The Peninsula Foundation

Tag: China

  • Dynamics Of Trade Surplus

    Dynamics Of Trade Surplus

    While a trade surplus is usually seen as a positive sign of economic health because it indicates a country is exporting more than it imports, a persistent and large trade surplus, especially by major global players like China, has also generated geopolitical and economic tensions worldwide.

    Interestingly, in the decades preceding China’s emergence as a major exporter, from the end of World War II to the early 1970s, the United States ran trade surpluses, primarily due to its industrial strength and its role as a key exporter in the global market —a position China has only recently assumed.

    The issue of trade surplus is now becoming the new nuisance in global affairs. Those who benefit from it support it; others protest. However, the discussion of this topic arises from actions by US President Trump, who is attempting to manipulate trade tariffs to influence global trade in favour of the American economy. While a trade surplus is usually seen as a positive sign of economic health because it indicates a country is exporting more than it imports, a persistent and large trade surplus, especially by major global players like China, has also generated geopolitical and economic tensions worldwide. A recent US Treasury report accused China of disrupting the global economic balance through its substantial trade surplus. This article critically examines the financial mechanisms behind trade surpluses, the strategic narratives of developed nations, and the counter-narratives of developing economies, with a particular focus on China.

    The latest semi-annual US Treasury report (June 2025) did not label China as a currency manipulator but criticised its lack of transparency in managing the renminbi. Instead, it added countries such as Ireland and Switzerland to its “monitoring list” based on trade surplus and intervention metrics. The report highlights China’s opaque exchange rate practices and suggests that intervention through state tools (e.g., sovereign wealth funds) should be more closely monitored.

    Western media and think tanks argue that China’s surplus fuels its industrial oversupply, causing global spillovers and structural trade imbalances. This has harmed local industries in emerging economies by flooding markets with cheap Chinese goods made in factories connected to the Belt and Road Initiative. As a result, many of these countries are now imposing anti-dumping duties to safeguard their domestic industries.

    China’s larger economic footprint means its external balance continues to significantly influence trading partners.

    For China, a trade surplus serves both as a consequence and a policy. The IMF contends that China’s surplus mainly stems from internal macroeconomic factors — such as weak household consumption and excess industrial capacity — rather than intentional export strategies or outright manipulation. Although this surplus rate is lower than at the peak of the “China shock” in the 2000s, China’s larger economic footprint means its external balance continues to significantly influence trading partners. IMF models suggest that weak domestic demand — driven by property downturns and low consumer confidence — has caused a decline in consumption in China and has pushed the real renminbi lower, which in turn enhances exports. This has further amplified the trade surplus.

    However, Western policymakers and scholars argue that Beijing’s industrial model, underpinned by subsidies and exchange rate policies, amplifies this surplus into a global oversupply and trade friction. Brookings researchers describe this as a “mercantilist trade policy,” characterised by low domestic consumption, state-driven subsidies, and a focus on exports. The resulting surplus—now larger relative to global GDP than during the 2008 peak—puts pressure on trading partners despite US tariffs that have failed to reduce the bilateral trade deficit.

    Statistical Distortions: “Missing Imports”

    The most revealing statistic is that from 2018 to 2024, official US data revealed a $66 billion reduction in imports from China, while Chinese records indicated a $91 billion increase in exports to the US, a discrepancy of $157 billion. Much of this is due to the US de minimis rule, which permits parcels valued at under USD 800 to enter the country duty-free and bypass detailed customs reporting. E-commerce giants like Temu and Shein exploit this loophole, and 1.36 billion de minimis parcels entered the US market in 2024 alone, most of which originated from China. This underreporting skews trade data, underestimating China’s market reach and downplaying the structural impact of the surplus.

    Global Spillovers and E-commerce Consequences

    These surplus-driven shipments have severely impacted U.S. domestic retailers. However, bricks-and-mortar firms face import duties, labour regulations, intellectual property standards, and environmental rules. They cannot compete with low-value imports, which are not subject to duties or other regulations. Recent changes in U.S. policy have directly addressed the de minimis loophole, and an exemption for low-value Chinese imports was removed as of 2 May 2025, causing parcel duties to rise to 145%. This has caused small U.S. retailers to halt shipments, and platforms like Temu have been using local warehouses to circumvent fees, only to have the policy to be temporarily rolled back on May 14, highlighting the unstable political climate surrounding e-commerce regulation.

    Impact on Emerging Economies

    Developing countries are increasingly feeling the impact of China’s surplus-led export model. According to the World Bank, two-thirds of developing economies are expected to see their GDP growth slow from 4.2 per cent to 3.8 per cent by 2025, due to ongoing trade frictions, particularly between the US and China. Inexpensive Chinese goods, whether cheaper solar panels, electronics, or textiles, also pose a threat to emerging markets, and many are fighting back with anti-dumping duties and trade defence measures. At the same time, countries like Brazil, Indonesia, South Africa, and India have imposed tariffs, launched dumping investigations, and reconsidered their trade dependencies. Even countries that are traditionally aligned with China are concerned about the surging Chinese exports. An additional concern is that FDI in developing countries has declined to its lowest level since 2005, reaching just $435 billion in 2023. There is a risk that investment will fall further, raising concerns about investment, infrastructure, and poverty reduction.

    The Times article explains that Donald Trump’s tariffs did not reduce Chinese imports. Even with highly aggressive tariffs, the share of U.S. imports from China decreased by only 7 to 8 percentage points from 2018 to 2024, although industry estimates suggest that the actual fall in Chinese-origin goods entering U.S. supply chains is smaller (perhaps around 3 to 4 percentage points), due to relabelling and third-party routing.

    This raises stark questions about the effectiveness of the counter-tariff cycle. The overall outcome of this tariff war is simply a confusing and panicked state of affairs. The Times article explains that Donald Trump’s tariffs did not reduce Chinese imports. Even with highly aggressive tariffs, the share of U.S. imports from China decreased by only 7 to 8 percentage points from 2018 to 2024, although industry estimates suggest that the actual fall in Chinese-origin goods entering U.S. supply chains is smaller (perhaps around 3 to 4 percentage points), due to relabelling and third-party routing.

