Category: Geopolitics & Geo-economics

  • China’s economy is still far out growing the U.S. – contrary to Western media “fake news”

    China’s economy is still far out growing the U.S. – contrary to Western media “fake news”

    GDP data for China, the U.S., and the other G7 countries for the year 2023 has now been published. This makes possible an accurate assessment of China’s, the U.S., and major economies performance—both in terms of China’s domestic goals and international comparisons. There are two key reasons this is important.

    • First for China’s domestic reasons: to achieve a balanced estimate of China’s socialist economic situation and therefore the tasks it faces.
    • Second, because the U.S. has launched a quite extraordinary propaganda campaign, including numerous straightforward factual falsifications, to attempt to conceal the real international economic facts.

    The factual situation is that China’s economy, as it heads into 2024, has far outgrown all other major comparable economies. This reality is in total contradiction to claims in the U.S. media. This in turn, therefore, demonstrates the extraordinary distortions and falsifications in the U.S. media about this situation. It confirms that, with a few honourable exceptions, Western economic journalism is primarily dominated by, in some cases quite extraordinary, “fake news” rather than any objective analysis. Both for understanding the economic situation, and the degree of distortion in the U.S. media, it is therefore necessary to establish the facts of current international developments

    China’s growth targets

    Starting with China’s strategic domestic criteria, it has set clear goals for its economic development over the next period which will complete its transition from a “developing” to a “high-income” economy by World Bank international standards. In precise numbers, in 2020’s discussion around the 14th Five Year plan, it was concluded that for China by 2035: “It is entirely possible to double the total or per capita income”. Such a result would mean China decisively overcoming the alleged “middle income trap” and, as the 20th Party Congress stated, China reaching the level of a “medium-developed country by 2035”.

    In contrast, a recent series of Western reports, widely used in anti-China propaganda, claim that China’s economy will experience sharp slowdown and will fail to reach its targets.

    Self-evidently which of these outcomes is achieved is of fundamental importance for China’s entire national rejuvenation and construction of socialism—as Xi Jinping stated, China’s: “path takes economic development as the central task, and brings along economic, political, cultural, social, ecological and other forms of progress.” But the outcome also affects the entire global economy—for example, a recent article by the chair of Rockefeller International, published in the Financial Times, made the claim that what was occurring was China’s “economy… losing share to its peers”. The Wall Street journal asserted: “China’s economy limps into 2024” whereas in contrast the U.S. was marked by a “resilient domestic economy.” The British Daily Telegraph proclaimed China has a “stagnant economy”. The Washington Postheadlined that: “Falling inflation, rising growth give U.S. the world’s best recovery” with the article claiming: “in the United States… the surprisingly strong economy is outperforming all of its major trading partners.” This is allegedly because: “Through the end of September, it was more than 7 percent larger than before the pandemic. That was more than twice Japan’s gain and far better than Germany’s anaemic 0.3 percent increase.” Numerous similar claims could be quoted from the U.S. media.

    U.S. use of “fake news”

    Reading U.S. media claims on these issues, and comparing them to the facts. it is impossible to avoid the conclusion that what is involved is deliberate “fake news” for propaganda purposes—as will be seen, the only alternative explanation is that it is disgracefully sloppy journalism that should not appear in supposedly “quality” media. For example, it is simply absurdly untrue, genuinely “fake news”, that the U.S. is “outperforming all of its major trading partners”, or that China has a “stagnant economy”. Anyone who bothers to consult the facts, an elementary requirement for a journalist, can easily find out that such claims are entirely false—as will be shown in detail below.

    To first give an example regarding U.S. domestic reports, before dealing with international aspects, a distortion of U.S. economic growth in 2023 was so widely reported in the U.S. media that it is again hard to avoid the conclusion that this was a deliberate misrepresentation to present an exaggerated view of U.S. economic performance. Factually, the U.S. Bureau of Economic Analysis, the U.S. official statistics agency for economic growth, reported that U.S. GDP in 2023 rose by 2.5%—for comparison China’s GDP increased by 5.2%. But a series of U.S. media outlets, starting with the Wall Street Journal, instead proclaimedthat the “U.S. economy grew 3.1% over the last year”.

    This “fake news” on U.S. growth was created by statistical “cherry picking”. In this case comparing only the last quarter of 2023 with the last quarter of 2022, which was an increase of 3.1%, but not by taking GDP growth in the year as a whole “last year”. But U.S. growth in the earlier part of 2023 was far weaker than in the 4th quarter—year on year growth in the 1stquarter was only 1.7% and in the 2nd quarter only 2.4%. Taking into account this weak growth in the first part of the year, and stronger growth in the second, U.S. growth for the year as a whole was only 2.5%—not 3.1%. As it is perfectly easy to look up the actual annual figure, which was precisely published by the U.S. statistical authorities, it is hard to avoid the conclusion that this was a deliberate distortion in the U.S. media to falsely present a higher U.S. growth rate in 2023 than the reality.

    It may be noted that even if U.S. GDP growth had been 3.1% then China’s was much higher at 5.2%. But the real data makes it transparently clear that China’s economy grew more than twice as fast as the U.S. in 2023—showing at a glance that claims that the U.S. is “outperforming all of its major trading partners”, or that China has a “stagnant economy” were entirely “fake news”.

    Many more examples of U.S. media false claims could be given, but the best way to see the overall situation is to systematically present the overall facts of growth in the major economies.

    What China has to do to achieve its 2035 goals

    Turning first to assessing China’s economic performance, compared to its own strategic goals of doubling GDP and per capita GDP between 2020 and 2035, it should be noted that in 2022 China’s population declined by 0.1% and this fall is expected to continue—the UN projects China’s population will decline by an average 0.1% a year between 2020 and 2035. Therefore, in economic growth terms, the goal of doubling GDP growth to 2035 is slightly more challenging than the per capita target and will be concentrated on here—if China’stotal GDP goal is achieved then the per capita GDP one will necessarily be exceeded.

    To make an international comparison of China’s growth projections compared with the U.S., the U.S. Congressional Budget Office (CBO), responsible for the official growth projections for the U.S. economy on which its government’s policies rely, estimates there will be 1.8% annual average U.S. GDP growth between 2023 and 2023—with this falling to 1.6% from 2034 onwards. This figure is slightly below the current U.S. 12-year long term annual average GDP growth of 2.3%—12 being the number of years from 2023 to 2035. To avoid any suggestion of bias against the U.S., and in favour of China, in international comparisons here the higher U.S. number of 2.3% will be used.

    The results of such figures are that if China hits its growth target for 2035, and the U.S. continues to grow at 2.3%, then between 2020 and 2035 China’s economy will grow by 100% and the U.S. by 41%—see Figure 1. Therefore, from 2020 to 2035, China’s economy would grow slightly more than two and a half times as fast as the U.S.

    The strategic consequences of China’s economic growth rate

    The international implications of any such growth outcomes were succinctly summarised by Martin Wolf, chief economics commentator of the Financial Times. If China’s economy continues to grow substantially faster than Western ones, and it achieves the status of a “medium-developed country by 2035”, then, in addition to achieving high domestic living standards, China’s will become by far the world’s largest economy. As Wolf put it: “The implications can be seen in quite a simple way. According to the IMF, China’s gross domestic product per head (measured at purchasing power) was 28 per cent of U.S. levels in 2022. This is almost exactly half of Poland’s relative GDP per head… Now, suppose its [China’s] relative GDP per head doubled, to match Poland’s. Then its GDP would be more than double that of the U.S. and bigger than that of the U.S. and EU together.” By 2035 such a process would not be completed on the growth rates already given, and measuring by Wolf’s chosen measure of purchasing power parities (PPPs) China’s economy by 2035 would be 60% bigger than that of the U.S. But even that would make China by far the world’s largest economy.

    Wolf equally accurately notes that the only way that such an outcome would be prevented from occurring is if China’s economy slows down to the growth rate of a Western economy such as the U.S. Clearly, if China’s economic growth slows to that of a Western economy, then, naturally, China will never catch up with the West—it will necessarily simply stay the same distance behind. Therefore. as Wolf accurately puts it the outcomes are:

    What is the economic future of China? Will it become a high-income economy and so, inevitably, the largest in the world for an extended period, or will it be stuck in the ‘middle income’ trap, with growth comparable to that of the U.S.?

    The progress in achieving China’s strategic economic goals

    Turning to the precise figure required to achieve China’s 2035 target, China’s goal of doubling GDP required average annual growth of at least 4.7% a year between 2020 and 2035. So far China, as Figure 1 shows, is ahead of this goal—annual average growth in 2020-2022 was 5.7%, meaning that from 2023-2035 annual average 4.6% growth is now required.

    China’ 5.2% GDP increase in 2023 therefore once again exceeded the required 4.6% growth rate to achieve its 2035 goal—as shown in Figure 1. From 2020 to 2023 the required total increase in China’s GDP to hit its 2035 target was 14.9%, whereas in fact its growth was 17.5%. This is in line with the 45-year record since 1978’s Reform and Opening Up, during which entire period the medium/long term targets set by China have always been exceeded.

    Therefore. to summarise, there is no sign whatever in 2023, or indeed in the period since 2020, that China will fail to meet its target of doubling GDP between 2020 and 2035—China is ahead of this target. Such a 4.6% growth rate would easily ensure China becomes a high-income economy by World Bank criteria well before 2035—the present criteria for this being per capita income of $13,846.

    It should be noted, as discussed in in detail below, that a clear international conclusion flows from this necessary 4.6% annual average growth rate for China to achieve its strategic goals. It means that China must continue to grow much faster than the Western economies throughout this period to 2035—that is in line with China’s current trend. However, if China were to slow down to the growth rate of a Western economy, then it will fail to achieve its strategic goals to 2035, may not succeed in becoming a high income economy, and will necessarily remain the same distance behind the West as now. The implications of this will be considered below.

    Systematic comparisons not “cherry picking”

    Having considered China’s performance in 2023 terms of achieving its own domestic strategic goals we will now turn to actual results and a comparison of China with other international economies. This immediately shows the factual absurdity, the pure “fake news” of claims such as that the U.S. has “the world’s best recovery“ and “the United States… is outperforming all of its major trading partners.” On the contrary China has continued to far outgrow the U.S. economy not only in 2023 but in the entire last period. China’s outperformance of the other major Western economies, the G7, is even greater that of the U.S.

    Entirely misleading claims regarding such international comparisons, used for propaganda as opposed to serious analysis, are sometimes made because data is taken from extremely short periods of time which are taken out of context—unrepresentative statistical “cherry picking” or, as Lenin put it, a statistical “dirty business”. Such a method is always erroneous, but it is particularly so during periods which were affected by the impact of the Covid pandemic as these caused extremely violent short-term economic fluctuations related to lock downs and similar measures. China’s assertion of superior growth is based on its overall performance, not an absurd claim that it outperforms every other economy, on every single measure, in every single period! Therefore, in making international comparisons, the most suitable period to take is that for since the beginning of the pandemic up to the latest available GDP data. As comparison of China with the U.S. is the most commonly made one, and particularly concentrated on by the U.S. media campaign, this will be considered first.

    China’s and the U.S.’s growth in 2023

    It was already noted that in 2023 China’s GDP grew by 5.2% and the U.S. by 2.5%—China’s economy growing more than twice as fast as the U.S. But it should also be observed that 2023 was an above trend growth year for the U.S.—U.S. annual average growth over a 12-year period is only 2.3% and over a 20-year period it is only 2.1%. Therefore, although in 2023 China’s economy grew more than twice as fast as the U.S., that figure is actually somewhat flattering for the U.S. Figure 2shows that in the overall period since the beginning of the pandemic China’s economy has grown by 20.1% and the U.S. by 8.1%—that is China’s total GDP growth since the beginning of the pandemic was two and half times greater than the U.S. China’s annual average growth rate was 4.7% compared to the US’s 2.0%.

    Economic performance of China and the three major global economic centres

    Turning to wider international comparisons than the U.S. such data immediately shows the extremely negative situation in most “Global North” economies and China’s great outperformance of them. To start by analysing this in the broadest terms, Figure 3 shows the developments in the world’s three largest economic centres—China, the U.S., and the Eurozone. These three together account for 57% of world GDP at current exchange rates and 46% in purchasing power parities (PPPs). No other economic centre comes close to matching their weight in the world economy.

    Regarding the relative performance of these three major economic centres, at the time of writing data has not been published for the Euro Area for the whole year of 2023 —which would be the ideal comparison. However, it has been published for the the Euro area for the four quarters of 2023 individually and trends can be calculated on that basis. These show that In the four years to the 4th quarter of 2023, covering the period since the beginning of the pandemic, China’s economy has grown by 20.1%, the U.S. by 8.2%, and the Eurozone by 3.0%. China’s economy therefore grew by two and a half times as fast as the U.S. while the situation of the Eurozone could accurately be described as extremely negative with annual average GDP growth in the last four years of only 0.7%.

    Such data again makes it immediately obvious that claims in the Western media that China faces economic crisis, and the Western economies are doing well is entirely absurd—pure fantasy propaganda disconnected from reality.

    Relative performance of China and the G7

    Turning to analysing individual countries, then comparing China to all G7 states, i.e. the major advanced economies, shows the situation equally clearly—see Figure 4. Data for China and all G7 economies has now been published for the whole of 2023. The huge outperformance by China of all the major advanced economies is again evident.

    Over the four years since the beginning of the pandemic China’s economy grew by 20.1%, the U.S. by 8.1%, Canada by 5.4%, Italy by 3.1%, the UK by 1.8%, France by 1.7%, Japan by 1.1% and Germany by 0.7%.

    In the same period China’s economy therefore grew two and a half times as fast as the U.S., almost four times as fast as Canada, almost seven times as fast as Italy, 11 times as fast as the UK, 12 times as fast as France, 18 times as fast as Japan and almost 29 times as fast as Germany.

    In terms of annual average GDP growth during this period China’s was 4.7%, the U.S. 2.0%, Canada 1.3%, Italy 0.8%, the UK 0.4%, France 0.4%, Japan 0.3% and Germany 0.2%.

    It may therefore be seen that China’s economy far outperformed the U.S., while the performance of all other major G7 economies may be quite reasonably described as extremely negative—all having annual average economic growth rates of around or even under 1%.

    Comparison of China to developing economies

    A comparison using the IMF’s January 2024 projections can also be made to the major developing economies—the BRICS. Figure 5 shows this, using the factual result for China and the IMF projections for the other countries. Over the period since the start of the pandemic, from 2019-2023, China’s GDP grew by 20.1%, India by 17.5%, Brazil by 7.7%, Russia by 3.7% and South Africa by 0.9%.

