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South America: The dark side of commodities

Posted by / 17th March 2014 / Categories: Analysis / Tags: , , , / -

For many, 2013 has been the year of “The Great Deceleration“. Emerging economies worldwide are lowering their expectations. The reasons behind this slow down might be deeper than simply the international economic downturn. The role of raw materials in emerging economies, in combination with short-sighted policy making, made the current situation all but inevitable.

Let’s start with the most obvious example: China. The Middle Empire will be lucky enough if it is currently growing at its official target of 7.5%, which in itself is a far cry from the 10.4% of 2010, and still further away from the 14.2% of 2007. The same is happening to the other BRICS, India (around 5%), Brazil and Russia (around 2.5%) will grow hardly half of what they’ve become used to. Of course, these growth rates might sound miraculous compared to the slothful richer economies, but they represent the slowest speed of the emerging economies in a decade except for the period surrounding the international collapse in 2009. Gone are the days of record-breaking speed in growth rates, and emerging economies’ capacity to play catch-up with their richer counterparts will be limited.

How can this deceleration be explained? If the emerging economies were able to rapidly recover from the financial world crisis of 2009, how is one to understand this relapse? The answer lies precisely in their model of growth. To better understand the height and decline of their boom, it is necessary to consider the role of commodities in some of these economies.

At least, that is definitely the case of South America. According to the Economic Commission for Latin America (ECLAC), South-American economies enjoyed a period of continued rise of commodities prices from the beginning of the century, thanks to demand from other industrializing economies, such as China. These high prices boosted the growth of the region and gave even more incentives to specialize in the export of raw materials. International specialization in commodities can be highly damaging to local economies, both because of South America’s subsequent immersion in globalization, as well as the socio-economic development of these societies.

Starting with the dangers of the dependency on commodity exports, an obvious problem is their volatile price. As extraordinary as they rise, they can collapse just as easily, taking with them the income of the economy that exports them. This makes them a source of instability, reducing their resilience to international economic turbulence. As the demand of raw materials declined, the bubble of their prices bursts This has been the most obvious reason for the deceleration of most commodity-specialized economies.

However, there is more to it than collapsing prices. The focus on commodities endorses a type of structure of national and regional economies that is neither beneficial to their international competitiveness, nor to their internal development.

Firstly, it promotes a weak business chain, with big commodities-exporting companies not incorporating other transformative industries in the process. They do not enhance regional value chains, the key for a beneficial participation in globalization.

Secondly, such specialisation promotes a concentration of large enterprise, crowding-out small-scale companies. At the same time, raw materials business is a low labour-intensive sector compared to other sectors, such as manufacturing. In contrast to other sectors, they are a very limited source of employment. With labour being a key factor in any coherent strategy of economic development, this is a fundamental problem that goes beyond mere export numbers.
Thirdly, it tends to inflate the local currency’s exchange rate, thereby making exports other than the dominant commodities more expensive, and imports cheaper. This “Dutch disease”, as it is known, enhance the concentration on this kind of exports and so the country become finally completely dependent on their primary product exports.

In other words, a commodity-focused exporting economy is not necessarily favourable to socio-economic development. It does not promote significant employment, nor does it guarantee a solid competitive position within the international economy. As a result, it has creates significant weakness, and one that South-American and other emerging countries are suffering from right now.

The verdict would be even more damning if based on other than economic criteria: from a social perspective, commodity focused approaches hurt a wide range of issues such as education, gender equality, and quality of life. For instance, as it requires a qualified labour force, this model will not promote higher education of the workforce; neither high salaries nor good work conditions are encouraged by extractive industries.

It may seem odd, therefore, that political discourse -both from the left and the right- often focus, positively, on the sovereign use of commodities. A topical example is of course Venezuela, i.e. the country with the highest dependence on commodities income, followed by Chile. There are three broad explanations for such destructive political behaviour: short-term economic imperative, political usefulness, and systemic pressures.

Economically, commodities are easily accessible, typically not requiring a highly educated workforce or significant state investments, as financing nowadays can be easily found at an international level. They quickly produce short-term gains, unlike more sophisticated sources for economic growth.

This also explains their political attraction: the boosting of the primary sector often falls neatly into political cycles, offering quick results at the cost of long-term problems. Moreover, the idea of resource independence has historically been an important issue in most societies, and still explains a lot of economically dubious choices governments all over the world make. Natural resources are an easy source of income, especially attractive for “developing” countries. Indeed, they might not require difficult structural adjustments, or large constant investment. Hence, they are often seen as a low cost rapid development.

