Free trade agreement (FTAs) is the type of biliteral coperation between two or more

states. It facilitate free flow of trade , invesment ,economic integration, elimiating

tariff/restrictions on each other commodities.

Chinas President Xi in the Middle East: From U.S. Regime Change to Chinese
Economic Development?
By Dr. Dan Steinbock
Global Research, February 03, 2016
1 February 2016
Region: Asia, Middle East & North Africa
Theme: Global Economy

114
4 0
148

President Xi Jinpings three-nation tour in the Middle East heralds a shift from US regime change to Chinese
economic development.
President Xis tour took place amid a perilous moment in the region. Saudi Arabia is struggling with the plunge of oil prices,
rapidly rising debt and a war against Yemen. In Egypt, opposition is increasing against the perceived successors of
President Hosni Mubaraks three-decade long rule. In Iran, sanctions have been lifted after decades of international
insulation.
In one way or another, all three countries are also involved in Syrias civil war, battles against the Islamic State and regional
conflicts, along with Russia, the U.S. and European powers; the continuing Israel-Palestine conflict; and the economic and
religious Sunni-Shia friction which contributes to regional rivalries, splits several Arab states internally and has been
historically manipulated by foreign powers.
Xis tour signals a shift away from the divide and rule colonial legacies to economic development.
Economic development with Chinese characteristics
In his first stop in Riyadh, Saudi Arabia, President Xi met Saudi King Salman bin Abdulaziz Al Saud and Deputy Crown Prince
Mohammad bin Salman. It was the climax of longstanding rapprochement. Saudi Arabia established diplomatic relations
with China only after the Cold War in 1990. By the early 2010s, China supplanted the US as Saudi Arabias largest crude oil
client.
At the same time, bilateral trade has soared to $74 billion. China is Saudi Arabias largest trade partner. During Xis visit,
Saudi Aramco and Chinas Sinopec signed a $1.5 billion agreement for strategic cooperation. China also plays a role among
Saudi Arabias military suppliers.

In Egypt, President Xi met President Abdel Fattah al-Sisi, amid Cairos controversial measures to suppress the 4-year
anniversary of the 2011 uprising. Egypt was the first country in Africa and the Arab world to establish diplomatic
relationship with China in 1956. Nevertheless, bilateral strategic cooperation was initiated only in 1999 and a
comprehensive strategic relationship two years ago. In 2014, total bilateral trade amounted to $12 billion. Thats when
Beijing established a $100 billion economic and trade cooperation zone in Egypt. China is discussing potential investments
in large Egyptian infrastructure projects. Beijing is also expected to lend Egypts central bank $1 billion to assist its efforts
to shore up foreign reserves.
President Xis last stop was Tehran, where he met his Iranian counterpart Hassan Rouhani and the supreme leader Ayatollah
Ali Khamenei. Since 2011, China has been Irans leading customer for oil exports, even as the West ramped up sanctions
against Tehran. Iran, said President Rouhani, would not forget friends who helped us in a difficult time.
In 2014, bilateral trade amounted to $52 billion. China is Irans largest trade partner. In Tehran, the two countries opened a
new chapter in bilateral ties by agreeing to expand trade to $600 billion in the next decade. To Beijing, Iran is a critical
hub along the new Silk Road route. To Tehran, China means great economic opportunities in the post-sanctions era.
In brief, President Xis three-nation tour codified Chinas presence in the Middle East as a major energy buyer, major
importer, infrastructure builder, and peace broker.
U.S. history of regime changes
If Chinas effective presence in the Middle East began to increase in the early 21 century, the U.S. role originates from the
postwar era. After the 1945 Yalta Conference, which effectively divided Europe, President Roosevelts subsequent meeting
with Saudi King Abdel Aziz Ibn Saud led to a secret agreement, which required Washington to provide Riyadh military
security in exchange for secure access to supplies of oil.
For more than six decades, that pact prevailed, despite Washingtons periodic debates about US need for energy selfsufficiency. But in the past decade, it has begun to crumble with the U.S. shale gas revolution. Moreover, the spread of
terror and counter-insurgencies pose questions about the viability of interventionist policies in the Middle East. The US
approach has been predicated on strategic alliances and whenever such alignments have not been viable on regime
change.
st