     Theoretical perspectives

    Dependency Theory and the Prebisch–Singer Hypothesis argue that developing countries experience declining terms of trade because they focus on primary goods, whereas industrialised nations retain advantages in high-value manufacturing. However, China has challenged this idea by dominating global markets in both primary and advanced products. As a result, we might reasonably conclude that even rising industrial powers, when driven by surplus, tend to uphold the global structures of dependency. Models like Unequal and Ecologically Unequal Exchange demonstrate how trade surpluses frequently involve a systematic undervaluation of labour and environmental costs in poorer countries, redirecting wealth to the Global North.

    These theories emphasise how global trade undervalues labour, worsens resource extraction, and causes environmental degradation, thereby transferring wealth from peripheral to core countries. Research suggests that Chinese-led global supply chains contribute to environmental damage and resource depletion in exporting countries, externalising ecological costs, which worsens the structural disadvantages for those nations. China’s GVC-enabled export surge often externalises ecological costs to commodity-exporting nations.

    Macroeconomic accounting theory states that a capital account deficit indicates a trade surplus, which means that for China, this results in capital inflows. Consequently, China needs to impose tight controls on its currency to maintain financial stability. With a current account surplus of approximately 3% of GDP, global capital flows, combined with managed exchange rates and the accumulation of foreign reserves—mainly US Treasuries—demonstrate structural policies designed to keep the renminbi weak and direct money into Western securities.

    The current trade environment is shaped by negotiation frameworks, such as the US–China truce, and tools, such as WTO rules and anti-dumping procedures. However, the US is now expanding its pressure on Europe, targeting its large goods surplus and digital tax regimes in an effort to rebalance trade.

    Global Debate

    IMF chief economist Pierre Olivier Gourinchas emphasised that “external balances are determined by macroeconomic fundamentals, not the link to trade and industrial policy, which is more tenuous”. The IMF analysis from the spring meetings similarly implies that internal imbalances (such as differences in savings and investment) influence external current account outcomes, and that China’s surplus reflects its high savings rate, low consumption, and industrial overcapacity. Therefore, while US officials describe China’s trade surplus as a sign of mercantilist excess, IMF analysis reminds us that external imbalances are a reflection of underlying macroeconomic divisions: in China’s case, a high savings rate, low consumption, and industrial overcapacity.

    Inderjit Gill, Chief Economist and Senior Vice President for Development Economics at the World Bank, said: “In the rest of the world, the developing world is now a development-free zone.”

    Surplus narratives are tools of structural power: while developed nations try to portray surplus as distortion, dumping, and manipulation to justify tariffs, subsidies, and monitoring, developing countries aim to reframe them as ecological exchange and dependency to highlight systemic inequalities

    Growth in developing economies, which has ratcheted down from 6 per cent in the 2000s to 5 per cent in the 2010s, and then to less than 4 per cent in the 2020s, mirrors the decline in global trade growth, from 5 per cent in the 2000s to around 4.5 per cent in the 2010s, and below 3 per cent in the 2020s. This illustrates the bilateral nature of the trade surplus. First, fundamentally, surplus narratives are tools of structural power: while developed nations try to portray surplus as distortion, dumping, and manipulation to justify tariffs, subsidies, and monitoring, developing countries aim to reframe them as ecological exchange and dependency to highlight systemic inequalities.

    China promotes an alternative narrative about its surplus, arguing that it stems from genuine investment, state-led development, and economies of scale, rather than protectionism or currency manipulation. Belt and Road infrastructure is presented as development, not geopolitical trap – although critics raise concerns of “debt-trap diplomacy”.

    Interestingly, in the decades preceding China’s emergence as a major exporter, from the end of World War II to the early 1970s, the United States ran trade surpluses, primarily due to its industrial strength and its role as a key exporter in the global market —a position China has only recently assumed.

    A paper by Robert Stehrer titled “What Is behind the US Trade Deficit?” published in ‘The Vienna Institute for International Economic Studies’ (WIW), traces the historical US trade deficit back to the 19th century and places it in a global context. A reading of it would show a broader narrative at play.

    Policy Roadmap

    Stricter transparency rules are essential to close statistical loopholes and create a level playing field by mandating the disclosure of foreign exchange interventions and de minimis trade flows (such as e-commerce transactions below US$800). These flows can artificially keep a country’s exports cheap and imports expensive, thereby inflating its trade surplus. Countries with persistent surpluses (exceeding 3% of GDP) should participate in a dialogue-based “Global Adjustment Protocol” that includes concessional finance for structural reforms, aiming to strike a balance between conditionality and developmental needs.

    One crucial step in this direction would be to include a green surplus index as part of a Green Current Account Score, which measures environmental degradation and natural resource depletion, thereby aligning surplus behaviour with sustainability goals.

    The urgent need is for reform of international organisations, liberating the IMF and WTO from Western dominance, transforming them into genuinely global entities or replacing them with organisations like the BRICS bank (NDB) and AIIB. Additionally, they should be empowered with greater authority to monitor global imbalances and suggest corrective measures, such as managing capital flows instead of imposing unilateral tariffs. This would help streamline WTO procedures, reducing delays, and defend policy space—such as supporting trade defence measures (anti-dumping duties, safeguards) by emerging economies.

    Conclusion:

    This article argues, through an economic analysis of current trade affairs, how hegemonic powers manipulate the political landscape. Trade surpluses are not merely economic aggregates—they are narrative tools in international power politics, with developed countries portraying surpluses as dumping or currency manipulation to justify tariffs and regulatory barriers. Conversely, surplus nations (both developed and emerging) describe their surpluses as the result of sound investments, economies of scale, and effective state guidance.

    From the macroeconomic surplus in the economy to the underreported e-commerce inflows, the reality of modern trade imbalances is far more complex than what mercantilist rhetoric suggests. An analysis of China’s experience demonstrates this point. The next phase of global trade reforms should emphasise transparency, robust multilateral regulations, and ecological responsibility. Beyond mercantilist rhetoric, there is a need for systemic frameworks that accurately reflect economic realities and sustainable goals—only then can tensions caused by surpluses be managed in a balanced and lasting manner.