    This data confirms that the major Global South economies are growing faster than most of the major Global North economies, which is part of the rise of the Global South and draws attention to the good performance of India. But China grew more than two and half times more than all the BRICS economies except India—China’s growth was 15% greater than India’s. It should be noted that India is at a far lower stage of development than the other BRICS economies—all the others fall in the World Bank classification of upper middle-income economies whereas India falls into the lower middle income group.

    Comparison of China’s growth to Western economies

    Finally, this outperformance by China casts light on what is necessary to achieve its own 2035 strategic targets. China’s 4.6% growth rate necessary to meet these goals means that it must continue to maintain a growth rate far higher than Western economies—Figure 6 shows this in overall terms in addition to individual comparisons given to major economies above. Whereas China must achieve an annual average 4.6% growth rate the median growth rate of high income “Western” economies is only 1.9%, the U.S. is 2.3%, and the median for developing economies is 3.0%.That is, to achieve its 2035 goals China must grow twice as fast as the long term trend of the U.S., almost two and a half times as fast as the median for high income economies, and more than 50% faster than the median for developing economies. As already seen, China is more than achieving this.

    But such facts immediately show why it is an extremely misleading when proposals are made that China should move towards the macro-economic structure of a Western economy. If China adopts the structure of a Western economy then, of course, China will slow down to the same growth rate as Western economies—and therefore fail to achieve its 2035 economic goals. China will be precisely stuck in the negative outcome of the situation accurately diagnosed by Martin Wolf.

    What is the economic future of China? Will it become a high-income economy and so, inevitably, the largest in the world for an extended period, or will it be stuck in the ‘middle income’ trap, with growth comparable to that of the U.S.?

    Conclusion

    In conclusion, it addition to objectively analysing 2023’s economic results, it is also necessary in the light of this factual situation to make a remark regarding Western, in particular U.S. “journalism”.

    None of the data given above is secret, all is available from public readily accessible sources. In many cases it does not even require any calculations and simply published data can be used. But the U.S. media and journalists report information that is systematically misleading and in many cases simply untrue. While it lagged China in creating economic growth the U.S. was certainly the world leader in creating “fake economic news”! What was the reason, what attitude should be taken to it?

    First, to avoid accusations of distortion, it should be stated that there were a small handful of Western journalists who refused to go along with this type of distortion and fake news. For example Chris Giles, the Financial Times economics commentator, in December, sharply attacked “an absurd way to compare economies… among people who should know better.” Giles did not do this because of support for China but because, quite rightly, he warned that spreading false or distorted information led to serious errors by countries doing so: “Coming from the UK, which lost its top economic dog status in the late 19th century but still has some delusions of grandeur, I can understand American denialism… But ultimately, bad comparisons foster bad decisions.” But the overwhelming majority of U.S. and Western journalists continued to spread fake news. Why?

    First, the fact that identical distortions and false information appeared absolutely simultaneously across a very wide range of media makes it clear that undoubtedly U.S. intelligence services were involved in creating it—i.e. part of the misrepresentation and distortions were entirely deliberate and conscious, aimed at disguising the real situation.

    Second, another part was merely sloppy journalism—that is journalists who could not be bothered to check facts.

    Third, supporting both of these factors was “white Western arrogance”—an arrogant assumption, rooted in centuries of European and European descended countries dominating the world, that the West must be right. Therefore, such arrogance made it impossible to acknowledge or report the clear facts that China’s economy is far outperforming the West.

    But whether it was conscious distortion, sloppy journalism, or conscious or unconscious arrogance, in all these cases no respect should be given to the Western “quality” media. It is not trying to find out the truth, which is the job of journalism, it is simply spreading false propaganda.

    It remains a truth that if a theory and the real world don’t coincide there are only two courses that can be taken. The first, that of a sane person, is to abandon the theory. The second, that of a dangerous one, is to abandon the real world—precisely the danger that Chris Giles pointed to. What has been appearing in the Western media about international economic comparisons regarding China is precisely abandonment of the real world in favour of systematic fake news.

     

    This article was published earlier in mronline.org and is republished under Creative Commons Attribution-Non Commercial-No Derivatives 4.0 International License

    Feature Image Credit: China will continue to lead global growth in 2024 – globaltimes.cn

  • What the Global Economy and Security Require

    What the Global Economy and Security Require

    With the new year 2024 well underway, the world is afflicted with wars, economic challenges, and the larger issues of climate change impact that threaten the very survival of the planet. It is paradoxical to see that great powers are still focused on competition and conflict. The year ahead portends continued conflicts, wars, and the weaponisation of economic infrastructures, demonstrated by Israel’s genocidal war against the Palestinians. Carla Norrlof highlights the increase in geopolitical conflicts and the complex relationship between economics and security. The article, like most Western academics, looks from the American perspective. and may miss the larger worldview.

    – Team TPF

    This article was published earlier in Project Syndicate.

     

    If America and its allies are to maximize both security and prosperity in the coming years, policymakers and strategists will have to understand the complex interplay of forces that is making the world more adversarial and fraught with risk. The global environment demands a comprehensive new economic-security agenda. The global order is undergoing significant changes that demand a new economic-security agenda.

    From hot wars and localized insurgencies to great-power standoffs, geopolitical conflict has made the complex relationship between economics and security a daily concern for ordinary people everywhere. Complicating matters even more is the fact that emerging markets are gaining economic clout and directly challenging traditional powers’ longstanding dominance through new networks and strategic alliances.

    These developments alone would have made this a tumultuous period marked by economic instability, inflation, and supply-chain disruptions. But one also must account for rapid technological advances – which have introduced new security risks (such as arms races and cyber threats) – as well as natural risks such as pandemics and climate change.

    To navigate this dangerous new world, we must reckon with three interrelated dimensions: the effects of geopolitics on the global economy; the influence of global economic relations on national security; and the relationship between global economic competition and overall prosperity.

    Each pathway sheds light on the multifaceted interplay between economics and security. We will need to understand all of them if we are to tackle the varied and complex challenges presented by our highly interconnected global system.

    As recent years have shown, geopolitics can profoundly affect the global economy, reshaping trade, investment flows, and policies sometimes almost overnight. Aside from their devastating human toll, wars like the Russian invasion of Ukraine and Israel’s campaign in Gaza often reverberate far beyond the immediate theater of conflict.

    For example, Western-led sanctions on Russia, and the disruption of Ukrainian grain exports through the Black Sea, caused energy and food prices to soar, resulting in supply insecurity and inflation on a global scale. Moreover, China has deepened its economic relationship with Russia following the mass exodus of Western firms in 2022 and 2023.

    Similarly, Israel’s bombing of Gaza has destabilized the entire Middle East, especially tourism-dependent neighbouring countries such as Egypt, Jordan, and Lebanon. Meanwhile, Yemeni Houthi rebels, long supplied by Iran, have been attacking cargo ships in the Red Sea, leading international shipping firms to suspend or adjust their routes and directly impeding trade through the Suez Canal – a major artery of global commerce.

    We are witnessing the destabilizing effects of natural threats as well. The COVID-19 pandemic drove a massive shift away from cost-effective “just-in-time” supply chains to a “just-in-case” model aimed at strengthening resilience during disruptions. And, more recently, an El Niño-induced drought has diminished the capacity of the Panama Canal – another major artery of global commerce. Whether for geopolitical or ecological reasons, rerouting around these new bottlenecks inevitably increases shipping costs, causes delivery delays, disrupts global supply chains, and creates inflationary pressure.

    Turning to the second dimension – the implications of global economic relations for national security – it is clear that countries will be more likely to adopt bold or aggressive security policies if they already have a web of economic ties that can either attract support or dampen opposition. China, for example, is counting on economically dependent countries within its Belt and Road Initiative to accept its political influence and longer-term bid for hegemony. Many countries also now rely on China for critical defence-related supply-chain components, which leaves them vulnerable diplomatically and militarily.

    More broadly, global connectivity, in the form of economic networks and infrastructure, is increasingly being weaponized for geopolitical ends. As Russia’s war on Ukraine shows, economic ties can create dependencies that raise the cost of opposing assertive security policies (or even outright aggression). The implicit threat of supply disruptions has a coercive – sometimes quite subtle and insidious – effect on a country’s national security objectives. Owing to the network effects of the dollar system, the United States retains significant leverage to enforce international order through coercive sanctions against states that violate international norms.

    Trading with the enemy can be lucrative, or simply practical, but it also alters the distribution of power. As Western governments learned over the past two decades, the advantages conferred by technological superiority can be substantially offset by forced technology transfers, intellectual property theft, and reverse engineering.

    The third dimension – the relationship between global economic competition and prosperity – has been complicated by these first two dynamics, because the pursuit of material well-being now must be weighed against security considerations. Discussions in this area thus centre around the concept of economic security, meaning stable incomes and a reliable supply of the resources needed to support a given standard of living. Both Donald Trump’s “Make America Great Again” slogan and President Joe Biden’s “Build Back Better” plan reflect concerns that economic relations with China harm US prosperity.

    The challenge for the US and its allies is to manage the tensions between these varying economic and security objectives. There is a potential conflict between adapting to market- and geopolitically-driven shifts in economic power and sustaining the economic strength to finance a military force capable of protecting the global economy. The US, as the dominant power, must remain both willing and capable of preserving an open, rules-based global economy and a peaceful international order. That will require additional investments in military capabilities and alliances to counteract territorial aggression and safeguard sea lanes, as well as stronger environmental policies and frameworks to distribute global economic gains according to market principles.

    By attempting to mitigate security risks through deglobalization (reshoring, onshoring, and “friend-shoring”), we risk adding to the economic and security threats presented by a more fragmented world. Though economic ties with rivals can create dangerous dependencies, they also can act as a safeguard against hostility.

    All governments will need to grapple with these tensions as they develop a new economic-security agenda. The world is quickly becoming more adversarial and fraught with risk. To maximize both security and prosperity, we will have to understand the complex interplay of forces that are creating it.

    Feature Image Credit: India Today

  • Trump followed four years later by Trump: Would America’s trustiness and system of alliances survive?

    Trump followed four years later by Trump: Would America’s trustiness and system of alliances survive?

    Ambassador Alfredo Toro Hardy examines, in this excellently analysed paper, the self-created problems that have contributed to America’s declining influence in the world. As he rightly points out, America helped construct the post-1945 world order by facilitating global recovery through alliances, and mutual support and interweaving the exercise of its power with international institutions and legal instruments. The rise of neoconservatism following the end of the Cold War, particularly during the Bush years from 2000 to 2008, led to American exceptionalism, unipolar ambitions, and the failure of American foreign policy.  Obama’s Presidency was, as Zbigniew Brezinski said, a second chance for restoring American leadership but those gains were nullified in Donald Trump’s 2016-20 presidency leading to the loss of trust in American Leadership. In a final analysis that may be questionable for some, Ambassador Alfredo sees Biden’s administration returning to the path of liberal internationalism and recovering much of the lost trust of the world.  His fear is that it may all be lost if Trump returns in 2024.                               – Team TPF

     

    TPF Occasional Paper   9/2023    

    Trump followed four years later by Trump: Would America’s trustiness and system of alliances survive?

     

     

    According to Daniel W. Drezner: “Despite four criminal indictments, Donald Trump is the runaway frontrunner to win the GOP nomination for president. Assuming he does, current polling shows a neck-and-neck race between Trump and Biden in the general election. It would be reckless for other leaders to dismiss the possibility of a second Trump term beginning on January 20, 2025. Indeed, the person who knows this best is Biden himself. In his first joint address to Congress, Biden said that in a conversation with world leaders, he has ‘made it known that America is back’, and their responses have tended to be a variation of “but for how long?”. [1]

    A bit of historical context

    In order to duly understand the implications of a Trump return to the White House, a historical perspective is needed. Without context, it is difficult to comprehend the meaning of the “but for how long?” that worries so many around the world. Let’s, thus, go back in time.

    Under its liberal internationalist grand vision, Washington positioned itself at the top of a potent hegemonic system. One, allowing that its leadership could be sustained by the consensual acquiescence of others. Indeed, through a network of institutions, treaties, mechanisms and initiatives, whose creation it promoted after World War II, the United States was able to interweave the exercise of its power with international institutions and legal instruments. Its alliances were a fundamental part of that system. On the other side of the Iron Curtain, though, the Soviet Union established its own system of alliances and common institutions.

                In the 1970s, however, America’s leadership came into question. Two reasons were responsible for it. Firstly, the Vietnam War. The excesses committed therein and America’s impotence to prevail militarily generated great discomfort among several of its allies. Secondly, the crisis of the Bretton Woods system. As a global reserve currency issuer, the stability of the U.S. currency was fundamental. In a persistent way, though, Washington had to run current account deficits to fulfil the supply of dollars at a fixed parity with gold. This impacted the desirability of the dollar, which in turn threatened its position as a reserve currency issuer. When a run for America’s gold reserves showed a lack of trust in the dollar, President Nixon decided in 1971 to unhook the value of the dollar from gold altogether.

                Notwithstanding these two events, America’s leadership upon its alliance system would remain intact, as there was no one else to face the Soviet threat. However, when around two decades later the Soviet Union imploded, America’s standing at the top would become global for the same reason: There was no one else there. Significantly, the United States’ supremacy was to be accepted as legitimate by the whole international community because, again, it was able to interweave the exercise of its power with international institutions and legal instruments.

    Inexplicable under the light of common sense

                In 2001, however, George W. Bush’s team came into government bringing with them an awkward notion about the United States’ might. Instead of understanding that the hegemonic system in place served their country’s interests perfectly well, the Bush team believed that such a system had to be rearranged in tandem with America’s new position as the sole superpower. As a consequence, they began to turn upside down a complex structure that had taken decades to build.

    The Bush administration’s world frame became, indeed, a curious one. It believed in unconditional followers and not in allies’ worthy of respect; it believed in ad hoc coalitions and “with us or against us” propositions where multilateral institutions and norms had little value; it believed in the punishment of dissidence and not in the encouragement of cooperation; it believed in preventive action prevailing over international law.

    In proclaiming the futility of cooperative multilateralism, which in their perspective just constrained the freedom of action of America’s might, they asserted the prerogatives of a sole superpower. The Bush administration’s world frame became, indeed, a curious one. It believed in unconditional followers and not in allies’ worthy of respect; it believed in ad hoc coalitions and “with us or against us” propositions where multilateral institutions and norms had little value; it believed in the punishment of dissidence and not in the encouragement of cooperation; it believed in preventive action prevailing over international law. Well-known “neoconservatives” such as Charles Krauthammer, Robert Kagan, and John Bolton, proclaimed America’s supremacy and derided countries not willing to follow its unilateralism.

