Mandate of Heaven? Trans-Pacific Partnership vs. the Regional Comprehensive Economic Partnership

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Mandate of Heaven? Trans-Pacific Partnership vs. the Regional Comprehensive Economic Partnership

Part Two of Three

Robert B. Scaife

“The winner becomes king, the loser becomes outlaw” (”成者為王,敗者為寇“).

— Popular Chinese saying

On the surface the TPP is just a trade deal, albeit a grand one, that has been hailed as the most significant step toward trade liberalization since the WTO Uruguay round in 1994. However, the TPP is about political and economic dominance in Asia as much as it is about trade liberalization. According to those involved, there were many sticking points in arriving at consensus with the TPP, however the formation of the PRC-led Asian Infrastructure Investment Bank (AIIB) (and Beijing’s move to mold investments in Asia to their favor) seemed to be the impetus to form a consensus to counter Beijing’s growing dominance in Asia.

The U.S. along with 11 countries around the Pacific parties (United States, Australian, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, Canada, Mexico, and Japan), the TPP would have historically been the largest regional trade deal ever considered, covering nearly 40% of global GDP and over 30% of world trade. Contrariwise, the Beijing-backed Regional Comprehensive Economic Partnership (RCEP) is smaller economically. It covers 16 nations (10 ASEAN member states plus Australia, People’s Republic of China (PRC), India, Japan, South Korea, and New Zealand), and would account for roughly 30% of global GDP and more than a 25% of world trade.

The TPP and RCEP should be viewed in the context of two competing world-views that are, at their heart, antagonistic with each other. First, the United States is not willing to give up its Pacific hegemony due to its myriad interests and number of close allies in the region. Additionally, the United States has accused the PRC of currency manipulation in keeping the Yuan artificially low, subsidising industrial resource inputs to undercut US industries, and exemptions from taxes that provide an unfair advantage to Chinese exporter, et cetera. These accusations, of course, are a violation of World Trade Organization (WTO) rules on unfair trade practices.

Forecasts for the impact of TPP look at a variety of economic assumptions, with one study from the Peterson Institute for International Economics that suggests that the ratification of the TPP would have $77.5 billion increase in US income gains alone by 2025 with the other TPP partners earning $259 billion. Additionally, the PRC and Hong Kong would be excluded from $47.5 billion in income over the same period. The underpinnings of the TPP is an effort to liberalize trade and to forestall a cession of Asian-Pacific primacy to the PRC.

 

“Your aim must be to take All-under-Heaven intact. Thus your troops are not worn out and your gains will be complete. This is the art of offensive strategy.”

”故善用兵者,屈人之兵而非戰也,拔人之城而非攻也,毀人之國而非久也,必以全爭於天下,故兵不頓而利可全,此謀攻之法也“

— Sun Tzu, The Art of War, Chapter III, Line 11

 

The underpinnings of PRC policy, however, are motivated by the ancient cultural idea of tianxia (天下), literally “under heaven,” which in classical Chinese political thought the Emperor was styled at the “Son of Heaven” (天子), having received the “Mandate of Heaven” (天命), and would therefore be the ruler of the entire world. Two places within modern Chinese politics where the idea of tianxia manifests itself is within the slogan/ideology of the “China Dream” and the “One Belt, One Road” (OBOR) (一带一路) or “New Silk Road” strategy.

With regard to Xi Jinping’s “China Dream” (中国梦) as part of a larger discussion on Chinese identity, thinking, and values, analysts see three future scenarios for the “China Dream”: a slogan that will lose relevance over time; an idea that develops on par with that of the “American Dream”; or the beginning of a “reconstruction of a distinctive Chinese ideology with wide-ranging ramifications for national identity.”  The adoption of a slogan that undergirds a new Chairman’s administration is nothing novel (e.g. Hu Jintao’s “Harmonious Society” [和谐社会]); however, what is novel about the “China Dream” is how it has been linked to a previous administration’s ideology and Confucian thought.

One can also see the “China Dream” as an appeal to patriotic elites and another ultimate failure (as was, Hu Jintao’s hexie) due to the fact that growing sentiments of individualism with remain subservient to government control. Coupling the idea of a “China Dream” with that of the persistent imperial ideology of a tianxia worldview, China sees its rightful place as a leader in the world and the hegemonic power in East Asia. The “China Dream” can be considered as part of a growing Sino-centric statist ideology that is attempting to rejuvenate the past glories of Imperial China, especially with regard to the OBOR project.

The Silk Road Economic Belt and the 21st-century Maritime Silk Road (丝绸之路经济带和21世纪海上丝绸之路), or OBOR, is seen by many analyst as a response to a growing perception of dependence and vulnerability of the PRC’s domestic economic development to externalities in its region. OBOR is presented as a comprehensive and centralized development strategy rather than one that is explicitly Sino-centric. Understanding the primacy of domestic politics within the PRC, with foreign affairs coming to the fore in support of domestic policy, this makes sense. Nevertheless, when looking at OBOR within the framework of a growing tianxia ideology, an “inward looking, domestic focused” PRC looking at the exploitation of the global economy to stimulate the Chinese economy and to ensure the stability of the PRC political-economic system makes perfect sense.

All of this is part of a growing call by political elites in the PRC for a rejuvenation of China’s past power and glory. In doing so, the PRC seems to be pursuing what Prof. Fei-Ling Wang describes as a “Four-R Strategy” regarding the US: Resisting, Reducing, Replacing, and Reordering. In a 2015 paper for the Foreign Policy Research Centre in New Delhi, Prof. Wang states, “China’s four-R strategy is deeply rooted in a peculiar Chinese traditional and ideational foundation for the making of Chinese foreign policy. It is also necessitated by the current Chinese politics. Essentially, it is for the rising China to counter the American power so to safeguard Beijing’s core interest of political survival and regime security.”

The TPP and RCEP tell the tale of two wholly divergent views for the future of geo-politics. The TPP seeks to rebalance the Pacific economy, however effectively is unknown, in favor of the United States and Western-friendly states. In effect, the TPP seeks to maintain the status quo. RCEP seeks to reorder the Pacific balance of power more in the PRC’s favor; that is not to say that the PRC necessarily would like be a “superpower,” but it is actively seeking to act as a hegemon in the Asian-Pacific theatre and acting as a bulwark against what it sees as pernicious meddling by the West (if one is so inclined, there are libraries full of books and articles on the effect that humiliation had on the psyche of post-Qing dynasty/post-Tongzhi Restoration China).

Whichever trade policy wins out could potentially set the economic agenda of the world for a decade or more. What the new administration should be asking itself is if it wants to resist the PRC influence in the global economy and in Asia-Pacific; or, alternately, would it like the US to be subsumed and finally integrated with a PRC led global economy. I am not saying the TPP is perfect by any means, but if the President-elect wants to kill the TPP, perhaps he should talk with the signatory states and come up with a way to make the treaty more palatable for the American people.

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On January 16, 2017
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