     

     References:

     

    Feature Image Credit: Aljazeera.com

    Graphs Credits: Reddit; Financial Times; Statista

  • The Pakistan Paradox: Courted by Rivals, Valued Only Against India

    The Pakistan Paradox: Courted by Rivals, Valued Only Against India

    Pakistan’s presence at China’s Victory Day parade exposed a more profound truth: its value lies not in strategic brilliance but in being a pawn for both Washington and Beijing. Far from balancing, Islamabad survives as a tool in the great power game against India.

    China’s recent Victory Day parade on September 3, 2025, was more than a ceremonial display; it was a calculated act of strategic signalling to the West. By showcasing its formidable military hardware and hosting close allies such as Russia’s Vladimir Putin and North Korea’s Kim Jong-un, Beijing sought to project its emergence as a great power, much as it did during the 2008 Olympics. By bringing these leaders together, China signalled not only unity but also the contours of an emerging alternative world order that challenges Western dominance.

    The parade sent “chill waves” across Western capitals, with even Donald Trump admitting that he closely followed the event. On social media, he sardonically addressed China: “Please give my warmest regards to Vladimir Putin and Kim Jong Un, as you conspire against the United States of America.” On September 5, 2025, he further voiced his frustration, declaring that the U.S. had “lost India and Russia to deepest, darkest China,” a remark that reflected Washington’s growing unease over Beijing’s expanding influence.

    India, notably absent from China’s Victory Day parade on September 3, 2025, made its own strategic moves. Prime Minister Narendra Modi visited Japan on August 29–30, ahead of the Shanghai Cooperation Organisation (SCO) summit in Tianjin on August 31–September 1. By going to Tokyo first and then to Tianjin, Modi signalled to the West that India continues to prioritise its commitments in the Indo-Pacific, while also reminding Beijing that New Delhi remains open to engagement. During the SCO summit, Modi’s remark that India’s engagement with China “should not be seen through third-country lenses” was intended to reassure the West of India’s balancing strategy.

    Yet, amid this choreography of great powers, one country’s presence at the Victory Day parade raised eyebrows: Pakistan. Prime Minister Shehbaz Sharif stood alongside leaders who openly challenge the Western-led order—figures the West often labels as part of an “axis of evil”—despite Pakistan being nominally allied with the United States. What was even more surprising was the silence of Washington and its partners. Had it been India’s leader at the parade, the Western outcry would have been deafening. But when Pakistan did it, no questions were asked. Why this extraordinary tolerance?

    The explanation lies not in Pakistan’s own strategic brilliance. Unlike India, Pakistan lacks genuine strategic agency or independent decision-making capacity. It has long been dependent on external patrons and remains heavily constrained by domestic crises. The narrative advanced by some strategic experts that Islamabad is engaged in a masterful balancing act between Washington and Beijing is misleading. Instead, both the U.S. and China tolerate Pakistan’s duplicity because of its enduring strategic utility against India.

    Washington knows Pakistan’s record all too well. During the War on Terror, Islamabad received over $33 billion in U.S. aid while simultaneously providing sanctuary to Taliban leaders. U.S. officials, including President Trump, repeatedly acknowledged this duplicity. In a tweet on January 1, 2018, Trump stated: ‘The United States has foolishly given Pakistan more than 33 billion dollars in aid over the last 15 years, and they have given us nothing but lies & deceit, thinking of our leaders as fools. They give safe haven to the terrorists we hunt in Afghanistan, with little help. No more!”

    Similarly, Congressman Ted Poe, Chairman of the House Subcommittee on Terrorism, introduced a bill in 2016 calling for Pakistan to be declared a “state sponsor of terrorism,” stating that Pakistan was “not only an untrustworthy ally but has also aided and abetted the enemies of the United States”. Counterterrorism cooperation is, therefore, not the real reason Washington continues to indulge Pakistan. Nor are West Asia’s dynamics or connectivity goals the central factor, though they play a role.

    The real reason is India. Pakistan serves as a pressure valve for Washington to use whenever New Delhi strays from American strategic priorities. Similarly, for Beijing, Pakistan is an indispensable grey-zone tool against India — a reliable proxy that complicates India’s security calculus without requiring direct Chinese involvement. This explains why China continues to describe its relationship with Pakistan as ‘higher than the Himalayas, deeper than the oceans, sweeter than honey, and stronger than steel,’ even though Beijing is fully aware that the “honey” and other lofty adjectives in this partnership are largely rhetorical, given Pakistan’s military establishment has historically maintained close ties with the Pentagon and U.S. defense agencies.

    Recent developments illustrate this pattern. Despite Islamabad striking a minerals deal in Balochistan with the U.S.—an area where China has invested heavily through the China-Pakistan Economic Corridor (CPEC) and even frequently loses its workers to terrorist attacks—Beijing has not retaliated.

    China has invested nearly $60 billion in CPEC projects, including Gwadar Port and associated infrastructure, yet continues to tolerate Pakistan’s parallel engagement with the U.S. Even though just days ago, China exited funding for certain sections of CPEC, such as the Karachi–Rohri stretch of the Main Line-1 railway, the broader corridor remains intact and firmly under Beijing’s control.

    Similarly, Washington has been remarkably quiet about the expansion of CPEC and its recent announcement to extend it into Afghanistan, despite this development directly strengthening Chinese influence in South and Central Asia, which contradicts U.S. national security strategies, including the Indo-Pacific strategy designed to counterbalance China. Imagine if India were to engage China in a similar manner; the Western backlash would be immediate and fierce.

    The silence over Pakistan reveals the underlying logic: both Washington and Beijing find it useful to maintain Islamabad as a strategic lever against India. For China, Pakistan provides military intelligence, operational support, and a constant security distraction for New Delhi, keeping India tied down on its western front. For the U.S., Pakistan is less a partner in counterterrorism than a tool to remind India of the costs of drifting too far from American preferences.

    Thus, Pakistan’s position is not the result of deft balancing or sophisticated statecraft. It is tolerated, even courted, by two rival great powers because of its instrumental value in their respective strategies against India. Far from being an Independent balancer, Pakistan remains a dependent actor whose importance derives almost entirely from the leverage it provides to others.

    For India, the lesson is clear. The tolerance extended to Pakistan by both Washington and Beijing is not about Islamabad’s capabilities or credibility — both powers know well its history of duplicity. Instead, it reflects the centrality of India in global strategy and the willingness of other powers to use Pakistan as a pawn in their broader geopolitical contest. Recognising this reality is essential for shaping New Delhi’s responses, ensuring that India continues to strengthen its autonomy and strategic weight in the Indo-Pacific and beyond.