                But who were these neoconservatives? They were the intellectual architects of Bush’s foreign policy, who saw themselves as the natural inheritors of the foreign policy establishment of Truman’s time. The one that had forged the fundamental guidelines of America’s foreign policy during the Cold War, in what was labelled as the “creation”. In their view, with the United States having won the Cold War, a new creation was needed. Their beliefs could be summed up as diplomacy if possible, force if necessary; U.N. if possible, ad hoc coalitions, unilateral action, and preemptive strikes if necessary. America, indeed, should not be constrained by accepted rules, multilateral institutions, or international law. At the same time, the U.S.’ postulates of freedom and democracy, expressions of its exceptionalism, entailed the right to propitiate regime change whenever necessary, in order to preserve America’s security and the world order.

    Bogged down in Iraq and Afghanistan, while deriding and humiliating so many around the world, America’s neoconservatives undressed the emperor. By taking off his clothes, they made his frailties visible for everyone to watch.

    Inexplicable, under the light of common sense, the Bush team disassociated power from the international structures and norms that facilitated and legitimized its exercise. As a consequence, America moved from being the most successful hegemonic power ever to becoming a second-rate imperial power that proved incapable of prevailing in two peripheral wars. Bogged down in Iraq and Afghanistan, while deriding and humiliating so many around the world, America’s neoconservatives undressed the emperor. By taking off his clothes, they made his frailties visible for everyone to watch.

                At the beginning of 2005, while reporting a Pew Research Center poll, The Economist stated that the prevailing anti-American sentiment around the world was greater and deeper than at any other moment in history. The BBC World Service and Global Poll Research Partners, meanwhile, conducted another global poll in which they asked, “How do you perceive the influence of the U.S. in the world?”. The populations of some of America’s traditional allies gave an adverse answer in the following percentages: Canada 60%; Mexico 57%; Germany 54%; Australia 52%; Brazil 51%; United Kingdom 50%. With such a negative perception among Washington’s closest allies, America’s credibility was in tatters.[2]

             Is the liberal international order ending? what is next? dailysabah.com

     While Bush’s presidency was reaching its end, Zbigniew Brzezinski wrote a pivotal book that asserted that the United States had lost much of its international standing. This felt, according to the book, particularly disturbing. Indeed, as a result of the combined impact of modern technology and global political awakening, that speeded up political history, what in the past took centuries to materialize now just took decades, whereas what before had taken decades, now could materialize in a single year. The primacy of any world power was thus faced with immense pressures of change, adaptation and fall. Brzezinski believed, however, that although America had deeply eroded its international standing, a second chance was still possible. This is because no other power could rival Washington’s role. However, recuperating the lost trust and legitimacy would be an arduous job, requiring years of sustained effort and true ability. The opportunity of this second chance should not be missed, he insisted, as there wouldn’t be a third one. [3]

    A second chance

                Barak Obama did certainly his best to recover the space that had been lost during the preceding eight years. That is, the U.S.’s leading role within a liberal internationalist structure. However, times had changed since his predecessor’s inauguration. In the first place, a massive financial crisis that had begun in America welcomed Obama, when he arrived at the White House. This had increased the international doubts about the trustiness of the country. In the second place, China’s economy and international position had taken a huge leap ahead during the previous eight years. Brzezinski’s notion that no other power could rival the United States was rapidly evolving. As a result, Obama was left facing a truly daunting challenge.

                To rebuild Washington’s standing in the international scene, Obama’s administration embarked on a dual course of action. He followed, on the one hand, cooperative multilateralism and collective action. On the other hand, he prioritized the U.S.’ presence where it was most in need, avoiding unnecessary distractions as much as possible. Within the first of these aims, Obama seemed to have adhered to Richard Hass’ notion that power alone was simple potentiality, with the role of a successful foreign policy being that of transforming potentiality into real influence. Good evidence of this approach was provided through Washington’s role in the Paris Agreement on Climate Change, in the Joint Comprehensive Plan of Action in relation to Iran, in the NATO summits, in the newly created G20, and in the summits of the Americas, among many other instances. By not becoming too overbearing, and by respecting other countries’ points of view, the Obama Administration played a leading influence within the context of collective action. Although theoretically being one among many, the United States always played the leading role.[4]

    Within this context, Obama’s administration followed a coalition-building strategy. The Trans-Pacific Partnership represented the economic approach to the pivot and aimed at building an association covering forty per cent of the global economy. There, the United States would be the first among equals. As for the security approach to the pivot, the U.S. Navy repositioned its forces within the Pacific and the Atlantic oceans.

                To prioritize America’s presence where it was most needed, Obama turned the attention to China and the Asia-Pacific. While America was focusing on the Middle East, China enjoyed a period of strategic opportunity. His administration’s “pivot to Asia” emerged as a result. This policy had the dual objective of building economic prosperity and security, within that region. Its intention was countering, through facts, the notion that America was losing its staying power in the Pacific. Within this context, Obama’s administration followed a coalition-building strategy. The Trans-Pacific Partnership represented the economic approach to the pivot and aimed at building an association covering forty per cent of the global economy. There, the United States would be the first among equals. As for the security approach to the pivot, the U.S. Navy repositioned its forces within the Pacific and the Atlantic oceans. From a roughly fifty-fifty correlation between the two oceans, sixty per cent of its fleet was moved to the Pacific. Meanwhile, the U.S. increased joint exercises and training with several countries of the region, while stationing 2,500 marines in Darwin, Australia. As a result of the pivot, many of China’s neighbours began to feel that there was a real alternative to this country’s overbearing assertiveness.[5]

                Barak Obama was on a good track to consolidating the second chance that Brzezinski had alluded to. His foreign policy helped much in regaining international credibility and standing for his country, and the Bush years began to be seen as just a bump on the road of America’s foreign policy. Unfortunately, Donald Trump was the next President. And Trump coming just eight years after Bush, was more than what America’s allies could swallow.

    Dog-eat-dog foreign policy

                The Bush and Trump foreign policies could not be put on an equal footing, though. The abrasive arrogance of Bush’s neoconservatives, however distasteful, embodied a school of thought in matters of foreign policy. One, characterized by a merger between exalted visions of America’s exceptionalism and Wilsonianism. Francis Fukuyama defined it as Wilsionanism minus international institutions, whereas John Mearsheimer labelled it as Wilsionanism with teeth. Although overplaying conventional notions to the extreme, Bush’s foreign policy remained on track with a longstanding tradition. Much to the contrary, Trump’s foreign policy, according to Fareed Zakaria, was based on a more basic premise– The world was largely an uninteresting place, except for the fact that most countries just wanted to screw the United States. Trump believed that by stripping the global system of its ordering arrangements, a “dog eat dog” environment would emerge. One, in which his country would come up as the top dog. His foreign policy, thus, was but a reflection of gut feelings, sheer ignorance and prejudices.[6]

                Trump derided multilateral cooperation and preferred a bilateral approach to foreign relations. One, in which America could exert its full power in a direct way, instead of letting it dilute by including others in the decision-making process. Within this context, the U.S.’ market leverage had to be used to its full extent, to corner others into complying with Washington’s positions. At the same time, he equated economy and national security and, as a consequence, was prone to “weaponize” economic policies. Moreover, he premised on the use of the American dollar as a bullying tool to be used to his country’s political advantage. Not only China but some of America’s main allies as well, were targeted within this approach. Dusting off Section 323 of the 1962 Trade Expansion Act, which allowed tariffs on national security grounds, Trump imposed penalizations in every direction. Some of the USA’s closest allies were badly affected as a result.

                Given Trump’s contempt for cooperative multilateralism, but also aiming at erasing Obama’s legacy, an obsessive issue with him, he withdrew the U.S. from the Trans-Pacific Partnership, from the Paris Agreement on Climate Change, and from the Joint Comprehensive Plan of Action in relation to Iran. He also withdrew his country from other multilateral institutions, such as the United Nations’ Human Rights Commission and, in the middle of the Covid 19 pandemic, from the World Health Organization. Trump threatened to cut funding to the U.N., waged a largely victorious campaign to sideline the International Criminal Court, and brought the World Trade Organization to a virtual standstill. Even more, he did not just walk away from the Joint Comprehensive Plan of Action, in relation to Iran, but threatened its other signatories to impose sanctions on them if, on the basis of the agreement, they continued to trade with Iran.

    Trump followed a transactional approach to foreign policy in which principles and allies mattered little, and where trade and money were prioritized over security considerations.

                Trump followed a transactional approach to foreign policy in which principles and allies mattered little, and where trade and money were prioritized over security considerations. In 2019, he asked Japan to increase fourfold its annual contribution for the privilege of hosting 50,000 American troops in its territory, while requesting South Korea to pay 400 percent more for hosting American soldiers. This, amid China’s increasing assertiveness and North Korea’s continuous threats. In his relations with New Delhi, a fundamental U.S. ally within any containment strategy to China, he subordinated geostrategic considerations to trade. On the premise that India was limiting American manufacturers from access to its market, Trump threatened this proud nation with a trade war.[7]

                Irritated because certain NATO member countries were not spending enough on their defence, Trump labelled some of Washington’s closest partners within the organization as “delinquents”. He also threatened to reduce the U.S.’ participation in NATO, calling it “obsolete”, while referring to Germany as a “captive of Russia”. At the same time, Trump abruptly cancelled a meeting with the Danish Prime Minister, because she was unwilling to discuss the sale of Greenland to the United States. This, notwithstanding the fact that this was something expressively forbidden by the 1975 Helsinki Final Act, represents the cornerstone of European stability. The European Union, in his view, was not a fundamental ally, but a competitor and an economic foe. Deliberately, Trump antagonized European governments, including that of London at the time, by cheering Brexit. Meanwhile, he imposed tariffs on steel and aluminium on many of its closest partners and humiliated Canada and Mexico by imposing upon them a tough renegotiation of NAFTA. One, whose ensuing accord did not bring significant changes. Moreover, he fractured the G7, a group integrated by Washington’s closest allies, leaving the United States standing alone on one side with the rest standing on the other.

    In June 2018, Donald Tusk, President of the European Council, expressed his bewilderment at seeing that the rules-based international order was being challenged precisely by its main architect and guarantor– the United States. Financial Times columnist Martin Wolf summoned up all of this, by expressing that under Trump the U.S. had become a rogue superpower.

                Unsurprisingly, thus, America’s closest allies reached the conclusion that they could no longer trust it. Several examples attested to this. In November 2017, Canberra’s White Paper on the security of Asia expressed uncertainty about America’s commitment to that continent. In April 2018, the United Kingdom, Germany and France issued an official statement expressing that they would forcefully defend their interests against the U.S.’ protectionism. On May 10, 2018, Angela Merkel stated in Aquisgran that the time in which Europe could trust America was over. On May 31, 2018, Justin Trudeau aired Canada’s affront at being considered a threat to the United States. In June 2018, Donald Tusk, President of the European Council, expressed his bewilderment at seeing that the rules-based international order was being challenged precisely by its main architect and guarantor– the United States. In November 2019, in an interview given to The Economist, Emmanuel Macron stated that the European countries could no longer rely on the United States, which had turned its back on them. Financial Times columnist Martin Wolf summoned up all of this, by expressing that under Trump the U.S. had become a rogue superpower.[8]

    The return of liberal internationalism

    Politically and geopolitically Biden rapidly went back to the old premises of liberal internationalism. Cooperative multilateralism and collective action were put back in place, and alliances became, once again, a fundamental part of America’s foreign policy. 

               As mentioned, George W. Bush followed a few years later by Donald Trump was more than what America’s allies could handle. Fortunately for that country, and for its allies, Trump failed to be re-elected in 2020, and Joe Biden came to power. True, the latter’s so-called foreign policy for the middle classes kept in place some of Trump’s international trade policies. However, politically and geopolitically he rapidly went back to the old premises of liberal internationalism. Cooperative multilateralism and collective action were put back in place, and alliances became, once again, a fundamental part of America’s foreign policy.  Moreover, Biden forcefully addressed some of his country’s main economic deficiencies, which had become an important source of vulnerability in its rivalry with China. In sum, Biden strengthened the United States’ economy, its alliances, and its international standing.

                Notwithstanding the fact that Biden had to fight inch by inch with a seemingly unconquerable opposition, while continuously negotiating with two reluctant senators from his own party, he was able to pass a group of transformational laws. Among them, are the Infrastructure Investment and Job Act, the CHIPS and Science Act and the Inflation Reduction Act. Together, these legislations allow for a government investment of a trillion dollars in the modernization of the country’s economy and its re-industrialization, including the consolidation of its technological leadership, the updating of its infrastructures and the reconversion of its energy matrix towards clean energy. Private investments derived from such laws would be gigantic, with the sole CHIPS Act having produced investment pledges of more than 100 billion dollars. This projects, vis-à-vis China’s competition, an image of strength and strategic purpose. Moreover, before foes and friends, these accomplishments prove that the U.S. can overcome its legislative gridlocks, in order to modernize its economy and its competitive standing.

                Meanwhile, Washington’s alliances have significantly strengthened. In Europe, Russia’s invasion of Ukraine and Washington’s firm reaction to it had important consequences. While the former showed to its European allies that America’s leadership was still indispensable, the latter made clear that the U.S. had the determination and the capacity to exercise such leadership. Washington has indeed led in response to the invasion, in the articulation of the alliances and the revitalization of NATO, in sanctions on Russia, and in the organization of the help provided to Ukraine. It has also been Kyiv’s main source of support in military equipment and intelligence, deciding at each step of the road what kind of armament should be supplied to the Ukrainian forces. In short, before European allies that had doubted Washington’s commitments to its continent, and of the viability of NATO itself, America proved to be the indispensable superpower.

                Meanwhile, American alliances in the Indo-Pacific have also been strengthened and expanded, with multiple initiatives emerging as a result. As the invasion of Ukraine made evident the return of geopolitics by the big door, increasing the fears of China’s threat to regional order, Washington has become for many the essential partner. America’s security umbrella has proved to be for them a fundamental tool in containing China’s increasing arrogance and disregard for international law and jurisprudence. Among the security mechanisms or initiatives created or reinforced under its stewardship are an energized Quad; the emergence of AUKUS; NATO’s approach to the Indo-Pacific region; the tripartite Camp David’s security agreement between Japan, South Korea and the U.S.; a revamped defence treaty with The Philippines; an increased military cooperation with Australia; and Hanoi’s growing strategic alignment with Washington. On the economic side, we find the Indo-Pacific Economic Framework for Prosperity and the freshly emerged Partnership for Global Infrastructure and Investment & India-Middle East-Europe Economic Corridor.

