If the previous few years in Asian trade finance were dominated by the financial retrenchment of the west, then arguably this year’s biggest story is about political retrenchment. With the election of President Donald Trump, the US withdrew from the Trans-Pacific Partnership and rejected the free trade agenda it established in the post-war years.
Economic nationalism has been central to Trump’s policies, with the US’ exit leaving a huge void in Asia Pacific, into which China has been swift to move. Through its Belt and Road initiative, as well as the strongly anti-protectionist rhetoric of President Xi Jinping, Communist China has emerged as the dominant superpower in the region and an unlikely champion of the free market.
The tentacles of China’s ascendency are everywhere in Asian trade. You can read within this publication about China’s complex rivalries and relationships with the other regional trading powerhouses, as well as how its rising wealth has allowed smaller Asian nations to scrap it out for a share of the lower-value supply chain.
Emboldened by its growing stature, China has acted upon its longstanding territorial claims in the waters to its south and east, increasing geopolitical risks.
On the other side of the world, the US is pressuring Beijing to exert some influence over the increasingly belligerent – and increasingly powerful, in nuclear terms – North Korea. You could say we live in interesting times, but that would grossly understate the potential dangers at every turn.
For trade finance bankers in Asia, these issues have provided plentiful conversations, at a time in which the deal flow remains low. Any talking point that distracts from the material questions about the health of the industry may feel welcome – which might explain why banks have gone for fintech and blockchain hook, line and sinker. You can read about the most interesting developments in that space in these pages too.
Our Trade Briefing analyses all of these trends and risks, while the accompanying articles help put some meat on the bones of the raw data. Enjoy the first edition of GTR+ Asia, let’s hope the next one is greeted by more peaceable times.
In this issue: