Richard Whittall:

The Globalist's Top Ten Books in 2016: The Turbulent World of Middle East Soccer

Middle East Eye: "

The Turbulent World of Middle East Soccer is one of the weightiest, most revelatory, original and important books written about sport"

“The Turbulent World of Middle East Soccer has helped me immensely with great information and perspective.”

Bob Bradley, former US and Egyptian national coach: "James Dorsey’s The Turbulent World of Middle Eastern Soccer (has) become a reference point for those seeking the latest information as well as looking at the broader picture."
Alon Raab in The International Journal of the History of Sport: “Dorsey’s blog is a goldmine of information.”
Play the Game: "Your expertise is clearly superior when it comes to Middle Eastern soccer."
Andrew Das, The New York Times soccer blog Goal: "No one is better at this kind of work than James Dorsey"
David Zirin, Sports Illustrated: "Essential Reading"
Change FIFA: "A fantastic new blog'

Richard Whitall of A More Splendid Life:
"James combines his intimate knowledge of the region with a great passion for soccer"

Christopher Ahl, Play the Game: "An excellent Middle East Football blog"
James Corbett, Inside World Football

Sunday, September 29, 2019

JMD on NBN: Nicholas Walton, Singapore, Singapura, From Miracle to Complacency

Nicholas Walton

Singapore, Singapura

From Miracle to Complacency

Hurst 2019
September 27, 2019 James M. Dorsey

Nicholas Walton’s Singapore, Singapura: From Miracle to Complacency (Hurst, 2019) is far more than a portrait of the rise of a resource-poor nation that has become a model of economic development, governance and management of inter-communal relations. Part travelogue, part history, Walton charts the opportunities and pitfalls confronting small states that have become particularly acute in an era of identity politics and civilizational leadership. Potential threats include not only the Singapore’s struggle to insulate itself from global trends as well the impact of the rise of ultra-conservative attitudes in its majority Muslim neighbours, Malaysia and Indonesia, but also increased difficulty in balancing rival powers China and the United States. If that were not enough, Singapore is juggling multiple issues at a time that it is transiting to a new generational leadership faced with the challenge of ensuring that Singapore remains relevant to its neighbours as well as the international community at large.

To do so, Singapore’s leadership will have to upgrade if not reinvent its relevance to its neighbours as well as the international community at large given tectonic geopolitical and technological shifts among which first and foremost artificial intelligence. Walton argues convincingly that complacency may be one of Singapore’s greatest challenges. Generational change involves not only a new generation of leadership but also a generation that was born into a wealthy welfare state, lacks the older generations’ sense of being pioneers and takes things for granted. It is a challenge that is likely to have consequences for a rethink of Singapore’s education system, considered one of the world’s best. In portraying the miracle of Singapore’s success and the challenges it faces, Walton brings a strong sense of history, keen observation and a journalist’s ability to paint with words an incisive picture of a country that has turned its lack of resources into an asset.

James M. Dorsey is a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies and the National University of Singapore’s Middle East Institute.

Thursday, September 26, 2019

Saudi policy shift: A rare Trump foreign policy success

By James M. Dorsey

A podcast version of this story is available on Soundcloud, Itunes, Spotify, Stitcher, TuneIn, Spreaker, Pocket Casts, Tumblr, Patreon, Podbean and Castbox.

By the law of unintended consequences, US President Donald J. Trump’s mix of uncritical and cynical embrace of Saudi Arabia and transactional approach towards relations with the kingdom may be producing results.

Saudi Arabia appears to be backing away from its largely disastrous assertive and robust go-it alone foreign and defense policy posture and reverting to a more cautious approach that embraces multilateralism, seeks international backing before acting and emphasizes traditional and public diplomacy.

The kingdom’s shift towards a less reckless, more coordinated and deliberate foreign and defense policy does not necessarily mean a change in rhetoric or a greater willingness to seek negotiated solutions.

It entails a change in tone and strategy rather than a backing away from key foreign or domestic policy positions, including Saudi Arabia’s deep-seated animosity towards Iran.

Saudi state minister for foreign affairs Adel al-Jubeir made that clear, saying that Saudi Arabia had not ruled out a military response to drone and missile attacks that severely damaged two if its key oil installations.

Mr. Al-Jubeir reiterated conditions for any successful negotiation that include tough restrictions on and oversight of Iran’s nuclear program and limits to its development of ballistic missile. He further demanded fundamental changes to Iran’s foreign and defense policy.

