How Washington and Beijing can find common ground

With Donald Trump’s election, China and the United States could be on a collision course. The US president-elect promised during the campaign to label China a currency manipulator, instruct the US trade representative to bring trade cases against China in the World Trade Organization, and threaten 45 per cent tariffs if China does not renegotiate trade agreements with the US. Meanwhile, China pursues a military buildup in the South China Sea designed to diminish US influence in Asia.

As Trump addresses trade and the other issues on the US-China agenda as president and not candidate, he may find it useful to look for areas where the two countries could work together. One opportunity ready to be explored is the vision promoted by both Beijing and Washington of the need for more economic and infrastructure connections between East Asia, South and Central Asia, the Middle East and Europe.

Two concepts are in play: China’s One Belt One Road, or OBOR initiative, a multibillion dollar programme to build ports, railways, roads, power plants in and around 60 countries and the more modest, but still important, the American New Silk Road initiative, or NSR.

In July 2011, then Secretary of State Hillary Clinton spoke in India about the benefits of linking Central Asian economies with those in South Asia, with Afghanistan and Pakistan in the centre. Increased regional economic connectivity, she argued, would promote sustainable economic growth, a crucial part of the effort to defeat extremism. In September, the US convened NSR ministerial meeting in New York and China expressed enthusiasm for the project. Obstacles then emerged. The Chinese said the name New Silk Road “belonged to China” and “Historic Trade Routes” would be a better name for the US initiative. In 2013, Chinese leaders responded with a Silk Road initiative of their own: One Belt One Road consists of two main components – a land-based Silk Road Economic Belt and a sea-based Maritime Silk Road – which Chinese leaders believe will together change the geostrategic and geo-economic face of the region.

In August 2016, Chinese President Xi Jinping announced that more than 100 countries and international organisations had committed to participate in OBOR. According to Chinese press reports, OBOR is supported by $40 billion from China’s Silk Road infrastructure fund, $100 billion in Asian Infrastructure Investment Bank pledges, and an initial $50 billion commitment from the New Development Bank of the BRICS countries – Brazil, Russia, India, China and South Africa – with a promise to increase that to $100 billion.

The US and Chinese projects are currently on separate trajectories. American officials maintain that they support OBOR, though the US is rightly wary of projects that enhance China’s military capacity. And the United States cannot match the dollars or yuan pledged or spent.

That said there are several strategic, regional and commercial benefits to additional US-China cooperation around the OBOR and NSR initiatives.

For example, the September 2016 US-China Summit in Hangzhou highlighted Afghanistan as an “area of cooperation.” The two countries share an interest in an Afghan state in which Al Qaeda and the Daesh find no havens, drug exports shrink, and private sector-based economic activity increases. A coordinated OBOR-NSR effort to create what Afghan officials once called an “Asian Roundabout” to encourage a sustainable Afghan economy would promote these shared goals. The recent opening of a rail line from the eastern coast of China to the northern Afghan city of Hairatan, offers Afghan exporters an alternative route to Asia with dramatically reduced transit times.

Another area of potential cooperation is in Pakistan, where China and the US want Pakistan to support regional stability, grow their economy and undermine extremism. China’s $51 billion commitment to the China-Pakistan Economic Corridor (CPEC) is designed to build highways, railways and energy generation in Pakistan, including a proposed rail and highway between Pakistan’s port at Gwadar and China’s northwestern region of Xinjiang, which would also connect the OBOR to China’s Maritime Silk Road project. Pakistanis hope the corridor will create 700,000 jobs by 2030, which should provide alternatives to extremism for some of Pakistan’s 190 million people, a majority of whom are under the age of 22.

The possibilities of joint efforts inspired by OBOR and NSR present the incoming administration with a strategic opportunity to improve US-China ties, advance common security interests, and create economic opportunities for American business. Success would bring tangible benefits to a region where further state failure would surely fuel extremism, a threat to both the US and China. And, not least, there would be something positive on President Trump’s already contentious agenda with China when he takes office in January.

Marc Grossman is a Vice Chairman of The Cohen Group. -YaleGlobal

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