ONE WORLD TWO SYSTEMS – collisions or freeing of positive forces?

There is a lot going on right now. Domestically the Chinese have started moves to open their economy. The automobile industry is allowing foreigners greater equity shares in a move that suggests the technology balance has been achieved and they are prepared to allow foreign car companies more open access, but that is probably a reciprocal approach. So look for moves in both directions, especially in and with Europe.


The big changes in opening up are just beginning but their scale depends on how much of a threat the USA present to China. For sure the Chinese will open more to those nations who are friendly.


Hainan island has been designated one total Free Trade Zone, which makes this large island on the edge of the South China Sea potentially as significant as Hong Kong and Taiwan.  Now there is a long term string of pearls.


China’s development of the Maritime aspect of BRI links with modification potential of the China Pakistan Corridor.


These two are a backdrop for Chinese and Indian discussions to create a new partnership which might deter India from working so actively with Washington’s new Asian Nato “Quad” organisation – of the USA, Japan, India and Australia.


At the same time the US – China trade “war” shows no sign of abating. The blocks imposed by the USA on ZTE is killing major deals by ZTE in the UK and will likely speed up Chinese import substitution for chips and other areas where they are dependency on the USA, in particular, for their back room processing of their financial services industry.


The USA moves are either to strike a long term blow at the rise of China, or to create the base line for a negotiation with China on China’s rise and the USA role in Asia. Either way the USA moves are long expected and planned for by China.


Whilst China is prepared for a deal with the USA, it is not going to be like deals the USA has been able to force on other weaker nations.


We are on a blink trajectory for the moment. Then we will see how far the USA is planning to go. China is clearly perceived as major long term threat to the USA. But are they too late to do anything about it short of war, and can they manage their economic interests in the context of a war?


This context is one I wrote about from 7 to 8 years ago. We are now there.


We should notice that Macron has been loudly talking about European initiatives and participating in the USA coalition for strikes on Syria. But Germany has largely been silent as it continues quietly to open its economic dialogue with Russia.


In the end there are many key regional interests that may prove more significant than the USA global moves. Japan may respond to China’s openings to work together with South Korea. India could respond to initiatives to recast the South Asian region with China. Europe could respond to China initiatives to open the huge new Silk Roads opening the Eurasian continent after centuries of quiet.


So when one reads the headlines we need to stay aware of the big pictures.


The UK and France seem closely aligned with the USA but we shall see how far their interests are served in which directions. Interesting times.


The Chinese main contradiction is finishing the emergence of the Chinese socialist economy while meeting its people’s needs for much greater equality in the sharing of the national wealth. A new welfare deal is the easiest way to deal with this around the use of dividends and corporate responsibility for delivering a modern welfare system. Vice Premier Liu He seems to be at the helm of this reporting directly to President Xi.


Outside China, it is the contradiction of the managing of the relationships with the old managers of the world and enabling a new global strategy of nations working together for a shared future, based on a cohesive approach to sustainable economic development to rid the world of poverty, and based upon sharing in a reasonable way. Vice President Wang Qishan seems to be at the helm of this reporting directly to President Xi.


These two areas are going to take 10-15 years to work through – hence the removal of time limits on the Presidential term. In the background Wang Huning is another Party heavyweight of significance advising on the balancing of these two primary contradictions for China. And he sees much through the vista of BRI.


So see the wood for trees. China is changing into a new socialist form which could affect global national systems for generations to come. And China and the USA are entering a vital stage in determining if the world will evolve or stay the same as it has been for the last 300 years.


It may be 10 years before the outcomes are clear with many moves up and down before then.


The UK and France may wish they could move more fluidly in this time. They may want to protect the old world. That may be possible.


The USA has the big decisions to make. They have led the world since early in the last century. Are we seeing their changing role emerging or can they retain global leadership, or just the first among equals?


And what role will Europe, Japan and India have in this story? Let alone Russia, Iran, Turkey, Saudi Arabia. The USA cannot fight on all fronts simultaneously. It cannot allow its corporates’ global markets to be undermined and disrupted. So we shall see a period of moves and countermoves. But one thing is for sure, China will quietly delink from USA dependency. And that could hurt USA companies.



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