- Today's most expensive infrastructure project
- What can the Vietnamese expect from the West?
- A new trade war is inevitable
Today's most expensive infrastructure project
Those who think that nothing is happening in Asia (well, apart from some turmoil in South Korea, an attempted military coup and other joys) will be disappointed. In Asia, crucial events are taking place, even though they are often hushed up.
For example, the battle for USD 67 billion is underway here. This is undoubtedly the most expensive infrastructure project of our time, and answers many questions about the world's future. Including possible answers to the following questions: What will be the main thrust of US President-elect Donald Trump's domestic and foreign policy? That is, how he plans to fight the main global competitor - China - for leadership and what he will do to bring manufacturing back to the United States.
Returning to the 67 billion, the decision has already been taken to build a high-speed railway from the north to the south of Vietnam, from Hanoi to Ho Chi Minh City, or 1,500 kilometers. The speed of the trains would be 350 kilometers per hour and the journey time would be five hours (today it is 30). The planned completion date is 2035.
Why it matters: "People's Daily confidently declares that no matter how the search for contractors goes, the Vietnamese will not be able to do without the Chinese. This is because the Chinese are not only the best in the world regarding high-speed train technology but also have no rivals, as the Japanese have remained in the 'last century'. The Chinese also have experience of building abroad: a similar high-speed railway built by the Chinese recently opened in Indonesia.
What can the Vietnamese expect from the West?
Can the West pressure Vietnam to "dance to their tune"? It is likely so because the head of NATO's military committee, the American Rob Bauer, recently warned allied businesses that the commercial decisions they make are of strategic importance to the security of their countries and that it is time for them to get used to adapting their production and logistics to the 'military scenario'. What is more profitable and better is another matter.
But Vietnam, like at least two-thirds of the world ("the majority of the world"), operates on a different paradigm - a balance sheet. If possible, do not argue with the West or the East, but choose what is best for you in terms of price and quality. Hanoi, a strategic partner of China and the United States, cleverly maintains this balance. This choice guarantees long-term security for a country that is not the strongest in our difficult times (Kazakhstan has followed a similar tactic). Therefore, the Vietnamese will likely split the project into several packages, some of which will go to another country. But if the Chinese do not get a major stake in the technology, this will mean a sharp fall in Vietnam's shares as a country.
Now the question is: what is this railway for anyway? The answer is obvious: ' China started preparing for a new trade war with Mr. Trump the day before yesterday - and Vietnam is directly involved in this.
A new trade war is inevitable
The war is almost a foregone conclusion because Trump has managed to promise the electorate that he will impose import tariffs on all goods in order to bring production back to American soil. From friendly countries, they will amount to ten percent, from China to 100 percent. The figures in his speeches varied, but the general picture is this.
So, is it time for Beijing to prepare for the problems associated with the closure of US markets? That would require careful attention to what the media says about it. And some believe America is already 'late for the train'. The fact is, a similar policy to that of D. Trump pursued during his first term in office, and Joe Biden later continued it. This means Beijing has had enough time to take the hint and regroup. The debate is more about whether China would have done the same if it had not been "attacked" with increased tariffs and other measures back in 2018. In other words, Trump himself and J. Biden have provoked a change in the foreign economic strategy of the 'global industrial-production workshop'.
By the way, there are different systems for calculating production in China and in the lagging US. One of them shows that today, China accounts for 30% of world industrial production, compared with around 20% for the USA. According to the Swiss Centre for Economic Policy Research, China's net industrial output is higher than that of the nine countries that follow it and three times higher than that of the US.
These calculations are difficult to make, among other things, because around 40% of the EU's GDP is in the EU. In fact, about 40 % of the goods manufactured and sold in the US have components imported from abroad, including China. On the other hand, the US imports a lot, but the share of Chinese production in imports is decreasing markedly. But is this true? Vietnam is well known for not being intimidated by Trump's promises of tariff increases. The relocation of Chinese production chains to the country, which began a few years ago, has not taken long to become massive, and today, a large number of Vietnamese goods are said to be going to the US, and Vietnam is enjoying an economic upturn. The same applies to Mexico and the other countries on the list. Today's overall picture is that China's foreign trade is declining in the American direction but growing strongly in all the others.
This was soon noticed, and the following predictions were made: China's neighbors and the entire Global South are in for a new economic miracle due to Trump's policies. They are delighted that their economies are merging with China's into one powerful system and technology is improving rapidly. And such a system needs new highways. Incidentally, the Hanoi-Hoshimin route is only part of the seamless high-speed railway that Beijing is determined to build to Singapore.
This raises a new question: can Trump be so foolish as to close his own market, thereby destroying American production and driving up prices at home? He wants to agree with Beijing on some kind of new relationship scheme that will make America great again. And because it is Trump, he is asking for this: first, he threatens and intimidates, and then he negotiates. The only question is to what extent the Chinese, or anyone else, is in the mood today to be intimidated and negotiate. We are likely to find out next year.
