But our position is not strong—and will only weaken further when we leave the European Unionby George Magnus / April 9, 2018 / Leave a comment
As March 2019 draws ever nearer, the UK government, parliament, and the rest of us are wondering what sort of future role Brexit Britain might play in a troubled world. Inevitably, we all look to the opportunities—and risks—in Asia, the world’s most economically dynamic and politically dangerous region. Although we Brits are no strangers to Asia our imperial past is long gone. We built our future closer to our European home and now play a relatively minor part on the rising continent. Today, it is Xi Jinping’s Asia, and we will need to think our economic and political strategy through very carefully.
China is the dominant economic power in the region and, like imperial China a long time ago and other regional hegemons in the 19th and 20th centuries, is using its economic leverage to coerce regional neighbours—covertly or otherwise—and those looking in from the outside to advance its economic and political goals. In older times, trade and commercial privileges would be granted or withheld according to a system of tribute in which other countries would offer diplomatic favours, gifts and so on. Today, a modern equivalent is plain to see. In recent years, China has taken action against Norway, Japan, the Philippines, Vietnam and South Korea when they have fallen foul of Beijing’s wishes, and there is every reason to expect this to persist.
China is reorganising and building up its military, especially naval, capabilities, and is pursuing an unashamedly nationalistic and protectionist industrial strategy to be a global leader in technology in the next decade or so. It has about 17 free trade agreements, overwhelmingly with Asian and Oceanic countries. It is trying, not without difficulty, to form a new multilateral agreement called the Regional Comprehensive Economic Partnership. It was the driving force behind the establishment of the New Development Bank (originally known as the BRICS Bank), and the Asian Infrastructure Investment Bank—both viewed as alternatives to US and Japanese-run Bretton Woods institutions. Xi himself is the creator of the Belt and Road Initiative, China’s most assertive strategy to promote its own geopolitical footprint in Eurasia and beyond, and its own economic governance model.