    Enough would be enough

                Although the Global South has proved to be particularly reluctant to fall back under the security leadership of the superpowers, Washington has undoubtedly become the indispensable partner for many in Europe and the Indo-Pacific. Thanks to Biden, the United States has repositioned itself on the cusp of a potent alliance system, regaining credibility and vitality. What would happen, thus, if he is defeated in the 2024 elections and Trump regains the White House? In 2007, Brzezinski believed, as mentioned, that although America had deeply eroded its international standing, a second chance was still possible. Actually, with Biden (and thanks in no small part to the Russian invasion and China’s pugnacity), the U.S. got an unexpected third chance. But definitively, enough would be enough. Moreover, during Trump’s first term in office, a professional civil service and an institutional contention wall (boosted by the so-called “adults in the room”), may have been able to keep at bay Trump’s worst excesses. According to The Economist, though, that wouldn’t be the case during a second term, where thousands of career public servants would be fired and substituted by MAGA followers. The deconstruction of the so-called “deep State” would be the aim to be attained, which would translate into getting rid of anyone who knows how to get the job done within the Federal Government. Hence, for America’s allies, Trump’s nightmarish first period would pale in relation to a second one. Trump followed four years later by Trump, no doubt about it, would shatter America’s trustiness, credibility, international standing, and its system of alliances. [9]

    Notes:

    [1] “Bracing for Trump 2.0”, Foreign Affairs, September 5, 2023

    [2] The Economist, 19th February, 2005; Walt, Stephen M, Taming American Power, New York: W.W. Norton and Company, 2005, p.72.

    [3] Second Chance, New York: Basic Books, 2007, p. 191, 192, 206.

    [4] Hass, Richard, “America and the Great Abdication”, The Atlantic, December 28, 2017.

    [5] Campbell, Kurt, The Pivot, New York: Twelve, 2016, pp. 11-28.

    [6] Steltzer, Irwin, Neoconservatism, London: Atlantic Books, 2004, pp. 3-28; Fukuyama, Francis, “After the Neoconservatives”, London: Profile Books, 2006, p. 41; Zakaria, Farid, “The Self-Destruction of American Power”, Foreign Affairs, July-August 2019.

    [7] World Politics Review, “Trump works overtime to shake down alliances in Asia and appease North Korea”, October 14, 2019.

    [8] White, Hugh, “Canberra voices fears”, The Strait Time, 25 November, 2017; Breuninger, Kevin, “Canada announces retaliatory tariffs”, CNBC, May 31, 2018; The Economist, “Emmanuel Macron warns Europe”, November 7th, 2019; Kishore Mahbubani, Has China Won? New York: Public Affairs, 2020, p. 56; Cooley, Alexander and Nexon, Daniel, Exit from Hegemony , Oxford: Oxford University Press, 2020, p. 70.

    [9]  The Economist, “Preparing the way: The alarming plans for Trump’s second term”, July 15th, 2023.

     

    Feature Image Credit: livemint.com

    Cartoon Credit: seltzercreativegroup.com

  • The US economic war on China

    The US economic war on China

    The anti-China policies come out of a familiar playbook of US policy-making. The aim is to prevent economic and technological competition from a major rival.

    China’s economy is slowing down. Current forecasts put China’s GDP growth in 2023 at less than 5%, below the forecasts made last year and far below the high growth rates that China enjoyed until the late 2010s. The Western press is filled with China’s supposed misdeeds: a financial crisis in the real estate market, a general overhang of debt, and other ills. Yet much of the slowdown is the result of US measures that aim to slow China’s growth. Such US policies violate World Trade Organization rules and are a danger to global prosperity. They should be stopped.
    The anti-China policies come out of a familiar playbook of US policy-making. The aim is to prevent economic and technological competition from a major rival. The first and most obvious application of this playbook was the technology blockade that the US imposed on the Soviet Union during the Cold War. The Soviet Union was America’s declared enemy and US policy aimed to block Soviet access to advanced technologies.

    At the end of the 1980s and early 1990s, the US deliberately sought to slow Japan’s economic growth. This may seem surprising, as Japan was and is a US ally. Yet Japan was becoming “too successful,” as Japanese firms outcompeted US firms in key sectors, including semiconductors, consumer electronics, and automobiles.

    The second application of the playbook is less obvious, and in fact, is generally overlooked even by knowledgeable observers. At the end of the 1980s and early 1990s, the US deliberately sought to slow Japan’s economic growth. This may seem surprising, as Japan was and is a US ally. Yet Japan was becoming “too successful,” as Japanese firms outcompeted US firms in key sectors, including semiconductors, consumer electronics, and automobiles. Japan’s success was widely hailed in bestsellers such as Japan as Number One by my late, great colleague, Harvard Professor Ezra Vogel.
    In the mid-to-late 1980s, US politicians limited US markets to Japan’s exports (via so-called “voluntary” limits agreed with Japan) and pushed Japan to overvalue its currency. The Japanese Yen appreciated from around 240 Yen per dollar in 1985 to 128 Yen per dollar in 1988 and 94 Yen to the dollar in 1995, pricing Japanese goods out of the US market. Japan went into a slump as export growth collapsed. Between 1980 and 1985, Japan’s exports rose annually by 7.9 percent; between 1985 and 1990, export growth fell to 3.5 percent annually; and between 1990 and 1995, to 3.3 percent annually. As growth slowed markedly, many Japanese companies fell into financial distress, leading to a financial bust in the early 1990s.

    In the mid-1990s, I asked one of Japan’s most powerful government officials why Japan didn’t devalue the currency to re-establish growth. His answer was that the US wouldn’t allow it.

    Now the US is taking aim at China. Starting around 2015, US policymakers came to view China as a threat rather than a trade partner. This change of view was due to China’s economic success. China’s economic rise really began to alarm US strategists when China announced in 2015 a “Made in China 2025” policy to promote China’s advancement to the cutting edge of robotics, information technology, renewable energy, and other advanced technologies. Around the same time, China announced its Belt and Road Initiative to help build modern infrastructure throughout Asia, Africa and other regions, largely using Chinese finance, companies, and technologies.

    After winning the 2016 election on an anti-China platform, Trump imposed unilateral tariffs on China that clearly violated WTO rules. To ensure that WTO would not rule against the US measures, the US disabled the WTO appellate court by blocking new appointments.

    The US dusted off the old playbook to slow China’s surging growth. President Barrack Obama first proposed to create a new trading group with Asian countries that would exclude China, but presidential candidate Donald Trump went further, promising outright protectionism against China. After winning the 2016 election on an anti-China platform, Trump imposed unilateral tariffs on China that clearly violated WTO rules. To ensure that WTO would not rule against the US measures, the US disabled the WTO appellate court by blocking new appointments. The Trump Administration also blocked products from leading Chinese technology companies such as ZTE and Huawei and urged US allies to do the same.

    When President Joe Biden came to office, many (including me) expected Biden to reverse or ease Trump’s anti-China policies. The opposite happened. Biden doubled down, not only maintaining Trump’s tariffs on China but also signing new executive orders to limit China’s access to advanced semiconductor technologies and US investments. American firms were advised informally to shift their supply chains from China to other countries, a process labelled “friend-shoring” as opposed to offshoring. In carrying out these measures, the US completely ignored WTO principles and procedures.

    The US strongly denies that it is in an economic war with China, but as the old adage goes, if it looks like a duck, swims like a duck, and quacks like a duck, it’s probably a duck. The US is using a familiar playbook, and the Washington politicians are invoking martial rhetoric, calling China an enemy that must be contained or defeated.

    The results are seen in a reversal of China’s exports to the US. In the month that Trump came into office, January 2017, China accounted for 22 per cent of US merchandise imports. By the time Biden came into office in January 2021, China’s share of US imports had dropped to 19 per cent. As of June 2023, China’s share of US imports had plummeted to 13 per cent. Between June 2022 and June 2023, US imports from China fell by a whopping 29 per cent.

    Of course, the dynamics of China’s economy are complex and hardly driven by China-US trade alone. Perhaps China’s exports to the US will partly rebound. Yet Biden seems unlikely to ease trade barriers with China in the lead-up to the 2024 election.

    Unlike Japan in the 1990s, which was dependent on the US for its security, and so followed US demands, China has more room for maneuver in the face of US protectionism. Most importantly, I believe, China can substantially increase its exports to the rest of Asia, Africa, and Latin America, through policies such as expanding the Belt and Road Initiative. My assessment is that the US attempt to contain China is not only wrongheaded in principle but destined to fail in practice. China will find partners throughout the world economy to support a continued expansion of trade and technological advances.

     

    Feature Image Credit: The limits of US-China Economic Rivalry www.setav.org

  • BRICS: On 1 January 2024, the World’s Centre of Gravity will Shift

    BRICS: On 1 January 2024, the World’s Centre of Gravity will Shift

    As is often the case in history, the actions of a dying empire create common ground for its victims to look for new alternatives, no matter how embryonic and contradictory they are. The diversity of support for the expansion of BRICS is an indication of the growing loss of the political hegemony of imperialism.

    On the last day of the BRICS summit in Johannesburg, South Africa, the five founding states (Brazil, Russia, India, China, and South Africa) welcomed six new members: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE). The BRICS partnership now encompasses 47.3 per cent of the world’s population, with a combined global Gross Domestic Product (by purchasing power parity, or PPP,) of 36.4 per cent. In comparison, though the G7 states (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) account for merely 10 per cent of the world’s population, their share of the global GDP (by PPP) is 30.4 per cent. In 2021, the nations that today form the expanded BRICS group were responsible for 38.3 percent of global industrial output while their G7 counterparts accounted for 30.5 percent. All available indicators, including harvest production and the total volume of metal production, show the immense power of this new grouping. Celso Amorim, advisor to the Brazilian government and one of the architects of BRICS during his former tenure as foreign minister, said of the new development that ‘[t]he world can no longer be dictated by the G7’.

    Certainly, the BRICS nations, for all their internal hierarchies and challenges, now represent a larger share of the global GDP than the G7, which continues to behave as the world’s executive body. Over forty countries expressed an interest in joining BRICS, although only twenty-three applied for membership before the South Africa meeting (including seven of the thirteen countries in the Organisation of Petroleum Exporting Countries, or OPEC). Indonesia, the world’s seventh largest country in terms of GDP (by PPP), withdrew its application to BRICS at the last moment but said it would consider joining later. Indonesia’s President Joko Widodo’s comments reflect the mood of the summit: ‘We must reject trade discrimination. Industrial down streaming must not be hindered. We must all continue to voice equal and inclusive cooperation’.

    The facts are clear: the Global North’s percentage of world GDP fell from 57.3 per cent in 1993 to 40.6 per cent in 2022, with the US’s percentage shrinking from 19.7 per cent to only 15.6 per cent of global GDP (by PPP) in the same period – despite its monopoly privilege. In 2022, the Global South, without China, had a GDP (by PPP) greater than that of the Global North.

    BRICS does not operate independently of new regional formations that aim to build platforms outside the grip of the West, such as the Community of Latin America and Caribbean States (CELAC) and the Shanghai Cooperation Organisation (SCO). Instead, BRICS membership has the potential to enhance regionalism for those already within these regional fora. Both sets of interregional bodies are leaning into a historical tide supported by important data, analysed by Tricontinental: Institute for Social Research using a range of widely available and reliable global databases. The facts are clear: the Global North’s percentage of world GDP fell from 57.3 per cent in 1993 to 40.6 per cent in 2022, with the US’s percentage shrinking from 19.7 per cent to only 15.6 per cent of global GDP (by PPP) in the same period – despite its monopoly privilege. In 2022, the Global South, without China, had a GDP (by PPP) greater than that of the Global North.

    The West, perhaps because of its rapid relative economic decline, is struggling to maintain its hegemony by driving a New Cold War against emergent states such as China. Perhaps the single best evidence of the racial, political, military, and economic plans of the Western powers can be summed up by a recent declaration of the North Atlantic Treaty Organisation (NATO) and the European Union (EU): ‘NATO and the EU play complementary, coherent and mutually reinforcing roles in supporting international peace and security. We will further mobilise the combined set of instruments at our disposal, be they political, economic, or military, to pursue our common objectives to the benefit of our one billion citizens’.

    Why did BRICS welcome such a disparate group of countries, including two monarchies, into its fold? When asked to reflect on the character of the new full member states, Brazil’s President Luiz Inácio Lula da Silva said, ‘What matters is not the person who governs but the importance of the country. We can’t deny the geopolitical importance of Iran and other countries that will join BRICS’. This is the measure of how the founding countries made the decision to expand their alliance. At the heart of BRICS’s growth are at least three issues: control over energy supplies and pathways, control over global financial and development systems, and control over institutions for peace and security.

    A larger BRICS has now created a formidable energy group. Iran, Saudi Arabia, and the UAE are also members of OPEC, which, with Russia, a key member of OPEC+, now accounts for 26.3 million barrels of oil per day, just below thirty per cent of global daily oil production. Egypt, which is not an OPEC member, is nonetheless one of the largest African oil producers, with an output of 567,650 barrels per day. China’s role in brokering a deal between Iran and Saudi Arabia in April enabled the entry of both of these oil-producing countries into BRICS. The issue here is not just the production of oil, but the establishment of new global energy pathways.

    The Chinese-led Belt and Road Initiative has already created a web of oil and natural gas platforms around the Global South, integrated into the expansion of Khalifa Port and natural gas facilities at Fujairah and Ruwais in the UAE, alongside the development of Saudi Arabia’s Vision 2030. There is every expectation that the expanded BRICS will begin to coordinate its energy infrastructure outside of OPEC+, including the volumes of oil and natural gas that are drawn out of the earth. Tensions between Russia and Saudi Arabia over oil volumes have simmered this year as Russia exceeded its quota to compensate for Western sanctions placed on it due to the war in Ukraine. Now these two countries will have another forum, outside of OPEC+ and with China at the table, to build a common agenda on energy. Saudi Arabia plans to sell oil to China in renminbi (RMB), undermining the structure of the petrodollar system (China’s two other main oil providers, Iraq and Russia, already receive payment in RMB).

    Both the discussions at the BRICS summit and its final communiqué focused on the need to strengthen a financial and development architecture for the world that is not governed by the triumvirate of the International Monetary Fund (IMF), Wall Street, and the US dollar. However, BRICS does not seek to circumvent established global trade and development institutions such as the World Trade Organisation (WTO), the World Bank, and the IMF. For instance, BRICS reaffirmed the importance of the ‘rules-based multilateral trading system with the World Trade Organisation at its core’ and called for ‘a robust Global Financial Safety Net with a quota-based and adequately resourced [IMF] at its centre’. Its proposals do not fundamentally break with the IMF or WTO; rather, they offer a dual pathway forward: first, for BRICS to exert more control and direction over these organisations, of which they are members but have been suborned to a Western agenda, and second, for BRICS states to realise their aspirations to build their own parallel institutions (such as the New Development Bank, or NDB). Saudi Arabia’s massive investment fund is worth close to $1 trillion, which could partially resource the NDB.

