The Rise of China as a Global Political Powerhouse

At a Glance

  • Ian Bremmer says Xi Jinping speech a "game changer"
  • Paris Climate Accord, TPP will go ahead without U.S.

Speaking at CME Group’s 2017 Global Financial Leadership Conference (GFLC) in the session on “Globalism, Populism, and the Wave to Come”, Ian Bremmer, President and Founder of the Eurasia Group, spoke about the rise of China’s political ambitions.  He noted that China may have only 60 percent of the GDP of the United States; yet China is actively taking the initiative to magnify its economic clout and share the stage with the U.S. as a global political giant.

Bremmer noted that in his long career as a political analyst, he had witnessed only two game-changing political speeches.  The first was in December 1991 when Mikhail S. Gorbachev, then President of the Union of Soviet Socialist Republics (USSR), gave his resignation speech in Moscow and effectively ratified the end of the USSR and the independence and sovereignty for the republics.  For Bremmer, the second game-changing speech came in November 2017 with the address of Chinese President Xi Jinping’s speech at the Asia-Pacific Economic Cooperation (APEC) summit in Da Nang, Vietnam.

Xi argued that “Over the last few decades, economic globalization has contributed significantly to global growth. Indeed, it has become an irreversible historical trend … In pursuing economic globalization, we should make it more open, more inclusive, more balanced, more equitable and more beneficial to all.”

What made the Chinese President’s speech a game-changer was the context.  He followed U.S. President Donald J. Trump, who struck a sharp note in criticizing countries guilty of “chronic trade abuses.”  And, the U.S. President pointedly took pride in removing the U.S. from multi-lateral agreements, such as the Paris Climate Accord and the Trans-Pacific Partnership (TPP), arguing that what was in the best interests of the U.S. was to pursue bi-lateral trade arrangements.

In all likelihood, the TPP will go forward without the U.S., as will the Paris Climate Accord.  According to Bremmer, pulling out of these multi-lateral arrangements does not hit the U.S. very hard economically and do play to the rise of populism and nationalism spurred in part by a sense of inequality in the American public.

For China, the pullback of the US from global leadership is an unparalleled opportunity to fill a vacuum and to move the needle on China’s place in the world order – literally to fill the gap being left by the U.S.  For Bremmer, there is no doubt that this is good politics in China, and takes a critical step by President Xi to change the game such that China is the global voice for openness and inclusiveness.  What the future holds is not clear; however, the world order has irrevocably changed with new reality of the return of China as an effective global political leader after an absence of several centuries.

Bluford (Blu) Putnam has served as Managing Director and Chief Economist of CME Group since May 2011. He is responsible for leading economic analysis on global financial markets by identifying emerging trends, evaluating economic factors and forecasting their impact. Prior to joining CME Group, Putnam gained more than 35 years of experience in the financial services industry with concentrations in central banking, investment research and portfolio management. He has authored five books on international finance.

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