The elephant in the room is clearly China. And as Hilary Clinton remarked on her visit to Israel last week, the world is indeed moving fast. China is entering the world stage in a major way, in their own inexorable sweep of pragmatism, and for the most part a buffering effect that could finally put the periods of full-scale warfare to rest, particularly in the Middle East where commercial relations, trade, investment and economics will prove more beneficial for all concerned than wholesale armed confrontation.
As in Bill Clinton’s line, “it’s the economy stupid,” this has been the trail whereby China invests its foreign exchange surpluses, inflates their economy and raises wages while very carefully managing the volatile valve of political and social reform. Unlike Germany’s self-serving relationship with southern Euro zone nations, China wants the flow of cargo by train, truck, and boat to be moving back to China. It’s doubtful that israel is going to ditch its American boyfriend anytime soon, but its steady and evolving relationship with China seems positive and possibly another notch in climbing towards being a truly international nation. There is still going to be academics like Michael Ignatieff railing against China in a demonizing, one-dimensional manner, but the hoary rhetoric of kleptocracy is way to whiny to posit the reality as anything more than a retreat to seemingly out-of-date models based on Voltaire, Diderot, and the Enlightenment….
Daniel Pipes ( see link at end) …Two recent developments – Vladimir Putin’s recent trip to the Middle East and the Chinese government’s financing of an Israeli cargo railway – hint at a reshuffling of alliances in the region.
The Middle East’s most consequential divide is no longer the Arab/Israeli one but the Islamist/non-Islamist one, with Iran in one corner, Israel in the other, and other states somewhere between. It’s far from a linear alignment, with plenty of incongruities; the revolutionary Islamists in Tehran and the evolutionary ones in Ankara, for example, increasingly are at odds, while the Tehran-Damascus axis flourishes as never before.
The Russian and Chinese actions point to these alliances shaping the foreign policies of outside powers too. Whereas the European Union and the U.S. government are increasingly sympathetic to Islamism, in part as a way to tame their own Muslim populations, Moscow and Beijing have a history of open conflict with their Muslim populations and therefore adopt policies more hostile to Islamism in the Middle East….
…Which brings us to the president of the Russian Federation. Pinhas Inbari notes at “After Putin’s visit: Are Israel and Russia inching closer together?” that his “decision to begin his tour in Israel, along with the large size of his delegation, indicated that Israel was the focus of the visit, while the PA and Jordan were of secondary importance.” That’s because, despite their major differences on Syria and Iran, the two governments “agree on another, no less relevant issue that dominates political discourse in the Middle East: the concern over the advent of the Muslim Brotherhood to power.”
Inbari notes how Putin’s trip mirror imaged Obama’s various trips, both stylistically (the holy sites he visited) and substantially (tacitly agreeing with Netanyahu on Palestinian diplomacy). He concludes:
One should not be deluded into thinking that Israel and Russia have become fast friends and strategic allies. Regretfully, Russia’s best friends in the region are the rogue states of Iran and Syria. Yet, the shared concern regarding the advent of the Muslim Brotherhood and its welcoming by the United States, bring Russia and Israel a little closer.
Today’s Chinese deal fits the same template.
Israel and China today signed historic cooperation agreements to build the Eilat railway and future projects, including the inland canal port north of Eilat. … The main project on the agenda is construction of a cargo rail line that will link Israel’s Mediterranean ports in Ashdod and Haifa with the Eilat Port. There are also plans to extend the line to Jordan’s Aqaba Port. … [Israeli sources indicate that the Chinese] consider the project to be important, as it fits in with China’s global strategy to strengthen critical trade routes. … Tonight, the Israeli delegation will be guests at a special dinner given by the Chinese government. The food will be kosher lemehadrin.Read More:http://www.danielpipes.org/blog/2012/07/russia-china-israel-against-islamism
( see link at end) …For the first time, Israel’s exports to Asia surpassed its exports to the United States. The Israel Export Institute said in a report Monday that 21 percent of Israeli exports between October 2011 and January 2012 went to Asian countries, while exports to the US constituted only 20% of Israeli exports.
The change in export destination was due to a combination of circumstances, institute officials said. Due to the recession in the US and Europe, Israeli companies have been busy developing new markets for their products and services in the Far East — mostly India and China, but also Taiwan, Singapore, South Korea, and Vietnam. About 35% of Israeli exports went to the European Union.
The data is somewhat worrying, Institute chairman Ramzi Gabay said at the report’s release, because the US is still the largest single target market for Israeli exports, and a falloff now could mean that Israeli companies will lose market share to competitors when the US economy recovers.
Nevertheless, the Institute itself is preparing for a future in which Asia dominates the world economy, and is working to build ties with governments, entrepreneurs, and companies in the region to pave the way for future Israeli economic ties. There are already dozens of Israeli companies in China and India, and some of them have already built strong ties with the local market there. The Israel Trade Mission in China lists at least 250 Israeli companies doing business there, and the Export Institute has run numerous seminars designed to help companies get their foot in the Chinese door.Read More:http://www.timesofisrael.com/israel-prepares-for-an-asian-future/
Steve Hadley:As Secretary Paulson points out in his paper, this progress was driven heavily by a perception that it was in the U.S. interest for China to advance economically. And U.S.-China economic relations was really heavily an engine of China economic growth. There is now some question about that, and not so much confidence in the U.S. side that what’s good for China is good for us and good for the world. And so our relations are at a new stage. And what Secretary Paulson has done in his paper is suggest how the United States-China relations should change and what should be its foundations going forward…..
Hank Paulson: …I often explain to people when they talk about the tension in the trade area, I say, that’s the good news, you know, that 40 years ago we didn’t have any tension in trade, and we didn’t have any trade, and whenever you’ve got an economic relationship, you’re going to have tension. But I do think that the – that this – to the extent this consensus is fraying, and it is fraying, I think it has to do with a number of things. I think it has to do with the success China has had economically. I think it has to do with some of the problems and issues we’ve had, and – which are causing some people to lose confidence. And again, I think that the problems we have have got nothing to do with China or very little to do with China. They – they’re – we just need to look in the mirror, and they’ll be more difficult to solve if China is having problems. But I do think that’s an issue.
And I think another issue is as China is progressing, I think more and more U.S. companies and U.S. citizens recognize they’re going to be competing selling the kinds of products and the higher-value-added products we like to sell. It – for those that don’t like getting, you know, sandals and toys from China, I think the competition in the future is – we’re going to be talking about aircraft and, you know, higher-value-added products….
…Almost 47.8 percent of the GDP is investment. Consumption is only 33 percent. And one of the thing (sic) Hank calls for in this paper is they need to move from investment-based economic growth to consumption-based economic growth. But the dilemma, I thought, was shown interestingly in Premier Wen Jiabao, who announced a stimulus package recently. And what was his stimulation – stimulus package? More investment in capital investment through state-owned enterprises to put more people to work. So Hank, when you talk about economic reform, can they – can they break out of this investment-driven economic growth, or is all this talk about transitioning to a consumer-based economy just a lot of hot air?…Read More:http://www.acus.org/event/next-steps-us-china-relations-conversation-hank-paulson-and-steve-hadley/transcript