“Systemic pressures” combines a series of issues related to the allocation of political and economic resources work in practice. These systemic dynamics constitute another dimension of the problem that should not be ignored in the analysis of the actors involved. This includes issues such as corruption –commodities are relatively easily accessed through bribing officials– as well as international network pressures to play the globalisation game.

These factors have allowed the resource curse to be repeated over and over again, especially because of exacerbating conditions around the globe. In the specific case of South America, the role of the emerging China has been such a condition.

In the context of “shifting wealth” to Asia, an important part of the industrial production has moved to this region, especially to China. From there, increased demand for raw material emerged and as a result has been one of the main reasons behind the rising prices of commodities in South America. Exports from Latin America to China tripled from 2000 to 2007, simultaneously to China’s direct investment multiplication in the region. Quite representative of this optimistic trade attitude was the forum “Going to Latin America” that was held last month in Guangdong.

Furthermore, business with China has been enhanced by the desire of emancipation from the Western influence. Whether this desire materializes through direct anti-United States discourse (such as the case of Bolivia), or whether this emancipation happens through a pragmatic attitude of diversification of allies, there is a powerful pull away from dependence on Europe and the United States. The result has been the growing presence of China and its commodities demands in South America.

For both left and right oriented governments, China is seen as a pragmatic actor, mainly relevant because of its economic weight. Besides some isolated complaints of interference, South Americans do not tend to see it as a threat. South American governments seem not worried about its global ambitions, and from a political perspective China has indeed treaded lightly thus far.

The main concern in Latin American capitals has been the deceleration of the Chinese economy during this past year, and its direct effects on local economies. However, the real problems lie deeper. China’s role in South American economies commodity dependence has a dark, destructive edge, and should be recognised as such. Treating development as a short term strategy will only have damaging long term consequences.

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Economics and the Environment: A Brief Review of Arctic Change

Posted by / 2nd November 2013 / Categories: Analysis / Tags: , , , , , / -

This morning, two news stories filled me with a fleeting sense of hope. Firstly, a remote Arctic Island, known as ‘Rat Island’ due to a mass infestation of Norwegian rats, is finally rodent free. Conservationists have been working tirelessly to exterminate the invasive population for the benefit of the indigenous inhabitants of nesting birds including puffins. Secondly, after their sojourn from storming Arctic oil-rigs, Greenpeace activists and accompanying journalists have had piracy charges downgraded to hooliganism by Russian authorities. What are the wider prospects though for the Arctic heritage to remain unchanged?

In popular European imagination the Arctic looms large as a pristine inaccessible wilderness, a cold inhospitable land of polar bears, fit only for our most intrepid explorers and scientists. From this starting point European sensitivities rail against the huge potential of the Arctic as a source of primary commodities to fuel economic growth. Europe’s is a tendency toward Arctic conservationism and a fanciful hope, like that of China’s too, that the Arctic should be considered, in a non-legal sense, a global Common. This imagery will be increasingly that – a figment of the imagination. We are witnessing an astonishing pace of ecological, economic and political transformation of the Arctic driven by climate change. The Arctic we know and love is moving to the mythological annals of history.

Change is coming apace. Already the annual average temperature for the Arctic region is about 1 ºC warmer than the recorded average between 1961 to 1990 and as much as 5 ºC above the seasonal norm for October-November. As the arctic warms, the scientists’ Arctic sea-ice dial is being constantly ratcheted down from rock-hard towards almost-slushy. In three decades Arctic sea ice covers now only half of its previous expanse. Estimates of an ice-free summer ocean by 2030 are now looking a little conservative with the latest data suggesting a decade earlier is plausible, in part explained by polar amplification and spurred along by black carbon deposits.

Polar bears and walruses are particularly dependent on thick sea ice. The polar bear is now listed as an endangered species and walruses as candidate species for listing. Decline in the population of several sub-species of seal follow hot on their heels. Moreover, subarctic flora and fauna, both terrestrial and marine, are migrating northward to compete with indigenous species that cannot rely on evolutionary responses to keep pace with the rate of change. Habitats are changing: coastlines are eroding and as the permafrost reduces, frozen tundra is reverting to swampland last seen some 50 million years ago. Arctic cyclones are growing in size and strength with local impact, but also being held responsible for catastrophic weather events across the hemisphere: flooding in China, heat waves and fires in Russia, severe winters in the US and Europe and summer monsoons and droughts in India.

