Year of the Rooster: China struts its stuff around the world

As we enter the Chinese New Year, and as the US seems to withdraw from its global economic outlook with the election of President Donald Trump, the Republic of China is making some big moves in trade—seemingly intent on becoming the next global superpower.

Here are three of China’s current strategies, each of which could have a major impact on trade worldwide.

One Belt, One Road

Earlier this month, a bright orange train with 44 containers set off from eastern China, starting a 7,500-mile journey all the way to western Europe. It unloaded ten of these at Duisburg, Germany, before arriving at the Eurohub freight terminal in Barking, London—making it the first cargo train ever to arrive in the UK from China.

It’s part of China’s expanding rail cargo operations and the “One Belt, One Road” trade policy announced by President Xi Jinping in 2013, based in part on the historical Silk Road trade routes. It’s designed to connect China with the rest of Eurasia both on land and at sea, increasing China’s “soft power” across the continents.

China’s alternative to the TPP

Now that the US has pulled out of the Trans-Pacific Partnership (TPP) under the administration of Donald Trump, it’s become much more likely that China’s rival proposal, the Regional Comprehensive Economic Partnership (RCEP), will take hold.

China declined to join the TPP, spearheaded by the US, and has instead negotiated with the member states of the Association of Southeast Nations (including the Phillippines, Thailand, Vietnam and Malaysia), as well as India, Australia, Japan, South Korea and New Zealand, to take up its alternative free trade agreement.

Shinzo Abe, Prime Minister of Japan, has already indicated that the TPP is meaningless without the US. President Trump’s reasons for withdrawing were protectionist, but if the RCEP goes ahead, China may now strengthen its global trading position at America’s expense.

Control over the South China Sea

China is preparing to deploy a second aircraft carrier in the South China Sea, where the country has been waging ongoing territory disputes with Vietnam, the Philippines, Brunei, Taiwan and Malaysia.

China claims their territory extends to the so-called “nine-dash line” that encompasses much of the South China Sea and the islands within it, including the Parcel Islands and Spratly Islands. Vietnam, the Philippines and other bordering countries claim some of the territory as their own, while international players such as the US have pushed for freedom of navigation to protect the large volumes of international trade that pass through the region.

China has been building artificial islands in the sea and turning them into military and logistics bases. It’s part of a broad move by the country to dominate the region despite international backlash. The US has threatened to intervene, but some say it’s now too late to stop China’s plans going ahead.

This could have a major impact not only on global trade but on carefully-negotiated international law and security in the Western Pacific region, which includes Australia. It may also embolden China to pursue other strategic territories around the world.

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