“No nukes, no missiles and no terrorism,” Mr. Al-Jubeir said in language that was likely to appeal to a broad audience but masked the two countries’ core differences.

Nicolas Dunais, an economic advisor to Gulf governments who last year was helping Saudi Arabia establish a national risk and resilience unit, got a glimpse of Saudi Arabia’s fundamental attitude before the kingdom’s recent repackaging.

Suggestions by Mr. Dunais to consider the broader risks related to the missile threat and to undertake an indirect dialogue with the Houthi leadership were summarily dismissed given the confidence that military might alone would be enough to crush a ragtag army of rebels

King Salman signalled the policy shift when he told a Cabinet meeting, days after the attacks believed to have at least been enabled by Iran, that they were "not aimed at the vital facilities of Saudi Arabia only, but also threaten the global economy."

King Salman’s statement was as much an effort to capitalize on the attacks to garner international support and step up pressure on Iran as it was the setting of a different foreign policy tone.

Unlike the United States that put responsibility for the attacks squarely on the shoulders of Iran, Saudi spokesmen were careful to stop short of holding Iran directly responsible for the attacks. Instead, they asserted that the weapons used in the attacks were Iranian made and therefore bore some degree of responsibility.

Similarly, in sharp contrast to the kingdom’s rejection of an international investigation into last year’s killing of journalist Jamal Khashoggi and its tight control of access to war-torn Yemen, Saudi Arabia followed up on King Salman’s statement by inviting the United Nations and others to participate in a forensic investigation of the attacks that would focus on the origin of the weapons employed, and the launching spot of the drones and missiles.

Speaking to the New York-based Council of Foreign Relations, Mr. Al-Jubeir said foreign experts had already arrived in the kingdom.

Driving the point home, Mr. Al al-Jubeir said earlier that Saudi Arabia was consulting “with friends and allies about the next steps to take.”

In a further embrace of multilateralism, Saudi Arabia, days after the attacks, joined a US-led coalition to secure the Middle East’s waterways. Earlier, Britain, Bahrain and Australia pledged to participate in the coalition.

The Saudi moves were buffeted by a concerted reaching out to the media rather than relying primarily on expensive public relations and lobbying agencies to ensure that the kingdom’s voice and more cautious approach was heard and noted.

The attacks drove home the vulnerability of the kingdom’s oil assets that account for the bulk of its revenues and its international standing and a realization that Saudi Arabia could not count on unquestioned support of the international community and particularly the United States, its long-standing guardian angel.

That realization came as Saudi Arabia was working to repair damage to its image as a result of its conduct of the Yemen war; the killing of Mr. Khashoggi; the massive crackdown on activists, critics and businessmen; and its abrupt and undiplomatic response to countries like Sweden and Canada that voiced public criticism of the kingdom’s policies.

This week, Saudi ambassador to the UN Abdulaziz Alwasil didn’t mince his words, responding to Australia’s leadership of 24 Western nations in issuing a statement condemning the kingdom for a raft of human rights abuses.

Yet, in a sign of the times and in contrast to earlier incidents involving Sweden and Canada, Mr. Alwasil did not threaten disruption of trade and other forms of cooperation with Australia nor did he indicate that the kingdom may expel Australian diplomats.

Saudi Arabia’s efforts to come to grips with new realities came as the kingdom was preparing for an initial public offering by its national oil company, Aramco, that has been struggling to ensure that it meets Crown Prince Mohammed bin Salman’s target valuation of US$2 trillion.

The precarity of the kingdom’s situation was obvious for all to see when Mr. Trump made clear that his inclination was not to launch a risky retaliatory strike against Iran in response to the attacks but to tighten economic sanctions and to continue exploring a possible dialogue with the Islamic republic,

Adding insult to injury, Mr. Trump emphasized the fact that the attacks were against Saudi Arabia and not against the United States and that his administration would support a Saudi response or potentially act on its behalf against payment.

As a result, Saudi Arabia has been manoeuvring to ensure that the situation does not get out of control and that it is not put in a position in which it risks an all-out war that could prove to be devastating.

Saudi Arabia’s shift in policy approach follows in the footsteps of the United Arab Emirates that has in recent months sought to de-escalate tensions in the Gulf by distancing itself from Saudi positions.

The UAE has partially withdrawn its forces from Yemen in an effort to prevent further reputational damage, a move that sparked fighting between UAE and Saudi-backed forces in the country. It was careful not to blame Iran for attacks on tankers off the coast of the UAE believed to have been launched by Iran and reached out to the Islamic republic by sending a coast guard delegation to Tehran.

