APEC SUMMIT
Towards
Multipolarity
As China steps up its role as the global growth engine, the APEC
summit in Beijing opens a new
chapter in the geopolitical rivalry between the U.S. and a
Sino-Russian alliance for domination of Eurasia. By ATUL ANEJA
A string of
initiatives taken by the host, China, during the Asia-Pacific Economic
Cooperation (APEC) conference on November 10-11 have
reinforced its standing as a core pillar of the world economy. In partnership
with Russia, with which it signed a second mega energy deal a
day before the formal inauguration of the summit, China also poured more
concrete to strengthen the foundations of an emerging
multipolar world. While the mainstream media were applauding the deal between
China and the United States on climate change, which
followed the APEC meeting, to suggest that the Big-2, China and the U.S., were set
to commandeer the world, something much more
significant happened in Beijing under the nose of U.S. President Barack Obama.
In the Chinese capital, and in the presence of 21 leaders
of APEC, the coffin of a unipolar world, which emerged out of the catastrophic
collapse of the Soviet Union in 1991, was nailed. A new
chapter in the geopolitical rivalry between the U.S. and a Sino-Russian
alliance for domination of Eurasia opened.
China took
major steps to convey without ambiguity that it was stepping up its role as a
global growth engine. At the APEC chief executive
officers’ meeting, Chinese President Xi Jinping announced that Beijing would
invest $1.25 trillion in overseas projects in the next 10
years. This would nearly triple China’s existing direct investments abroad,
providing a significant stimulus to the international economy.
China’s
ambitious goals, though hard to achieve, are not utopian. Its overseas
investments last year alone totalled $108 billion, marking a sharp 23
per cent increase over the previous year. In the first nine months of this
year, there was a further increase of 22 per cent. If the current
trend persists, it is highly probable that from $660 billion—last year’s figure
of direct overseas investments—the magic aspirational
target of $1.25 trillion, stated by Xi, will be scaled by 2024.
Xi made it
clear during his address that instead of pursuing a zero-sum game, China
adopted a win-win strategy. He said that the Chinese
market would absorb imports worth $10 trillion in the next five years. An
estimated 500 million Chinese tourists were likely to travel abroad
during the same time frame, a situation that would bring substantial benefits
to the host countries. “China’s development provides
Asia-Pacific and the world with enormous opportunities and benefits; the
commercial opportunities are limitless and permanent,”
observed Xi.
Consolidation of Eurasia
With its
consolidation in Eurasia firmly in focus, China also announced that it would
pitch in $40 billion to revive the ancient Silk Road, radiating
from China, to Europe. Without bypassing Moscow, a state-of-the-art Euro-Asia
land corridor marshalled by Beijing promises to open new
growth centres, which are set to benefit from massive investments in
infrastructure. Expressways, railway tracks, fibre
optic lines,
mobile towers, energy pipelines and industrial parks could appear soon along a
route, which was the haunt of trade caravans,
missionaries, scholars and spies before the advent of maritime trade. Xi said
other countries were free to pitch into the $40 billion base
fund to develop the new Silk Road.
China also
proposes the revival of the Maritime Silk Route (MSR), starting from its
coastline in the Fujian province. By taking this initiative,
China hopes to revive a route taken by Zheng He, the 15th century Chinese
mariner, during his serial voyages in sections of the Pacific and Indian
Oceans. Officials in Fujian said China would finance the development of the
marine industry, including shipbuilding,
logistical infrastructure and industrial parks, in countries that participate
in the MSR initiative.
With funding
for such mega projects dependent at present on Western-backed financial
institutions, China has decided to form the Asian
Infrastructure and Investment Bank (AIIB). The move rebuffs the decision of the
International Monetary Fund (IMF) to limit China’s role
to a paltry 3.8 per cent of the votes. Little wonder then that the U.S. is
unhappy with the AIIB initiative, which will give China and its
partner countries far greater financial autonomy than they enjoyed earlier.
Officially, the U.S. said it had “concerns about the ambiguous
nature of the AIIB proposal as it currently stands”. But behind the scenes, a
seething diplomatic battle has ensued, visible in
the hectic U.S. lobbying to persuade allies such as Australia and South Korea
not to join the AIIB. This has been countered by the exertions
of Jin Liquin, the Chinese official handpicked for the top job in the bank, who
has shuttled between Beijing and other Asian
capitals to woo prospective partner countries for the initiative. Twenty-one
Asian countries, including India, signed a preliminary agreement on
October 24 to establish the AIIB. The bank is set to be open for business in
2015.
China scored
a major victory at the APEC conference, when all the 21 countries in the group
agreed to undertake a joint strategic study for the
formation of a Free Trade Area of the Asia-Pacific, marking the official
take-off of the FTAAP process. The FTAAP aspires to galvanise
Asia-Pacific’s economic integration with China as its centre. Under the FTAAP
framework, the Chinese visualise the formation of
a giant FTA, which will effectively scrap fragmented free trade agreements that
currently bind the Asia-Pacific economies. Xinhua, China’s
official news agency, reported Foreign Minister Wang Yi as saying that the
FTAAP “will help to integrate regional, bilateral and
multilateral cooperation mechanisms and reduce the risk of overlap and
fragmentation”.