Change does not end there. The changing climate opens the areas to economic exploitation on a grand scale – a new centre of trade and industry with a form not unlike that of the Mediterranean. It is not entirely fanciful to suggest that the opening up of the Arctic frontier will deliver the sorts of radical shifts in global trade and geo-political strategy that come only once in a life-time. Paralleling the Age of Discovery or the US’s taming of the west as an engine of its meteoric rise to global super power status. In economic and political terms there is a lot to play for, but as with great games there is also real risk, among them irreparable environmental damage, militarisation, and dislocation of indigenous people and their livelihoods.

Alaska and western Siberia already account for around 10% of global oil and gas production, the region’s production share is set to rocket. The US Geological Survey estimates that the Arctic holds 22% of the worlds undiscovered oil and gas, not to mention rich deposits of rare minerals and isotopes. Retreating ice; new exploration and extraction technologies; and transport access by sea make discovery and extraction real and increasing possibilities. It does not end here, the potential for hydro- and geothermal power, construction and fishing (as stocks head for warmer arctic waters) all add to a very long list of economic opportunities that spin out and will spur on the changing face of the Arctic. Just imagine the tourism opportunities: paired sailings of cruise ships witnessing the dramatic sight of vast walls of melting ice crashing into the ocean and strings of wilderness junkies trudging over pristine Icelandic glaciers in designer snow boots.

The question of sea access – the opening of the fifth ocean – of itself is of massive economic and naval significance. Reducing sea-ice coupled with supporting maritime technology and logistical support will lead to the opening up of new sea routes crossing the Arctic. The passage becoming accessible most rapidly is the Northern Sea Route (Russia’s preferred name for the North-East Passage) skirting the Russian coast. The North-West Passage, following the Canadian archipelago, lags behind, but remains a realistic possibility. In 2012, 46 vessels managed to cross the Northern Sea Route (NSR), and most recently, the Yong Seng, a Chinese commercial vessel followed the NSR, arriving in Rotterdam amid much media fanfare. The excitement was generated by the news that the voyage had trimmed 14 days off the usual time required for the route south via Suez. Estimates place financial savings per commercial vessel per voyage are in the region of $600,000.

In the long term, the reorientation of shipping from China via the NSR to supply the major markets of Europe bodes well for both economies in broad terms, with the prospects of cheaper products arriving more quickly. However there are winners and losers. Hong Kong marks the equidistance point between the southern and northern routes. As such the future of seaports North and South of this point look very different. Singapore, for example, may lose out to new ports developing along the Chinese coastline and in Japan. Likewise northern European ports such as Rotterdam and Felixstowe may benefit.

Politics and questions of infrastructure supporting shipping are also critical. Russian cooperation, ice-breakers to rescue beached ships, maritime policing, supply and repair stops are all part of the viability jigsaw. Also, there remain challenges to Canada and Russia’s sovereignty over the two sea routes. Much to their annoyance, the US and EU in particular continue to argue that the routes should be considered as international Strait. China too, in its references to global commons and the occasional broadside from an ex-sea admiral, may well hold this view, but prefers to supress it given a more fundamental respect for sovereign rights.

The assimilated view of seasoned political commentators seems to be shifting in regards to the Arctic. Whereas the trend a couple of years back was to stress the dystopian prospects of the Arctic thaw – a terrain poised to escalate geopolitical conflict – the pendulum, with some reasoned argument, swings now in favour of backing the prospect of a new Arctic consensus. This revised view is derived from a growing tendency for Arctic states to find agreement on some of their long-standing, sometimes pernicious, territorial disputes. Realising there is good sense in rising above the narrowest state-interests, there may be a move to avoiding escalating conflict and to work collectively to exploit the rich opportunities offered in the Arctic.

These difficulties and differences aside, surely this is good news for Europe, but the question is what is Europe’s response in making hay while the sun shines and how does this articulate with European environmental and conservation aims? The question of European policy, flavoured by our well-heeled and well-intentioned Arctic imaginary is important. It has coloured the EU policy approach without winning many friends. For those states or transnational bodies sitting outside of the Arctic inner circle lessons are being learnt, more rapidly in the case of China than Europe, about not rocking the boat if you want to get in on the action. To date Europe has been perceived as an angry child rather than a critical friend, with the dual impact of removing us from the economic and environmental spheres of influence. Europe needs more sophistication in defining its Arctic interests and related policy, if it wants to move from the imaginary to the pragmatic.

