Yet another G7 closes with a controversial final communiqué full of postponements on the most important decisions on the climate, migrants and the terrorist threat and with an unchallenged US leadership that leaves no room for a resumption of the G8 with Russia, much less to optimal assessments or short-term solutions on what is happening on the Asian continent: from the North Korean threat to the IS offensive in the Philippines.
Until today, the Asian continent had remained the happy island of investments in emerging countries and local currencies, far from the serious political and social problems of Brazil and Venezuela, and from the Turkish drift from the EU, but recent events have seen Japan alone to represent in Taormina a continental reality far from the politics of a country that has never suffered terrorist attacks, also and not only because it is opposed to any reception of migrants, and which on the military strategic framework abdicated some time ago to China.
Already China, the stone guest of the G7 which accounts for a third of global growth and which is decisive for the management of the security of the North Korean threat and which has been downgraded by Moody's, almost twenty years after the last pronouncement similar to a rating house. The rating passes from Aa3 to A1 while the outlook which was negative in March 2016 has been brought back to stable. The impact of this reduction by just one step did not have major impacts either on the bond market or on the stock market and also from the credit point of view it is the Chinese rating agencies that dominate and certainly not those of American emanation.
The alarm on the level of public debt, which according to the International Monetary Fund remains at 60% of GDP, was already sounded a year ago by Moody's and the sum with local debt does not currently create major concerns. However, no pronouncements or extraordinary measures are expected from the Government or the Central Bank until after the 19th National Congress of the Chinese Party which will be held in October and will kick off the new Five Year Plan which will take China beyond 2020 in the wake of the its so-called “One Belt, One Road” strategy which, according to leader XI Jinping's expectations, should give a positive jolt to international trade depressed by the global crisis and which has just recovered from the risks of deflation.
Already in 2015 China overtook Japan accrediting itself as the second world economy after the USA but remaining relegated to the outline of a wider G20, holding high the BRICS flag and fighting US hegemony from within the structure of multilateral bodies with the launch of Aiib, the Asia Infrastructure Investment Bank which has attracted the support of over 70 countries, including the Philippines but not the United States of America.
And just as in Manchester in yet another suicide attack, perpetrated by an Islamic terrorist, 22 people died 12 thousand kilometers away, on the island of Mindanao in the Philippines, the city of Marawi was overwhelmed by a civil war between Islamic rebels and the Philippine Army. The two groups of terrorists Abu Sayyaf and Maute Group affiliated to IS attacked in the city and occupied a hospital and a courthouse, burned houses and a church, forcing the government to impose martial law. A very serious fact that takes place on the soil of one of the allied countries of the USA but which is not directly part of NATO.
It is well known that relations between the new President Duterte and his allies are not idyllic because despite the massive military and industrial investments of China and the USA with Manila, there are many raw nerves especially given the character of the "justice" Rodrigo Duterte who does not easy diplomatic and trade relations. He gives a nod to the Chinese and takes home over $14 billion in trade deals in one trip last October and then attacks China over the notorious disputed islands in the South Sea.
Same technique with the USA with which it concludes important agreements for military contracts and then declares its intention to move away from Washington. But above all, it is the accusations of dangerous connivance and the disastrous outcome of its "anti-drug teams" that are worrying and which are now shifting the attention of the geopolitical risk to South Asia.
Once again China, which is not admitted to the table of the World's Greatest and which in the last thirty years has shown growth rates among the highest in the world, always in the top positions, and which is heading towards a completion of the transformation of the internal model of productive growth, becomes crucial for the fight against Islamic terrorism and for limiting the risk of the North Korean threat, but above all for managing a more than necessary dialogue with an America that sees the clouds of family scandals around Trump gathering and making the undeniable positive results of the reopening of dialogue in the meetings in the Middle East are also opaque.