In March 1949, the CIA sponsored the coup detat by Col. Husni al-Zaim, which overthrew democratic rule in Syria.
In 1953, the CIA helped Shah Mohammad Reza Pahlavi to remove the democratically elected Prime Minister Mohammed
Mossadegh, which destabilized Irans inclusive development for decades, paving the way to the 1979 the Islamic revolution.
During the 1958 Lebanon crisis, President Eisenhower first applied the doctrine under which the U.S. would intervene to
protect regimes it saw threatened by international communism. In the Kennedy era, CIA planned a coup against Abd alKarim Qasims Iraq.
With the 1970s energy crises, the proclivity for intervention intensified. During the Yom Kippur War, President Nixon
authorized a strategic airlift to deliver weapons to Israel, which led to decades of massive military aid to Israel, despite
continued settlement violations in the occupied territories. Meanwhile, the CIA armed Kurdish rebels fighting Iraqs Baathist
leadership.
Under Reagan, Washington sent troops to Lebanon during the Lebanese Civil War until the Beirut barracks bombing. During
the 1980s Iran-Iraq War, U.S. warships escorted Kuwaiti oil tankers against Iranian attacks, while attacking Iran to pressure
Tehran to a ceasefire with Iraq. In 1986, Libya was bombed in response to terrorism.
After the Cold War, the U.S. led a coalition to remove Iraq from Kuwait in the Gulf War. In 2003, U.S. invasion of Iraq toppled
the government of Saddam Hussein, unleashing a decade of instability and giving rise to the brutal Islamic State. In 2011
the U.S. participated in a Western coalition that launched a military intervention in Libya and covert operations elsewhere in
the Middle East. And when Syria was swept by a civil war, the U.S. joined in, along with France and the U.K.
The list of U.S. interventions in the region is long and bitter.
One region, two approaches
The historical roots of regime change originate from the 19 century imperialism and 20 century colonialism. In the Bush
era, regime change was an explicit neoconservative objective; in the Obama era, it has been implicit in assertive liberal
internationalism. As a result, America is not seen as an honest broker in the region.
In contrast, the Chinese approach builds on non-interference, stabilization and economic development. Historically, China
and the Arab world share a history of imperial disintegration, colonial humiliation and struggle for sovereignty and
territorial integrity. Although the relations between China and the Arab world go back to the 1955 Bandung conference of
the Non-Aligned Movement, economic cooperation began to intensify with the opening of the Sino-Arab Cooperation Forum
in 2004.
th

th

In the past decade, this cooperation has broadened on the back of economic cooperation. With the One Road, One Belt
initiative, it has potential to contribute dramatically to economic development. But while it differs diametrically from U.S.
policies,
it
is
not
positioned
against
U.S.
interests
in
the
region.
Indeed,
some

U.S. administration officials see the Chinese presence in the region as a

Iranian friction.

real opportunity to deescalate growing

Saudi-

What we are witnessing in the Middle East today and what President Xis tour signals is not just bilateral trade expansion,
but a new secular tend that heralds the rise of multi-polarity in the region.
Dr Steinbock is the CEO of Difference Group and has served as research director at the India, China and America Institute
(USA) and visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). For
more, see www.differencegroup.net
The original source of this article is Global Research
Copyright Dr. Dan Steinbock, Global Research, 2016

http://www.globalresearch.ca/chinas-president-xi-in-the-middle-east-from-u-sregime-change-to-chinese-economic-development/5505344