Returning to Rat Island puffins, the question arises as what is their long-term hardiness in the face of new waves of change arriving on their shores? As for Greenpeace, notwithstanding the vagaries of the Russian judicial process, jurisprudence suggests that piracy charges are subject to international law – the UN Convention on the Law of the Seas – and that there seemed little hope of a successful prosecution on these terms. Russia no doubt realised this, although appearing to have backed down, they have in truth managed to send a clear warning to transgressors as to the primacy of Russian economic interests in the Arctic region. Perhaps then we need to set sail on a new course for the European eco-warrior, hell bent on achieving the best and most pragmatic environmental outcomes for the Artic, by turning attention on EU reform. We need to look at our own institutions rather fighting Russian or Chinese ghosts. Batten down the hatches Greenpeace, were setting sail for Brussels!  facebooktwittergoogle_plusredditpinterestlinkedinmail

Report: The US Withdrawal from Afghanistan

Posted by / 31st July 2013 / Categories: Reports / Tags: , , , , , / -

The withdrawal of most United States combat troops from Afghanistan in 2014 not only is an important symbolic moment for Washington’s foreign policy which will effectively close the book on the post-9/11 “War on Terror”, it will also have major repercussions on Afghanistan and its neighbours in Central Asia. The void that Western forces leave behind is likely to be filled by more local-centred interests and other major international players such as China and Russia. Afghanistan has always been a geopolitical battleground, and the 21st Century will prove no different. The extraction and transport of natural resources, zones of influence, religious and ethnic strife, concerns about local terrorism and its proximity to other geostrategic hot-spots such as Iran and Pakistan- all combined with a lack of internal sovereignty-means that Afghanistan is unlikely to escape the clutches of external meddling.

ReSeT has written a series of articles by its experts on what the post-withdrawal future will bring for the most important national actors involved, and on how this will affect international relations during the coming decade.Through one article per country, we will analyse the impact that the new Afghan situation will have on:

 

Afghanistan (Carmen Alonso Villaseñor): The conflict in the Central Asian country is a prime example of the complexities involved in New Wars. The inability of the superpowers to understand and address them has historically led to defeat in the arid mountains of this country. Beyond the particular failed policies of the consecutive invaders, Afghanistan represents the inaptitude of the international system of states to deal with modern challenges.

Pakistan (Balder Hageraats): Afghanistan’s future is intimately linked with that of Pakistan because of cross border identities and interests. Both countries’ complicated and ambiguous relationships with the US will become even more strained after 2014, and Islamabad will shift its focus towards Beijing and other local players. The West is likely to be marginalised in this process, and may need to shift its focus back to India.

Iran (Ricard Boscar): Despite mainstream thought in policy and security circles in the West, Iran could play an important role in the stability of Afghanistan and the region. Teheran has enough resources, ranging from cultural to economic assets, to cast its influence eastwards. How Iran decides to use them is linked to the future arrangement of interests in the region and depends on the US stance towards the ayatollahs’ regime.

Russia (Alberto Pérez Vadillo): The American withdrawal will force Moscow to recalibrate its policy towards Afghanistan and across the region. Much of what Russia can achieve depends on its relations towards the various Central Asian states. Regarding this, Moscow’s room to manouver will be constrained by both the presence Washington chooses to preserve and Beijing’s ambitions.

China (Carmen Alonso Villaseñor): The growing weight of China in international geopolitics has gotten to a point of no return. But the new superpower is still reluctant to assume the responsibility and burden that its position implies. Beijing’s economic diplomacy is already strong, but to secure its interests, China will have to adjust its foreign policy, and Afghanistan after 2014 will be an important thest of this.

The United States (Balder Hageraats): The United States, after licking its wounds from two unwinnable wars and economic crisis, will need to scale back it global ambitions, and particularly those in Central Asia, where it will no longer be able to compete with other more local competitors. Washington policy will focus on specific goals, such as national resources security, rather than maintaining its more expansive agenda of the last decade.

Read the whole report here: ReSeT Report: The US Withdrawal from Afghanistan

 

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Changing Places: Sino-American Rivalry and Cooperation in Central Asia

Posted by / 8th July 2013 / Categories: Reports / Tags: , , , / -

When most United States’ combat troops leave Afghanistan in 2014, it will symbolize the end of a war that has dramatically changed the geopolitical landscape in Central Asia. In particular it will highlight the demise of Western influence over the region, and the rise of Asian players, especially The People’s Republic of China. In this paper we will analyse the main geostrategic shifts that are visible in the area, and how the main global protagonists, namely the United States and China, are likely to adapt to them. Even though the situation clearly requires major changes in policy with respect to Central Asia in both capitals, there are internal obstacles in both countries that will likely weaken their respective positions. Other local players such as Russia, Iran and India are likely to benefit from a failure by the two global rivals to adequately react to the changing circumstances.

The ability, or lack thereof, of China and the U.S. to find and accept this new balance of powers between them will decide the future of the region. Cooperation, rather than confrontation, would benefit both powers as well as enhance local stability. If there is a resurgence of the “Great Game”, with geopolitical competition manifesting itself in Afghanistan and its surroundings, China and the U.S. are both likely to lose terrain to other regional actors. Therefore, their main challenge will be to overcome internal obstacles to clear the way for an effective power balance in the region.

Read more: Changing Places in Central Asia Panorama 2012

 

This paper was published in Panorama 2012, and written by Balder Hageraats and Carmen Alonso Villaseñor.

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Central Asia: Renewed Focus on Kashmir

Posted by / 1st July 2012 / Categories: Analysis / Tags: , , , , / -

The geostrategic situation in central Asia is likely to change dramatically in the next few years, and especially after 2014. Two main events will trigger this: the withdrawal of US troops from Afghanistan– leaving a power vacuum in the region-, and the already growing economic dominance of China, as well as India. The consequent rivalry for resources and influence in the region between is likely to have large consequences.

In this environment, the Kashmir conflict will be a scenario where the intentions and political strategy of China for this new context might be revealed. The solution of the conflict in this region between India and Pakistan remains complex, with no real prospect of a long-lasting agreement. The relative calm in the region seems to have been the result of the situation in Afghanistan and US pressure to put the conflict on halt to not exacerbate the difficulties it is facing already. Now, with the US removing itself from the equation, Beijing will become a more prominent variable. It has welcomed positive developments between Islamabad and New Delhi, but it has been reluctant to show its cards. The fate of Kashmir is now in the hands of three, rather than two, regional and nuclearly-armed rivals. India seems to have more to gain from this than Pakistan.

CHINA’S KASHMIR POLICY OVER TIME

Since the partition of India and Pakistan in 1947, Kashmir has been the main battlefield for the projection of their rivalry. However, the Kashmir territorial dispute has been also a global concern, as it caused nuclear proliferation and cross-border terrorism.

China has not remained indifferent to the conflict either, even if its involvement has not been consistent. China´s Kashmir policy has rather flowed through different phases, each one determined by its own current interests in the region, its relations with Pakistan and India, and its general Asian strategy.

From neutrality in the 1950s, Beijing moved to a clear support of Pakistan during the 1960s and 70s, as a result of the take-over of Tibet and its own war with India in 1962. But since Deng Xiaping took over direction of China´s external policy in 1978, China returned to neutrality, as its relations with India improved. By early 1990s China´s position is that Kashmir conflict is a bilateral matter, and currently China clearly supports a peaceful solution to the conflict: Beijing is interested in a stable Asia and better relations with India.

The above stated different phases of the Beijing’s Kashmir policy are sketched by a network of complex interests and bilateral relations that will also influence China’s future position on the conflict. The most obvious of those interests is its own entanglement: India claims the Chinese-controlled Aksai Chin of approximately 35,000 square kilometers as part of the territory in Ladaakh, Kashmir. This border area, even though it has no natural resources, has been strategic territory for China as it connects Tibet and Xinjiang. However, with the completion of numerous road and rail links to Lhasa from other parts of China, Aksai Chin has lost part of this significance for China.

Security and economic concerns are paramount to Beijing. Both elements are present in its relations with Pakistan and India, and the evolution of those is the key element that will define China´s approach to Kashmir´s conflict.