Said Rebecca Wasser, a senior policy analyst at RAND Corp., noting that the attacks had made the kingdom realize that it may be playing for stakes that are too high: “I think there has a been a calculation that the costs might be too high.”

Mr. Trump can claim some credit for Saudi Arabia’s emerging adoption of a more cautious approach. Higher costs and greater risk perceptions were likely one consequence of his transactional approach towards the kingdom.

Dr. James M. Dorsey is a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies, an adjunct senior research fellow at the National University of Singapore’s Middle East Institute and co-director of the University of Wuerzburg’s Institute of Fan Culture

Wednesday, September 25, 2019

Big power rivalry in the Gulf requires a US strategy rethink

By James M. Dorsey

A podcast version of this story is available on Soundcloud, Itunes, Spotify, Stitcher, TuneIn, Spreaker, Pocket Casts, Tumblr, Patreon, Podbean and Castbox.

As French, Pakistani and other leaders seek to engineer a meeting between the US and Iranian presidents on the sidelines of the United Nations General Assembly, big power rivalry could rack up tension in the waters of the Gulf and the Indian Ocean.

With prospects for a face-to-face encounter between presidents Donald J. Trump and Hassan Rouhani slim at best, attention is likely to focus on beefing up the security of key Saudi oil facilities after drone and missile attacks, blamed by the kingdom and the United States on Iran, and identifying an appropriate response that minimizes the risk of a full-fledged military confrontation.

Saudi Arabia and the United Arab Emirates, days after the attacks severely damaged oil installations, joined a US-led coalition to secure the Middle East’s waterways. Earlier, Britain, Bahrain and Australia pledged to participate in the coalition.

Japan declined to join but said it was considering sending its Maritime Self-Defense Force (SDF) on information-gathering missions in the region. It said it would coordinate with the US-led coalition and would include the Strait of Hormuz in its operations if Iran agreed. Japan has unsuccessfully sought to mediate between the United States and Iran.

The US Defense Department, meanwhile, in response to a request from Saudi Arabia and the UAE and in an effort to reassure Gulf allies said last week that it was sending an unspecified number of troops and equipment to the two countries to bolster their defences.

Iranian Brigadier General Ghadir Nezami, head of international and diplomatic affairs of his country’s armed forces, raised the stakes by saying that the Iranian navy would be holding joint exercises with Russia and China in the Indian Ocean and the Sea of Oman.

General Nezami, who is believed to have recently accompanied chairman of the Iranian Joint Chiefs of Staff Major General Mohammad Baqeri on a visit to China, gave no date for the exercises. Chinese and Russian media have yet to report the planned exercise while spokesmen in the two countries declined to confirm or deny the Iranian announcement.

Iranian Navy Commander Rear Admiral Hossein Khanzadi said in July that the Russian and Iranian navies would be conducting a joint exercise within a matter of months to boost military cooperation.
Russian and Chinese hesitancy to confirm the exercise may be designed to avoid hiking tensions as efforts at the United Nations to mediate between the United States and Iran proceed.

Moreover, Russian president Vladimir Putin is likely to want to avoid a shadow being cast over his planned visit to Saudi Arabia in October. Mr. Putin has urged the kingdom to proceed with the acquisition of Russia’s S-400 anti-missile system that was agreed in principle two years ago.

Russian foreign minister Sergey Lavrov met this week with his Saudi counterpart Ibrahim Assaf at the United Nations to discuss the visit.

Russia and China may also not want to undermine a Chinese-backed Russian proposal for a collective security agreement in the Gulf that would replace the US defence umbrella at a time that Saudi Arabia, uncertain about American reliability, may reach out to other countries for support in protecting its oil assets.

South Korea’s Yonhap news agency last week reported that Crown Prince Mohammed bin Salman had requested South Korean assistance in the strengthening of the kingdom’s air defense system.

Gulf concern about US reliability, dating back to US president Barak Obama’s negotiation of an international nuclear agreement with Iran and reinforced by Mr. Trump’s transactional response to the recent attacks on Saudi oil fields, leaves the Saudis and the Americans with no good choices.

Middle East scholar and former advisor to the US Defence Department Bilal Y. Saab argues, against the backdrop of a widespread feeling in Gulf states that the United States is gradually reducing its commitment to their defense as Washington focuses on Asia and the Indo-Pacific, that the United States in particular is caught in a Catch-22.