    BRICS’s agenda to improve ‘the stability, reliability, and fairness of the global financial architecture’ is mostly being carried forward by the ‘use of local currencies, alternative financial arrangements, and alternative payment systems’. The concept of ‘local currencies’ refers to the growing practice of states using their own currencies for cross-border trade rather than relying upon the dollar. Though approximately 150 currencies in the world are considered to be legal tender, cross-border payments almost always rely on the dollar (which, as of 2021, accounts for 40 per cent of flows over the Society for Worldwide Interbank Financial Telecommunications, or SWIFT, network).

    Other currencies play a limited role, with the Chinese RMB comprising 2.5 per cent of cross-border payments. However, the emergence of new global messaging platforms – such as China’s Cross-Border Payment Interbank System, India’s Unified Payments Interface, and Russia’s Financial Messaging System (SPFS) – as well as regional digital currency systems promise to increase the use of alternative currencies. For instance, cryptocurrency assets briefly provided a potential avenue for new trading systems before their asset valuations declined, and the expanded BRICS recently approved the establishment of a working group to study a BRICS reference currency.

    Following the expansion of BRICS, the NDB said that it will also expand its members and that, as its General Strategy, 2022–2026 notes, thirty per cent of all of its financing will be in local currencies. As part of its framework for a new development system, its president, Dilma Rousseff, said that the NDB will not follow the IMF policy of imposing conditions on borrowing countries. ‘We repudiate any kind of conditionality’, Rousseff said. ‘Often a loan is given upon the condition that certain policies are carried out. We don’t do that. We respect the policies of each country’.

    In their communiqué, the BRICS nations write about the importance of ‘comprehensive reform of the UN, including its Security Council’

    In their communiqué, the BRICS nations write about the importance of ‘comprehensive reform of the UN, including its Security Council’. Currently, the UN Security Council has fifteen members, five of whom are permanent (China, France, Russia, the UK, and the US). There are no permanent members from Africa, Latin America, or the most populous country in the world, India. To repair these inequities, BRICS offers its support to ‘the legitimate aspirations of emerging and developing countries from Africa, Asia, and Latin America, including Brazil, India, and South Africa to play a greater role in international affairs’. The West’s refusal to allow these countries a permanent seat at the UN Security Council has only strengthened their commitment to the BRICS process and to enhance their role in the G20.

    The entry of Ethiopia and Iran into BRICS shows how these large Global South states are reacting to the West’s sanctions policy against dozens of countries, including two founding BRICS members (China and Russia). The Group of Friends in Defence of the UN Charter – Venezuela’s initiative from 2019 – brings together twenty UN member states that are facing the brunt of illegal US sanctions, from Algeria to Zimbabwe. Many of these states attended the BRICS summit as invitees and are eager to join the expanded BRICS as full members.

    We are not living in a period of revolutions. Socialists always seek to advance democratic and progressive trends. As is often the case in history, the actions of a dying empire create common ground for its victims to look for new alternatives, no matter how embryonic and contradictory they are. The diversity of support for the expansion of BRICS is an indication of the growing loss of the political hegemony of imperialism.

    This article was published earlier in tricontinental.org and is republished under the Creative Commons.

     

  • The Atomic Executioner’s Lament

    The Atomic Executioner’s Lament

    While the world focuses on the trials and travails of the scientists who invented the atomic bomb, little attention is paid to the hard positions taken by the nuclear executioners, the men called upon to drop these bombs in time of war.

     

    Crew of the Enola Gay, returning from their atomic bombing mission over Hiroshima, Japan. At center is navigator Capt. Theodore Van Kirk; to the right, in foreground, is flight commander Col. Paul Tibbetts. (Wikimedia Commons, Public domain)

     

    There is an interesting scene in Chris Nolan’s film Oppenheimer, one which could easily get lost in the complexity of telling the story of the man considered to be the father of the American atomic bomb, J. Robert Oppenheimer.

    The Trinity test of the first nuclear device has been successfully completed, and Oppenheimer is watching as two men in military uniform are packing up one of Oppenheimer’s “gadgets” for shipment out of Los Alamos to an undisclosed destination.

    Oppenheimer talks to them about the optimum height for the detonation of the weapon above ground, but is cut off by one of the soldiers, who, smiling, declares “We’ve got it from here.”

    Such men existed, although the scene in the movie — and the dialogue — was almost certainly the product of a scriptwriter’s imagination. The U.S. military went to great lengths to keep the method of delivery of the atomic bomb a secret, not to be shared with either Oppenheimer or his scientists.

    Formed on March 6, 1945, the 1st Ordnance Squadron, Special (Aviation) was part of the 509th Composite Group, commanded by then-Lieutenant Colonel Paul Tibbets. Prior to being organized into the 1st Ordnance Squadron, the men of the unit were assigned to a U.S. Army ordnance squadron stationed a Wendover, Utah, where Tibbets and the rest of the 509th Composite Group were based.

    Mission map for the bombings of Hiroshima and Nagasaki, Aug. 6 and Aug. 9, 1945. Scale is not consistent due to the curvature of the Earth. Angles and locations are approximate. Kokura was included as the original target for Aug. 9 but weather obscured visibility; Nagasaki was chosen instead. (Mr.98, Wikimedia Commons, Public domain)

    While Oppenheimer and his scientists designed the nuclear device, the mechanism of delivery — the bomb itself — was designed by specialists assigned to the 509th. It was the job of the men of the 1st Ordnance Squadron to build these bombs from scratch.

    The bomb dropped on Hiroshima by Paul Tibbets, flying a B-29 named the Enola Gay, was assembled on the Pacific Island of Tinian by the 1st Ordnance Squadron.

    Concerned about the possibility of the B-29 crashing on takeoff, thereby triggering the explosive charge that would send the uranium slug into the uranium core (the so-called gun device), the decision was made that the final assembly of the bomb would be done only after the Enola Gay took off.

    One of the 1st Ordnance Squadron technicians placed the uranium slug into the bomb at 7,000 feet over the Pacific Ocean.

    The bomb worked as designed, killing more than 80,000 Japanese in an instant; hundreds of thousands more died afterwards from the radiation released by the weapon.

    For the pilot and crew of the Enola Gay, there was no remorse over killing so many people. “I knew we did the right thing because when I knew we’d be doing that I thought, yes, we’re going to kill a lot of people, but by God we’re going to save a lot of lives,’ Tibbets recounted to Studs Terkel in 2002. He added:

    “We won’t have to invade [Japan]. You’re gonna kill innocent people at the same time, but we’ve never fought a damn war anywhere in the world where they didn’t kill innocent people,” Tibbets told Terkel. “If the newspapers would just cut out the shit: ‘You’ve killed so many civilians.’ That’s their tough luck for being there.

    An atomic bomb victim with burns, Ninoshima Quarantine Office, Aug. 7, 1945. (Onuka Masami, Wikimedia Commons, Public domain)

    Major Charles Sweeney, the pilot of Bockscar, the B-29 that dropped the second American atomic bomb on the city of Nagasaki on Aug. 9, 1945, held similar convictions about his role in killing 35,000 Japanese instantly.

    “I saw these beautiful young men who were being slaughtered by an evil, evil military force,” Sweeney recounted in 1995. “There’s no question in my mind that President Truman made the right decision.” However, Sweeney noted, “As the man who commanded the last atomic mission, I pray that I retain that singular distinction.”

    History records the remorse felt by Oppenheimer and his Soviet counterpart, Andrei Sakharov, and the punishment they both suffered at the hands of their respective governments. They suffered from designer’s remorse, a regret — stated after the fact — that what they had built should not be used, but somehow locked away from the world, as if the Pandora’s Box of nuclear weaponization had never been opened.

    Having designed their respective weapons, however, both Oppenheimer and Sakharov lost control of their creations, turning them over to military establishments which did not participate in the intellectual and moral machinations of bringing such a weapon into existence, but rather the cold, hard reality of using these weapons to achieve a purpose and goal which, as had been the case for Tibbets and Sweeney, seemed justified.

    Ignoring the Executioner

    Brigadier General Charles W. Sweeney, pilot of the aircraft that dropped the atomic bomb on Nagasaki. (Public domain, Wikimedia Commons)

    This is the executioners’ lament, a contradiction of emotions where the perceived need for justice outweighs the costs associated.

    While the world focuses on the trials and travails of Oppenheimer and Sakharov, they remain silent about the hard positions taken by the nuclear executioners, the men called upon to drop these bombs in time of war.  There have only been two such men, and they remained resolute in their judgement that it was the right thing to do.

    The executioner’s lament is overlooked by most people involved in supporting nuclear disarmament. This is a mistake, because the executioner, as was pointed out to Oppenheimer by the men of the 1stOrdnance Squadron, is in control.

    They possess the weapons, and they are the ones who will be called upon to deliver the weapons. Their loyalty and dedication to the task are constantly tested in order to ensure that, when the time comes to execute orders, they will do so without question.

    Image of a younger Petrov from a family album.
    (Stanislav Petrov’s Personal Library, Wikimedia Commons, CC0)

     

     

    Those opposed to nuclear weapons often point to the example of Stanislav Petrov, a former lieutenant colonel of the Soviet Air Defense Forces who, in 1983, twice made a decision to delay reporting the suspected launch of U.S. missiles towards the Soviet Union, believing (rightly) that the launch detection was a result of malfunctioning equipment.

    But the fact is that Petrov was an outlier who himself admitted that had another officer been on duty that fateful day, they would have reported the American missile launches per protocol.

    Those who will execute the orders to use nuclear weapons in any future nuclear conflict will, in fact, execute those orders. They are trained, like Tibbets and Sweeney, to believe in the righteousness of their cause.

    Dmitry Medvedev, the former Russian prime minister and president who currently serves as the deputy chairman of the Russian National Security Council, has publicly warned the Western supporters of Ukraine that Russia would “have to” use nuclear weapons if Ukrainian forces were to succeed in their goal of recapturing the former territories of Ukraine that have been claimed by Russia in the aftermath of referenda held in September 2022.

    “Imagine,” Medvedev said, “if the offensive, which is backed by NATO, was a success and they tore off a part of our land, then we would be forced to use a nuclear weapon according to the rules of a decree from the president of Russia. There would simply be no other option.”

    Some in the West view Medvedev’s statement to be an empty threat; U.S. President Joe Biden said last month that there is no real prospect of Russian President Vladimir Putin ordering the use of nuclear weapons against either Ukraine or the West.

    “Not only the West, but China and the rest of the world have said: ‘don’t go there,’ ” Biden said following the NATO Summit in Vilnius.

    Ignoring Russian Doctrine

    But Biden, like other doubters, emphasizes substance over process, denying the role played by the executioner in implementing justice defined on their terms, not that of those being subjected to execution.

    Russia has a nuclear doctrine that mandates that nuclear weapons are to be used “when the very existence of the state is put under threat.” According to Medvedev, “there would simply be no other option,” ironically noting that “our enemies should pray” for a Russian victory, as the only way to make sure “that a global nuclear fire is not ignited.”

    The Russians who would execute the orders to launch nuclear weapons against the West would be operating with the same moral clarity as had Paul Tibbets and Charles Sweeney some 88 years ago. The executioner’s lament holds that they will be saddened by their decision but convinced that they had no other choice.

    Proving them wrong will be impossible because, unlike the war with Japan, where the survivors were given the luxury of reflection and accountability, there will be no survivors in any future nuclear conflict.

    The onus, therefore, is on the average citizen to get involved in processes that separate the tools of our collective demise — nuclear weapons — from those who will be called upon to use them.

    Meaningful nuclear disarmament is the only hope humankind has for its continued survival.

    The time to begin pushing for this is now, and there is no better place to start than on Aug. 6, 2023 — the 78th anniversary of the bombing of Hiroshima, when like-minded persons will gather outside the United Nations to begin a dialogue about disarmament that will hopefully resonate enough to have an impact of the 2024 elections.

     

    This article was published earlier in consortiumnews.com

    The views expressed are the author’s own.

    Feature Image: The devastated city of Hiroshima after the atomic bomb blast – bbc.com

  • BRICS++: The West tries playing ‘catch-up’, but it’s too late

    BRICS++: The West tries playing ‘catch-up’, but it’s too late

    Until recently, the West has largely derided the BRICS project. But it finally is awaking to the fact that the BRICS initiative possesses the potential to turn both geo-politics, and the international monetary system, upside-down.

    The seismic Geo-Political event of this era is the explosion of BRICS membership and of even bigger potential BRICS membership. This movement has crossed a key threshold. It has transited from ‘vanilla’ multipolarity to being an anti-colonial expression — a shift that should not be underestimated. It is an ethos drawing energy from deep layers of passionate feeling that was stifled in the immediate post-war years, but which is re-surfacing to invest the multi-polar framework with evident dynamism.

    There are currently eight nations that have formally applied for membership and 17 others that have expressed interest in joining. If Saudi Arabia and Russia are both members, that is two of the three largest energy producers in the one camp.

    If Russia, China, Brazil and India are all members, there will be four of the seven largest countries in the world measured by landmass — possessing 30% of the Earth’s dry surface and related natural resources — as BRICS members.

    Almost 50% of the world’s wheat and rice production, as well as 15% of the world’s gold reserves, are in the BRICS.

    Meanwhile, China, India, Brazil, and Russia are four of the nine highest-population countries on the planet with a combined population of 3.2 billion people or 40% of the Earth’s population.

    “China, India, Brazil, Russia and Saudi Arabia have a combined GDP of $29 trillion or 28% of nominal global GDP. If one uses purchasing power parity to measure GDP, then the BRICS share is over 54%. Russia and China have two of the three largest nuclear arsenals in the world”.

    “By every measure then — population, landmass, energy output, GDP, food output and nuclear weapons — BRICS is not just another multilateral debating society. They are a substantial and credible alternative to Western hegemony”, Jim Rickards asserts.

    With a new trading currency framework likely to be fore-shadowed in August at the BRICS summit, the currency will descend upon a highly receptive audience. It will fall into an increasingly sophisticated network of capital and communications. This network will greatly enhance its chances of success.

    The key mistake is the failure to distinguish between the respective roles of a payment (trading) currency and a reserve currency. Payment currencies are used in trade for goods and services. Nations can trade in whatever payment currency they want; it doesn’t have to be dollars. However, in so doing – in a large way – the demand for the dollar incrementally is drained away. Ultimately this loss of foreign demand for dollars circumscribes the ability of the US to go on spending well above its income.

    What has defined a reserve currency has been a large, well-developed sovereign bond market. No country in the world comes close to the US Treasury bond market in terms of breadth and convertibility.

