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By K. C. Bhatt

The two leading economies are locked into a fresh conflict presently, after the US senator and the leader of the House of Representatives Nancy Pelosi visited Taiwan recently.

She being someone who is a senator for almost three decades now, is an American of Italian origin, who inherited her political career from her parents, who too made their careers in politics.

So, to the people who assume that some families survive on politics only in Japan and some other Asian democracies, Nancy Pelosi is an example that it is not so.

Hence at this stage, there could have been nothing else for her to grab the attention than visiting Taiwan, though President Biden did not exactly support her tour and as soon she returned made it clear that the One China-US policy still holds.

The USA and China have a robust trade relationship where they account for almost half of the total global trade. But before the Covid pandemic, it was found that both were also borrowing heavily to maintain their growth.

When the Trump administration started a trade war with China, it did not last even six months. One of the major victories for the USA was the agreement that now China will buy 25 billion dollars worth of US corn, instead of around only 19 billion dollars earlier. So, to the US farmers, who produce corn supported by the heavy subsidies of the government, the market was assured till the next conflict begins between the two biggest economies of the world.

But the loser was Brazil, which got the opportunity to sell its corn to China for six months at least, apart from a few other countries. But now Brazil and others have to wait for another trade war between the two leading economies to sell their corn at a proper price.

The corn China imports are used to produce pork or beef, which it sells mostly to the USA itself. So be it potato chips or computer chips, the two leading economies buy or sell between them only and exclude the rest of the world mercilessly.

No wonder only these two countries were growing economically and the rest of the world, including the EU and Britain, were facing recession even before the pandemic of Covid struck.

Besides China has a trade surplus of a trillion dollars a year in its trade with the USA. It also has the biggest cash reserve of three trillion US dollars which is the highest outside of the USA. Also, it is the leading investor in the USA and the rest of the world.

No wonder the existing scheme of things has nothing to offer to all the other members of the world economy. Their only chance is a trade war between the two leading economies to sell their products. Besides Trump, no other US administration has cared to even briefly correct this major flaw of the world economy.

So Trump is more popular in the world than any other US politician in recent memory. He did his best to bring some balance or sanity to the highly skewed trade of the world. Besides, he adopted policies where no major conflict began in the world and even US relations with North Korea and Russia too improved. It seems unlikely that any other US president will follow his policies and change the paradigm of global trade where there are only two playing countries and the rest are spectators.

In a way, these two countries are the closest strategic partners too, as any spanner thrown in their design might bring down their growth for which not only the rest of the world is paying but they are also heavily borrowing.

So the Pelosi visit might not change things much, as US politics is directed by its corporate interests. Pelosi might have made her point while keeping an eye on the next elections.

The main difference between the US and Chinese economies is the fact that China has a trade deficit with almost no other country in the world, while the USA has it with most of them. Apart from Australia and Netherlands, all other countries buy fewer goods from the USA than they sell to it.

So the hold the USA has over China is even more troublesome. As, if it becomes more strict in its trade policies with other countries besides China, it could curtail buying their goods. It could further shrink their economies and they will have even lesser money to buy Chinese goods in turn.

Therefore the two leading economies are engaged in so many ways that they cannot afford a major conflict between them, as it could bring down both of them together.

Nepal imports ten times more than it exports presently. So it is somewhat in a situation like the USA in some respects. Because it is in a position to impose trade sanctions against a country which goes against its policy.

Nepalese expatriate community sends remittance every ten days which is more than the foreign direct investment which comes here in a year. Likewise, the remittance every four days exceeds the donations Nepal receives in a year.

With internal borrowing at forty percent only, Nepal is one of the best-performing economies in the world today. Only Russia is better with its borrowing at around twenty percent.

So it is now time for Nepal to have domestic policies which reflect its economic might; and hence the foreign policy, which demands its rightful place in the world of this century.

For almost four decades now Nepal has faced tremendous adversities for its survival. They were not only natural but were designed by various global powers to meet their vested interests. If Nepal has done so well during this time, it looks as if the coming days can pose no greater challenges than it has already faced.

No wonder no other country in the neighbourhood or beyond is happy with Nepal as it is emerging as one of the happiest nations in the world.

What is lacking is leadership which can negotiate better Nepal’s position in the world of today.

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