Its options of reducing commitment without surrendering its umbilical defense cord and making way for America’s rivals are limited.

Mr. Saab believes that the United States should focus its security cooperation less single-mindedly on arms sales and more on building the Gulf states’ institutional national defense infrastructure. Failure to do so, would risk regional tensions repeatedly spiralling out of control and ultimately prevent a gradual US drawdown.

The problem is, in Mr. Saab’s words, that what the United States should be doing to “responsibly reduce its security burden and footprint in the region” while safeguarding opportunities for lucrative arms sales would likely reinforce perceptions of America as unreliable and willing to sacrifice its friends – a perception that dates from the 2011 popular Arab revolts when Washington ultimately backed the toppling of Egyptian president and US ally Hosni Mubarak.

Mr. Saad is the first person to admit that his proposition may be pie in the sky.

“It would mean building and empowering institutions that have the guns, and thus the ability, to conduct coups. Only a foolish Arab autocrat would be interested in that. It would also mean liberalizing or professionalizing national-security ministries and intelligence agencies. Few Arab leaders would voluntarily undermine the favourable clientelistic networks that are run by their governments. In short, defense reform requires political reform,” he says.

Moreover, institution building would bring the different threat perceptions of the Gulf states and the US into sharp relief and force Gulf states to rethink their arms acquisition policies and grant the United States access to their jealousy guarded most secret data and programs.

Said Mr. Saab: “There is no shortage of problems on the US end or on its partners’ end when it comes to security cooperation. But it will be impossible to address any of those without making a total switch on how the United States thinks about security cooperation.”

That would require a US president who thinks in strategic rather than transactional terms.

Dr. James M. Dorsey is a senior fellow at Nanyang Technological University’s S. Rajaratnam School of International Studies, an adjunct senior research fellow at the National University of Singapore’s Middle East Institute and co-director of the University of Wuerzburg’s Institute of Fan Culture

Monday, September 23, 2019

Trump’s Trade Wars: A New World Order?

Trump’s Trade Wars: A New World Order?

The escalating trade war between the United States and China risks a breakdown in global trade as the world’s two largest economies contemplate encouraging the emergence of trading environments that they would dominate.

Sunday, 22 September 2019 09:25 GMT

A podcast version of this story is available on Soundcloud, Itunes, Spotify, Stitcher, TuneIn, Spreaker, Pocket Casts, Tumblr, Patreon, Podbean and Castbox.

President Trump’s declared economic protectionism has taken the United States’ international relations with several foes and allies to some uncharted territories. His open-ended trade wars toward several nations have triggered criticism among conservatives and liberals alike in the United States. He has justified his actions by arguing for a downturn of America’s trade deficit. However, a recent Harvard CAPS/Harris Poll survey shows 63 percent of registered voters said that tariffs imposed on Chinese products ultimately hurt the U.S. more than China; while 74 percent said that American consumers are shouldering most of the burden of those tariffs. (1) The political network funded in part by billionaire libertarian Charles Koch has contested Mr. Trump’s approach toward China, and decided to shape an alternative strategy in the year of the U.S. Presidential elections. One Koch senior official has acknowledged, “It doesn’t penetrate with the people that are willing to go along with the argument that you have to punish China.” There is now a pursuit of a “two steps back strategy,” which will involve putting together a team of almost 100 business leaders to call on the Trump administration and lawmakers to end the trade war with China. (2)

In this paper, James M. Dorsey, senior fellow at the S. Rajaratnam School of International Studies at Singapore's Nanyang Technological University and the National University of Singapore’s Middle East Institute, examines the ramifications of President Trump’s policy of economic sanctions and tariffs vis-à-vis several nations and international groupings. He also looks at China’s counter strategy, and whether Middle Eastern countries, like Saudi Arabia, will be caught in the web of the current trade wars.

US President Donald J. Trump may not like armed conflict, but he sure loves economic warfare, whether it is to impose his political will on countries, protect sectors of the U.S. economy, secure more preferential trade terms, or stop others from gaining technological advantage.