    And Western finance personnel, therefore, snort in derision at the prospects of the US dollar ever losing its hegemony. But they forget perhaps that there was no US bond market until WW1 when  Woodrow Wilson authorized Liberty Bonds to help finance the war. There were bond rallies and Liberty Bond parades in every major city. It became a patriotic duty to buy Liberty Bonds. The effort worked, and it birthed the US bond market.

    In short, the way to create an instant reserve currency is to create an instant bond market using your own citizens as willing buyers. As Jim Rickards earlier noted, were the BRICS to ‘use a patriotic model’ (by drawing on today’s anti-colonial spirit sweeping the BRICS countries) it would be possible to create international reserve assets denominated in the BRICS+ (trading) currency.

    Also, the recent Bank for International Settlements (BIS)-led experiments in real-time and digital Central Bank foreign exchange transactions promises to transform such a project – and to lessen substantially the need for a large reserve-asset reservoir.

    Until recently, the West has largely derided the BRICS project. But it finally is awaking to the fact that the BRICS initiative possesses the potential to turn both geo-politics and the international monetary system, upside-down.

    This month, the Chair of the Eurasia Group, Cliff Kupchan, wrote in Foreign Policy that “6 Swing States Will Decide the Future of Geopolitics

    “Middle powers today have more agency than at any time since World War II. These are countries with significant leverage in geopolitics. Much more interesting [however] are the six leading middle powers of the global south: Brazil, India, Indonesia, Saudi Arabia, South Africa, and Turkey. These swing states of the global south are not fully aligned with either superpower and are therefore free to create new power dynamics. These six also serve as a good barometer for broader geopolitical trends”.

     

    “… the question remains whether the BRICS states are going to become a more formal institution under China’s direction … that prospect is a clear challenge to the West…But the threat is unlikely to materialize. These countries may have tacked away from the United States — but that’s different from joining a Chinese-directed, Russian-assisted body actively opposing the United States. As of now, BRICS has not shown the ability to develop and implement a common agenda, so there is very little institutional strength for China to co-opt”

    The blinkers are on. The Western Establishment just doesn’t ‘get it’. Kupchan’s article’s conclusion: “the US has been playing catch-up – and not doing very well at even that”. It needs a well-crafted strategy toward each of the key Swing States (to halt their ‘tacking away’ from the US, towards the Russia-China axis), he warns. Arm-twisting, threats and coercion, presumably, as usual.

    ‘Catching-up’?  The horse already has bolted. The stable is empty.

     

    Feature Image: Indian Express

    This article was published earlier in Al Mayadeen English.

  • Five Centuries of Global Transformation: A Chinese Perspective

    Five Centuries of Global Transformation: A Chinese Perspective

    Humanity is in the midst of a global upheaval, on a scale unseen in 500 years: namely, the relative decline of Europe and the United States, the rise of China and the Global South, and the resulting revolutionary transformation of the international landscape. Although the era of Western global dominance is often said to have lasted five centuries, precisely speaking this is an overstatement. In reality, Europe and the United States have occupied their positions as world hegemons for closer to 200 years, after reaching their initial stages of industrialisation. The first industrial revolution was a turning point in world history, significantly impacting the relationship between the West and the rest of the world. Today, the era of Western hegemony has run its course and a new world order is emerging, with China playing a major role in this development. This article explores how we arrived at the current global conjuncture examining the different stages in the relationship between China and the West.

    Stage I: A Shifting Balance Between China and the West

    The first encounter between China and Europe dates back to the era of naval exploration of the fifteenth and sixteenth centuries, during which the Chinese navigator and diplomat Zheng He (1371–1433) embarked on his Voyages Down the Western Seas (郑和下西洋, Zhèng Hé xià xīyáng) (1405–1433), followed by the Portuguese and Spanish naval expeditions to Asia.[1] From then on, China has established direct contact with Europe through ocean passages.

    During this period China was ruled by the Ming dynasty (1388–1644), which adopted a worldview guided by the concept of tianxia (天下, tiānxià, ‘all under heaven’).[2] This belief system generally categorised humanity into two major civilisations: the Chinese who worshipped heaven, or the sky, and the West which, broadly, worshipped gods in a monotheistic sense.[3] It is important to note that, in this era, the Chinese had a broad conception of the West, considering it to encompass all the regions which expanded northwestward from Mesopotamia to the Mediterranean Sea and then to the Atlantic coast, rather than the contemporary notion which is generally limited to of the United States, Canada, Australia, New Zealand, and Europe. On the other hand, Chinese civilisation spread to the southeast, from the reaches of the Yellow River to the Yangtze River Basin onward to the coast. The two civilisations would meet at the confluence of the Indian and Pacific Oceans, from which point there has been a complete world history to speak of. At the same time, however, tianxia put forward a universalist conception of the world, in which China and the West were considered to share the same ‘world island’. Separated by the ‘Onion Mountains’ (the Pamir Mountains of Central Asia), each civilisation was thought to have its own history, though there was not yet a unified world history, and each maintained, based on their own knowledge, the tianxia order at their respective ends of the world island.

    Although the Ming dynasty discontinued its sea voyages after Zheng He’s seventh mission in 1433, some islands in the South Seas (南洋, nányáng, roughly corresponding to contemporary Southeast Asia) became incorporated into the imperial Chinese tributary system (朝贡, cháogòng). This constituted a major change in the tianxia order, compared with the prior Han (202 BCE–CE 9, 25–220 CE) and Tang (618–907 CE) dynasties in which tribute was mainly received from states of the Western Regions (西域, xīyù, roughly corresponding to contemporary Central Asia). More importantly, this southeastward expansion opened a road into the seas for China, as Chinese people of the southeast coast migrated to the South Seas, and with them goods such as silk, porcelain, and tea entered the maritime trade system. Compared with the prosperous Tang and Song (960–1279) periods, overseas trade expanded, with the Jiangnan (江南, jiāngnán, ‘south of the Yangtze River’) economy, which was largely centred on exports, being particularly dynamic; consequently, industrialisation accelerated and China, for the first time, became the ‘factory of the world’.

    European nations did not have the upper hand in their trade with China, however, they offset their deficit with the silver that they mined in the newly conquered Americas. This silver flowed into China in large quantities and became a major trading currency, leading to the globalisation of silver. Meanwhile, the introduction of corn and sweet potato seeds, native to the Americas, to China contributed to the rapid growth of the nation’s population due to the suitability of these crops to harsh conditions.

    However, China’s involvement in shaping a maritime-linked world order also brought about unexpected problems for the country; namely, an imbalance between its economy, which penetrated the maritime system, and its political and military institutions, which remained continental. This contradiction between the land and the sea produced significant tensions within China, eventually leading to the demise of the Ming dynasty. Border conflicts in the north and northeast required significant financial resources, however most of China’s wealth at that time came from maritime trade and was concentrated in the southeast. Consequently, education thrived in this coastal region, resulting in scholar-officials (士大夫, shìdàfū) from the southeast coming to dominate China’s political processes and prevent tax reforms to better distribute wealth – instead, the traditional tax system was strengthened, imposing larger burdens on the peasantry.[4] These tensions would eventually come to a head; taxation weighed particularly heavily on northern peasants who mainly lived off farming, leading to their displacement and becoming migrants who eventually overthrew the Ming regime. At the same time, military resources in the north were insufficient, leading to the growing influence of Qing rebel forces in the northeast and their opportunistic advances to the south, culminating in the establishment of the Qing dynasty’s (1636–1912) rule over the entire country.

    The Qing dynasty originated among the Manchu people of northeast China, who had agricultural and nomadic cultural roots. As Qing forces marched southwards and founded their empire, they made great efforts to establish control over the regions flanking China from the west and north, an arc extending from the Mongolian Plateau to the Tianshan Mountains and to the Qinghai-Tibet Plateau. For thousands of years, these northwest regions were a source of political instability, with successive dynasties trying and failing to unify the whole of China. By integrating these areas into the Chinese state, the Qing dynasty was thus able to achieve this historic political aim of unification. This domestic integration also had an impact on China’s international position, with Russia now becoming the country’s most important neighbour as the overland Silk Road was rerouted northwards, via the Mongolian steppe, through Russia to northern Europe.

    By the mid-to-late eighteenth century, these two ‘arcs’ of development, on the land and sea respectively, held equal weight but differing significance for China: the land provided security, while the seas were the source of vitality. However, both the land and sea developments contained contradictory dynamics: the regions of the northwestern steppe were not very stable internally while relations with neighbouring Russia and the Islamic world remained stable, on the other hand, the southeastern seas were stable internally but introduced new challenges for China in the form of relations with Europe and the United States. These land-sea dynamics have historically presented China with unique trade-offs and, to this day, they remain a fundamental strategic issue.

    In contrast, European countries benefited more from direct trade with China, and rose to a dominant position within the new global order. During the sixteenth century, under the increasingly decadent Roman Catholic Church, ethnic nationalism brewed up in Europe, culminating in Martin Luther’s Reformation in Germany. Subsequently, Europe entered an era of nation-state building known as the early modern period, characterised by the break-up of the authority of the Roman Catholic Church and the establishment of the sovereignty of secular monarchies, which overcame some of the hierarchies and divisions created by the feudal lords and made all subjects equal under the king’s law. The first country to achieve this was England, where Henry VIII banned the Church of England from paying annual tribute to the Papacy in 1533 and passed the Act of Supremacy the following year, establishing the king as the supreme head of the English Church which was made the state religion. This is why England is recognised as the first modern nation, while the constitutional changes were secondary.

    The Roman Catholic Church, facing a ruling crisis, sought to open up new pastoral avenues, and began to preach outside of Europe through the voyages of ‘discovery’. Christianity gradually became a world religion, one of the most important developments in the last five centuries, with missionaries finally making their way to China, after many twists and turns, in the late sixteenth century.

    The Christian missionaries had prepared to spread their message of truth to the Chinese, who they had expected to be ‘barbarians’. However, to their surprise, they discovered that China was a powerful civilisation with a sophisticated governance system and religious traditions. Although not believing in the personal gods of the missionaries, the Chinese people had a system of moral principles, a highly developed economy, and an established order. This inspired some missionaries to develop a serious appreciation for China, including translating Chinese classics and sending the texts back to Europe, where they would have a notable impact on the Enlightenment in Paris.[5]

    During the Enlightenment, Western philosophers developed ideas of humanism and rationalism, including notions that human beings are the subject and a ‘creator’ does not exist; humans should seek their own happiness instead of trying to ascend to the kingdom of God; humans can have sound moral beliefs and relations without relying on religion; the state can establish order without relying on religion; direct rule by the king over all subjects is the best political system, and so on. It is important to note, however, that these Enlightenment ideals, which are said to have formed the basis for Western modernity, had been common knowledge in China for thousands of years. As such, the flow of Chinese ideas and teachings to the West through Christian missionaries can be considered an important, if not the only, influence in the development of Western modernisation. Of course, Western countries have been the main drivers of global modernisation over the last two centuries, but the modernity that it advocates has long been embedded in other cultures, including China. It is necessary to recognise and affirm this fact to understand the evolution of the world today.

    In short, during the first stage of world history, which spanned more than 300 years from the early-to-mid fifteenth century to the mid-to-late eighteenth century, an integrated world system began to form, with both China and the West adjusting, changing, and benefiting in their interactions. From the Chinese perspective, this world order was largely fair.

    Stage II: Reversals of Fortunes Between China and the West

    In the mid-to-late eighteenth century, Western countries utilised their higher levels of industrialisation to secure decisive military superiority, which they abused to conquer and colonise nearly the entire Global South. This brought the world closer together than ever before, but in a union that was unjust and, therefore, unsustainable.

    Among the Western countries, England was the first to achieve an advanced stage of industrialisation, for which there was a special reason: colonisation. The British Empire appropriated massive amounts of wealth from its colonies, which also served as captive markets for British manufactures. This wealth and market demand, along with England’s relatively small population, drove scientific and technological development, and ultimately industrialisation based on the mining of fossil fuels (namely, coal), and the production of steel and machinery. During the eighteenth and nineteenth centuries, England would become the wealthiest and most powerful country in the world, with its wealth spreading to Western Europe and its colonial settlements such as the United States and Australia. The thriving European powers violently conquered and colonised the outside world through military force including most of Africa, Asia, and the Americas, eventually reaching China’s doorstep in the early-to-mid nineteenth century. In the preceding centuries of peaceful trading with China, the Western powers accumulated a large trade deficit, which they now sought to balance through the opium trade. However, due to the severe social consequences of this drug trade, China outlawed the importation of opium in 1800; in response, the Western powers launched two wars against China – the First Opium War (1839–1842) and the Second Opium War (1856–1860) – to violently open the country’s markets up. After China was defeated, various Western countries, including England, France, Germany, and the United States, forced China to sign unequal treaties granting these nations trade concessions and territories, including Hong Kong. As a result, the tianxia order began to crumble and China entered a period referred to as the ‘century of humiliation’ (百年国耻, bǎinián guóchǐ).

    China’s setback was rooted in the long-standing imbalance between its marine-oriented economy and continental military-political system. First, China’s market relied heavily on foreign trade, but the Qing government failed to develop a sovereign monetary policy, resulting in the trade flow being constantly controlled by foreign powers. Silver from abroad became China’s de facto currency and, with the government unable to exercise effective supervision, the country lost monetary sovereignty and was vulnerable to the fluctuations of silver supplies, destabilising the economy. Second, China’s natural resources were over-exploited to produce large amounts of exports; as a result, the country’s ecological environment was severely damaged. Constrained by both market and resource limitations, China’s endogenous growth hit a chokepoint, as productivity plateaued, employment declined, and surplus populations became displaced, leading to a series of major rebellions in the early-to-mid nineteenth century. It was in this context that the West showed up at China’s doorstep.

    Under the pressure of both domestic problems and external aggression, China embarked on the path of ‘learning from the outside world to defend against foreign intervention’ (师夷长技以制夷, shī yí zhǎng jì yǐ zhì yí), which has been fundamental theme of Chinese history over the past century or so. This formulation, despite having been ridiculed by many since the 1980s following the initiation of China’s economic reforms, epitomises the country’s strategy. On the one hand, China has closely studied the key drivers of Western power, namely industrial production, technological development, economic organisation, and military capability, as well as methods for social mobilisation based on the nation-state. On the other hand, China has sought to learn from other countries for the purpose of advancing its development, securing its independence, and building upon its own heritage.

    Until the mid-twentieth century, however, this path did not yield significant changes for China, fundamentally due to its inadequate state capacity, which deteriorated even further after the Qing dynasty fell in 1911. In fact, several initiatives undertaken in the late Qing period to strengthen the state, generated new problems in turn; for example, the ‘New Army’ (新军, xīnjūn) which was established in the late-nineteenth century in an effort to modernise China’s military would turn into a secessionist force. Meanwhile, theories of development advocated by scholar-officials in this period, such as the concept of ‘national salvation through industry’ (实业救国, shíyè jiùguó), were impossible to implement due to the state’s inability to provide institutional support. As such, trade remained China’s fastest growing economic sector, which, despite bringing short-term economic benefits, resulted in China becoming further subordinated to the West.

