‘Remember, the frog is unaware that it sits in water slowly coming to a boil and will only find out too late.’
ONE of these two countries – the United States and China – is, I think, like a frog in a pot of water that is slowly coming to a boil. If you don’t know that symbolism, it’s been said that a frog plunked into a pot of boiling water will immediately jump out of the pot to escape being scalded to death.
On the other hand, a frog in a pot of water that is slowly coming to a boil may not notice, until it’s too late, that he is a cooked goose (or frog). And before he could jump out of what he thinks is simply water that continues to warm up, he is a “nilagang frog.”
I suspect this is the case for one of the two biggest economies in the world – the United States of America and the People’s Republic of China. Remember, the frog is unaware that it sits in water slowly coming to a boil and will only find out too late. And so it sits pretty enjoying the warm soak.
Is that China?
Recently, the Chinese economy has been marked by some lethargy, a natural consequence perhaps after decades of double-digit growth. How to squeeze growth out of an economy whose last 20 years’ growth trajectory has been nothing but miraculous is like a lean bodybuilder squeezing out 1 percent more fat from a body that is already as lean as one can be.
That’s why the economy has been hit hard by a major downturn in the housing sector, leading to major bankruptcies in some of the biggest real estate developers – with serious consequences to the banking sector which is left holding an empty bag. The downturn in the housing sector had a domino effect – the industrial sector also slowed down as stainless steel factories or mills closed or reduced production, with some even relocating to Indonesia. Unverified reports also speak of urban decline with formerly bustling commercial centers experiencing a growing number of closed shops.
Most “dangerous” to the leadership, of course, is the mood of the public, particularly the young Chinese whose “predecessors” posed the most serious threat to the Communist Party of China in the years of party chiefs Hu Yaobang and Zhao Ziyang, who both fell from power and from grace.
That the leadership in Beijing keeps a close eye on the mood of the people and acts quickly to stamp out any threats is true not only within the Chinese mainland but is true even in its special zones, Hong Kong being a good example.
To balance off the slowdown at home, China embarked on the Belt and Road initiative to open new markets, open new trade routes, and broaden the network of friendly nations for the PROC. While the BRI is not without its own problems, it remains a major initiative for Beijing that offers the world an alternative to the long-standing economic structure that is focused on the west and on the United States.
But the latter, too, may very well be the frog in the simmering pot of water.
With the return of Donald Trump to the White House, the Western economic and even military structure has been given a major shake. Trump has started provoking trade wars with erstwhile friendly trading partners while shaking up (again) the Western military alliance that has provided Europe with a major security blanket. For Trump, forcing NATO members to pay their “fair share” of the costs for their security is being fair to the American taxpayers, who have been footing the bill since the end of World War II. But the motivation may not be as simple as that if it is true that Trump’s private business interests are invested in places like Russia (and even Saudi Arabia) – which could impact decision-making at the top.
But not just Trump – even his closest advisers and financiers like Elon Musk may be influenced by their investments in crafting US policy. For Musk, for example, China is a major if not the major market for Tesla – so keeping China-US relations on an even keel may be critical. But will this be at the expense, say, of long-time ally Taiwan? And of the interests of Japan, South Korea, and the Philippines?
For Trump, too, there is the problem of a domestic constituency where only 31 percent of the entire voting population voted for him. Another 30 percent voted for his opponent, about 1.5 percent voted for a third party and more than 36 percent stayed home. That is like a minority government. So keeping the mood at home quiet, even if restless here or there, is critical for governance.
The first week of Trump Part 2 does not seem to point to four years of domestic bliss.
So which of the two, you think, is the frog contentedly sitting in a pot of slowly boiling water?
Whoever it turns out to be, the next four years will be very exciting years to live through!