FROM INTIMACY TO MISTRUST

China´s cooperation with Pakistan has been strong over time. Pakistan is important for Beijing, both as a counter to India and also because of Chinese’s fight against separatist movements in its northwestern territories.

The conflict with Pakistan has distracted India from increasing its influence in the region, and has also been an obstacle in its relation with the US. In this sense China needs a strong Pakistan to contain India, to keep alive the situation of balance of power in South Asia. That is why China supported Pakistan renewed alliance with the US after 11/9. It was the only means to avoid Pakistan growing isolation in the international sphere, given its links with the Taliban in Afghanistan.

Recently, however, fear of Islamic fundamentalism originating in Pakistan has also been a major concern for the Chinese. Terrorists helped radicalize Uighur separatists in Xinjiang in the 1990s and the Uighur still today find a safe haven in Pakistan´s tribal areas. The withdrawal of the US from Afghanistan will increase Beijing´s fears of terrorist destabilization of its western border; China needs a capable Islamabad of controlling this threat, and until now Pakistan has not proven a real ability or willingness to do so.

Economic interests are also part of the equation. China has invested in Pakistan infrastructures and transport routes –a significant example is the maintenance of the KKH road or the construction of the port complex at the naval base of Gwadar – as an important part of the Chinese strategy to reduce its dependence on oil supplies through the Malacca Straits and create alternative routes. In recent years the economic cooperation has continued growing, with increasing Chinese investment in different sectors, especially in energy and trade.

In the Boao Forum for Asia celebrated in April, China and Pakistan renewed their close relationship, thus formally showing the stability of their alliance. But even though Islamabad is still seen as a key piece in regional security, China has become increasingly weary of its reliability as a partner. It does not seem to be able to offer Beijing concrete results.

BALANCING POWERS

Chinese relation with India has been much more tortuous over time. Characterized by border disputes in Aksai Chin and Arunachal Pradesh, the rivalry between the countries has resulted in several military confrontations in 1962, 1967 and 1987. However, in the last two decades they have relaunched their diplomatic ties.

The most powerful engine that promotes their improved relationship are the growing mutual economic interests. Trade and economic growth of both countries in south Asia has led towards cooperation in security issues as well: they share the necessity to confront the threat of organized crime, terrorism and domestic instability of countries in the region. They also share a common interest- both being rising powers- to limit United States influence in their own backyard, as well as in improving their representation in international institutions.

Even though it is true that India is an increasingly important strategic ally for the US, mainly as a possible counterweight against China in Asia, there are also concerns about their relationship. Obama’s protectionist economic policies, the US close relationship with Pakistan and its renewed emphasis on non-proliferation all put pressure on India. Just like China, India has begun to wonder if its neighboring rival could be a more useful partner than its natural friend. Some specific efforts at solidifying these mutual interests were already attempted in the past, such as the “Strategic and cooperative partnership for peace and prosperity” agreed by Wen Jiabao and Manmohan Singh in April 2005.

Of course, the Sino-Pakistani strategic nexus remains a concern worry for India. China is the main provider of military capabilities to Pakistan and that is a clear threat to India, as well as seen as a display of Beijing´s hostility. Similarly, the militarization of their disputed border areas, though stable, is a focus of tension between the countries. China´s growing presence in Myanmar and in other small countries in south Asia are interpreted as a struggle for dominance of the Indian Ocean. China wants multi-dimensional (including military) cooperation with most of the region for economic and strategic reasons. Some of the countries (Sri Lanka, Nepal, Bangladesh, etc.) are in the traditional sphere of influence of New Delhi, creating even greater tensions between the two most populous nations in the world

WHERE DOES CHINA GO?

With the nuclear threat ever surrounding the Kashmir conflict and its three regional rivals, the direction that China chooses in the next years is no trivial matter. Its natural ally, Pakistan, is increasingly seen as untrustworthy and unable to support China in it ambitions. Whereas in theory its position is strong, practice has created serious doubts on whether it really has anything tangible to offer.

Its natural rival, India, is still very much a source of strategic concern and practical headaches, but is also respected in Beijing. The fact that they have so many areas of contention paradoxically also means that they have a lot to offer each other. Mutual cooperation might allow dealing at the detriment of Pakistan and the United States. Diplomatic support in the Kashmir conflict is a bargaining chip that China might very well be willing to offer India in exchange for more important issues on the People’s Republic’s agenda.  facebooktwittergoogle_plusredditpinterestlinkedinmail