There is no Cold War today, no ideologically driven battle for hearts and minds. But there is a contest for influence between two very different political and economic systems, one that will determine who sets the standards and writes the rules for international trade and investment in the coming years. And the U.S. is losing ground.
Democrats and Republicans are locked in tactical combat over two basic questions: Is trade good for America? And what role should Congress play in the trade-negotiation process? That deadlock helped lead to the at least temporary defeat of President Obama’s signature Trans-Pacific Partnership trade deal in Congress on June 12. But as Washington argues with itself, Beijing is forging commercial agreements that enhance China’s ability to shape the next global order.
In recent years, a rising China has used its development banks to begin to chip away at American dominance in global trade, with programs like the $50 billion New Development Bank and the $40 billion Silk Road investment initiatives. The new China-led Asian Infrastructure Investment Bank, with a capital base of $100 billion, counts U.S. allies like Britain, Germany and France among its members and further enhances China’s development role across Asia. By the end of June, China will pledge billions for infrastructure investment in Europe.
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