzes key-events of the BRI neatly. Their report zooms in on the physical BRI infrastructure. Hopefully there will be a follow-up that will demystify the other branches of the ‘cornerstone of China’s foreign policy’, digital and health [Demystifying the Belt and Road Initiative]. Recent events form a catalyst of the BRI’s health aspect, even though the ‘Medicine and medical devices’ was mentioned as a key industry area in the ‘Made in 2025’ document.
The US strives to provide an answer to the digital BRI (with an approximated trade-volume of $1,3 trillion in 2018), called ‘Blue Dot Network’ - BDN. This project is finally taking shape with a pledged capital of around $60 billion dollars [US Blue Dot Network to counter China’s BRI]. The US is cooperating with Japan and Australia but is still waiting on the fourth member India. Hence, the name: ‘The Quad 2.0’. The target market: Indo-Pacific. Let’s hope this time the involved countries shall open their lessons learned report [Assessing the Quad: Prospects and limitations of quadrilateral cooperation for advancing Australia’s interests]. The last Quad endeavor – Quad 1.0 (or better said: its failure) strengthened the BRI.
Unfortunately, I could not find any reports of any well-known economic organization (World Bank, OECD, IMF) that have factored in this Keynesian injection, i.e. BDN. Perhaps a more definitive projection might be finalized when India solidifies its association.
It is interesting to observe how willing the global powers might cooperate on visible and noticeable threats, such as COVID-19, and/or the pending global ‘recession’, and the aftermath. They are indicators to gauge whether dealing with climate change shall bear any fruit.
Ali Çikmazkara
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