Mohamed Zeeshan

Opinion | US can regain Indo-Pacific ground by engaging with China’s distressed economic partners

With China’s economy bogged down amid Covid-19 lockdowns, now is the time for the US to reach out to Asia’s trade-dependent nations that are seeking help out of the pandemic-fuelled economic crisis

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Mohamed Zeeshan

Published: 1:30am, 28 May 2022Updated: 2:00am, 28 May 2022

Amid the war in Ukraine, US President Joe Biden was in Asia this week for a five-day diplomacy spree. The main purpose was undoubtedly to reaffirm that he hasn’t lost focus on the Indo-Pacific, despite the renewed challenges in Europe.

But part of Biden’s objective is also to address criticism that America’s engagement with Asia is too security-focused – or, as some commentators put it, “all guns and no butter”.

After former president Donald Trump withdrew the US from the wide-ranging Trans-Pacific Partnership (TPP), China filled the vacuum by taking part in the Regional Comprehensive Economic Partnership (RCEP) – the world’s largest trade bloc – leaving Washington stranded. Biden is seeking to bring the US back into the regional economic game through the new Indo-Pacific Economic Framework (IPEF), which he introduced this week in Tokyo.

Unlike traditional trade deals which focus on cutting tariffs, the IPEF is said to have four broad objectives: building supply chain resilience, expanding clean energy, fighting corruption and facilitating digital trade.

The context is favourable: owing to a fresh wave of Covid-19, China’s major cities are locked down and its economy is suffering. In its latest forecast, the International Monetary Fund slashed China’s growth rate for this year to a meagre 4.4 per cent. Last month, China’s industrial output fell by 2.9 per cent compared with a year ago. Retail sales have shrunk by over 11 per cent. Trade has also suffered.

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Under these circumstances, many of Asia’s trade-dependent nations are looking for alternative partners to help haul them out of the pandemic-fuelled economic crisis. But so far, the IPEF has proven to be a weak start.