The list of countries subject to sanctions or import tariffs designed to force changes in either economic, military, or geopolitical policies is long and includes both U.S. allies and rivals. Since Mr. Trump assumed presidency in January 2017, he has sanctioned China, North Korea, Russia, Venezuela, Iran, the European Union, Myanmar, Syria and Cuba. In one of his first actions after entering the Oval Office, he pulled the United States out of the Trans Pacific Partnership (TPP). (3). He has also sought to undermine the World Trade Organization (WTO), a US-inspired pillar of global trade. (4)

Mr. Trump’s liberal use of sanctions amounts to more than a penchant for economic warfare in an effort to create trade terms more advantageous to the United States. Economic warfare is the president’s strategy to shape a new world order that is likely to be multi-polar. Almost three years into Mr. Trump’s administration, it is proving to be a strategy with unintended consequences. Trump is not the only leader to discover that the employment of trade, commerce, and investment as not only an economic but also political tool can be a double-edged sword.

Conspiring by Default

So is Chinese president Xi Jinping as he confronts mounting anti-Chinese sentiment in Eurasia and greater competition on China’s border in the Russian Far East. Both leaders are forced to respond to external shocks, like mounting tension between Saudi Arabia and Iran in the wake of recent brazen drone and missile attacks on the kingdom’s oil installations. These attacks have led to a temporary cut of Saudi oil production by half, and are likely to change trading patterns, particularly in energy, not only of China; but also, of multiple other Asian states, including Japan, South Korea and India.

Mr. Trump’s protectionist penchant for economic warfare, 15 months before next year’s US presidential election, that breaks with 85 years of U.S. trade and economic policy focussed on free trade and open markets, has yet to produce a foreign policy success. China and Russia, determined to counter U.S. power, particularly in Asia, have forged ever-closer ties. Iran and North Korea have demonstrated the resilience to endure harsh sanctions. Nicholas Maduro retains his grip on Venezuela while Europe is increasingly exasperated with America and discussing ways of improving relations with Russia to counter China. (5)

Mr. Trump’s renegotiation of the North American Free Trade Agreement (NAFTA), renamed the United States-Mexico-Canada Agreement (USMC), weakened protections for investors in Mexico as well as government commitment to allow foreign companies to bid for procurement contracts. While adding a review process to the agreement, this policy has created a sense of instability. Mr. Trump enhanced uncertainty by subsequently threatening to impose new tariffs on Mexico because he did not like the country’s handling of Central Asian asylum seekers. (6)

Former World Bank president, U.S. trade representative and deputy-secretary of state Robert B. Zoellick predicts that Mr. Trump is likely to continuously wage economic warfare and keep trade partners off balance. “He will not change. Trade…is a core issue for the president’s political base. He must keep it boiling,” Mr. Zoellick said in a Wall Street Journal op-ed entitled “The Trade War’s Winners Don’t Include Us”. (7)

As a result, damage to U.S. credibility and ability to regulate the international political and economic order may outlast Mr. Trump’s sanctions and tariffs-driven policies. Countries like China and Russia are likely to expand trade relations with third countries, and shift supply chains at the expense of preferential U.S. access to markets. They may also defy U.S. secondary sanctions, which target third country companies and entities, which refuse to comply with, for example, sanctions against Iran, and initiate ways of undermining the global reserve function of the U.S. dollar.

The Trade War Timeline [PIIE]

U.S. losses are palatable. The TPP has lowered trade barriers for member countries (8) but not for the United States. The EU has gained preferential access to Japan (9) while China has retaliated with tariffs of 21.8 percent on U.S. products (10) and lowered them to 6.7 percent for others. (11) The U.S. Treasury has doled out billions of dollars to agricultural exporters (12) who have lost significant market share in China that they will find difficult to recover. U.S. manufacturers are moving operations to third countries (13) to evade the impact of the U.S.-China trade war while foreign direct investment in the United States is dropping. (14) Chinese investment in the United States has plummeted in the last two years. (15) Meanwhile, India and the United States are erecting barriers of their own (16) that will negatively affect bilateral trade while negotiations with the EU are stalled. (17)

Mr. Trump’s trade wars have reduced the United States’ ability to establish rules and standards that govern key sectors like medical services, finance, intellectual-property rights, data access and security; and enable the fight against corruption and promote transparency; “This president disdains rules; he acts as if governments control purchases like in old-style mercantilism,” Mr. Zoellick said. “Trump thinks that trade policy is a tweet at 3 o’clock in the morning,” added Democratic presidential candidate Bernie Saunders. (18)