    Feature Image Credit: India Today

    Pictures in Text: www.arabnews.com, www.nationalheraldindia.com, www.deccanherald.com

  • China and the Sunset of the International Liberal Order

    China and the Sunset of the International Liberal Order

         

    Rise of Multipolar World Order – www.newsvoyagernet.com

           The irrational amounts that the Soviet Union allocated to its defense budget not only represented a huge burden on its economy, but imposed a tremendous sacrifice on the standard of living of its citizens. Subsidies to the rest of the members of the Soviet bloc had to be added to this bill.

             Such amounts were barely sustainable for a country that, as from the first half of the 1960s, was subjected to a continuous economic stagnation. This situation became aggravated by the strong decline of oil prices, USSR’s main export, since the mid 1980s. The reescalation of the Cold War undertaken by Jimmy Carter and Ronald Reagan, particularly the latter, put in motion an American military buildup, that could not be matched by Moscow.

             With the intention of avoiding the implosion of its system, Moscow triggered a reform process that attained none other than accelerating such outcome. Indeed, Mikhail Gorbachev opened the pressure cooker hoping to liberate, in a controlled manner, the force contained in its interior. Once liberated, however, this force swept away with everything on its path. Initially came its European satellites, subsequently Gorbachev’s power base, and, finally, the Soviet Union itself. The Soviet system had reached the point where it could not survive without changes, but neither could assimilate them. In other words, it had exhausted its survival capacity.

              Without a shot being fired, Washington had won the Cold War. The exuberant sentiment of triumph therein derived translated into the “end of history” thesis. Having defeated its ideological rival, liberalism had become the final point in the ideological evolution of humanity. If anything, tough, the years that followed to the Soviet implosion were marred by trauma and conflict. In the essential, however, the idea that the world was homogenizing under the liberal credo was correct.

             On the one hand, indeed, the multilateral institutions, systems of alliances and rules of the game created by the United States shortly after World War II, or in subsequent years, allowed for a global governance architecture. A rules based liberal international order imposed itself over the world. On the other hand, the so-called Washington Consensus became a market economy’s recipe of universal application. This homogenization process was helped by two additional factors. First, the seven largest economies that followed the U.S., were industrialized democracies firmly supportive of its leadership. Second, globalization in its initial stage acted as a sort of planetary transmission belt that spread the symbols, uses, and values of the leading power.

             The new millennium thus arrived with an all-powerful America, whose liberal imprint was homogenizing the planet. The United States had indeed attained global hegemony, and Fukuyama’s end of history thesis seemed to reflect the emerging reality.

    But things turned out to be more complex than this, and the history of the end of history proved out to be a brief one. In a few years’ time, global “Pax Americana” began to be challenged by the presence of a powerful rival that seemed to have emerged out of the blue: China. How had this happened?

             Beginning the 1970s, Beijing and Washington had reached a simple but transformative agreement. Henceforward, the United States would recognize the Chinese Communist regime as China’s legitimate government. Meanwhile, China would no longer seek to constrain America’s leadership in Asia. By extension, this provided China with an economic opening to the West. Although it would be only after Deng Xiaoping’s arrival to power, that the real meaning of the latter became evident.

             In spite of the multiple challenges encountered along the way, both the United States and China made a deliberate effort to remain within the road opened in 1972. Their agreement showed to be not only highly resilient, but able to evolve amid changing circumstances. The year 2008, however, became an inflexion point within their relationship. From then onwards, everything began to unravel. Why was it so?

             The answer may be found in a notion familiar to the Chinese mentality, but alien to the Western one – the shi. This concept can be synthesized as an alignment of forces able to shape a new situation. More generally, it encompasses ideas such as momentum, strategic advantage, or propensity for things to happen. Which were, hence, the alignment of forces that materialized in that particular year? There were straightforward answers to that question: The U.S.’ financial excesses that produced the world’s worst financial crisis since 1929; Beijing’s sweeping efficiency in overcoming the risk of contagion from this crisis; China’s capability to maintain its economic growth, which helped preventing a major global economic downturn; and concomitantly, the highly successful Beijing Olympic games of that year, which provided the country with a tremendous self-esteem boost.

             The United States, indeed, had proven not to be the colossus that the Chinese had presumed, while China itself turned out to be much stronger than assumed. This implied that the U.S. was passing its peak as a superpower, and that the curves of the Chinese ascension and the American decline, were about to cross each other. Deng Xiaoping’s advice for future leadership generations, had emphasized the need of preserving a low profile, while waiting for the attainment of a position of strength. In Chinese eyes, 2008 seemed to show that China was muscular enough to act more boldly. Moreover, with the shi in motion, momentum had to be exploited.

             Beijing’s post-2008 assertiveness became much bolder after Xi Jinping’s arrival to power in 2012-2013. China, in his mind, was ready to contend for global leadership. More to the point within its own region, China’s centrality and the perception of the U.S. as an alien power, had to translate into pushing out America’s presence.

    Challenged by China, Washington reacted forcefully. Chinese perceptions run counter to the fact that the U.S.’ had been a major power in East Asia since 1854, which translated into countless loss of American lives in four wars. Moreover, safeguarding the freedom of navigation in the South China Sea, a key principle within the rules based liberal international order, provided a strong sense of staying power. This was reinforced by the fact that America’s global leadership was also at stake, thus requiring not to yield presence in that area for reputational reasons. The containment of Beijing’s ascendancy, became thus a priority for Washington.

             However, accommodating two behemoths that feel entitled to pre-eminence is a daunting task. Specially so, when one of them feels under threat of exclusion from the region, and the other feels that its emergence is being constrained. On top, both remain prisoners of their history and of their national myths. This makes them incapable of looking at the facts, without distorting them with the subjective lenses of their perceived sense of mission and superiority.

             War ensuing, under those circumstances, is an ongoing risk. But if war is a possibility, Cold War is already a fact. This implies a multifaceted wrestle in which geopolitics, technology, trade, finances, alliances, and warfare capabilities are all involved. And even if important convergent interest between them still remains in place, ties are being cut by the day. As a matter of fact, if in the past economic interdependence helped to shield from geopolitical dissonances, the opposite is the case today. Indeed, a whole array of zero-sum geopolitical controversies are rapidly curtailing economic links.

