Trending Now
We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
{{ subpage.title }}
What We're Watching: Hariri throws in the towel, China calls for Pakistan blast probe, Poland hits EU over judiciary
Lebanon's PM-designate resigns: Things continue to deteriorate in crisis-ridden Lebanon. On Thursday, veteran politician and prime minister-designate Saad Hariri resigned eight months after being tapped to form a technocratic government after a series of crises and disasters, chief among them the devastating explosion at a Beirut port last August. Lebanon's Hezbollah-aligned President Michel Aoun refused to accept any of Hariri's proposals, because he said they did not reflect the country's sectarian power-sharing requirements. But Hariri pushed back, saying that Aoun wanted too many government spots for his allies. The Lebanese pound dipped to a new low after Hariri called it quits Thursday, reaching 21,000 to the US dollar. It's unclear who will step in now to form a government, a prerequisite to releasing billions of dollars in aid from former colonizer France and others. Meanwhile, the EU has said it'll impose sanctions on Lebanese officials if progress remains static.
China wants answers from Pakistan: China is putting pressure on Pakistan to investigate this week's explosion on a bus in the remote northern Kohistan region that killed 13 people — among them nine Chinese workers employed at an infrastructure project financed by China's Belt and Road Initiative. The Pakistanis initially blamed the blast on a gas leak, but a preliminary probe has found traces of explosives. China is a close ally and has major investments in Pakistan, including a $65 billion economic corridor linking China's northwestern Xinjiang region to Gwadar port in southern Pakistan. In recent years, Pakistani militants — especially separatists from Balochistan — have regularly targeted Chinese infrastructure investments, but so far Beijing has not pulled the plug. For their part, the Pakistanis need Chinese cash to build infrastructure — even if these projects are very unpopular and could make Pakistan fall into China's debt trap. Indeed, Beijing has flushed Islamabad with cash in recent years, and it's paying off: PM Khan now says China has been one of Pakistan's most reliable friends in times of need.
Poland, EU tussle over rule of law: Poland's constitutional court has ruled that the European Union can't tell the country how to run its judiciary. It's the latest episode in a long-running dispute between Warsaw and Brussels over sweeping judicial reforms by Poland's conservative President Andrzej Duda and his ruling Law and Justice party. Since coming to office in 2015, the populist Duda has given broad powers to the supreme court's disciplinary chamber, which the EU wants to dissolve because it punishes and purges Polish judges critical of the government. Brussels says the reforms undermine judicial independence in Poland, while Warsaw argues that the overhaul is necessary to fix an inefficient judiciary. The Polish government has also cracked down on LGBTQ rights in recent years, creating yet more friction with the EU. The EU has spent years fighting member states Hungary and Poland — both of which are led by "illiberal" populists — over rule of law and human rights issues. Last year, Brussels tried to make disbursement of the bloc's pandemic relief fund contingent on all member states respecting EU rule-of-law norms. But the EU backed off after the Hungarians and the Poles threatened to block the EU budget.
Is China too confident?
Ian Bremmer's Quick Take:
Hi, everybody, Ian Bremmer here. Happy Monday. Have your Quick Take to start off the week. I want to talk a little bit about China and the backlash to China. We all know that China has been the top international focus of the Biden administration, considered to be the top national security threat, adversary, competitor of the United States. On top of the fact that there's large bipartisan agreement about that, on top of the fact that President Biden doesn't want to be seen in any way as potentially weak on China, to be vulnerable to the Republicans if he were to do so.
The pivot to Asia is indeed happening. This is part of the effort to quickly wrap up after 20 years, the War in Afghanistan, a reduction in US military footprint on the ground. Across the Middle East, an effort to make the Russia relationship more predictable, more stable. All of that is part of the focus on China. And then specifically in Asia, further with the Quad, the United States, Japan, Australia, and India, the first invitation of a foreign leader to the United States to meet with President Biden, that was Japanese Prime Minister Suga.