Bullying Does the Job

Mr. Trump’s erratic approach towards policy-making and implementation, involving the belief that bullying will do the job and vacillation between bluster and moderation, has projected him as an unreliable and impossible negotiator. This approach showcases a sharp contrast to his self-styled portrayal of himself as the master of the ‘Art of the Deal’. At the risk of sparking the emergence of parallel economic worlds, one dominated by the United States, the other by China, Mr. Trump assumes his trade war and efforts to block Chinese access to U.S. technology would sabotage Mr. Xi’s ‘Made in China 2025’ program designed to make China commercially and industrially self-sufficient. Mr. Trump further sees his trade war as a way of halting China’s efforts to replace the U.S. as the world’s foremost, cutting-edge economy. Reporting on a recent visit by Mr. Xi to Henan Province, Communist Party newspaper Global Times reported the president had “urged the development of the real economy bolstered by manufacturing, with self-reliance as the basis of all endeavours.” (19)

Mr. Trump may be right in his identification of the threat that China poses to U.S. economic and geopolitical dominance. The problem is that his policy solution risks accelerating the process rather than pausing or reversing it. Rather than stimulating research and development needed to ensure an American lead, Mr. Trump seems to believe that undermining China’s abilities is the key. The threat of the demise of a global market and the rise of parallel markets appears to have reinforced Chinese determination to become self-reliant to the degree possible.

“A more competitive United States would be a stabilizing force,” said Ely Ratnert, the executive vice president of the Center for a New American Security and former deputy national security adviser to Vice President Joe Biden, arguing that U.S. strategy should involve both engagement and containment. (20)

Trump's Looming Trade Ward [AP] 

Differences between China’s response to U.S. sanctions on telecommunications equipment and systems maker ZTE Corporation that threatened to bring the company down and Huawei, another major Chinese telecom equipment manufacturer, suggest that Mr. Xi has factored the emergence of parallel worlds into his thinking. Last year, he phoned Mr. Trump to plead with him to lift a crippling seven-year ban on the acquisition of U.S. components by ZTE. (21) The ban, imposed in response to allegation of ZTE’s busting of sanctions against Iran and North Korea, effectively sounded the death knell for ZTE, which has a workforce of 75,000. Mr. Trump agreed to lift the ban in exchange for ZTE agreeing to pay a U.S. $1.3 billion fine, undertake sweeping management changes, and hire American compliance executives to monitor internally the company.

No such deal was available to Huawei, neither would Mr. Xi be willing to accept another deal that he would have perceived as reminiscent of China’s historical humiliations at the hands of Western powers. Huawei has responded defiantly to U.S. sanctions, (22) the detention in Canada at the behest of the United States of its Chief Financial Officer, Meng Wanzhou, (23) daughter of the company’s founder, Ren Zhengfei, on charges of financial fraud, sanctions violations, and obstruction of justice; and a global campaign to prevent companies from acquiring Huawei’s 5G technology. The US asserts that Huawei has close ties to China’s military and security forces. (24) In line with what has been termed the decoupling of the U.S. and Chinese economies, Huawei introduced Harmony, its own operating system to rival Android; and make it less dependent on U.S. technology. (25)

In September 2019, the Trump administration took a further step towards decoupling with proposed new rules, which would allow the United States to exert greater control over foreign investment, by broadening the government’s authority to block technology and real estate transactions. The rules would give the Committee on Foreign Investment in the United States, or CFIUS, greater power to stop foreign investment in areas the U.S. deems protected, a move that primarily aims to bar China from access to sensitive American technology and other valuable assets. Beyond technology, the rules would red flag investment in infrastructure, such as telecommunications, utilities and energy as well as companies that collect sensitive personal data related to finance and health, particularly of individuals and/or federal employees involved in national security. Real estate acquisitions would be vetted on proximity to military installations, airports and ports. (26)

US Trade Deficit [European Data News] 

Chinese Trade Policy Backfires

If Mr. Trump has demonstrated his inclination to wage economic wars, his Chinese counterpart, Mr. Xi, sees trade and foreign investment as a way of not only securing economic growth by imposing increasingly controversial commercial terms; but also, achieving China’s geopolitical goals and promoting its concept of an invasive surveillance state. With countries like Pakistan, Malaysia, Myanmar and Nepal questioning projects that fail to respond to local needs and fail to contribute to economic growth because they rely on Chinese labor and materials, China has conceded that it may have to make adjustments to a policy that by default rather than design could end up contributing to decoupling.