             The U.S., particularly during the Biden administration, chose to contain China through a regional architecture of alliances and by way of linking NATO with Indo-Pacific problems and selective regional allies. The common denominator that gathers them together is the preservation of the rules based liberal international order. An order, threatened by China’s geostrategic regional expansionism.

     

     

     

    However, China itself is not short of allies. A revisionist axis, that aims at ending the rules based liberal international order, has taken shape. The same tries to throw back American power and to create its own spheres of influence. This axis represents a competing center of gravity, where countries dissatisfied with the prevailing international order can turn to. Together with China two additional Asia-Pacific powers, Russia and North Korea, are part of this bloc.

    Trump’s return to the White House might change the prevailing regional configuration of factors. Although becoming more challenging to Beijing from a trade perspective, he could substantially weaken not only the rules based liberal international order, but the architecture of alliances that contains China. The former, because the illiberal populism that he represents is at odds with the liberal order. The latter, not only because he could take the U.S. out of NATO, but because his transactional approach to foreign policy, which favors trade and money over geopolitics, could turn alliances upside down.

    The rules based liberal international order, which became universal over the ashes of the Soviet Union, could now be facing its sunset. This, not only because its main challenger, China, may strengthen its geopolitical position in the face of its rival alliances’ disruption, but, more significantly, because the U.S. itself may cease to champion it.

    Feature Image Credit: www.brookings.edu

     

  • China and the US: Conventional and Nuclear Military Strategies

    China and the US: Conventional and Nuclear Military Strategies

    Occasional Paper: 9/2024

    China and the US: Conventional and Nuclear Military Strategies

    Abstract

    China’s military strategy focuses on developing asymmetric capabilities to counter the United States’ technological advantages and superior military budget by investing in precision missiles, advanced targeting systems, and system destruction warfare. The US initiated the Defence Innovation Initiative to prioritise autonomous learning systems and high-speed projectiles; however, it diminished under the Trump administration, leaving the US reliant on legacy weapons systems vulnerable to new-generation autonomous and hypersonic weapons. Despite China’s advancements, the US maintains a significant advantage in nuclear warheads, with 5,800 compared to China’s 320 in 2020, consistent with Mao’s “minimum deterrent” strategy. While China’s nuclear arsenal primarily comprises strategic weapons, the US possesses both tactical and strategic types. The US complacency regarding China’s military challenge may stem from its nuclear superiority; however, as China progresses technologically, the US risks falling behind by relying on outdated weapons systems, often maintained due to their economic significance in key congressional districts.

    Key Words: #nuclear warheads, #hypersonic weapons, #precision weapons, #asymmetric capabilities, #system destruction warfare, #autonomous learning systems 

     

    Introduction

    Since the beginning of the millennium, China has decided to outsmart the United States’ military strength through a very particular strategy. It aimed at overcoming America’s technological advantages and much superior military budget by investing significant resources in asymmetrical capabilities. As Mark Leonard wrote, China was attempting to become an “asymmetric superpower” outside the realm of conventional military power (Leonard, 2008, p. 106).

    Asymmetric superpower

    Conscious that the Soviet Union had driven itself into bankruptcy by accepting a ruinous competition for military primacy with the US, China looked for cheaper ways to compete. As a result, it invested billions in an attempt to make a generational leap in military capabilities, able to neutralize and trump America’s superior conventional forces. In other words, instead of rivalling the United States on its own game, it searched to engage it in a different game altogether. It was the equivalent of what companies like Uber, Netflix, Airbnb or Spotify did in relation to the conventional economic sectors with which they competed. A novel by P.W. Singer and August Cole depicts how, through surprise and a whole array of asymmetric weapons, China defeats the superior forces of the United States (Singer and Cole, 2016).

    In essence, these weapons are dual-focused. On the one hand, they emphasize long and intermediate-range precision missiles and advanced targeting systems, able to penetrate battle network defences during the opening stages of a conflict. On the other hand, they aim at systems destruction warfare, able to cripple the US’ command, control, communication and intelligence battle network systems. The objective in both cases is to target the US’ soft spots with weapons priced at a fraction of the armaments or systems that they strive to destroy or render useless. The whole notion of asymmetric weapons, indeed, is based on exploiting America’s military weaknesses (like its dependence on information highways or space satellites) while neutralizing its strengths (like its fleet of aircraft carriers). Michael Pillsbury describes this situation in graphic terms: “For two decades, the Chinese have been building arrows designed to find a singular target – the Achilles’ heel of the United States” (Pillsbury, 2015, p. 196).

    America’s military legacy systems

    To counter China’s emerging military threat, the Obama administration put in motion what it called the Defence Innovation Initiative. This was also known as the Third Offset Strategy, as it recalled two previous occasions in the 1950s and the 1970s when, thanks to its technological leaps, the US could overcome the challenges posed by the Soviet military. Recognizing that the technological superiority, which had been the foundation of US military dominance for years, was not only eroding but was being challenged by China, the Pentagon defined a series of areas to be prioritized. Among them were the following: Autonomous learning systems, human-machine collaborative decision-making, network-enabled autonomous weapons, and high-speed projectiles (Ellman, Samp and Coll, 2017).

    However, as with many other initiatives representing the Obama legacy, this one began fading into oblivion with Trump’s arrival to power. As a result, the vision of significantly modernizing America’s military forces also faded (McLeary, 2017). This implied reverting to the previous state of affairs, which still lingers nowadays. In Raj M. Shah and Christopher M. Kirchhoff’s words: “We stand at the precipice of an even more consequential revolution in military affairs today. A new way of war is bearing down on us. Artificial-intelligence-powered autonomous weapons are going global. And the US military is not ready for them (…). Yet, as this is happening, the Pentagon still overwhelmingly spends its dollars on legacy weapons systems. It continues to rely on an outmoded and costly technical production system to buy tanks, ships and aircraft carriers that a new generation of weapons – autonomous and hypersonic – can demonstrably kill” (Shah and Kirchhoff, 2024).