Very unusual, if you don't pay attention to the fact that Japan is the most effective and important ally of the United States in Asia, vis-a-vis China. Second invitation, South Korean President Moon. Not the Germans, not the Canadians, no, South Korean President Moon. Only makes sense if you consider China to be the top priority.
Now what's interesting is that in the context of that, four years ago, you would have expected the Chinese government to be engaging much more with other Western countries, an effort to split the United States from its allies to ensure that the Chinese don't have a block of Western democracies against them, but mostly the United States. Certainly easy to do when it's Trump's America First, than when it's President Biden, who was more liked by American allies. But still the Chinese as the world's soon-to-be largest economy, have a lot of influence with other countries around the world. You'd think they want to play it.
The interesting thing is, they're not. Indeed, there has been a lot of backlash from other non-American advanced industrial democracies in part because the Chinese have been so angry about criticism from them. Think about the Australian trade war with China. Kicked off by the Chinese in response to the Australian government saying, even before the Trump administration, that they wanted investigations into the origins of COVID. Did it, or did it not come from a nature, from a wet market or escape inadvertently from a Chinese lab? China went all in against Australia in response to that. They got some criticism from the Europeans on the Uyghurs. They knew the Uyghur issue was coming.
There's a greater focus on human rights issues coming out of various parts of the European Union. In response, the Chinese government puts direct sanctions against members of European Parliament. Anyone advising Xi Jinping would have known that was going to blow up in their face. As a consequence, there was a suspension of the much-lauded EU-China investment deal, which was a big deal. It got approved in principle though, not ratified, right before Biden took office. It was a big win for China. Now, not such a big win for China. Italian government, Italian Prime Minister Mario Draghi, saying that he's thinking seriously about pulling his country out of China's Belt and Road. It was the first G7 economy to join Belt and Road. What a loss that would be.
Lithuania pulled out of the "16+1", the Chinese engagement to try to split the Central and Eastern European countries away from the Western European countries. These are the countries that more need Chinese investment. They're largely poorer. They want to ensure they have as much infrastructure support as possible. China has Hungary's Viktor Orban, but most of the Central and Eastern European countries now are counting a lot more on redistribution from the EU, and the support of Germany than they are of the Chinese and the Chinese government made it easier for that shift to occur.
In Canada, the two Michaels, who have been in detention for no legal, legitimate reason and have been mistreated, some say, have even been tortured. This would be a fairly easy thing for the Chinese government to resolve in the run-up to the Beijing Olympics. So far, they've shown no signs of actually doing that. When I look around the world right now, I see all sorts of efforts of the Chinese government, not just to go tit for tat with US escalation, but also to make it easier for the United States to coordinate an escalated competitor, China policy with that of all sorts of American allies.
And so that leads to the question of why is that happening? Why is the Chinese government making it easier for the United States? Why are we seeing this surfeit of advanced industrial democracies around the world all at the same time, showing that they are themselves angrier with China? And I would say that there are a few different things at play here. One is lots of confidence inside the Chinese leadership of China's model. You saw that a little bit after the 2008 financial crisis, global financial crisis. And then when the United States rebounded sharply, it largely went away.
But for a period of months, there was a lot of sense of the US financial system doesn't work, Western capitalism doesn't work. Look at what the banks are doing, look at the Occupy Wall Street movement. We do better for our working to middle class. And so, we should move away from the dollar. We should create our own BRICS Bank currency. Well, it became pretty clear from the economic advisors of the China leadership that that was way, way premature and wrong. And so they backed into more cooperation with the United States and the West.
This time around coming after Coronavirus, where the Chinese economy was the only major economy in the world to grow in 2020, maybe this is just an overhang of the feeling that China got it right. And the United States and Europe couldn't deal with it. And so they're not going to take that level of criticism. They feel much more confident that the model, the political model, the economic model, the technological model that is built to last, that is built for the duration is the Chinese model, not the Western model.