"It is normal and understandable that development focus can change at different stages in different countries, especially with changes in government. So China can also make some strategic adjustments when cooperating with these countries, but it is definitely not a reconsideration of the B&R (Belt and Road) initiative," Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges told the Global Times newspaper. (27)

Mr. Jun spoke as Chinese foreign minister, Wang Yi, was confronted on a visit to Islamabad with Pakistani demand that China should refocus its U.S. $45 billion plus investment in the China Pakistan Economic Corridor (CPEC), the single largest country infrastructure investment related to the Belt and Road initiative, to emphasize manufacturing and poverty reduction projects. (28) The Pakistani demand amounted to a rejection of China’s approach that appeared to position Pakistan as a raw materials supplier for China, an export market for Chinese products and labour, and an experimental ground for the export of the surveillance state China is rolling out, particularly in its troubled north-western province of Xinjiang. (29)

How the US-China Trade War Escalated [STATISTA] 

Elsewhere in Asia, some countries were putting their money where their mouth was. Chinese commercial terms prompted Nepal, like Pakistan to withdraw from a Chinese-funded dam project. (30) Furthermore, protests against the forced resettlement of eight Nepali villages persuaded CWE Investment Corporation, a subsidiary of China Three Gorges, to cancel a 750MW hydropower project. (31)

In July, Malaysia restarted the China-linked East Coast Rail Link project after forcing China to agree to downsizing construction costs by a third. The rail project, led by China Communications Construction Co. and Malaysia Rail Link Sdn., was cancelled in 2018 by Prime Minister Mahathir Mohamad after he balked at the U.S. $16 billion cost. (32) The rail scheme was one of several projects, including a natural gas pipeline, suspended or cancelled by Mr. Mahathir after taking office in May 2018. (33) Similarly, Myanmar forced China to scale back its Kyaukphyu deep-sea port project from U.S. $7.5 billion to 1.3 billion. (34)

Even China’s approach towards trade with Russia, its closest ally, has sparked anti-Chinese sentiment and raised questions of whether the current state of affairs is sustainable. Chinese investment in Russia is a fraction of China’s investment in other regions like sub-Saharan Africa or South America and less than China’s expanding stake in countries like Nigeria and Brazil. A Chinese-Russian agreement on economic cooperation in Siberia, Russia’s Far East and China’s Northeast for a period of nine years ending in 2018 has fallen far short of expectations.

The agreement identified 91 joint investment projects of which only 11 materialized. (35) Similarly, energy failed to live up to its billing. CEFC China Energy’s plan to acquire a 14 percent stake in Russia’s largest, and majority state-owned, oil company, Rosneft, never happened. Neither did an agreed U.S. $25 billion investment in Russia’s Power of Siberia gas pipeline. The pipeline’s export of 38 billion cubic metres of natural gas is but one source for China that in 2017 imported more than 90 billion cubic meters from Australia, Qatar, and Turkmenistan.

Pacific Rim States Affected by Trump's war on Free Trade [STATISTA]

Russia scholar Leo Aaron charged that the lopsided nature of Chinese-Russian economic relations fits the definition of Karl Marx and Vladimir Lenin of colonial trade, in which one country becomes a raw material appendage of another. “China is Russia’s second-largest trading partner (after the EU) and Russia’s largest individual partner in both exports and imports. For China, the Russian market is at best second-rate. Russia ranks tenth in Chinese exports and does not make it into the top ten in either imports or total trade,” Mr. Aaron said. He noted that three-quarters of Russia’s exports to China were raw materials as opposed to consumer goods, electronics and machinery that accounted for the bulk of Chinese sales to Russia. (36)

More ominously, China starting in Central Asia, a crucial region that borders on its strategic province of Xinjiang, is making deployment of its intrusive surveillance systems a pre-condition for investment; and in some cases appears willing to supply the infrastructure at no cost as part of a Smart City project developed by Huawei for initial roll-out in former Soviet states. (37) Huawei says the system, which involves installing thousands of security cameras equipped with artificial intelligence and facial recognition technology in public places, has been exported to 160 cities worldwide.

