China to reap trade rewards of a Trump presidency, say shipping leaders
A US policy shift towards isolationism under the presidency of Donald Trump would leave a trade vacuum that China would quickly fill and use to capitalise on the vast One Belt, One Road trade strategy, according to trade industry experts.
Speakers at a panel discussion on the macro view of shifting trade patterns, part of a Lloyd’s List Hong Kong business briefing, were united in a belief that the election of Trump as US president would be positive for China and its trade strategy.
David Beaves, partner at law firm Ince & Co, said Trump coming to power in the US would be a positive for China as the president-elect will have to adhere to at least a minimum of his campaign promises made to the electorate.
“That means there is going to be an element of nativism, protectionism and isolationism,” Beaves told delegates at the briefing. He said if Trump was more protectionist, as he had indicated he would be, that would involve the US backing out of some of its foreign policy commitments.
“The Trans-Pacific [trade] Partnership will be torn up and so a lot of the strategic worries that China has will be lessened. One Belt, One Road (OBOR) has strategic objectives for China and if the US becomes isolationist it will give impetus to the initiative and allow unimpeded growth, leaving a vacuum for China to step into. This will make OBOR even more important, strong, and vital for long-term Chinese interests.”
Pacific Basin CEO Mats Berglund said the election of Trump would make China even more convinced to continue with its OBOR strategy. “This will leave the US compromised and it will have to work even harder on its other partners,” he said.
Berglund said OBOR would create massive growth in the middle class in Asia. “That will drive demand for all kinds of goods, not only infrastructure-linked bulk goods but also consumer goods, the minor bulk cargo that we happen to carry a lot of. So long-term it will be good for shipping.”
The wider benefits of increased trade that will come down the OBOR pipeline were also hailed by the panelists.
Khalid Hashim, managing director of dry bulk carrier Precious Shipping, said OBOR was “the best thing that has happened to this world in a long time”, and that at today’s value, the USD1.4 trillion being set aside for the initiative OBOR was 12 times larger than the Marshall Plan, a US initiative to aid the recovery of Europe after the World War II.
“It will cut across three countries, 65 countries, and 4.4 billion people. Why would anyone want to resist this kind of infrastructure build-out? There is nothing to argue against OBOR. It will help to bring the world back to a more normal state that we haven’t had in 10 years,” he said.
Maersk Line Asia Pacific CEO Robert van Trooijen was also optimistic about the OBOR impact on container shipping. “It is not just a signature programme of the Chinese president. Maersk Group is both a user of infrastructure with our ships and a creator with our terminals, so we will be taking advantage of both,” he said.
Contact Greg Knowler at firstname.lastname@example.org and follow him on Twitter: @greg_knowler.