And so to the extent that they're going to recognize that they've played too confident, too hard, it's going to take longer because that level of confidence is a lot greater, a lot more deeply rooted and entrenched than it was in 2008, 2009. That is certainly one piece of it. A second piece of it. It is maybe because Xi Jinping has consolidated so much power today compared to five years ago, 10 years ago, that it's harder to get him good, but critical information that some of his policies are not succeeding.
We have seen this certainly in and around Russia with President Putin over the past years, when he first became president and then prime minister, and then president again. He would display an enormous amount of capacity for understanding details of Russian foreign policy and defense policy, energy policy, privatizations, corporations, policies towards state-owned enterprises. Putin doesn't do that as much anymore, and I suspect part of that is because he no longer has either the interest or the people around him that are going to give him unfiltered, unblemished, "This is what's really going on." If that is now starting to happen in China, then Xi Jinping, who calls the preponderance of the shots is actually thinking he's doing a better job internationally than he really is.
A bit of the "Emperor Has No Clothes" going on in China right now. And I'm sure there's at least some piece of that. And then the final point is that it might be increasingly hard for the Chinese government to admit domestically that they've gotten things wrong, especially with the run-up to the Olympics, with the run-up to Xi Jinping looking for his unprecedented third term, becoming president for life. All of this implies that if you're going to make a shift, you go through your big meetings first, effectively the equivalent what an election campaign would be in the United States, and then you take a softer approach.
I'm sure all three of those factors are playing. It's hard to know how to weight them, but that seems to be a problem for the Chinese government, because right now, the Biden administration and not just the G7, but also the Quad and even some other developing democracies like India, for example, some of the south Americans, are looking at Beijing and having less confidence that this is a model that they want to hedge towards to a greater degree, despite the fact that Chinese economy is doing quite well.
So an interesting issue to think about. Something I'm sure we'll be paying a lot more attention to over the coming weeks and months. I hope everyone's being safe, avoiding fewer people and enjoying this move into the summer or in the Southern Hemisphere, exactly the opposite. Talk to you soon. Be good.
Can the G7 really build back the world better than China?
Over the weekend, the Biden administration announced a G7-backed plan to build climate-friendly infrastructure projects across the developing world. Against the backdrop of rising US-China competition, the plan is widely perceived as a direct challenge to China's Belt and Road Initiative, which also aims to build roads, ports, and rails across the Global South.
But what is really in the new G7 program — known as "B3W" (Build Back Better for the World) — and what is it meant to achieve? Here are a few questions to ponder.
How will B3W differ from BRI? Quite a bit. B3W is presenting itself as the antithesis of BRI, which has mobilized much-needed funding for infrastructure projects in risky parts of the world that had long been neglected by traditional lenders, but has also been criticized for financing dirty coal plants, ignoring fair bidding processes, displacing vulnerable people, and saddling recipient countries with massive debt owed to China. By contrast, B3W says it'll fund "values-driven" infrastructure projects that align with the Paris Climate Accord, are awarded transparently, deliver long-term benefits to communities, and offer terms that developing nations can afford.
Lofty goals aside, the financing model is also very different. Unlike BRI — which doles out financing provided directly by China or by state-backed Chinese companies — B3W is pinning its hopes on capital markets and US development finance institutions like the Export-Import Bank. G7 countries would not contribute directly, but rather facilitate and guarantee deals for private sector investors who would ultimately foot the bill.
How much money are we talking about here? It's not clear. B3W says for now that it intends to raise "hundreds ofbillions of dollars." But that's a mere drop in the bucket considering that the G7 itself estimates the developing world needs to invest $40 trillion in infrastructure by 2035. The figure is also way behind the $3.7 trillion that BRI, launched in 2013, had secured for over 2,600 projects in more than 100 countries as of mid-2020.
