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If trade war breaks out, the future of intra-Asia market may well improve
Perhaps it is too soon to speak of rapprochement between China and India, but as US protectionism threatens them, they appear to be both seeking common ground, giving fresh momentum to the intra-Asia trade, adding value to the volume that already makes it the world's biggest.
So far, China seems to be doing most of the courting if only because it is the main target of American wrath. India is also a target, as is Canada and Mexico, but the animosity is much diluted.
Beijing now shows signs of wanting to treat its major trading partners well in case US tariffs force Chinese exporters to depend on Asian markets, analysts say, according to New York's Forbes magazine, which jokingly refers to itself as the "Capitalist Conspiracy".
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Shortest voyages carry richest intra-Asia cargo across the East China Sea
The shortest voyages carry the richest cargo in the intra-Asia trades. The three high-end trading partners that command these big volumes are China, Japan and South Korea, which together account for 20 per cent of world trade.
Since 2012, they have been working fitfully to leverage their already envious situation into something more. But having the value of the mighty three become greater than the sum of its parts, has not been easy and nor is it anywhere near complete.
At a comparatively minor level, there are territorial disputes in the way - such as China's land grab of the Spratly Islands. Most unhelpful to mutual trust was China's haughty dismissal of the negative ruling handed down by the International Court of Arbitration in the Hague in the Spratly case.
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With Asian investments looking better to Asians, intra-Asia trade will soarLooking at conventional wisdom of more than a decade ago, one recalls what the then British Foreign Secretary Lord Palmerston said: "If only every Chinese would buy a nightcap, the textile mills of Lancashire would run for a century." All of which might have been true had the Chinese had any use for a nightcap, which they did not.
One recalls Palmerston's prediction, when reading a 2006 white paper, "Asia’s Trade Is Everyone’s Business" from the Australia New Zealand Banking Group (ANZ), and one gets a sense of deja vu, that we have been here before. Both Palmerston and ANZ seem to be applying perfectly logical expectations to two entirely different circumstances, of which they had no real experience. One was a matter of place, the other, a matter of time.
Things did not turn out as expected in either case, not from 1836, not from 2006. Not that history repeated itself, but there were a few rhymes to be found in both scenarios.
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Peoples of Mekong move in ways that will boost intra-Asia trade fortunes
The Greater Mekong Subregion (GMS), that is Vietnam, Cambodia, Laos, Myanmar and Thailand and China have banded together into an important economic alliance - that is likely to impact significantly on the intra-Asia trade as a whole - even more so with booster rockets of China's inter-connecting Belt and Road Initiative.
On the face of it, GMS could be taken as one of those feel-good pacts, now 25 years old, whose benefits have been largely derived from announcing the goodwill it has generated, which chiefly benefit those making the announcements, but quickly forgotten as the gloss and glitter fades.
But today, GMS has a new easily recognisable and mutually beneficial potential, not only to enrich the signatories, albeit unevenly at first, but also alleviate what ails China and intra-Asia trade lanes in general. And this is what makes GMS more exciting and relevant today than ever before - and of momentous importance to the intra-Asia trade.
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Intra Asia Trade Specialists |
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