The past weeks have seen an outpouring of warnings that the transatlantic financial system is about to crash again, taking the speculative bubbles and toxic debts, which are much larger today than in 2008, down with it. From the International Monetary Fund to the Bank for International Settlements and Deutsche Bank, alarm bells have been set off.
Simultaneously, interest is fast growing in China’s Belt and Road Initiative (BRI) which is based on a completely different approach, that of developing the physical economy and not growth of financial instruments. This was an important theme at this year’s annual meeting of the World Bank and IMF in Washington last week. World Bank President Jim Yong Kim was very supportive of the BRI, and said he wanted to work with “every single country” involved. Cooperation with the Asian Infrastructure Investment Bank (AIIB), he added, is working well, which was confirmed by the Jin Liqun, the head of that bank founded by China.
A key strategic factor now in how this dynamic develops will be Donald Trump’s trip to Asia beginning Nov. 3, where he will pay a state visit to China, visit other countries and meet other leaders at the APEC and ASEAN summits, possibly including Russian President Vladimir Putin. Should Trump decide to bring the United States fully on board the BRI, that will be the fundamental game-changer internationally.
It would not only open the way for Chinese investments in the decrepit infrastructure in the U.S., but also lay the basis for solving numerous ongoing conflicts and averting the danger of world war, by placing cooperation firmly on a “win win” basis and setting up a new model of international relations.