    Legacy systems -aircraft carriers, fighter jets, tanks – are deliberately manufactured in key congressional districts around the country so that the argument over whether a weapons system is needed gets subsumed by the question of whether it produces jobs

    Indeed, as Fareed Zakaria put it: “The United States defence budget is (…) wasteful and yet eternally expanding (…). And the real threats of the future -cyberwar, space attacks- require different strategies and spending. Yet, Washington continues to spend billions on aircraft carriers and tanks” (Zakaria, 2019). A further quote explains the reason for this dependence on an ageing weapons inventory: “Legacy systems -aircraft carriers, fighter jets, tanks – are deliberately manufactured in key congressional districts around the country so that the argument over whether a weapons system is needed gets subsumed by the question of whether it produces jobs” (Sanger, 2024, p. 193). Hence, while China’s military advances towards a technological edge, America’s seems to be losing both focus and fitness.

    Minimum deterrence nuclear strategy

    Perhaps this American complacency concerning China’s disruptive weapons and overall military challenge could be explained by an overreliance on its nuclear superiority. Indeed, in 2020, in the comparison of nuclear warheads, the United States possessed overwhelming superiority with 5,800 against China’s 320 (Arms Control Association, 2020). This was consistent with the legacy of Mao’s “minimum deterrent” strategy. Within the above count, two kinds of nuclear weapons are involved – tactical and strategic. The former, with smaller explosive capacity, are designed for use in battlefields. With a much larger capacity, the latter aims at vital targets within the enemy’s home front. In relation to tactical nuclear weapons, America’s superiority is total, as China doesn’t have any. Nonetheless, in terms of long-range, accuracy, and extensive numbers, China’s conventional ballistic missiles (like the DF-26, also known as the Guam killer) can become an excellent match to the US’ tactical nuclear weapons (Roblin, 2018). The big difference between both countries, thus, is centred on America’s overwhelming superiority in strategic nuclear warheads.

    China’s minimum deterrent nuclear strategy was based on the assumption that, within cost-benefit decision-making, a limited nuclear force, able to target an adversary’s strategic objectives, could deter a superior nuclear force. This required retaliatory strike capacities that can survive a first enemy attack. In China’s case, this is attainable through road-mobile missiles that are difficult to find and destroy, and by way of missiles based on undetectable submarines. Moreover, Beijing’s hypersonic glide vehicle -whose prototype was successfully tested in July 2021- follows a trajectory that American systems cannot track. All of these impose restraint in the use of America’s more extensive arsenal and undermine its ability to carry out nuclear blackmail.

    there is no US defence that “could block” China’s hypersonic glide vehicle “not just because of its speed but also due to its ability to operate within Earth’s atmosphere and to change its altitude and direction in an unpredictable manner while flying much closer to the Earth’s surface”

    For the above aim, Beijing has developed new nuclear ballistic missiles, cruise missiles, and a sea-based delivery system. These include the DF-41 solid-fuel road-mobile intercontinental ballistic missile (with a range of 15,000 kilometres) or the submarine-launched JL-3 solid-fuel ballistic missile (whose range is likely to exceed 9,000 kilometres). To launch the JL-3 missiles, China counts with four Jin-class nuclear submarines, with an upgraded fifth under construction, each armed with twelve nuclear ballistic missiles (Huang, 2019; Panda, 2018). On top of that, there is no US defence that “could block” China’s hypersonic glide vehicle “not just because of its speed but also due to its ability to operate within Earth’s atmosphere and to change its altitude and direction in an unpredictable manner while flying much closer to the Earth’s surface” (Sanger, 2024, p. 190). All of this shows that America’s overwhelming superiority in terms of strategic nuclear warheads results in more theoretical than practical. What might justify a first American strategic nuclear strike on the knowledge that a Chinese retaliatory one could destroy New York, Chicago, Los Angeles, or all of the three together?

    Matching the US’ overkill nuclear capacity

    Being an asymmetric superpower while sustaining a minimum but highly credible deterrent nuclear strategy implied much subtility in terms of military thinking. One, in tune with the best Chinese traditions exemplified by Sun Tsu’s The Art of War and Chan-Kuo T’se’s Stratagems of the Warring States. However, in this regard, as in many others, Xi Jinping is sowing rigidity where subtility and flexibility prevailed. A perfect example of this is provided by its intent to match the US in terms of strategic nuclear warheads. In David E. Sanger’s words: “But now, it seemed apparent, Chinese leaders had changed their minds. Xi declared that China must ‘establish a strong strategic deterrence system’. And satellite images from near the cities of Yumen and Hami showed that Xi was now ready to throw Mao’s ‘minimum deterrent’ strategy out of the window” (Sanger, 2024, p. 200).

    Three elements attest to the former. Firstly, 230 launching silos are under construction in China. Secondly, these silos are part of a larger plan to match the US’ “triad” of land-launched, air-launched, and sea-launched nuclear weapons. Thirdly, it is estimated that by 2030, China will have an arsenal of 1,000 strategic nuclear weapons, which should reach 1,500 by 2035. The latter would imply equalling the Russian and the American nuclear strategic warheads (Sanger, 2024, p. 197; Cooper, 2021; The Economist, 2021; Hadley, 2023). 

    Xi Jinping is thus throwing overboard the Chinese capability to neutralize America’s strategic nuclear superiority at a fraction of its cost, searching to match its overkill capacity. In essence, nuclear arms seek to fulfil two main objectives. In the first place, intimidating or dissuading into compliance a given counterpart. In the second place, deterring by way of its retaliatory capacity, any first use of nuclear weapons by a counterpart.

    As seen, the second of those considerations was already guaranteed through its minimum deterrence strategy. In relation to the first, China already enjoys a tremendous dissuading power and the capacity to neutralize intimidation in its part of the world. Indeed, it holds firm control over the South China Sea. This is for three reasons. First, through its possession and positioning there, of the largest Navy in the world. Second, by way of the impressive firepower of its missiles, which includes the DF21/CSS-5, capable of sinking aircraft carriers more than 1,500 miles away. Third, via the construction and militarization of 27 artificial islands in the Paracel and Spratly archipelagos. All of this generates an anti-access and denial of space synergy, capable of being activated at any given time against hostile maritime forces. In other words, China cannot be intimidated into compliance by the United States in the South China Sea scenario (Fabey, 2018, pp. 228-231). Nor, in relation to Taiwan, could America’s superior nuclear forces dissuade Beijing to invade if it so decides. The US, indeed, would not be willing to trade the obliteration of Los Angeles or any other of its major cities by going nuclear in the defence of Taiwan.