Conservative Globalizers: Reconsidering the Rise of the Rest

Miles Kahler Tuesday, Feb. 2, 2016

Assessments of the largest emerging economiesChina, India and Braziland their global influence have been as volatile as each
of their stock markets. In the wake of the 2008 global financial crisis, the buoyancy of their economies supported both a global
recovery and their status as the rising powers of the 21st century. Now, the boom decade after 2001 seems a distant memory.
As Chinas economy slows from supercharged to respectable growth and rebalancing curbs its demand for commodities, growth in
commodity-producing countries, Brazil among them, has slumped. Even India, which surpassed Chinas growth rate for the first time
in 2015, confronts a stalled economic reform program under Prime Minister Narendra Modi and faces longer-term obstacles to its
ambitions to become a manufacturing powerhouse that would rival China. Ruchir Sharma, a prominent analyst on the economies of
Brazil, Russia, India, China and South Africathe group of emerging economies known as BRICShas argued that current distress
in these former dynamos reveals an underlying fragility in these once-rising powers.
The current downgrading of the BRICS economic prospects and their future global role has probably overshot reality. Although
Chinas boom is over and its high-growth years are unlikely to return, these economies, after a difficult adjustment, are likely to
outpace their industrialized counterparts, which face their own demographic and economic barriers to sustained growth.
Furthermore, the BRICS global ambitionseconomic as well as politicalare unlikely to disappear, even though their economic
clout may be temporarily diminished.
Evaluating the future roles of China, Brazil and India in global politics and governance first requires a more realistic assessment of
the ambitions and capabilities they demonstrated during the boom years. They did not pose a coherent challenge to the existing
global order at the time, due to international and domestic obstacles that persist in the current downturn. Chief among these are
each countrys difficult shift away from entrenched development models at a time of declining economic fortunes and international
headwinds. It is those rising domestic distractions that pose the greatest threat to their claims to a share of global leadershipand
also the greatest risks to a reformed international order.
Conservative Globalizers
As the three largest emerging economies, China, Brazil and India share certain characteristics that have shaped their approach to
international politics. None has been a U.S. ally; unlike Europe and Japan, dependence on U.S. security guarantees does not
moderate potential economic conflicts with Washington. Each had made large bets on opening its economy and breaking with a
more autarchic past. Their populations have endorsed the benefits of trade and foreign investment, providing a political base for this
turn to the global economy.
At the same time, the state continued to play a significant economic role in all three countries, intervening through ownership of or
influence over critical sectors, such as finance. Tight links between big business and political elites produced high levels of political
corruption, which ranked as a major political issue in China, Brazil and India. Finally, nationalism featured prominently in domestic
politics. In the cases of India and China, Prime Minister Narendra Modi and President Xi Jinping linked economic reform to a
program of national renovation and global rise.

The BRICS global ambitionseconomic as well as political

are unlikely to disappear, even though their economic clout
may be temporarily diminished.
Despite these shared characteristics, the emerging economic powerhouses did not present a collective challenge to the existing
global order. They neither exported state-led models of development nor exerted pressure for a highly regulated international
economy, as some had predicted. Instead, in nearly every issue area, China, Brazil and India can be best described as conservative
globalizers. Economic opening had encouraged deeper engagement with global institutions, and the politically popular benefits that