Liu Jiaxing, head of Huawei’s representative office in Uzbekistan, disclosed China’s insistence on adopting its surveillance approach in an interview with an Uzbek news outlet. “Investors will only go where the situation is stable. In view of this, the implementation of the Safe City project is very important for Uzbekistan as it will help the country develop its investment potential,” Mr. Liu said. (38) With no transparent regulation and oversight that ensure Central Asians’ privacy rights, China is likely to have access to data collected by the Smart City technology. Kyrgyzstan’s interior minister said data, one collected, would be handled at no cost to the government by Chinese National Electronics Import and Export Corporation, or CEIEC; a company believed to be tied to the Chinese military whose technology is deployed in Xinjiang, China’s surveillance system laboratory. (39)

India's Retaliation against US Exports [PIIE]

A Joker in the Game

The Middle East may not be at the core of the trade wars and policies that appear to be reshaping world trade. However, harsh U.S. sanctions on Iran and opposition to them by China, Russia and Europe have enabled Saudi Arabia and Iran to put their stamp on them. Devastating attacks in September on two Saudi oil facilities, which were claimed by Iranian-backed Houthi rebels in Yemen and blamed on Iran by the United States and less directly by Saudi Arabia, have prompted the kingdom’s major Asian customers to look at diversifying their supplies, which could force them to upgrade their ability to refine heavier grades of crude. “The key is to gradually get rid of heavy reliance on Middle Eastern oil. There is a consistent risk to oil supply from Middle East countries. China has been diversifying its oil suppliers,” said Zhu Guangming, an analyst eith consultancy Sublime China Information. (40)

China’s diversification options are Russia, the United States and Iran. Russia may be China’s safest bet as long as the U.S. imposes sanctions on Iran while the U.S. is tricky given the trade war. Trading patterns in the immediate aftermath of the attacks in Saudi Araba of Unipec, the trading arm of Chinese oil giant Sinopec, highlight China’s dilemma. Unipec was rushing in early September to sell U.S. oil it had acquired as China imposed a five-percent tariff on imports of American oil. Two weeks later, it was chartering ships to import U.S. light crude to compensate for Saudi shortfalls. (41)

A careful reading of Saudi and U.S. responses to the Saudi attacks suggests subtle differences between the two governments. They mask several emerging fundamental issues that could have far-reaching consequences for the Gulf’s security architecture and energy export focus. U.S. Secretary of State Mike Pompeo and Mr. Trump explicitly pointed the finger at Iran as being directly responsible, (42) while Saudi Arabia stopped short of blaming the Islamic republic, saying that its preliminary findings showed that Iranian weapons had been used in the attack. (43) Iran has denied any involvement. (44)

Saudi Arabia’s initial reluctance to unambiguously blame Iran may have a lot to do with Trump’s America First-driven response to the attacks, which appeared to contradict the Carter Doctrine proclaimed in 1980 by President Jimmy Carter. The doctrine, a cornerstone of the Saudi-U.S. relationship, stated that the United States would use military force, if necessary, to defend its national interests in the Gulf.

Mr. Trump’s apparent weakening of the United States’ commitment to the defense of the kingdom, encapsulated in the doctrine, risks fundamentally altering the relationship, already troubled by Saudi conduct of the more than four-year-long war in Yemen and last year’s killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul.

Signalling a break with the Carter doctrine, Trump was quick to point out that the attacks were on Saudi Arabia, not on the United States; and suggested it was for the Saudis to respond. “I haven’t promised the Saudis that. We have to sit down with the Saudis and work something out. That was an attack on Saudi Arabia, and that was not an attack on us. But we would certainly help them,” Mr. Trump said without identifying what kind of support the U.S. would be willing to provide. (45)

Despite blustering that the United States was “locked and loaded,” Mr. Trump insisted that “we have a lot of options but I’m not looking at options right now.” Mr. Trump further called into question the nature of the U.S.-Saudi defense relationship by declaring that “If we decide to do something, they’ll be very much involved, and that includes payment. And they understand that fully.”


The structure of global trade is by design or default in flux with potentially far-reaching consequences for international relations as well as political systems in various countries. The escalating trade war between the United States and China risks a breakdown in global trade as the world’s two largest economies contemplate encouraging the emergence of trading environments that they would dominate. Add to that, the impact of Mr. Trump’s penchant for economic sanctions, that in the case of Iran, have sparked escalating tension between Saudi Arabia and the United States that could reshape security perspectives in the Gulf and could lead to alternative flows of energy to Asia’s largest importers. The possible decoupling of the Chinese and U.S. economies would make it easier for China to politically align some beneficiaries of China’s Belt and Road initiative by imposing its concept of a 21st-century Orwellian surveillance state on them.

About the author

Senior Fellow at the S. Rajaratnam School of International Studies, Adjunct Senior Fellow at the National University of Singapore’s Middle East Institute,  co-director of the University of Würzburg’s Institute for Fan Culture, and co-host of the New Books in Middle Eastern Studies podcast. James is the author of “The Turbulent World of Middle East Soccer” blog.

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