Will there be political strings attached? Technically no, but the plan was unveiled as part of a broader G7 push to band together "like-minded" democracies as a counterweight to China's authoritarianism. It's therefore fair to assume that at least initially B3W will prioritize assisting fellow democracies — including weak ones that have only turned to Beijing because they have difficulty accessing loans from the IMF and other international finance institutions. This could appeal to countries like Zambia, which knows US creditors will want their money back but won't demand copper mines in exchange for debt relief like China.
The unintended consequence of favoring democratic nations could be making authoritarian regimes even more dependent on China to build their energy plants, ports, and roads. This is true for post-coup Myanmar, and for some Central American countries hungry for Chinese cash with no questions asked about human rights or the rule of law.
Could US domestic politics get in the way? Possibly. Standing up to China is just about the only thing Democrats and Republicans can agree on these days. But the Biden administration has yet to clarify what it'll do to help raise the money for B3W in US capital markets, and what — if any — tax incentives will be offered for investments outside the country. What's more, Republicans lawmakers would rather give (some) money for US companies to fix America's own crumbling infrastructure than to build a new port in Asia or a railroad in Africa.
Although Joe Biden keeps telling his G7 buddies that "America is back," they don't buy it... yet. They know that B3W's fate largely depends on the next two election cycles in the US. If it remains a US-led but still multilateral initiative, the project may lose steam if Republicans win back the House and Senate in next year's midterms. And B3W could be doomed if a climate-skeptic Republican candidate who espouses Donald Trump's "America First" principles, perhaps even Trump himself, wins the presidency in 2024.
- US-China: Temperature rising - GZERO Media ›
- China's plans for Afghanistan - GZERO Media ›
- Graphic Truth: One Belt, One Road, Two Worlds? - GZERO Media ›
- The Graphic Truth: Life is actually getting better - GZERO Media ›
- Senate's bipartisan $1T infrastructure bill could double US spending - GZERO Media ›
- The US-China economic competition is heating up, says investor Ray Dalio - GZERO Media ›
What We’re Watching: Australia cancels China deals, Zuma without lawyers, US to recognize Armenian genocide
Australia rips up Belt & Road deal: Australia cancelled two 2018 deals signed between Victoria, Australia's wealthiest state, and the Chinese government, that committed the two sides to working together on initiatives under China's Belt and Road infrastructure development program. Foreign Minister Marise Payne said that the agreements "were adverse to our foreign relations." Similar deals between Victoria and institutions in Iran and Syria were also abandoned by the Australian government this week, under a 2020 law that allows Canberra to nullify international agreements struck at local and state level. (Australian universities say the "foreign veto bill" amounts to "significant overreach.") Meanwhile, Beijing hit back, calling the move "unreasonable and provocative," and accusing Canberra of further stoking divisions after a series of escalatory moves by both sides that have seen China-Australia relations deteriorate to their worst point in decades. Chinese investment in Australia dropped by 62 percent last year, a massive blow for Australia's export-reliant economy.
Zuma's lawyers quit: Jacob Zuma's entire legal team has thrown in the towel just a month before the former South African president's high-stakes corruption trial. The lawyers have yet to explain why they've dropped Zuma, but regardless it will make it much harder for him to prove he is innocent of 16 charges of racketeering, fraud, corruption and money laundering related to a $2 billion arms deal from the 1990s. Zuma — who was forced to step down in 2018 over this corruption scandal — has long decried the trial as a political witch hunt, stonewalling all requests for evidence and often not showing up when he was due in court. But the process is a major test for South Africa's judiciary to demonstrate it can actually hold people in power to account for corruption. Zuma's successor and former ally, President Cyril Ramaphosa, will be watching very closely.