    However, by the time of the Second World War, which was preceded by China’s War of Resistance Against Japanese Aggression (1937–1945), the country’s international position began to improve, while the West experienced a relative decline. The Second World War and anti-colonial struggles for national liberation dealt a crushing blow to the old imperialist order, as the Western powers were forced to retreat, initiating a decline as they were no longer able to reap colonial dividends. Countries across Asia, Africa, and Latin America, including China, won their independence; meanwhile, the Soviet Union, stretching across Eurasia, emerged as a significant rival to the West. Amid these global convulsions, China’s weight on the international stage dramatically increased and it became an important force.

    In this global context, China began its journey toward national rejuvenation, with two main priorities. The first priority was political; emulating the Soviet Union, China’s Nationalist and the Communist parties established a strong state, which had been the cornerstone of Western economic development, while the lack of state organisation and mobilisation capacity was the greatest weakness of the Qing dynasty in the face of Western powers. The second priority was industrialisation, which advanced in a step-by-step manner in three phrases.

    The first breakthrough in industrialisation took place after the Chinese Revolution in 1949 and was made possible by the help of the Soviet Union, which exported a complete basic industrial system to China. Although this system had serious limitations, which came to a head by the 1970s and 1980s, it allowed China to develop a comprehensive understanding of the systematic nature of industry, especially the underlying structure of industrialisation, that is, heavy industry.

    The second breakthrough in industrialisation came after China established diplomatic relations with the United States in the 1970s and began to import technologies from the US and European countries. During this phase, China focused on the development of its southeast coast, a region which had a longstanding history of rural commerce and industry. With the support of machinery and knowledge gained during the first round of industrialisation, the consumer goods sector in the southeast coastal areas was able to develop rapidly at the township level, the level of government which had the most flexibility. By absorbing a large amount of workers, the labour-intensive industrial system significantly improved livelihood for the people.

    The third breakthrough in industrialisation, beginning at the turn of the century, was driven by the traditional emphasis for a strong state and a desire to continue the revolution, saw the government devote its capacity to building infrastructure and steering industrial development. As a result, China experienced continuous growth in industrial output and kept moving upwards along the industrial chain, creating the largest and most comprehensive manufacturing sector in the world. The global economic landscape thus changed dramatically.

    Today, China is in the midst of its fourth breakthrough in industrialisation, which revolves around the application of information technology to industry. In the current period, the United States is worried about being overtaken by China, which has prompted a fundamental change in bilateral relations and ushered in an era of global change.

    In short, at the heart of the second stage of world history were the shifting dynamics between China and the West. For more than 100 years since the early nineteenth century, the Western powers were on the upswing while China experienced a downturn; since the Second World War, however, the trends have reversed, with China on the rise and the West declining. Now it appears that the critical point in this relationship is approaching, where the two sides will reach equivalent positions, exhausting the limits of the old world order.

    Stage III: The Decline of the US-Led Order

    In the wake of China’s rise, the old, Western-dominated world order has been overwhelmed, however, the real trigger for its collapse is the instability resulting from the fact that the United States has been unable to secure the unipolar global dominance which it pursued after the end of the Cold War.

    Historically, the Roman empire could not reach India, let alone venture beyond the Onion Mountains; in the other direction, the Han and Tang dynasties could have hardly maintained their power even if they had managed to cross this range. The structural equilibrium for the world is for nations to stay in balance, rather than be ruled by a single centre.

    Even the immense technological advances in transportation and warfare have been unable to change this iron law. Prior to the Second World War, the Western powers had penetrated nearly all corners of the world; despite their competing interests and the force needed to maintain their colonies, this system of rule was, in a way, more stable than the current order by distributing power more broadly across the several countries. Meanwhile, in the postwar period, the Soviet Union and the West formed opposing Cold War blocs, with each camp having its own scope of influence and balanced, to an extent, by the other.

    In contrast, following the end of the Cold War, the United States became the sole superpower, dominating the entire world. The United States, as the most recently established Western country, the last ‘New World’ to be ‘discovered’ by the Europeans, and the most populous of these powers, was destined to be the final chapter in the West’s efforts to dominate the world. The United States confidently announced that their victory over the Soviet Union constituted ‘the end of history’. However, ambition cannot bypass the hard constraint of reality. Under the sole domination of the United States, the world order immediately became unstable and fragmented; the so-called Pax Americana was too short-lived to be written into the pages of history. After the brief ‘end of history’ euphoria under the Clinton and Bush administrations, the Obama era saw the United States initiate a ‘strategic contraction’, seeking to unload its burdens of global rule one after another.

    In addition to external costs, Washington’s fleeting pursuit of global hegemony also induced internal strains. Although the United States reaped many dividends from its imperial rule by developing a financial system in which capital could be globally allocated, this came with a cost; as a Chinese saying goes, ‘a blessing might be a misfortune in disguise’ (福兮祸所依, fú xī huò suǒ yī). The boom of the US financial sector, along with the volatile speculation that feeds off it, has caused the country to become deindustrialised, with the livelihoods of the working and middle classes bearing the brunt. Due to the self-protective measures of emerging countries such as China, it was impossible for this financial system to fully extract sufficient external gains to cover the domestic losses suffered by the popular classes due to deindustrialisation. Consequently, the US has developed extreme levels of income inequality, and become sharply polarised, with increasing division and antagonism between different classes and social groups.

    Deindustrialisation is at the root of the US crisis. Western superpowers were able to tyrannise the world during the nineteenth century, including their bullying of China, mainly due to their industrial superiority, which allowed them produce the most powerful ships and cannons; deindustrialisation causes the supply of those ‘ships and cannons’ to become inadequate. Even the US military-industrial system has become fragmentary and excessively costly due to the decline of supporting industries. The US elite realises the gravity of this problem, but successive administrations have struggled to address the issue; Obama called for reindustrialisation but made no progress due to the deep impasse between Republicans and Democrats, a dynamic that inhibits effective government action, which Francis Fukuyama termed the ‘vetocracy’; Trump followed this up with the timely slogan ‘Make America Great Again’, promising to make the US the world’s strongest industrial power once more; and this intention can also be seen in the incumbent Biden administration’s push for the enactment of the CHIPS and Science Act and other initiatives aimed at boosting domestic industrial development. However, as long as US finance capital can continue to take advantage of the global system to obtain high profits abroad, it cannot possibly return to domestic US industry and infrastructure. The United States would have to break the power of the financial magnates in order to revive its industry, but how could this even be possible?

    In contrast to the deindustrialisation which has taken place in the United States, China is steadily advancing through its fourth breakthrough of industrialisation and rising towards the top of global manufacturing, relying on the solid foundation of a complete industrial chain. Fearing that they will be surpassed in terms of ‘hard power’, the US elite has declared China to be a ‘competitor’ and the nature of relations between the two countries has fundamentally changed.

    The US elite have long referred to their country as the ‘City upon a Hill’, a Christian notion by which it is meant that the United States holds an exceptional status in the world and is a ‘beacon’ for other nations to follow. This deep-seated belief of superiority means that Washington cannot accept the ascendance of other nations or civilisations, such as China, which has been following its own path for thousands of years. China’s economic rise and, consequently, its growing influence in reshaping the US-led global order is nothing more than the world returning to a more balanced state; however, this is sacrilegious to Washington, comparable to the rejection of religious conversion for missionaries. It is clear that the US elite have exhausted their goodwill for China, are united in pursuing a hostile strategy against it, and will use all means to disrupt China’s development and influence on the world stage. Washington’s aggressive approach has, in turn, hardened the resolve of China to extricate itself from the confines of the US-led global system. Pax Americana will only allow China to develop in a manner which is subordinated to the rule of the United States, and so China has no choice but to take a new path and work to establish a new international order. This struggle between the United States and China is certain to dominate world headlines for the foreseeable future.

    Nevertheless, there are several factors which decrease the likelihood that the struggle will develop in a catastrophic manner. First, the two countries are geographically separated by the Pacific ocean; and, second, although the United States is a maritime nation adept at offshore balancing, it is much less capable of launching land-based incursions, particularly against a country such as China which is a composite land-sea power with enormous strategic depth. As a result, US efforts to launch a full-scale war against China would be nonviable; even if Washington instigated a naval war in the Western Pacific, the odds would not be in its favour. On top of these two considerations, the United States is, in essence, a ‘commercial republic’ (the initial definition given for the country by one of its Founding Fathers, Alexander Hamilton), meaning that its actions are fundamentally based on cost-benefit calculations; China, on the contrary, is highly experienced in dealing with aggressive external forces.[6]Altogether, these factors all but guarantee that a full-frontal war between the two countries can be entirely avoided.

    In this regard, the shifting positions of China and the United States vary greatly from similar dynamics in the past, such as the evolving hegemony on the European continent in recent centuries. In the latter context, the narrow confines of Europe cannot allow for multiple major powers, whereas the vast Pacific Ocean certainly can. This situation constitutes the bottom line of the relationship between the two countries. Therefore, while China and the United States will compete on all fronts, as long as China continues to increase its economic and military strength and clearly demonstrates its willingness to use that power, the United States will retreat in the same rational manner as its former suzerain, Britain, did. Once the United States withdraws from East Asia and the Western Pacific, a new world order will begin to take shape.

    Over the past few years, China’s efforts in this respect have paid off, causing some within the United States to recognise China’s power and determination, and adjust their strategy accordingly, pressuring allied countries to bear greater costs to uphold the Western-led order. Despite the posturing of the Western countries, there is, in fact, no such ‘alliance of democracies’; the US has always based its alliance system on common interests, of which the most important is to work together, not to advance any high-minded ideal, but to bleed other countries dry. Once these countries can no longer secure external profits together, they will have to compete with each other and their alliance system will promptly break up. In such a situation, the Western countries would return to a state similar to the period before the Second World War; fighting each other for survival rather than to carve the world into colonies. This battle of nations, although not necessarily through hot war, could cause the Western countries to backslide to their early modern state.

    The willingness of the United States to do anything in its pursuit of profit, has led to the rapid crumbling of its value system. Since former President Woodrow Wilson led the country to its position as the leader of the world system, values have been at the core of the US appeal. At that time, Wilson held sway with many Chinese intellectuals, though disillusion soon followed; meanwhile, today, the myth of the ‘American dream’ and universal values of the United States remains charismatic to a considerable proportion of Chinese elites, however, the experience of the Trump presidency has torn the mask off these purported values. The United States has openly returned to the vulgarity and brutality of colonial conquest and westward expansion.

    In addition, the current generation of Western elites suffers from a deficit in its capacity for strategic thinking. Many of the leading strategists and tacticians of the Cold War have now died, and amid hubris and dominance of the two decade ‘end of history’ era, the United States and European countries did not really produce a new generation of sharp intellectual figures. Consequently, in the face of their current dilemmas, the best that this generation of elites can offer is nothing more than repurposing old solutions and returning to the vulgarity of the colonial period.

    This kind of vulgarity may be shocking to some, however, it has deep roots in US history: from the Puritan colonists’ genocide against indigenous peoples in order to build their so-called ‘City upon a Hill’; to many of its founding fathers having been slave owners, who enshrined slavery in the Constitution; to the Federalist Papers which designed a complex system of separation of powers to guarantee freedom, but coldly discussed war and trade between countries; and to the country’s obsession with the right to bear arms, giving each person the right to kill in the name of freedom. Thus, we can see that Trump did not bring vulgarity to the United States, but only revealed the hidden tradition of the ‘commercial republic’ (it is worth noting that, in the Western tradition, merchants also tended to be plunderers and pirates).

    Today, the United States has nearly completed this transformation of its identity: from a republic of values to a republic of commerce. This version of the country does not possess the united will to resume its position as leader of the world order, as evidenced by the strong and continued influence of the ‘America First’ rhetoric. The rising support among certain sections of the US population for such political vulgarity will encourage more politicians to follow this example.

    The world order continues to be led by a number of powerful states, but is in the midst of great instability as efforts to strengthen the European Union have failed, Russia is likely to continue to decline, China is growing, Japan and South Korea lack real autonomy, and the United States, due to financial pressures, is rapidly shedding its responsibilities to support the network of post-war global multilateral institutions and alliances and instead seeks to build bilateral systems to maximise its specific interests. Put simply, the world order is falling apart; presently, the relevant questions are related to how rapid this breakdown will be, what an alternative new order should look like, and whether this new order can emerge and take effect in time to avoid widespread serious global instability.

    China’s Role in Reshaping the World Order

    A new international order has begun to emerge amid the disintegration of the old system. The main generative force in this dynamic is China, which is already the second-largest economy in the world and is a civilisation that is distinct from the West.

    China is one of the largest countries in the world and its long history has endowed it with experiences that are relevant to matters of global governance. With its immense size and diversity, China contains a world order within itself and has historically played a leading role in establishing a tianxia system that stretched over land and sea, from Central Asia to the South Seas. Alongside its rich history, China has also transformed itself into a modern country over the past century, having learned from Western experiences and its own tradition of modernity. By sharing the wisdom of its ancient history and the lessons of its modern development, China can play a constructive role in global efforts to address imbalances in the world order and build a new system in three major ways.

    1. The restoration of balanced global development. The classical order on the ‘world island’ (世界岛, shì jiè daǒ, roughly corresponding to Eurasia) leaned toward the continental nations, while the modern world order has been largely dominated by Western maritime powers. As a result, the world island became fractured, with the former centre of civilisation becoming a site of chaos and unending wars. Pax Americana was unable to establish a stable form of rule over the world island, as the United States was separated from this region by the sea and was unable to form constructive relations with non-Western countries. Therefore, the United States was only able to maintain a maritime order, rather than a world order. It relied on brutal military interventions into the centre of the world island, hastily retreating after wreaking havoc and leaving the region in a perpetual state of rupture.

    Conversely, China’s approach to the construction of a new international order is that of ‘listening to both sides and choosing the middle course’ (执两用中, zhí liǎng yòng zhōng). Historically, China successfully balanced the land and sea; during the Han and Tang dynasties, for instance, China accumulated experience in interacting with land-based civilisations, meanwhile, since the Song and Ming dynasties, China has been deeply involved in the maritime trade system. It is based on this historical experience that China has proposed the Belt and Road Initiative (BRI), of which the most important aspect is the incorporation of the world island and the oceans, accommodating both the ancient and modern orders. The BRI offers a proposal to develop an integrated and balanced world system, with the ‘Belt’ aiming to restore order on the world island, while the ‘Road’ is oriented towards the order on the seas. Alongside this initiative, China has built corresponding institutions, such as the Shanghai Cooperation Organisation (SCO).