resulted made the existing international economic order an unlikely target for a hostile takeover.
Following the global financial crisis, all three countries demonstrated their support for a reformed global order that awarded them a
larger role. Of course, they pressed their national and collective interests in those forums, sometimes at the risk of gridlock. The
stalemated Doha Development Agenda, a trade negotiation at the World Trade Organization (WTO) that was launched in 2001 but
stalled in 2008, was a case in point. Within existing global governance institutions, China, India and Brazil aimed to reduce what
they saw as the disproportionate influence of the incumbent, industrialized powers. They demanded a reallocation of quota shares
and voting power at the Bretton Woods institutions, the International Monetary Fund (IMF) and the World Bank. They also gained a
prominent role in the newly empowered Group of 20 (G-20). The Financial Stability Board, a fourth pillar of global economic
governancealong with the IMF, World Bank and WTOalsoawarded the emerging economies new decision-making power over
the financial reform agenda.
Throughout those conversations, the new economic powers voiced a common criticism: Their growing economic dynamism meant
that the old configurations of powera cartel of industrialized countrieswere out of date. The world would necessarily become
more multipolar, and emerging economic powers applauded that transition, hoping to have a greater hand in reshaping the rules
going forward.
Dramatic change in the substance of those rules, however, seemed doubtful. The emerging powers stance toward capital controls
exemplified this combination of newfound influence in the service of modest reforms. They promoted a new, though hardly
revolutionary, international consensus on capital controlsgovernment measures to regulate the international flow of capital
previously shunned by the IMFthat recognized their utility as one instrument in the toolkit of macroeconomic management. They
did not, however, press for a return to comprehensive capital controls; in fact, China and India were gradually removing controls, not
tightening them. Brazils particular circumstancesheightened capital inflows that distorted its exchange rateled it to implement a
financial transactions tax in 2009 to discourage those inflows, a tax suspended in 2013 as capital outflows mounted.
All three countries position on capital controls, however, reflected not only their greater influence in global institutions, but also their
aims to maintain maximum policy discretion in dealing with the effects of globalization. As conservative globalizers, they have
supported reformed global governance institutions but have been reluctant to cede autonomy beyond those original, embedded
institutional bargains, resisting greater oversight of national policies by other economic powers or global institutions. That attitude
reached beyond the economic sphere. For example, their skepticism regarding humanitarian intervention and the application of the
Responsibility to Protect norma loosening of barriers to international intervention in narrowly defined circumstances of mass
atrocitiesreflected that protective stance.
Many alarmists overstated the challenge that China, India and Brazil posed to the existing economic and political order, because
these observers not only misjudged the goals of the emerging powers but also exaggerated their capabilities. In many areas,
particularly those in which economic weight brought greater influence, such as trade and monetary governance, the emerging
economies could exercise substantial veto power, producing gridlock but often failing to generate outcomes that reflected their
preferences. They could build coalitions to enhance their bargaining leverage, but the diversity of their economic interests and
political alignments limited the permanence of those coalitions. Economically and politically, their weight was felt most directly in
their respective regions, in which each was the largest economy by a substantial margin.
Even before Chinas recent economic slowdown and the collapse in commodity prices, however, all three countries faced daunting
domestic agendaseconomic and social inequality, environmental degradation and political corruptionimpeding their rise as a
force in global politics and governance. Meanwhile, more-open economies and globalized politics produced an army of actors and
audiences with a stake in their external relations, meaning that foreign policy could no longer be managed as a purely elite
operation. These limitations on the expansion of their global influence became more apparent with the end of the China-driven
boom.
Domestic Shifts, Foreign Activism
As decade-long booms in Brazil and China drew to a close, new leadership emerged in each of the largest emerging economies.
Dilma Rousseff, who became Brazils president in 2011, did not embrace the global ambitions of her predecessor, Luiz Inacio Lula
da Silva, who sought to increase Brazils regional and global profile as well as South Americas autonomy vis-a-vis Washington. In
her second term, Rousseff was beset by cascading domestic troubles, including protests against failing public infrastructure, a
mega-scandal surrounding the state-owned oil company, Petrobras, and, finally, the threat of impeachment. Economic and political
decline made Rousseff more willing to seek warmer relations with the United States and Europe, representing a shift away from Lula
da Silvas focus on South-South ties. During her June 2015 visit to Washington, Rousseffwhose approval rating at the time
hovered at 10 percentconcentrated on attracting U.S. investment and economic cooperation, quietly setting aside her previous
demand for the United States to apologize for hacking into her personal cell phone and email.

Protests for the impeachment of President Dilma Rousseff,

Brasilia, Brazil, Dec. 13, 2015 (AP photo by Eraldo Peres).
In 2012 and 2013, Xi Jinping assumed the top leadership position in Chinas Communist Party and government, respectively, and
quickly made his mark at home and abroad. He launched an unprecedented anti-corruption campaign, centralized political power in
his hands, instituted a crackdown on civil society, and adopted an activist and nationalist approach to foreign policy. All of this was
combined with an apparent commitment to economic reform, which he confirmed at the November 2013 plenum of the Communist
Party Central Committee.
Xi took an active approach toward the region as well, promising Chinese financing for regional infrastructure through the One Belt,
One Road initiative, bilateral lending from the China Development Bank and other state agencies, and new China-centered regional
initiatives, in particular the Asian Infrastructure Investment Bank (AIIB). He maintained Chinas military buildup and adopted an
assertive stance on territorial disputes in the South and East China Seas. Beijings commitments to Asian infrastructure burnished its
regional leadership, promoted its standing vis-a-vis rival Japan and propped up industries that would lose from its economic
rebalancing away from domestic investment. Chinas military assertiveness, however, undermined many of the gains from its
financial largesse, prompting Japan, Vietnam and the Philippines to move closer to the United States militarily, even as they
maintained and deepened economic relations with China.
When Narendra Modi, also a nationalist reformer, came to power in India in 2014, he quickly demonstrated the same centralizing
and activist foreign policy that Xi had embraced. India, however, had fewer sources of economic attraction to deploy. Its financial
resources and commitment to regional infrastructure were slender compared to Chinas, and its demand for regional exports was
less of a magnet. In terms of regional outreach, Indias rivalry with Pakistan slowed its institution-building efforts in South Asia.
Modis activism was at least partially an attempt to compete with Xis deep regional footprint. At the same time, he acknowledged
that China would make important contributions to Indias future economic development.

