Trump isn’t the global economy’s only challenge

The world’s policy makers need to disentangle their feelings about Donald Trump from their efforts to address the challenges facing the global economy and US-Asia relations. It’s a tall order, but there are signs that they might be making progress.
Over the past year, I’ve been to a lot of conferences where everyone was focused on Trump and the disruptions he created or came to epitomise. His name became a label to paste on just about any shift in economic relations or commercial power.
Yet this week, at the World Economic Forum’s Global Future Councils in Dubai, I noticed something different — a more considered sense that Trump is as much symptom as cause, that there are long-term forces at work that have little to do with the US or its leader. Discussions focused more on technology, value chains, jobs and growth than US elections.
Even the topic of trade was distinctly less Trump-centric. Although Mike Pence’s recent speech opening a broad front against China got some airtime, people recognised that the open-market rhetoric of the 1990s had lost support across the American political spectrum. US companies might disagree with the White House’s tactics, but they aren’t public boosters of the Middle Kingdom. This isn’t just Trump and may well have happened under Hillary Clinton.
Different tone, similar thrust.
Meanwhile, technology is reshaping the global supply chains that Trump’s policies have shaken. Some manufacturing and assembly will ultimately return to the US from China, or move to relatively US-friendly places such as Indonesia and Vietnam.
China is moving away from low-cost factories anyway. And it’s not clear that cheaper locales will get a chance to repeat its export-manufacturing success before automation and robots catch up with the development model that’s been a textbook for developing countries. China may have been the last country of any consequence to manage it.
It’s even conceivable that the trade clash between the US and China evolves into something like a competition between computer operating systems. The idea is that America’s goal is to contain Chinese advances in artificial intelligence and get other countries to align with Uncle Sam’s operating system. Europe and Japan, for instance, will need to decide who to throw in with. It’s tough to imagine them opting for China.
Everyone seemed to agree that Asia remains the world’s economic engine. It’s a narrative that could benefit from some scrutiny. After all, China’s rise over the past four decades has happened with a favourable, or at least benign, attitude from the US. Now that’s changing, and not just because Donald Trump became president.
There’s more change in the world than Trump. Reminders of that are timely and welcome.
— Bloomberg

Daniel Moss writes and edits articles on economics for Bloomberg Opinion. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America