    Simultaneously confronting two gunfighters

    It was complicated enough during the Cold War to defend against one major nuclear power. The message of the new [Chinese] silos was that now the United States would, for the first time in its history, must think about defending in the future against two major nuclear powers with arsenals roughly the size of Washington’s – and be prepared for the possibility that they might decide to work together

    Matching the US’ nuclear overkill capacity will not significantly alter the strategic equation between both countries. If anything, it would only immobilize in easy-to-target silos, the bulk of its strategic nuclear force. However, Xi’s difficult-to-understand decision makes more sense if, instead of thinking of two nuclear powers, we were to think of a game of three. This would entail a more profound strategic problem for the United States that David E. Sanger synthesizes: “It was complicated enough during the Cold War to defend against one major nuclear power. The message of the new [Chinese] silos was that now the United States would, for the first time in its history, must think about defending in the future against two major nuclear powers with arsenals roughly the size of Washington’s – and be prepared for the possibility that they might decide to work together” (Sanger, 2024, p. 201). This working together factor should be seen as the new normal, as a revisionist block led by China and Russia confronts America’s system of alliances and its post-WWII rules-based world order.

    Although the United States could try to increase the number of its nukes, nothing precludes its two competitors from augmenting theirs as well, with the intention of maintaining an overwhelming superiority. According to Thomas Schelling, leading Game Theory scholar and Economics Nobel Prize winner, the confrontation between two nuclear superpowers, in parity conditions, was tantamount to that of two far-west gunfighters: Whoever shot first had the upper hand. This is because it can destroy a significant proportion of its counterpart’s nuclear arsenal (Fontaine, 2024). In the case in point, Uncle Sam would have to simultaneously confront two gunfighters, each matching his skills and firepower. Although beyond a certain threshold, there wouldn’t seem to exist a significant difference in the capacity of destruction involved, nuclear blackmail could be imposed upon the weakest competitor. In this case, the United States.

    Conclusion

    From an American perspective, overreliance on its challenged nuclear power makes no sense. Especially if it translates into a laid-back attitude in relation to the current technological revolution in conventional warfare. If Washington doesn’t go forward with a third offset military strategy, it could find itself in an extremely vulnerable position. Just two cases can exemplify this. Aircraft carriers are becoming obsolete as a result of the Chinese DF21-CSS5 missile, able to sink them 1,500 miles away, in the same manner in which war in Ukraine is showing the obsolescence of modern tanks when faced with portable Javelins and drones. If the US is not able to undertake a leap forward in conventional military weapons and systems, it will be overcome by its rivals in both conventional and nuclear forces. For Washington, no doubt about it, this is an inflexion moment.

     

    References:

    Arms Control Association (2020). “Nuclear weapons: Who has what at a glance”, August.

    Cooper, Helene (2021). “China could have 1,000 nuclear warheads by 2030, Pentagon says”. The New York Times, November 3.

    Ellman, Jesse, Samp, Lisa, Coll, Gabriel (2017). “Assessing the Third Offset Strategy”. Center for Strategic & International Studies, CSIS, March.

    Fabey, Michael (2018) Crashback: The Power Clash Between US and China in the Pacific. New York: Scribner.

    Fontaine, Phillipe (2024). “Commitment, Cold War, and the battles of self: Thomas Schelling on Behavior Control”. Journal of the Behavioral Sciences, April.

    Hadley, Greg (2023). “China Now Has More ICBM Launchers than the US”. Air & Space Forces Magazine. February 7.

    Huang, Cary (2019). “China’s show of military might risk backfiring”. Inkstone, October 19.

    Leonard, Mark (2008). What Does China Think? New York: HarperCollins.

    McLeary, Paul (2017). “The Pentagon’s Third Offset May be Dead, But No One Knows What Comes Next”. Foreign Policy, December 18.

    Panda, Ankit (2018). “China conducts first test of new JL-3 submarine-launched ballistic missile”. The Diplomat, December 20.

    Pillsbury, Michael (2015). The Hundred-Year Marathon. New York: Henry Holt and Company.

    Roblin, Sebastien (2018). “Why China’s DF-26 Missile is a Guam Killer”. The National Interest, November 9.

    Sanger, David E. (2024). New York: Crown Publishing Books.

    Shah, Raj M. and Kirchhoff, Christopher M. (2024). “The US Military is not Ready for the New Era of Warfare”. The New York Times, September 13.

    Singer, P.W. and Cole, August (2016). Ghost Fleet: A Novel of the Next World War. Boston: Eamon Dolan Book.

    The Economist (2021). “China’s nuclear arsenal has been extremely modest, but that is changing”, November 20.

    Zakaria, Fareed (2019). “Defense spending is America’s cancerous bipartisan consensus”. The Washington Post, July 18.

     

    Feature Image Credit: NikkeiAsia

    Text Image: AsiaTimes.com

  • China’s Role in reducing the Global Carbon Footprint: The 2060 Promise and Geopolitics on the Climate Front

    China’s Role in reducing the Global Carbon Footprint: The 2060 Promise and Geopolitics on the Climate Front

    Introduction

    The devastating role carbon plays in climate change cannot be underestimated. The rise in global surface temperatures, air pollution, and sea levels are visible effects of a rapidly changing environment. China, the world’s second most populous country, is also the largest emitter of greenhouse gases[i]. According to the CAIT database, in 2020, China emitted what amounted to 27% of the total greenhouse gas emissions in the world[ii]. Under President Xi Jinping, China has moved to position itself as an “ecological civilization”, striving to advance its role in global climate protection[iii]. China’s endeavours received acclaim when it became one of the first major countries to ratify the Paris Agreement in 2015, pledging to attain peak emissions by 2030 and net zero carbon emissions by 2060. This article aims to delineate China’s strategies and motivations for addressing carbon emissions and contrast these with the measures implemented by Western and developing countries to diminish their carbon footprint.

