Global Glance: January 30, 2017
A quick look at intriguing international stories
By John Bostwick, Managing Editor, Radius
Is the US About to Play the Part of the Buffalo Bills to China’s New England Patriots?
Going into their final 2003 NFL regular-season game, the New England Patriots were 13-2, but they were hardly an NFL juggernaut. They’d failed to make the playoffs the previous year. The team they were about to play — the Buffalo Bills — had trounced them 31-0 on opening day four months earlier. And their lone championship (after the 2001 season) came in a game that could have gone either way, with a pedestrian Patriots roster that led their coach to say afterwards, “Can you believe we won the Super Bowl with this?”
In an interesting coincidence, the Patriots pasted the Buffalo Bills by the same 31-0 scoreline in the 2003 regular-season finale. Hall of Fame coach and announcer John Madden said near the end of the broadcast: “These are two teams going in different directions.”
I quote Madden from memory, but his drift was clear and he was undoubtedly prescient. Since 2003, the Patriots have won 12 of 13 AFC East championships and are favored to win their fifth Super Bowl this weekend. Meanwhile the Bills — who’d dominated the AFC for much of the previous decade — have finished above .500 only twice during that stretch, never winning more than nine games in a season.
I go into this because I live in New England and Super Bowl talk is (as usual around this time of year) rampant, and because I recalled Madden’s comment when reading about Chinese president Xi Jinping’s speech this month in Switzerland at the World Economic Forum. Xi’s speech, when read in light of President Donald Trump’s inaugural address, may signal that China is headed in a new direction, as is the US. Unfortunately for us Yanks, some feel the US is in effect about to play the part of the 2003 Bills to China’s 2003 Patriots — Trump’s “vague friendship” with Pats quarterback Tom Brady notwithstanding.
It goes without saying that the US has been an economic, military and cultural powerhouse since the Second World War. For decades, the term “leader of the free world” has been synonymous with the US presidency. This unofficial title is, of course, a sledgehammer hint as to why much of the world views the US as arrogant and selfish, a charge that can be difficult to counter given that, among other facts, Americans comprise less than five percent of the world’s population and use about 25 percent of its natural resources.
Then again Americans are, according to one 2016 study cited by The Boston Globe, “by far the most charitable [citizens on Earth] — roughly twice as generous as Canadians, Spaniards and the Irish, for instance, and more than 20 times as apt to give as Germans and Italians.” The US also has a history of helping other countries. Following World War II, to take the archetypal example, the US gave nearly $13 billion (or about $130 billion in today’s currency) to devastated European nations under the Marshall Plan. Incidentally, one of the Plan’s three goals outlined to the US Congress was “the reduction of barriers which hamper trade.”
China on the other hand has been characterized lately by insularity, even as it challenges the US as the world’s leading economic power. A Guardian article explains that, domestically, President Xi has “[rooted] out unwelcome foreign influences, such as freedom of speech and western-style democracy.” This mistrust of outsiders extends to foreign businesses. As a Time article points out, “Large sections of the Chinese economy are closed off to foreign trade, its leviathan state-owned enterprises (SOEs) enjoy such preferential treatment to render competition meaningless, and … the landscape for foreign investment is deteriorating.”
China’s foreign policy record has been similarly self-serving. Here’s Thomas E. Kellogg in an article published last week in The Diplomat: “Too often, Beijing views international crises through the prism of its own self-interest, and as a result gives short shrift to the needs of the international community and the international system.”
As mentioned, these trends involving the US and China appear to be shifting. One of Donald Trump’s first acts as president was to pull out of the Trans Pacific Partnership, a deal that was strongly supported by former president Obama and that, according to Greg Ip of The Wall Street Journal, reflected “the expansive American model of free trade — rather than China’s narrower variant.”
Ip’s article was published less than two years ago but now reads like ancient history. Trump’s inaugural address proclaimed an American economic strategy that, far from being “expansive,” is now narrowly, aggressively focused on the US’s own interests. Trump proclaimed that under his leadership, “Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families.” He and his cabinet, he said, “will follow two simple rules: Buy American and hire American.” In case anyone missed the point, he added, “At the bedrock of our politics will be a total allegiance to the United States of America.”
Trump’s speech came just two days after President Xi spoke at the World Economic Forum in Davos, Switzerland. By all accounts that I’ve read, Xi’s speech was a bizarre contrast to Trump’s, as the Chinese leader emphasized openness and cooperation. Fortune reports that “Xi called for ‘inclusive globalization’ and for global unity, saying ‘self-isolation will benefit no-one.’” Fortune adds that “China's cabinet issued measures to further open the economy to foreign investment, including easing limits on investment in banks and other financial institutions.”
An Economist article neatly captures the historical-political absurdity of the Davos event, which included a “fawning reception given to China’s leader” by Forum delegates that “lapped up” his speech. Remember, this is a leader that Andrew Nathan of The New York Review says “has reinstated many of the most dangerous features of Mao’s rule: personal dictatorship, enforced ideological conformity and arbitrary persecution.”
But back to Xi’s Davos speech: “Here,” the Economist article marvels, “at a time of global uncertainty and anxiety for capitalists, was the world’s most powerful communist presenting himself as a champion of globalization and open markets.” That article points out that Xi didn’t mention Trump’s name in his comments, but addressed him indirectly, saying, “No one will emerge as a winner in a trade war.” Xi also compared “protectionism to ‘locking oneself in a dark room.’”
Martin Wolf of The Financial Times provides more quotes from Xi that stand in contrast to Trump’s protectionist, America-first rhetoric. Xi, Wolf notes, argued that “blaming economic globalization for the world’s problems is inconsistent with reality” and that “globalization has powered global growth and facilitated movement of goods and capital, advances in science, technology and civilization, and interactions among people.”
Many Republicans (who tend to promote free trade) in Congress would side with Xi, not with their own president, on the subject of globalization. Wolf for one is baffled by Trump’s inward-looking trade strategy, saying, “Who would have imagined that primitive mercantilism would seize the policymaking machinery of the world’s most powerful market economy and issuer of the world’s principal reserve currency?” Wolf states unequivocally that “Mr. Xi’s vision is the right one.”
I won’t try to summarize all of Wolf’s points, but I urge you to read his article. I’m no fan of economists — who, it’s said, exist to make weathermen look good — but Wolf writes convincingly on the subject of Trump and Xi and their respective visions about globalization. And I take Wolf seriously when he writes of Trump’s economic advisors: “The frightening fact is that the people who seem closest to Mr. Trump believe things that are almost entirely false.” Wolf closes by saying that Trump’s protectionist stance will likely either undermine the global structure the US has largely created or open the door for a new hegemonic power. (That would be China in this case, not the New England Patriots.)