    2. Moving beyond capitalism and promoting people-centred development. The system on which Western power and prosperity has been built is capitalism, rooted in European legacies of the merchant-marauder duality and colonial conquest, driven by the pursuit of monetary profits, managing capital with a monstrously developed financial system, and hinging on trade. Under capitalism, the Western powers have viewed countries of the Global South as ‘others’, treating them as hunting grounds for cheap resources or markets. Although the Western powers have been able to occupy and spread capitalism to much of the world, they have not been able to widely cultivate prosperity, too often tending towards malicious opportunism; for those countries that do not profit from colonialism, but suffer from its brutal oppression, the system is nonviable. As a result, since the Western powers took charge of the world in the nineteenth century, the vast majority of non-Western countries have been unable to attain industrial or modern development, a track record which disproves the purported universality of capitalism.

    The ancient Chinese sages advocated for a socioeconomic model that Dr Sun Yat-sen, a leader in the 1911 revolution to overthrow of the Qing dynasty and the first president of the Republic of China, called the ‘Principles of People’s Livelihood’ (民生主义, mínshēng zhǔyì) which can be rephrased as ‘the philosophy of benefiting the people’ (厚生主义, Hòushēng zhǔyì). This philosophy, which values the production, utilisation, and distribution of material to allow people to live better and in a sustainable manner, dates back over 2000 years, appearing as early as the Book of Documents (尚书, shàngshū), an ancient Confucian text. Guided by this philosophy, a policy of ‘promoting the fundamental and suppressing the incidental’ (崇本抑末, chóngběn yìmò) was adopted in ancient China to orient commercial and financial activities towards production and people’s livelihood. Today, China has rejuvenated this model and begun to share it with other countries through the BRI, which has taken the approach of teaching others ‘how to fish’, emphasising the improvement of infrastructure and advancement of industrialisation.

    China, which is now the world’s factory and continues to upgrade its industries, is also driving a reconfiguration of the world’s division of labour: upstream, accepting components produced by cutting-edge manufacturing in Western countries; downstream, transferring productive and manufacturing capacity to underdeveloped countries, particularly in Africa. As the world’s largest consumer market, China should access energy from different parts of the world in a fair and even manner, and promote global policies which emphasise production (‘the fundamental’) and minimise financial speculation (‘the incidental’).

    3. Towards a world of unity and diversity. When the European powers established the current world order, they generally pursued ‘homogenisation’, inclined to use violence to impose their system on other countries and inevitably creating enemies. The United States, influenced by Christian Puritanism, tends to believe in the uniformity of values, imposing its purported ‘universal values’ on the world, and denouncing any nation that differs from its conceptions as ‘evil’ and an enemy. During ‘the end of history’ period, this tendency was exemplified by the so-called War on Terror which launched invasions and missiles throughout the Middle East. Despite this preoccupation with homogenisation, the US-led order is being unravelled by rampant polarisation, broken apart by intensifying cultural and political divisions.

    China, on the other hand, tells a different story. For millennia, based on the principle of ‘multiple gods united in one heaven’ or ‘one culture and multiple deisms’, various religious and ethnic groups have been integrated within China through the worship of heaven or the culture, thus developing the nation and the tianxia system of unity and diversity. Universal order or harmony can neither be attained through violent conquest nor through the preaching and imposition of values to change ‘the other’ into ‘self’, but rather by recognising the autonomy of ‘the other’; as emphasised in The Analects of Confucius (论语·季氏, lúnyǔ·jìshì), ‘…all the influences of civil culture and virtue are to be cultivated to attract them to be so; and when they have been so attracted, they must be made contented and tranquil’ (修文德以来之,既来之,则安之, xiūwén dé yǐlái zhī, jì lái zhī, zé ānzhī). By and large, it is along this path of harmony in diversity that China today conducts international relations.

    China should understand the building of a new international order through the lens of revitalising the tianxia order, and its approach should be guided by the sages’ way of ‘harmonising all nations’ (协和万邦, xiéhé wànbāng) to pacify the tianxia. The process of constructing a new international order, or a revitalised tianxia order, should adhere to the following considerations:

    1. A tianxia order will not be built at once but progressively. A Chinese idiom can be used to describe the China-led process of forming a new global system: ‘Although Zhou was an old country, the (favouring) appointment alighted on it recently’ (周虽旧邦,其命维新, zhōu suī jiù bāng, qí mìng wéixīn). Zhou was an old kingdom that was governed by moral edification; its influence gradually expanded, first to neighbouring states and then beyond, until two-thirds of the tianxia paid allegiance to the kingdom and the existing Yin dynasty (c. 1600–1045 BCE) was replaced by the Zhou dynasty (c. 1045– 256 BCE). In approaching the construction of a new international order and revitalising the concept of tianxia, China should follow this progressive approach to avoiding a collision with the existing hegemonic system. The concept of tianxia refers to a historical process without end.

    2. Virtue and propriety are the first priority in maintaining the emerging tianxia system. A tianxia system aims to ‘harmonise all nations’, not to establish closed alliances or demand homogeneity. China should promote morality, decency, and shared economic prosperity in relations between nations and international law. What distinguishes this approach from the existing system of international law is that, in addition to clarifying the rights and obligations of each party, it also emphasises building mutual affection and rapport between nations.

    3. A tianxia order will not seek to monopolise the entire world. The world is too large to be effectively governed by any country alone. The sages understood this and so their tianxia order never attempted to expand all over the known world at the time, nor did later generations; for instance, Zheng He came across many nations during his voyages to the Western Seas, but the Ming dynasty did not colonise and conquer them, nor did he include them all in the tributary system, but instead allowed them to make their own choices. Today, China does not seek to impose any system onto other countries; with such moderation, the struggle for hegemony can be avoided.

    4. A new international order will consist of several regional systems. Instead of a world system governed by one dominant country or a small group of powers, a new global order will likely be made up of several regional systems. Across the world, countries with common geographies, cultures, belief systems, and interests have already begun to form their own regional organisations, such as in Africa, Asia, Latin America, the Middle East, and the Atlantic states; China should focus on the Western Pacific and Eurasia.

    The concept of regional systems shares some similarities with Samuel Huntington’s division of civilisations, however, importantly, it does not necessitate any clash between them. As a large country and land-sea power, China will likely overlap with multiple regional systems, including both maritime- and land-based regional systems. China, which literally means ‘the country of the middle’, should serve as a harmoniser between different regional systems and act to mitigate conflict and confrontation; in this way, a new international order of both unity and diversity can emerge.

    A new architecture of global governance will be built gradually, with layers nested upon each other from the inside out. To this end, China’s efforts should begin in the innermost layer to which it belongs, East Asia. Traditionally, China, the Korean peninsula, Vietnam, Japan, and other countries in this region formed a Confucian cultural sphere; however, after the Second World War, despite these nations successfully modernising, relations between them have deteriorated due to the pressures of foreign powers, such as the United States and Soviet Union. China’s efforts to reorganise the world order must start from here, by revitalising this shared heritage, developing coordinated regional policies based on the ‘Principles of People’s Livelihood’, and demonstrating improved standards of prosperity and civility for the world. As the achievements and strength of such regional efforts grow, the power of the United States and its world order will inevitably fade out, and the process of global transformation will rapidly accelerate.

    After the inner layer of East Asia, the next-most nested layer, or middle layer, that China should focus on is the heart of the world island, Eurasia. Central to these regional efforts is the SCO, in which China, Russia, India, and Pakistan are already member states, Iran and Afghanistan are observer states, and Turkey and Germany can be invited. Due to its economic decline and weakening global influence, Russia is likely to increase its focus on its neighbouring regions, namely Central Asia, and to participate more actively in the SCO, including assisting in efforts to promote harmonious relations and development in the region and minimising conflict. The stability of Eurasia is key, not only to the security and prosperity of China, particularly its western regions, but to overall global peace.

    Finally, the outermost layer for China is the institutionalised BRI, which connects nations and regions across the world. Proposed by President Xi Jinping in 2013, to date China has signed more than 200 BRI cooperation agreements with 149 countries and 32 international organisations.

    Concluding Remarks

    The evolution and future direction of the world order cannot be understood without examining the shifting relationship between China and the West over the past five centuries. In the early modern era, the Western powers were inspired by China in their pursuit of modernisation; in the past century, China has learned from the West. The re-emergence of China has shaken the foundations of the old Western-dominated world order and is a driving force in the formation of a new international system. Amid the momentous changes in the global landscape, it is necessary to recognise the strengths and limits of Western modernity, ideologies, and institutions, while also appreciating the Chinese tradition of modernity and its developments in the current era. For China, this requires a restructuring of its knowledge system, guided by a new vision which is inspired by classical Chinese wisdom: ‘Chinese learning as substance, Western learning for application’ (中学为体,西学为用, Zhōngxué wèi tǐ, xīxué wèi yòng).

    Bibliography

    Hamilton, Alexander, John Jay, and James Madison. The Federalist Papers [联邦党人文集]. Translated by Cheng Fengru, Han Zai, and Xun Shu. The Commercial Press, 1995.

    Yao, Zhongqiu. The Way of Yao and Shun: The Birth of Chinese Civilisation [尧舜之道:中国文明的诞生]. Hainan Publishing House, 2016.

    Zhu, Qianzhi. The Influence of Chinese Philosophy on Europe [中国哲学对欧洲的影响]. Hebei People’s Publishing House, 1999.

    Author’s Notes

    1. During the early fifteenth century, the Ming dynasty (1388–1644) sponsored a series of seven ocean voyages led by the Chinese navigator and diplomat Zheng He (1371–1433). Over a thirty-year period, these naval missions travelled from China to Southeast Asia, India, the Horn of Africa, and the Middle East.

    2. Tianxia is an ancient Chinese worldview which dates back over four thousand years and roughly translates to ‘all under heaven’, or the Earth and living beings under the sky. Incorporating moral, cultural, political, and geographical elements, tianxia has been a central concept in Chinese philosophy, civilisation, and governance. According to this belief system, achieving harmony and universal peace for tianxia, where all peoples and states share the Earth in common (天下为公 tiānxià wèi gōng), is the highest ideal.

    3. See Yao Zhongqiu, The Way of Yao and Shun: The Birth of Chinese Civilisation [尧舜之道:中国文明的诞生] (Hainan Publishing House, 2016), 64–74.

    4. Scholar-officials were intellectuals appointed to political and government posts by the emperor of China. This highly educated group formed a distinct social class which dominated government administration within imperial China.

    5. For further reading on this topic, see Zhu Qianzhi, The Influence of Chinese Philosophy on Europe [中国哲学对欧洲的影响] (Hebei People’s Publishing House, 1999).

    6. Alexander Hamilton, John Jay, and James Madison, The Federalist Papers [联邦党人文集], trans. Cheng Fengru, Han Zai, and Xun Shu (The Commercial Press, 1995).

     

    This article was published earlier in Dongsheng and is republished under the Creative Commons license CC 4.0

    Feature Image: Detail from Catalan Atlas (circa 1375) depicting Marco Polo’s caravan on the Silk Road. Abraham Cresques / Wikimedia Commons.

  • India and Myanmar: Two Years after the Coup

    India and Myanmar: Two Years after the Coup

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    Relegated to the sidelines with the ongoing Ukraine war and other crises like Taiwan, Myanmar has resurfaced in world headlines. In a recent dispatch, Associated Press (AP) reported that on 11 April 2023 ‘a fighter jet dropped bombs directly onto a crowd of people who were gathering at 8 am for the opening of a local office of the country’s opposition movement outside Pazigyi village in Sagaing region’s Kanbalu township….’ 1 . Subsequent information indicates that the number of dead including women and children is over 170. If so, this is the deadliest aerial attack carried out by the Myanmar military on its own people in the bloody aftermath of the military coup two years ago.

    With various Ethnic Armed Organisations (EAOs) and Peoples’ Defence Forces (PDFs) battling the Tatmadaw, martial law has been declared in 47 townships in Myanmar, cutting across states and regions. 2 More than 154,000 people have been displaced in the first two months of 2023, with total numbers of Internally Displaced People (IDPs) since the military takeover now at 1.3 million. Heavy fighting rages in Kachin State, the South East and North West of the country, 3 and overall 3000 civilian deaths since February 2021 are estimated 4 . Targeted assassination of military appointed government officials continues, the latest victim being the deputy director-general of the Union Election Commission who was shot dead on 22 April this year 5 . In 2022, up to 30,000 civilian infrastructures, including schools are reported to have been destroyed during military operations 6 . This situation has compelled the Tatmadaw to again postpone elections earlier scheduled for August 2023. The state of emergency has been extended.

    Important Developments Post February 2021

    The above statistics provide a telling perspective of the current violence in Myanmar. Yet there are other noteworthy developments in the country post the February 2021 coup. First of these is the increasing relevance of the opposition National Unity Government (NUG) around which civilian support appears to have coalesced.

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    Featured Image Credits: CNBC Indonesia

  • Understanding the ‘Xi Jinping’ thought on Rule of Law: Future Substance of Lawfare and Challenges in the Indo-Pacific

    Understanding the ‘Xi Jinping’ thought on Rule of Law: Future Substance of Lawfare and Challenges in the Indo-Pacific

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    Abstract

    Lawfare aims at using the law and legal systems to hurt or discredit opponents or stop them from reaching their political goals. It is seen that the rule of law has been used to shape the future course of the war as an alternative to traditional military means. Regimes worldwide have started using the law to constrain behaviour, contest circumstances, confuse legal precedents, and gain an advantage. In this paper, the author looks at how China uses “lawfare” in its own country, worldwide and lessons for India.

    Introduction

    While the world focused on the conflict between Ukraine and Russia, China and Solomon Island signed an inter-governmental security pact1 which has been raising concerns regarding the rule-based order2 in the Indo-Pacific region. China, as a rising power, is undoubtedly becoming a significant adversary to various countries bordering it, including India; its growth aims at unipolar Asia, which is causing enormous uncertainty in the region.

    Due to this, it becomes important to understand the multipolar distribution of power in the region since the Indo-Pacific is becoming a site for political contestation and the rise of ‘lawfare’. It is seen that in order to contest for leadership, China has been active on the front to demonstrate, influence, and ideate with different nations. It is actively setting rules and terms of compliance for it through a set of carefully crafted strategies of ‘lawfare’.

    This paper seeks to examine the theoretical underpinnings of lawfare, its internal dimension that influences China’s domestic policy, and its external dimension that has a bearing on China’s strategic and international standing, and finally how China uses lawfare to intimidate other nations and what the world can learn from it.

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