China’s plan for world domination

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PM Malcolm Turnbull says the TPP could still go ahead, with the possibility of China joining the deal.

Donald Trump’s scrapping of the TPP could mean big things for China.


THE withdrawal of the US from the Trans-Pacific Partnership came as a huge blow to Australian producers.

With the stroke of his pen and a smile, US President Donald Trump lived up to his promise of killing the TPP between America, Australia, New Zealand and nine other Pacific nations.

Prime Minister Malcolm Turnbull says he’s not giving up, this week insisting he remains committed to the pact to boost jobs and economic growth.

Former Labor prime minister Kevin Rudd endorsed the pact, saying it’s a good idea to keep it alive, and making an additional suggestion.

“Throw it to the Chinese as an invitation,” he told an Asia Society forum in New York. “It’s World Trade Organisation-plus.”

As it becomes increasingly unlikely that the US will rejoin the TPP, China is emerging as a rising superpower, keen to become a key player in the world economy.

If its grand global plan comes to fruition, it could dominate the world stage.

CHINA’S PLAN FOR WORLD DOMINATION

For the past three years, China has been pursuing an ambitious geopolitical plan known as the “One Belt, One Road” initiative.

The development strategy, widely regarded as one of President Xi Jinping’s signature propositions, seeks to connect countries across continents on trade.

Unlike the TPP, it centres on China and is largely focused on being of financial benefit to poorer Asian countries, and includes various global infrastructure projects.

Chinese President Xi Jinping has been pushing the One Belt One Road initiative since he came to power.

Chinese President Xi Jinping has been pushing the One Belt One Road initiative since he came to power.Source:AFP

The ambitious plan involves building ports and creating a 6000-kilometre sea route connecting China to South East Asia, Oceania and North Africa (the “Maritime Silk Road”), as well as through building railway and road infrastructure that would connect it with Central and West Asia, the Middle East and Europe (the “Silk Road Economic Belt”).

The project is popular in China, with support for it seen as mandatory for Chinese officials who want to move up the career ladder and prove their loyalty to President Xi Jinping.

Unlike the TPP, there are no restrictions on collaborations with other countries. Anyone can join, and in a 2014 address to Australian parliament, Mr Xi specifically said he “welcomed Australia’s participation in the Maritime Silk Road”.

Many countries have been reluctant to join the pact — but that was before Mr Trump entered the scene.

With his “America first” policy and his frequent criticism of global alliances, these countries may soon seek new “umbrellas” to fall under.

Mr Trump’s decision to destroy the TPP could therefore prove to be a great opportunity for China.

Beijing is hoping to use this strategy to exert influence over 60 countries — far more than the 12 countries that made up the TPP.

President Donald Trump’s withdrawal from the TPP could present huge opportunities for China.

President Donald Trump’s withdrawal from the TPP could present huge opportunities for China.Source:Getty Images

The difference, however, is that the vast majority of countries under China’s initiative are developing, and are in dire need of aid and money from China.

Some of the OBOR projects are massive. According to The Economist, officials say there are up to 900 deals under way, worth $890 billion, such as a rail link between Beijing and the German city of Duisburg, and a 3000-kilometre high-speed rail from Kunming, in the country’s southwest, to Singapore.

China has said it will invest a cumulative $4 trillion into the project, though it does not say by when.

Australian enterprises, banks and law firms have promoted OBOR as a positive economic opportunity.

A not-for-profit organisation called the Australia-China OBOR Initiative is pushing hard to see the framework extended here, saying it will have great benefits for Australian businesses and industries.

In a report, the ACOBOR says Australian businesses will be able to attract Chinese partners in major Australian-based projects.

It also says they can use the framework of the initiative to partner with Chinese enterprises in projects beyond Australia — both in China and the other 59 countries part of the Belt and Road.

WHAT’S IN IT FOR CHINA?

Over the past decade, China has increasingly become keen to solidify itself as a world power.

Already the world economy’s largest source of growth, the country has accounted for more than 60 per cent of all global growth over the past 15 years.

At the annual summit of the Asia-Pacific Economic Co-operation group in November last year, Mr Xi declared his country open for business.

“Openness is vital for the prosperity of the Asia-Pacific,” he said. “China will not shut the door to the outside world but will open it even wider.”

In stark contrast to Mr Trump, Mr Xi said China will “fully involve ourselves in economic globalisation”.

Former Labor prime minister Kevin Rudd has called on Australia to forge closer ties with China.

Former Labor prime minister Kevin Rudd has called on Australia to forge closer ties with China.Source:Getty Images

Last year, former World Trade Organisation chief Supachai Panitchpakdi stated that the OBOR initiative only served China’s interests.

Beijing has been accused of seeking to dominate smaller countries through its massive financial assets, by having long-term control of their infrastructure, resources and land assets.

China has also been accused of using the program as a way to further validate its claims to the disputed islands on the South China Sea, as well as to help its own security.

In October, The Lowy Institute’s director of the East Asia Program Merriden Varrall explained there were several reasons for China’s relentless pursual of power.

She said China sees its rise to power as a return to “the natural order of things”. They basically believe this is their fate or destiny — a view that extends from Mr Xi down to the poorest ranks of the country’s 1.3 billion population.

She also said it sees itself as Asia’s “father figure”, which is why the ambitious OBOR plan is focused on the economies of poorer countries.

“If you’re the father figure, the centre of this circle, you’re expected to protect and look after the others, and the others in turn are expected to show a certain amount of deference and respect to you,” said Dr Varrall.

This explains why China is so keen to economically open itself to the outside world — to make everyone take it seriously and see it as it sees itself: as the world’s biggest and most important power.

WHAT ABOUT THE RCEP?

With the loss of the TPP, Donald Trump has opened up a huge potential opportunity for Beijing to swoop in and fill the void in the region.

In addition to the OBOR, this can be achieved through the Regional Comprehensive Economic Partnership (RCEP), a 16-member regional trade agreement that includes Australia.

Its focus would be on loosening rules on cross-border investment and freeing up market access by getting rid of tariffs.

If China was to pursue and succeed in implementing this, the country could successfully upstage the US as the leader of regional economic order, solidifying its strategic power on a global scale.

Former trade minister Andrew Robb likened the TPP to a “difficult-to-unscramble omelet”, saying Australia should now focus on the RCEP deal instead.

“If that’s concluded this year that will put enormous pressure on the United States — not only trade pressure but also geopolitical pressure when the region starts to wonder who do they turn to for leadership,” he said.

Numerous experts have called for closer ties between Australia and China.

Numerous experts have called for closer ties between Australia and China.Source:News Corp Australia

But in an earlier interview with news.com.au, Weihuan Zhou, a law lecturer at UNSW, said this is unlikely to happen if the TPP is dead and buried.

“But China is only so active in pushing the RCEP because of the TPP, because of Japan’s role in the TPP,” Dr Zhou said.

“If the US withdraws from the TPP and the pact dies, China likely won’t continue pushing for the RCEP.”

Clearly, however, there’s a huge void to be filled now — and China looks primed to take the leading role.

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