The new economic powers voiced a common criticism: Old

configurations of powera cartel of industrialized countries
were out of date.
Brazil, China and Indias foreign policy activism included greater pressure for expanding their influence in global governance
institutions. A prime target were IMF governance reforms, originally agreed after the global financial crisis but stalled since 2010 in
the U.S. Congress. The three emerging powers contemplated outside options that would increase their leverage over these and
other global reforms. In 2014, the BRICS launched a New Development Bank and a Contingent Reserve Arrangement that sought to
challenge the roles of the IMF and World Bank. However, the AIIB was more significant, given the scale of its resources, its larger
membership and Chinas central role in its promotion. Despite the Obama administrations distrust of the institution, the
AIIB recruited U.S. allies as members, demonstrating the attraction of Chinas financial resources and Washingtons inability to
thwart new regional alternatives.
Foreign policy activism played well to nationalist audiences at home, but the recent record of India, China, and Brazil reinforces their
earlier role as conservative globalizers. Their political leadership continued to consider economic successand domestic support
as inseparable from integration with the international economy and participation in a reformed global order. The AIIB was only the
latest in a long line of regional development banks created by emerging economies, beginning with the oil producers in the 1970s.
As it slowly builds its reputation as a lender, the AIIB appears more likely to complement, rather than challenge, the World Bank and
other established development institutions.
In other domains, domestic politics in these emerging powers has led to a convergence of interests with the industrialized world.
This shift has been most apparent in attitudes toward climate change and greenhouse gas emissions, which contributed to the
agreement reached at the COP21 U.N. climate conference in December. The agreement between Xi and U.S. President Barack
Obama in 2014 to decrease carbon dioxide emissions tempered the divide between the emerging economic powers and the
industrialized countries and opened the way for an agreement at COP21.

U.S. President Barack Obama and Chinese President Xi Jinping on the sidelines
of the COP21 climate conference, Le Bourget, France, Nov. 30, 2015 (AP photo by Evan Vucci).
India, which had often played the no card in international negotiations on climate change, brought positive proposals to Paris for a
new global solar alliance and took the lead in reaching a global climate bargain rather than leveraging its veto power. India and
Chinas movement on climate change are linked to growing awareness of their own vulnerability to its adverse effects. Anxiety in
their urban middle classes over environmental degradation, including the worst urban air pollution in the world, also served as an
important backdrop and spur to agreement at the global level.
Of course, as the emerging powers created alternatives to global institutions, the United States and the European powers were
simultaneously at work creating their own outside options, in the form of mega-regional trade agreements that excluded China,
Brazil and India: the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. These projects placed global
trade negotiations, conducted at the WTO, at risk. At the Nairobi ministerial meeting of the WTO in December 2015, the United
States and the European Union forged a coalition with Brazil to ban export subsidies in agricultural trade, one of the meetings major
accomplishments. But neither the industrialized nor the emerging economies were able to chart a new course for global trade. India
and other developing countries continued to back the Doha Development Agenda; the United States and the EU were prepared to
abandon the stalled negotiations. The futureappeared to lie in more plurilateral agreements based on coalitions of the willing, rather
than consensus-based negotiations among the entire WTO membership.
Sliding Economies, Rising Powers?
Economic shockwaves emanating from China over the past year have sent a clear signal that its boom is over. They have also
spread gloom over the emerging economies. IMF Managing Director Christine Lagarde has warned that a new reality will slow
economic convergence between emerging economies and rich countries. As economic growth slowsor goes into reverse in Brazil
and other commodity-producing countriespolitical leaders face the challenge of instituting economic reforms that were often
stalled during the boom years under less favorable economic conditions.
Brazils turn toward fiscal consolidation has faced stiff resistance from groups to the left of the presidents own political party, forcing
its finance minister, Joaquim Levy, to resign. In China, a risk-averse leadership has delayed promised economic reforms and
intervened haphazardly in financial markets, producing perverse results. Modis reforms have also stalled: His substantial majority in
the lower house of Indias parliament cannot overcome dogged resistance from his political opponents in the upper house. At the
same time, demands have mounted in all three countries for adequate public infrastructure, environmental sustainability, and
measures to address poverty, economic inequality and widespread political corruption.