The FTAAP,
frontally challenges the Tran-Pacific Partnership (TPP), a free trade proposal
steered by the U.S. The TPP glaringly excludes
China but includes top U.S. allies, including Japan and Australia in its
12-member star cast, giving rise to valid suspicions that the purpose
of the alliance is to seek China’s economic diminution. It is,
therefore, not surprising that China views the TPP as an “economic NATO [North
Atlantic Treaty Organisation]”, an extension of the U.S.-led “Asia
Pivot”, a military containment doctrine that draws additional U.S. troops into
China’s periphery in alliance with
partners that
include Japan, South Korea, Australia and the Philippines. China sees
the Silk Road integrationist initiatives and the formation of the AIIB and the
FTAAP as a strategic response to the military encirclement
and economic squeeze of it by the U.S.-led “Asia Pivot” and the TPP project.
In posting
its geopolitical riposte to the U.S.-determined inroads, China has found in
Russia a willing strategic partner. A fundamental shift in
their relationship took place when the NATO led the assault to assassinate
Libyan leader Muammar Qaddafi in October 2011. There is
enough literature available in the public domain to infer that both Moscow and
Beijing interpreted Qaddafi’s killing as an illustration
of “regime change” rather than as an advancement of “democracy”, under the
flawed notion of Arab Spring or a revolution for change.
With the U.S. intervention in Libya as the turning point, China and Russia
began their joint opposition at the United Nations Security Council
to legitimise the use of force against the government of President Bashar
al-Assad in Syria, which has been under severe
pressure from NATO and its allies in the Persian Gulf. Russia and China
recognised that the defence of Syria was essential to prevent Iran,
on the periphery of the Eurasian corridor, from becoming a victim of another “regime
change” push. So far the two
countries,
especially Russia, have prevented the fall of the Assad government, seen as the
first line of Eurasian defence, with Iran as the close
second.
The arrival
of Xi as China’s President in 2013, and his bonding with his Russian
counterpart, Vladimir Putin, has consolidated the Sino- Russian
alliance. China’s Silk Road initiatives that followed Xi’s arrival at the
centre stage, have imparted conceptual cement to fortify the Eurasian
corridor and prevent it from becoming a playground of the West.
A day before
the APEC formally kicked off, Xi and Putin oversaw the signing of a preliminary
agreement on another massive energy agreement
with China. The project can dwarf Europe as a consumer of Russian gas.
Russia's eastward pivot
The proposal,
marking Russia’s eastward pivot, has set a target of supplying 30 billion cubic
metres (bcm) of gas to China every year along the
so-called “western” or “Altay” route. This will supplement the proposed supply
of 38 bcm of gas to China through Russia’s “Power of
Siberia” pipeline passing along the “eastern route”. The “eastern route” deal,
worth $400 billion, was signed in May. Work on the project has
commenced. Aleksey
Miller, a senior member of Putin’s inner circle and head of the energy giant
Gazprom, announced that the deal would hedge Moscow’s
dependence on the European energy markets. “After we have launched supplies via
the ‘western route’, the volume of gas
deliveries to
China can exceed the current volumes of export to Europe,” he observed.
From an
energy security perspective, China is pushing for Russian gas supplies, sent
along a more secure land corridor, fearing that shipments of
oil and gas along the sea route are more open to disruption following the
announcement by the U.S. of its China-centric “Asia Pivot”
military doctrine. Putin’s
presence at the APEC summit resulted in another agreement that could allow the
China National Oil and Gas Exploration and Development
Corporation to pick up a 10 per cent stake in Vancorneft, which is part of
Rosneft, another Russian energy giant.
China and
Russia are also in the crosshairs of the U.S. because of their increasing
tangential shift from the dollar economy to rouble and yuan as
currencies to settle their trade transactions. Russia has
angered the U.S.’ powerful financial oligarchy by de-pegging the rouble to the
dollar and euro. The Russian bank VTB signalled its
intent to leave the London Stock Exchange for Shanghai. Russian energy giants
are already flocking to Hong Kong, which is set to become
linked to Shanghai directly. With their
relations with the U.S. structurally impaired, a military dimension of the
Moscow-Beijing partnership is acquiring greater salience.
Russia is now selling China its “game-changing” S-400 air defence missile
system and has plans to supply the superior S-500 missile
system, which is designed to intercept intercontinental ballistic missiles. As China
begins to enforce its plans to emerge as a powerful engine of the global
economy and a nerve centre of geopolitics in conjunction with Russia for the
defence of Eurasia, a collision of fundamental interests with the U.S. is
becoming inevitable. Post-APEC, the stage is
set for the emergence of a multipolar world, either peacefully through dialogue
or through an escalation of conflict with extremely
dangerous consequences, raising serious concerns about international peace and
security in the future.
(Published in Frontline.in)
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