Beijing is more than pleased about Donald Trump turning his back on a major U.S.-led Pacific trade pact.
Ian Bremmer, president of the global intelligence firm Eurasia Group and a closely watched political scientist, said Wednesday that officials in China are excited about President-elect Trump's plan to withdraw from U.S. participation in the planned Trans-Pacific Partnership. The proposed free-trade bloc would have included 12 countries accounting for more than a third of global trade.
President Barack Obama and others had argued that the TPP deal was a way for the United States to continue to assert its leadership — especially in the face of an increasingly powerful China that is eager to replace the U.S. as the main power in the region. Trump's apparent killing of the TPP creates a geopolitical vacuum in the eyes of both Beijing and American allies, Bremmer said.
"This means that everyone in Asia no longer sees the United States as a credible leader, so they have to go to China for leadership," Bremmer told CNBC. "There's a little bit of triumphalism in Beijing."
Others have pointed out that the demise of the TPP means that China now will likely set standards for a major portion of the globe when it comes to environmental laws, intellectual property rights and labor protections — all principles for which Beijing has demonstrated little commitment.
American allies are freaked out about this in Asia. The Chinese are licking their lips — they're very happy about it.Ian Bremmerpresident, Eurasia Group, on the apparent end of the TPP
China, Bremmer said, is now actively planning "new architecture" for regional leadership that does not include Washington because "they see opportunity now that they understand the Americans are abdicating."
This, of course, will have major repercussions for other countries in the Asia-Pacific region, especially allies like Japan, South Korea and Australia.
"American allies are freaked out about this in Asia. The Chinese are licking their lips — they're very happy about it," Bremmer said in a separate televised interview Wednesday.
China has openly celebrated the TPP's seeming demise, with the propaganda outlet Global Times declaring that Trump's pledge to quit the deal "sends unclear signals."
"Trump appears to be redesigning the U.S. leadership, withdrawing the country from fields in which he thinks resources are being wasted," another Global Times editorial said. "China thus will gain some room to exert its influence."
But others are less sure that China will benefit from the apparent collapse of the TPP.
"Net net, the loss of TPP is going to be a loss for China," Meredith Sumpter, who directs the Asia practice at the Eurasia Group, told CNBC earlier this month. "There's this popular view that the TPP was meant to be exclusive of China, and that's simply not true: The U.S. wanted to get China engaged at a second (round of discussions), and the Chinese were quietly showing interest in that."
"I don't see any meaningful benefit for China from the U.S. rejection of TPP. There will be a good deal of diplomatic theater but it all gets forgotten by the next news cycle," Derek Scissors, a scholar at the American Enterprise Institute, wrote in a note to CNBC.
"The Chinese will talk about grand new deals but the only truly free trade agreement they've ever signed is with Taiwan, and that is still primarily political. The Chinese will certainly sign trade agreements, but they will do nothing to change the Asian economy."
