'Chexit': China might just exit the multilateral order, if the US pushes it too hard - SCMP

The South China Morning Post (SCMP) carries a story on Monday, citing that China is likely to decouple from the global multilateral trade framework, mainly grieved by the US’ if the protectionism policies.

Key Highlights:

“The convergence of China with the West, initiated by Deng Xiaoping in the 1970s, has reached a fork in the road. 

Recent shifts in geopolitical policy and practice, chiefly by the United States, have presented China with the stark choice of continuing to play along with the Western order of things, as it has for the past four decades or decoupling from cooperative endeavors and pursuing a wholly independent agenda.

The time has come for China to assess which option is most expedient for its advancement in the 21st century. The 45th US president looms large in China's current calculus as to which approach will best serve its interests.

The prospect of Donald Trump winning a second term– and the US' trade war dragging on – will be an anathema to the Communist Party leadership.

One option is for China to reshape the world to its advantage following the US' retreat from globalization. It could influence multilateral organizations such as the United Nations, the International Monetary Fund and the World Bank, which all shape the international rules-based order.

Another option is for China to focus on its own development model. The Belt and Road Initiative has reinforced Xi's message that China is open for business, and setting up shop along the old Silk Road drives economic growth in China, as well as its partner countries.”

The article is likely to add the ongoing US-China trade pessimism, rendering negative to the risk sentiment, in turning keeping the demand for safe-have Yen underpinned.