The geopolitical center of the world was not in Davos
While Trump in Davos dominated the media, real news was and is being made in the Asia-Pacific. China might be overreaching, India is strategically moving and Japan is busy with coordinating the anti-Chinese front. The only real news at Davos concerned the EU, not the Trumpian road show of an US neither led nor leading.
Last year Chinese president Xi-Jinping dominated the Davos news with his ringing endorsement of open economies and free trade. Since then the climate for anybody hoping for a parallel loosing up in Chinese external, let alone internal policy got much colder. At the 2017 Party Congress, Xi was enshrined as ‘Mao II’ whose ‘thoughts’ have become part of the curriculum not only for all pupils and students in China, but also the daily reading diet of all Chinese. To make sure that the diet is followed, the Orwellian scenario of a totally supervised citizenry is approaching. The government will introduce a bonus/malus system, not for car insurance but for overall good behavior of every single Chinese. What ‘good’ means is decided by the Communist Party; any kind of dissident opinion, let alone acting it out will presumably not give you any merit points. The role of the CP is thus getting back to the political, economic and social center of society. Just the way it was in the bad old days of Maoism.
The all-powerful digital emperor in Beijing is getting active help from abroad. In a little noticed development Apple has now ceded all authority over its collected data to Beijing. Within the framework of an agreement with state-owned Guizhou-Cloud Big Data, it will build its first data-storage center in China, effectively ceding all control over the data stored there to the government, probably including all personal data of Chinese clients. This comes after an Apple announcement earlier in 2017 that it will close down all digital possibilities to circumvent official blockage of content, such as the main Western news outlets, in China. The reasoning given by the world’s largest digital provider is as evident as it is potentially shortsighted: ‘We are just following the law of the land’. Fine to make short time commercial gains but potentially lethal as Apple thus loses its much trumpeted independence from governments everywhere. The one element that has so far been the distinct hallmark of Western digital companies who will be engaged in the future in an ever fiercer battle with the fast growing Chinese competition where automatic exchange of data with the state is presumed.
As is probably the case with Huawei. Their new high-end smartphone ‘Mate 10 Pro’ cannot find a carrier in the US as Verizon Wireless and AT&T will not team up with them following pressure from Washington which suspects the Chinese company of outright espionage. Whether true or not, whether in the US or elsewhere in the West, Apple’s fate, and behaviour in China does not inspire confidence about indispensable digital firewalls between the governing and the governed.
In past papers Share-an-Ambassador has already pointed to potential politically motivated problems with Chinese companies and /or within the framework of Chinese initiatives. With regard to the BRI (Belt and Road Initiative, ‘the New Silk Road’), first figures show that such warnings were not without basis: 90% of Chinese funded infrastructure projects went to Chinese contractors, whereas multilaterally funded (World Bank, Asian Development Bank) BRI projects saw a much more even distribution of contracts between local, Chinese and third-country suppliers. (Source: CSIS, Washington).
Externally, the Indian giant is finally moving to counter some of the political and security related inroads of China in the Asia Pacific. Right after his brief appearance at Davos, Prime Minister Modi received in Delhi the heads of the 10 ASEAN (Association of South-East Asian Nations) countries with a ringing appeal to the greater Indo-Pacific area. First used in Australia and Japan, then picked up by Trump, the Indo-Pacific has become a sort of Asian code for structures and general cooperation not involving China. Lagging far behind in commercial (India-ASEAN trade is not even 10% of Chinese-ASEAN exchanges) and in financial terms (no Indian infrastructure financing or bond underwriting), Delhi tries to make up against its neighboring nemesis to the North with offers of defense cooperation and an appeal to democratic values. It is helped in this by the ever more aggressive stance of Beijing in the South China Sea, where Chinese Coast Guard Vessels – rather than involved in life-saving and helping with disaster control as behooves any Coast Guard – are behaving as de-facto marine armed forces, squeezing out ASEAN fishing boats and fortifying hitherto uninhabited islands.
On the Eastern horizon a commercially invigorated Japan is actively at work to counter Chinese influence, on one track involving the US in the form of the Japanese inspired ‘The Quad’ (USA, Japan, Australia, India) axis, but not hesitating to dismiss Washington’s currant policy on a second track involving Free Trade. During the Davos week the remaining members of the TPP (Trans Pacific Partnership) FT-Agreement issued a formal declaration that they would sign the agreement in March. Such second signing has become necessary following Trump’s withdrawal from TPP that Obama signed for the USA in 2016.
If the Trump administration had hoped that its ’America First’ policy would effectively block multilateral cooperation world-wide, it will thus have to think again. ‘Going around (Trumps’) America’ wherever and whenever possible was the dominant undertone at Davos, too. Every one of the Presidents and Prime-Ministers in Davos took special care to stress their commitment to international cooperation with regard to commerce and climate. This included also the tenors of the EU, first among them French President Macron who set the tone with a side-remark indicating that they Trump and his cohorts should be seen as obnoxious children rather than an existential threat to the liberal order that has underpinned global progress since the 2nd WW.
Very much into this picture fitted also a speech by the British chancellor – he who controls the budget – who suggested in a speech before British business leaders in Davos that the UK should seek post-Brexit ‘closest possible relations with the EU’ , ‘for the societal benefits of continued cross-border flow of ideas, goods, services, people and capital’. Philip Hammond said in other words that the only solution was continued adherence to all facets of the single market which far outweighs any possible benefits of a US-UK special relationship. In contrast to Theresa May’s sparsely attended plenary speech and get-together with Trump (‘we stand shoulder to shoulder’), it was refreshing to hear that cross-channel the British version of obnoxious children, Boris and his gang, have not succeeded defeating all British common sense.
Picture: Moritz Hager