This guest article was written by William Laraque who is the Managing Director of US-International Trade Services.
Geopolitical hegemony and nation-building today are principally accomplished through e-commerce. No, not with just selling on such e-commerce platforms as Alibaba and Amazon, but with fully integrated e-commerce platforms. Several developments support this assertion:
- Koch Industries are investing $2 billion in Infor.
- Fintech firms Tencent and Alipay, both closely linked to e-commerce platforms, are now processing more financial transactions than the largest Chinese banks.
- Jack Ma has agreed to help Thailand build an e-commerce capability. The Thai Economic Development banks and agencies would be heavily involved.
- The Millennium Development Goals failed except for the growth of China and India and the replacing Sustainable Development Goals will fail also if India does not succeed economically.
- The populist revolt via Brexit and Trump is not aimed solely at an ineffective EU and Washington DC. It is also aimed at a global financial and economic development apparatchik which is largely ineffective and perpetrates and encourages inequality. The massive global economic development community constitutes a bureaucracy that has largely failed in its objectives. This failure is parallel to that of the ‘nation building’ efforts of the US. We, the US are great at military ‘shock and awe’ but we fail miserably, time and time again, at nation-building.
- Nation-building is proceeding as a regional economic phenomenon and this phenomenon is built on ecosystems that are deploying regionally.
- Banks and financial institutions are largely missing the boat unless they are linked to e-commerce platforms and are a part of e-commerce ecosystrms.
In other articles in Finance Magnates, I have traced the progression and evolution of trade finance from World Trade Associates in 1979, to TradeCard, to GTNexus and now, to Infor.
Now that the US has signaled the populist intention to withdraw from TPP, China has already moved quickly to reassure Latin and South American countries of its objectives vis a vis trade.
Some of China’s initiatives are:
- Chinese deal-making is directed in particular at Chile, Ecuador, Peru, Pacific-oriented nations all.
- For commodities, China is focused on copper, iron, soybeans and oil.
Chinese loans have focused on Venezuela, Brazil, Argentina and Ecuador
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- China wants to improve relations with the ‘new’ governments of Brazil and Argentina
- China has sought bilateral free trade agreements with Peru, Chile and Costa Rica, and has approached Colombia.
The grotesque failure of the US Red Cross, the UN, the Clinton Foundation after the catastrophic earthquake in Haiti, in 2010, are symptomatic of woefully inadequate nation-building efforts.
- China has offered to create an e-commerce industry in Thailand.
- Saudi Arabia and the UAE are creating ‘Noon’, an e-commerce infrastructure in order to “end the region’s addiction to oil”.
- Singapore is using Lazada to grow economically throughout Southeast Asia.
- Amazon is spending $5 billion to succeed in India after failing in China.
The reason Amazon failed in China is not only because of competition from Alibaba. It is also because the Chinese were able to coordinate logistics, advertising, sales, financing and all the other support services necessary to effect a viable and sustainable e-commerce ecosystem.
Infor, which coordinates the services of banks, insurance companies, and with Amazon Web Services (AWS) all the other services necessary to conduct e-commerce successfully, is the most powerful riposte to Chinese e-commerce hegemony.
Chinese e-commerce initiatives are coming soon to Latin and South America, the US back door.