Peter Lewis: Asia business correspondent discusses military parade in Beijing

A military parade in Beijing has sent a clear message from China to the rest of the world.  

Asia business correspondent Peter Lewis told Heather duPlessis-Allan that ‘China may be the 2nd largest economy in the world, but it's not happy with that.’ 

He said that China is aiming to be more than a regional power across Asia, but given the abundance of US military bases globally, gaining an inter-continental foothold could prove difficult.  

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Episode Transcript

Speaker 1 (00:00):
Peter Lewis Asia Business Correspondents with us Alopeter, Hello, Heather, Okay,
so we have all the whole world had a look
at the goose stepping and the drones and the nukes
and the whole lot that was going on at the parade.
What was the point of making us look at that?

Speaker 2 (00:15):
Well, Jijinping is sending out a clear message here, which
is that China may be the second largest economy in
the world, but it's not happy with that. It's not
just going to stick with being a large economy. It
fully intends to be a global power and a large
military power as well. Now this is very much in

(00:35):
contrast to, for example, Japan. When Japan developed economically in
the nineteen sixties and seventies and then eventually in the
eighties became the world's second largest economy, it had no
intention of developing militarily, and that was partly because of
its constitution that was imposed upon its wouldn't allow that.

(00:55):
But also it didn't want to be a diplomatic power either.
It wasn't looking to change global institutions. It was quite
happy to sell you walkman's and video recorders and motor
cars and stick with that China is not going to
stick with that at all. It's making it very clear
not only does it have the capability of defending its

(01:18):
own sovereignty, not only is it going to be a
big regional power across Asia, but it wants to be
a global power as well, and one that can challenge
the US. Now, despite all that military hardware that you
saw being paraded through Beijing, and that was only what
we were allowed to see, I'm sure they have a
lot more impressive stuff behind that, they are a long

(01:41):
way from being able to challenge the US and project
that power globally. I mean, the US has military bases
all over the world, including several right on China's doorstep
in Japan, in South Korea, in the Philippines. China has
just one base around the world. That's in Djibouti in

(02:02):
East Africa, or the only one that it admits to.
There is suspicions that it has one in Cambodia and
maybe one in tagik Stant but it's a long long
way behind the US. So at the moment, this is
for show, but it's Jijingping sending out a very important
message here and particularly to the US.

Speaker 1 (02:22):
What did the Chinese population think of the images of
Jiji pain nicks to Putin and Kim Jong Un.

Speaker 2 (02:28):
Well, it's very unusual for them because they don't see
Kim jongn very often. He's very rarely in Beijing and
is certainly never seen in this sort of public gathering.
It's the first time that those three leaders, Vladimir Putin,
Jijinging Kim Jong Un have been seen together in public.
The Chinese population know very little about what goes on

(02:49):
across the border in North Korea because it's also secretive.
It's not only secretive to us, it's secretive to the
Chinese population as well. But the very clear that Jijinping
is trying to craft here a domestic consumption is that
he is a global leader, and leaders from all over

(03:09):
the world want to come to these events in China
and be seen with him and to develop relationships with China.
There are more than twenty global leaders there. There were
six of them from Southeast Asia alone, so he's projecting
there his image of having the most influence out of
all of the global leaders in the Southeast Asian region,

(03:31):
which is a very important economic zone. So this is
very much for domestic consumption projecting him as being a
global leader, not just the leader of his country, and
taking his country forward into its rightful place in the world.
And the way he sees it is that he wants
he wants China to have a big say in the

(03:54):
way in which the world is run and in some
of those global institutions that were previously set up by
the US after the Second World War, like the IMF,
like the World Bank and so on.

Speaker 1 (04:06):
Peter, what's going on with this global bond sell off?

Speaker 2 (04:10):
Yes, well, this is interesting. The countries that this is
occurring in the US, the UK, France, and Germany, Japan
are all countries that are heavily indebted and are struggling
with their fiscal discipline. They're struggling to reign in public spending,
They're struggling to bring down their deficits. And this sell

(04:32):
off is occurring at the long end of the bond curve,
in other words, with bonds with durations of ten, twenty
to thirty years or more, not at the short end,
which is where central banks can influence interest rates. This
area of the bond curve is outside the control of
central banks, and it's basically investors balking at first of

(04:54):
all the amount of debt that's being issued and the
failure of government simply to be able to reigin this
in and control spending. I mean we're seeing that for
example in the UK, where they maybe there's a fifty
pound black hole. The French government may well fall next
week because it's unable to reign in spending. And then,

(05:15):
of course in the US you have this issue with tariffs.
It could be that if these tariffs that Donald Trump
is imposed upon countries around the world have found to
be illegal by the Supreme Court, and the US may
have to pay them back to all those countries that
has collected tariffs from so far. So this will reduce

(05:39):
by maybe two or three trillion dollars over the next
ten years the amount of money that the US is
collecting and therefore put more stress on its finances. So
the bomb markets and investors in the bomb markets are
really saying, if we're going to take on this risk,
we need to have higher interest rates to compensate us
for that risk.

Speaker 1 (06:00):
Wow, it's going to get very complicated. Peter. I appreciate
your time. As always, We'll talk to you next week.
Peter Lewis Asia Business correspondent. By the way, on the parade,
Judith Collins has had a crack at Helen Clark for
going to the parade and for being seen in that
class photo with Putin and Kim John Earn and a
whole lot of them.

Speaker 2 (06:16):
The next time Helen Clark criticizes me for getting a
bit of extra money for our defense force, I think
I'm going to tell her exactly where she can put
her thoughts.

Speaker 1 (06:27):
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