Joining OBOR may be right choice for US and Canada
Joining China’s One Belt, One Road (OBOR) initiative may be an effective vehicle to spur economic growth in Canada and the US. The 110 nations that have expressed interest in participating in the trade initiative account for more than 45% of the world’s gross domestic product and population.
Two-way trade between China and the participating nations already exceeded US$1 trillion in 2016. China last year invested more than US$2.5 billion in some of the nations’ industries and infrastructure located along the the OBOR route. These numbers are expected to grow in the coming years. Indeed, two-way trade is expected to be between US$3 trillion and US$4 trillion when the initiative is fully implemented, accounting for nearly 25% of China’s total trade.
In light of these numbers and potential prospects, OBOR offers huge opportunities for Canadian and US exporters. Joining OBOR may indeed be the most effective and practical trade and investment policy that the two countries can implement to realize long-term sustainable economic growth.
In addition to the 110 (and growing) number of OBOR markets, China itself is able to absorb huge quantities of US and Canadian exports. Recent data coming out of China indicate that its economy is gaining strength, largely on domestic consumption and investment increases and continual economic reforms.
In the first quarter of this year, China’s GDP grew by 6.9%, private consumption rose by more than 7%, manufacturing increased by more than 10%, and trade surged by 21%. The International Monetary Fund predicts that China’s economy will likely grow by 6.5% this year and 6.2% in 2018.
This writer is equally bullish on the Chinese economy, projecting it to grow by between 6% and 8% annually to 2020 in a co-authored book, China’s Economic Rise and Its Global Impact, published by Palgrave McMillan in 2015.
Another reason to join the Chinese trade initiative is that the economies of China and US/Canada are highly complementary. Resource-based Canada has a considerable quantity of natural resources – forestry, fishery, mining, oil and gas, agriculture – that China needs to fuel its growing economy. The US capital-intensive and natural-resources-based economy is what China needs to sustain long-term economic growth. US technology and high-end manufacturing are demanded in China. With US President Donald Trump’s recent policy of “make in and buy in America,” joining OBOR makes perfect economic sense.
Ideology in the way
However, some influential politicians and pundits consider China the US’ biggest threat, doing everything possible to block investment from, selling to and buying from China, particularly products and investments they deem to be a danger to national security. Yet the same groups complain about the huge trade deficit that the US has with China. Moreover, after moving polluting manufacturing to China, the anti-China crowd complain about the country polluting the planet. It seems that they want to blame China for the problems its business and financial sponsors created.
Anti-China sentiments are no less harsh in Canada. There is no shortage of China-bashing rhetoric published by the country’s major newspapers, accusing the Chinese government of abusing human rights and posing a national-security threat because Chinese enterprises or entrepreneurs are buying or investing in Canada’s natural resources and real estate. After years of being brainwashed by the media’s relentless reporting on the country, the majority of both Canadians and Americans believe the rhetorical nonsense for lack of alternative sources of information on China.
Accusations of human rights abuses are largely if not solely fanned by so-called “pro-democracy” activists. In Canada and the US, for example, anti-China politicians often invite only these activists, Tibetan and Uighur separatists, and people such as Martin Lee and Anson Chan to testify before parliamentary or congressional hearings on China’s human rights activities.
While the anti-China activists might be telling the truth, Canadian and American politicians should also invite non-dissidents or the average person to testify on China’s records on human and religious rights. History will tell that the Chinese government does not always lie, nor do dissidents always tell the truth.
What are the real threats?
It is true that some Chinese officials, particularly those in local government, do suppress human rights, though perhaps not to the extent claimed by critics or dissidents. The fact is that more than 80% of the Chinese population supports Beijing’s economic and political policies, according to the US-based Pew Poll. With support that Canadian and American politicians can only hope for, it is difficult to argue that the Chinese government is as bad as its critics claim.
Critics argue that torture is done behind closed doors, out of people’s mind and sight. However, that speculation is questionable. The late Harry Wu lied that he was beaten in jail. His testimony served anti-China politicians’ purpose, allowing him to live comfortably if not luxuriously in the US on the taxpayers’ dime until he passed away at a luxury Latin American resort.
Meanwhile, selling technology to or accepting investment from China does not threaten Canadian or US national security. In fact, China is more at risk by investing in those two countries. It cannot take away the dirt it bought and facilities it built. Moreover, the US has a far more advanced and stronger military than China’s.
Last but not least, Chinese innovation is fast catching up to that of the US and Canada, not because it is stealing from them as the anti-China crowd would have us believe, but because China is spending heavily (more than 2% of GDP) on research and development. With more than 5 million STEM (science, technology, engineering and management) graduates each year, there are bound to some bright and creative ones.
The governments of the US and Canada should brush aside the anti-China rhetoric and join the OBOR trade initiative.