The international community needs to reestablish a world order based on rules as the rise of China coincides with the decline in European and American power, according to business and politics experts.
Credit Suisse Global Supertrends Conference — and the consensus was clear: Instead of “demonizing” Beijing or using military power, other major economies should welcome the opportunity to recommit to and rewrite international statutes.
That is, China has benefited from existing technology, but with intellectual property issues now at the forefront amid its trade war with the U.S., it needs to sign onto and adhere to agreements, they added.
“I think that we need rules more than ever before,” said Anthony Gardner, former U.S. ambassador to the European Union. “We should be able to manage our differences properly. We need rules, not military power, to help manage the rise of China, and to manage the inevitable decline of the United States.”
Ho Kwon Ping, the multimillionaire founder of Singapore-based hospitality group Banyan Tree Holdings, agreed, pointing to the risk of “the whole notion that the rising power and the declining power must come into conflict,” saying it creates a “self-fulfilling prophecy.”
“I totally agree with the idea that there must be a new rules-based order,” he said, adding that China’s perspective is that many current international statutes were created when it was “not at the table” as a global leader. At the same time, Ho acknowledged that China has managed to work the existing world order to its own advantage.
Still, the hotelier cautioned that it would be “dangerous” for China to be the rule maker, suggesting that it has to “help” set some of the new rules.
“We, the rest of us all, civilized countries, manage the rise of a ‘rogue player’ that is now upending all the rules — I don’t think China likes that kind of concept,” he said. “The world should accept the ascendancy of China, embrace it, make sure we minimize some of its more outrageous behavior, but at the same time integrate China into a new world order in which it plays a great role.”
In managing trade practices surrounding China, Gardner said the U.S. should see the European Union as an economic ally.
“We should be working with the EU together more than we have even in the past in bringing more cases to the (World Trade Organization) … which clearly has problems in dealing with China. Instead we are fighting with the EU,” he said, referring to U.S. President Donald Trump’s ongoing trade complaints about the bloc.
The ambassador also told CNBC’s Martin Soong that both the U.S. and the EU agree that Beijing should roll back certain practices, such as the forced transfer of technology from foreign firms to their Chinese partners, and restrictions on market access to overseas companies.
“We agree on 90 percent” of the issues about China, Gardner said. “What we should be doing is work with the EU more, not threatening the EU saying we’re going to put tariffs.”
Credit Suisse said in a report issued at its Singapore conference, that the rise of global trade disputes is “one of the most obvious results from the increase of populist governments.”
Citing World Trade Organization figures, the bank said 137 new trade-restrictive measures have been introduced between October 2017 and 2018, affecting $ 588.3 billion of trade. That’s seven times more than the year-ago period, it said.
The rash of trade conflicts “goes hand in hand with geopolitical challenges, the decline of the Western dominance (politically and economically), the emergence of a new world order, and the raise of new, groundbreaking and powerful technologies,” the report said.
Meanwhile, the U.S. and China are set to meet again for another round of trade talks in Beijing on April 30.