US to recognize Armenian genocide: A hundred years after the Ottomans tried to exterminate the empire's Armenian population, US President Joe Biden will officially recognize the campaign as a genocide on Saturday. Biden's decision, first sniffed out last month by our very own Ian Bremmer — makes him the first sitting US president to make the designation, joining nearly 30 other countries that have already done so. Although the move is purely symbolic, it risks hurting relations with Turkey, modern successor to the Ottoman Empire and which for decades has denied that as many as 1.5 million Armenians were intentionally massacred or marched to their deaths during and after World War I. With ties between the US and Turkey, a NATO ally, already strained over Turkish President Recep Tayyip Erdogan's increasing authoritarianism and his defense dalliances with Russia, expect some fireworks between Washington and Ankara in the coming days.Chinese PM Li Keqiang and Afghan CEO Abdullah Abdullah applaud while Afghanistan's Foreign Minister Salahuddin Rabbani and Chinese Foreign Minister Wang Yi exchange signed documents in Beijing in a 2016 ceremony.
China's plans for Afghanistan
Afghanistan frustrated nineteenth-century British imperialists for 40 years, and ejected the Soviet army in 1989 after a bloody decade there. And though American and NATO forces ousted the Taliban government in 2001 over its support for al-Qaeda, there's no good reason for confidence that nearly 20 years of occupation have brought lasting results for security and development across the country.
But… could China succeed where other outsiders have failed – and without a costly and risky military presence? Is the promise of lucrative trade and investment enough to ensure a power-sharing deal among Afghanistan's warring factions?
In recent years, the Chinese leadership has actively engagedboth the Western-backed government in Kabul and — given the likelihood they will eventually regain some degree of political power — Taliban fighters, in hopes of ending the never-ending conflicts that have long made Afghanistan ungovernable.
China has good reason to become more deeply involved. Afghanistan shares a short border with China's mainly Muslim Xinjiang region, and Beijing has long feared that instability in Afghanistan, heightened as the US and NATO prepare to withdraw troops, might allow Uighur separatists to use Afghan territory as a base for military operations. China also sees Afghanistan as an arena in which to promote stronger commercial and security ties with its Pakistani ally and gain advantage on its Indian rival.
Most importantly, Afghanistan offers major new economic opportunities for China via potential expansion across Afghan territory of China's Belt and Road infrastructure development project. Beyond the interest of Chinese companies in its mineral wealth, Afghanistan is China's direct overland path to the Middle East. It could also become part of the China-Pakistan Economic Corridor, a project of central economic and geopolitical importance for Belt and Road.
Deeper Chinese involvement might bring all kinds of good things for Afghanistan. All of the country's factions know China has staying power and a willingness to spend that others won't match. If China can persuade Afghanistan's government, the Taliban leadership, and local warlords that a sustainable power-sharing deal might make them all rich, it could bring a degree of stability that no foreign occupier can. Belt and Road could provide badly-needed infrastructure and the trade and investment opportunities that come with them.
And that's great… unless you're an Afghan who needs outside powers to try to force powerful locals to respect your rights. As we've written in the past, Afghanistan's women in particular face a precarious existence in a world where the fundamentalist Taliban exert major influence. Women and girls stand to lose significant gains in health and education made over the past two decades if Taliban promises to preserve them prove empty. Whatever high-minded rhetoric is written into diplomatic deals between China and Afghan factions, protections for human rights inside Afghanistan will never be a Chinese priority.
Or maybe it's all a mirage. Before China commits to big long-term investments — economic, political, and theoretically military if Chinese assets are threatened — its leadership must calculate whether engagement is a sustainable strategy. What if Afghan power brokers eventually decide they'd rather fight over spoils than keep the peace in their common interest? What if Taliban leaders can't control every Taliban faction? What if mounting debt, for both Pakistan and Afghanistan, make expanded regional infrastructure investment too risky?
Over the years, China's leaders have seen Britons, Europeans, Russians, and Americans stuck in Afghanistan without an exit strategy. Those are mistakes no one in Beijing is eager to repeat.
Kevin Rudd and China's Future
This week Ian talks China all episode long. First up, what China is getting right and what it is getting wrong. Then he sits down with former Australian Prime Minister Kevin Rudd to discuss Xi Jinping’s China. And on Puppet Regime, Vladimir Putin gets a brand new look. Let’s get to it.