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Asia-Pacific Fear, Global Systems Falling Apart, China and US Battle

Asia-Pacific Fear, Global Systems Falling Apart, China and US Battle

Now that the APEC meeting ended in a Clash of the Titans, and without a communique, all participants now turn their focus on G20 and the Trump-Xi meeting that could result in a  more interesting outcome.

In the history of the Asia-Pacific Economic Cooperation (APEC) group the meetings have always been well-mannered and civil, ending in warm and of course positive communiques that always encouraged cooperation and peace. However, this most recent meeting saw two clear changes – the US and China giving competing visions and the meeting finishing without an agreement on the final communique. It is clear that the trade war between the US and China, once thought to be a series of tariffs and government control, is much deeper and of course has structural and other components that are political and in some cases domestic. US jobs are central to the Trump vision, exporting as much as possible is the vision from Chinese leadership.

We at Classiarius are always writing about the collapse of the world order, starting in 1991 with the collapse of the Soviet Union, followed by cracks in the Bretton-Woods System in the 1990s and its accelerated breakdown starting from 2008. The world order is imploding and President Trump, President Xi and others are fighting for their countries and workers as the system breaks down.

APEC as we know it is being torn apart as some countries are siding with China and placing their loyalty with President-for-life Xi. Most leaders have different views on the path that APEC should take, with the lack of a clear communique at the summit in Papua New Guinea on Sunday, and discussions about trade being overwhelmed by the China – US trade tariffs. APEC is now breaking down as this multi-lateral system is under pressure from China. Many members of the system believe and support APEC and  of course want to preserve the multilateral system which is supported by a robust and well-funded WTO. Still, some members are falling behind China, while some are falling behind the US – Japan, New Zealand and Australia.

One specific issue was China wanting to insert two paragraphs into the document, the communique, but a diplomat rejected it. China has been angered and has blamed the WTO for saying that it has engaged in unfair trade practices. Tensions were high but it seems that the future of APEC and Asian cooperation are changing and that the collapsing of multilateral systems is here to stay.

China wants to break down all multilateral systems and form its own in Asia. The US , and its allies such as South Korea and Japan want to take a different path, one that will take regional players and align them in smaller groups. In the next 5 years, Asia will see change, and two distinct systems will emerge. Some experts are saying that China is disrupting as much as possible in Asia, an example is North Korea who gets a nod and a smile each time it demands Japan, the US and South Korean attention. China does nothing and the North Koreans do all the work – Asia is disrupted as a result.

Chances are that these trends will continue in the region.

Team Classiarius

JMB

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Classarius is the only data driven news for blockchain, cryptocurrencies and technology from investment professionals.
Disclaimer: We do not provide investment advice or strategies, this article is not intended as such but only to provide you the reader with information. Please conduct your own research before any investment of any kind.

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