By Gary Burrows
Those who attended Rodger Baker’s keynote address at Breakbulk Americas were led by the senior Stratfor analyst through a quick – though penetrating – overview of the shifts in political and trade powers since the cold war.
Having an explanation of uncertain times may bring clarity if not comfort for those in the business of moving goods. Events of the past few months have further fueled uncertainty.
Baker said the world is in a “transformative moment” in power and relationships among nations, as he described the balancing among leading powers China, the U.S. and European Union (“No Center of Gravity,” page 28).
That moment may have been represented by China President Xi Jinping during the Communist Party’s five-year, week-long congress in October, where Xi proclaimed a “new era” in global politics, in which China would move “closer to center stage.” Publications from The Economist to Time took note of the moment with cover stories, questioning the future U.S. role as a global power with China’s ascension.
As Baker explained, China has been drawn from isolationism to “push out and become a more activist player economically, politically and, in the near future, militarily.”
Central to China’s coming-out party is the ambitious Belt and Road Initiative, as it forges global trade routes to source vital resources and grow markets for China’s goods. Project cargo stands to eagerly benefit from China’s efforts throughout the world. Andrew Willis explores one of China’s global infrastructure initiatives, with the launch of a joint China-Brazil investment promotion fund to increase productive capacity with an initial US$20 billion to finance investment projects in Brazil (“Funding Fix,” page 24).
U.S. President Donald Trump spent nearly two weeks meeting heads of state in Asia, one country at a time. Trump claimed to come away from China with trade deals topping US$200 billion, though most were in the form of memoranda of understanding, which could be only as valuable as the printed MoU and ceremonial pen used to sign them.
Beyond trade, China’s political role rises as well, beyond taking a seat at the head of the table among Asian nations with the Trans-Pacific Partnership, and globally through initiatives such as the Paris Climate Agreement. Abdicating those options, Trump instead talks of cobbling bilateral deals nation by nation, while espousing an “America first” approach to the world. However, Trump also seeks out China to play a potential military role in getting North Korea to fall into line.
It’s looking like China’s economy could pass the U.S. well before 2030, as Price Waterhouse Coopers forecast earlier this year. India and Indonesia wait in the wings.
Of course, not all is rosy in China. While Xi further cements his powerbase following the Community Party’s congress, he is forced to perform a balancing act between maintaining China’s ambitious growth at home and abroad, and managing spiraling debt, Michael King finds (“Climbing Debt Mountain,” page 20).
At home, China’s years of trade growth have forced it to implement programs and develop regulations to facilitate transport while enhancing supply chain security regulations on project cargo travelling through the country. And, as Thomas Timlen reports, movers either jump through hoops – or face the consequences of failing to comply (“China’s Customs Clout,” page 14).
As world project markets look towards late 2018 to early 2019 for more positive signs of a turnaround, a transformative moment couldn’t come soon enough.
Image credit: Breakbulk
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