The future appeared to lie in more plurilateral agreements

based on coalitions of the willing, rather than consensusbased negotiations among the entire WTO.
This difficult political and economic environment could produce three possible outcomes. First, economic failures could be offset by
nationalist appeals, distracting potent constituencies with foreign threats or risky adventures. Chinas recent activation of an airstrip
in the South China Sea may have been an attempt to do just that during a week of disarray in Chinese financial markets. A second
and more likely option is a retreat from claims to international leadership by political elites distracted by domestic demands and
threats of political unrest. Instead of challenging the global order, China, India and Brazil would revert to free-riding on the fragile
support offered to global order by a politically divided United States and a fractured European Union. The result would resemble the
G-Zero world described by Ian Bremmer and Nouriel Roubini, leaderless and rudderless in the face of rising economic risks.
The limited success of the Paris climate change negotiations and the WTO Nairobi ministerial meeting could signal a third option:
finding solutions to domestic dilemmas through global agreements. Some of those agreements will involve leadership by all of the
economic powers, as was seen in Paris; others will be grounded in more limited North-South coalitions, as was the case in Nairobi.
How can the United States and the EU encourage these outcomes in order to mitigate a nationalist response or free-riding
lassitude?
First, political leaders in the rich countries must acknowledge that the success of emerging economies is in their national interest:
improving the economic prospects of more than 40 percent of the worlds population must continue. The ripple effects of Chinas
recent economic missteps underscored the importance of the emerging economies to the rest of the world. They are, quite simply,
too big to fail.
Developed economies should also encourage emerging powers to lead, when that leadership is directed to positive ends. American
resistance to the AIIB was shortsighted and self-defeating: The AIIB symbolized the kind of regional power that China should
exercise. To discourage less-benign alternatives to the existing global order, the incumbent powers should accept a greater role for
emerging powers in existing institutions, when merited by their rules, and encourage their leadership in institutional innovation.
With that new leadership comes responsibilities, however. The scale of these economies means that their economic and political
management are of deep concern to the rest of the world. From China in particular, the U.S. and Europe should demand greater

transparency and communication of policy intentions.

One route to greater transparency is to engage and include emerging powers in a wider set of bilateral and global discussions. One
model is the U.S.-China Strategic and Economic Dialogue, which has opened a window into Chinas opaque political system.
Transgovernmental networks and other informal governance arrangements should, whenever possible, include emerging powers
so long as they make a contribution to those arrangements. When these powers challenge established norms or rules, their claims
should be resistedon the basis of widely accepted regional or global consensus.
Given the rise of populist and nationalist political forces in Europe and the United States, such efforts may not be politically feasible,
and even if they were, they may not be adequate for the rough economic and political waters that may lie ahead. The temptation to
create alternatives to seemingly stalemated global governance institutions such as the WTO may prove too great, precipitating
conflict between incumbent and rising powers. A more likely scenario, if the past is any guide, is a world of drift as countries beset by
domestic demands and economic setbacks look to others to sustain a beneficial global order.
The alternative to these bleak futures, for both emerging and incumbent powers, was represented by the outcome at the Paris
climate change negotiations: a world of imperfect agreements that leave open paths to intensified future collaboration, and with that
collaboration, the hope that our most pressing global challenges will be met.
Miles Kahler is senior fellow for global governance at the Council on Foreign Relations and distinguished professor at the School of International
Service, American University, in Washington, D.C. Kahler is a member of the editorial boards of International Organization; Global Governance; and
Global Summitry. He has been a fellow at the Woodrow Wilson International Center for Scholars (2012-2013) and the Center for Advanced Study in the
Behavioral Sciences at Stanford University (2007-2008)

http://www.worldpoliticsreview.com/articles/17840/conservative-globalizersreconsidering-the-rise-of-the-rest