Jakarta, IO – I have been writing columns for this paper regarding the recent developments in diplomatic circles by Western leaders attempting to influence Beijing. They see President Xi Jinping as a potential peace advocate in the conflict between Russia and Ukraine, an ugly war that has been going on for over a year.
The effort started with the visit by PM of Spain, Pedro Sanchez, who travelled to Beijing to meet with President Xi, and went home with a promise by the host that China would indeed be willing to be an honest broker for a peaceful end to the war.
Next, it was the turn of France’s President Macron, travelling to Beijing for a similar purpose. He visited China for a few days and returned home with a similar message as that of PM Sanchez.
Then EU President Ursula von der Leyen turned to travel to Beijing and met with President Xi. She said afterwards that she believed China is in best choice for a peacemaker in this war. Apparently, EU Council President Charles Michel also visited President Xi with the same mission.
The above busy schedule of President Xi receiving so many Western leaders demonstrates that there no lack of good will from the Western countries in the concerted efforts to seriously wish for the Russia-Ukraine war to end peacefully soon.
We also know that just after President Xi Jinping met with President Putin in Moscow before, President Zelensky immediately sent an invitation to President Xi to visit Ukraine and meet with him to discuss the issue.
But, after all these attempts, we have not seen any signal of a new development in the direction of a ceasefire. We tend to revert to our original thought that it is difficult to trust Beijing or accept that China is indeed an honest broker truly neutral in this conflict. The Western Allies may be willing to forget that President Xi never used the word Russian invasion when he referred to the war. President Xi still stays quiet with respect to President Zelensky’s invitation for him to come to Ukraine. Meanwhile, the war has not seemed to slow down. Daily attacks of bombardment and drones continue in northeast cities of Ukraine. Similarly, in protest against Taiwan President Tsai Ing-wen’s meeting with Speaker Kevin McCarthy in California, China conducted military drill for two days in nearby Taiwan. In other words, he is not an honest broker nor a neutral one here; he supports President Putin’s move in the effort to return the former Soviet Union territory back, exactly as what Russia did to Crimea in 2014. So, he is consistent with his policy in support of the Russian ambition of returning to the old Soviet Union. Am I too soon or harsh in making this conjecture? Time will be the judge.
LET US LOOK AT OTHER ISSUES
The most recent development of China’s effort to strengthen its economy is shown in its active role in idea of the creation of a single currency among the BRICS (Brazil, Russia, India, China and South Africa). I wrote in my previous column on the issue that economically it is difficult to see how this idea would result in a concrete currency union. I do not have enough data on the economies of all these countries, but my hunch told me that one of the important requirements will not apply here, namely, about the economic and financial compatibility between the BRIC countries. Using the formation of Euro as the yardstick, the EU went into difficult route with the original countries to form a trading union, evolving to a currency union. The EU was established in 1957 as a trading union, yet the Euro was only set in 1992, with the agreement reached in Netherlands, and thereafter called the “Maastricht Treaty”.
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So, if the BRICS want to establish a currency union, even if they were able to shorten the time, surely it will still need many years to realize. From what we could follow in the news, it seems that their main justification for creating the currency union is to reduce their dependence on using the USD and Euro. In other words, this is a political justification, which even if it is important is certainly not enough to set up a currency union for sure.
Economically China is the strongest, but its growth has at the most half the growth of past years, when it was in double digits. India’s economic growth is ok but lower than that of China, at around 4 per cent. Brazil, with the new President Lula da Silva still must revive its economy, while South Africa is even worse, with economic growth of around 1 per cent. I do not tend to dramatize the story here, but indeed, setting up a currency union just to avoid using the USD and Euro would not be feasible financially. But maybe the announcement effect has already adversely affected the USD strength as we could see from a little appreciation of Rupiah viz a viz USD lately.