    China’s Image and Geopolitics in the Climate Sector

    Considering China’s position on the world stage as one of the largest and fastest-growing economies in the world, it has faced international pressure to take accountability for its contribution to climate change. China has previously argued that as a developing country, it should not have to share the same responsibilities of curbing climate change that developed countries, whose emissions went “unchecked for decades”, have[iv]. Nonetheless, they have pledged to lead by example in the climate sector. A large part of President Xi’s campaign to amplify China’s climate ambitions may come from appeasing the West while also setting up leadership in the clean energy sector to better cement its role as a superpower. According to a New York Times article, their promise to contribute to climate protection could be used to soothe the international audience and to counterbalance the worldwide anger that China faces over their oppression of the Uyghur Muslims in the Xinjiang province and their territorial conflicts in the South China Sea and Taiwan[v]. President Xi’s pledge at the UN to reach peak emissions before 2030 may have been an attempt to depict China as a pioneering nation striving to achieve net zero carbon emissions, serving as an alternative powerful entity for countries to turn to in lieu of the United States. This holds particular significance, as the USA remained mute about taking accountability for its own carbon emissions and withdrew from the Paris Agreement during Donald Trump’s presidency[vi]. This also shows China’s readiness to employ the consequences of climate change on its geopolitical agenda[vii].

    The future actions of China may significantly influence the climate policies of both developing and developed nations, potentially establishing China as a preeminent global force in climate change mitigation.

    China has endeavoured to shape its image in the climate sector. In 2015, despite being classified as a developing country, China refrained from requesting climate finance from developed countries and instead pledged $ 3.1 billion in funding to assist other developing countries in tackling climate change[viii]. As per the World Bank’s Country Climate and Development Report for China, China is poised to transform “climate action into economic opportunity.”[ix] By transitioning to a net zero carbon emissions economy, China can generate employment opportunities while safeguarding its non-renewable resources from depletion. China’s economy is also uniquely structured to seize the technological and reputational benefits of early climate action[x]. The future actions of China may significantly influence the climate policies of both developing and developed nations, potentially establishing China as a preeminent global force in climate change mitigation. Nonetheless, if China fails to fulfil its commitment to attain net zero carbon emissions by 2060, it may suffer substantial reputational damage, particularly given its current status as a pioneer in “advancing low carbon energy supply”[xi].

    Domestic Versus International Efforts in the Clean Energy Race

    However, domestic and international factors could affect China’s goal to peak emissions and the deadlines it has set for itself. A global event that may have affected their efforts to peak carbon emissions was the COVID-19 pandemic, in which the rise in carbon emissions from industries and vehicles was interrupted[xii]. However, after the pandemic, China’s economy saw swift growth, and in 2021, China’s carbon emissions were 4% higher than in the previous year[xiii]. Not only is China back on track to peak carbon emissions by 2030, but the International Energy Agency and World Energy Outlook 2023 also found that “China’s fossil fuel use will peak in 2024 before entering structural decline.”[xiv]

    Although China’s industrial sector is heavily reliant on coal and fossil fuels, it also boasts the world’s largest production of electric vehicles and is a leader in manufacturing solar panels and wind turbines[xv]. In contrast, developed countries, particularly the US, which withdrew from the Paris Agreement in 2017 during the Trump presidency, appear to be making less of an effort towards environmental protection.

    Developing countries, while not entirely possessed of the immense sprawl of China’s economy and population, are nonetheless not at the level of transitioning to clean energy that China is. India, too, has pledged to be carbon neutral by 2070 and to have emissions peak by 2030. Given its increasing economic growth rate, India must decrease its carbon intensity at the same pace. India lags behind China when it comes to manufacturing solar panels and other renewable energy sources. India’s central government is preparing to push energy modernization to “align with global energy transition trends.”[xvi] According to the Economic Times, particular emphasis has been laid on renewable energy sources like solar capacity and e-vehicles in the 2024-25 budget.[xvii]

    China and International Cooperation for Climate Protection

    With China producing sufficient solar capacity in 2022 to lead the rest of the world considerably and the deployment of solar power expected to rise until 2028, it is essential that the West does not make the mistake of isolating China

    Given that China has emerged as the leading manufacturer of electric vehicles (EVs), it remains to be seen whether developed and developing countries will leverage their supply chains to combat their own climate crises. While opportunities are plentiful for Western businesses to integrate with China’s cutting-edge alternatives for traditional energy sources, the United States has adopted a hardline stance towards China[xviii]. The US has imposed 100 per cent tariffs on Chinese-made e-vehicles, and solar cells face tariffs at 50 per cent.[xix] Simultaneously, rivalry and competition between the two countries on the climate front may help combat the climate dilemma and ever-increasing carbon emissions by avoiding the collective action problem. However, this will depend heavily on smooth cooperation and effective communication between Chinese authorities and developed nations within the EU and the USA[xxi]. Empowering domestic groups within countries can raise awareness of climate crises. A poll conducted in China revealed that 46% of the youth considered climate change the “most serious global issue.”[xxii] According to a survey conducted by the United Nations, 80% of people worldwide say they want climate action[vii]. With China producing sufficient solar capacity in 2022 to lead the rest of the world considerably and the deployment of solar power expected to rise until 2028, it is essential that the West does not make the mistake of isolating China[xxiii].

    Conclusion

    China has a significant advantage in its renewable energy sector. Western countries and other developing economies rely heavily on China’s green exports to address climate change urgently. China’s stringent measures to curb emissions from its coal-based industries and the growing output from its alternative energy sources reflect its proactive stance in becoming a global leader in addressing climate change — a position that surpasses other nations’ efforts. While it is debatable whether China’s commitment to reduce its carbon emissions was a political strategy to appease Europe, it is undeniable that tackling climate change is a pressing issue. With the public’s overwhelming support for implementing change in the climate sector, governments worldwide must prioritise their citizens’ needs and cooperate to develop policies that ensure a sustainable future for our planet.

     

    Notes:

    [i] Saurav Anand, “Solar Capacity, EVs, and Nuclear SMRs to Get Budget Boost for Energy Security – ET EnergyWorld,” ETEnergyworld.com, July 11, 2024, https://energy.economictimes.indiatimes.com/news/renewable/solar-capacity-evs-and-nuclear-smrs-to-get-budget-boost-for-energy-security/111648384?action=profile_completion&utm_source=Mailer&utm_medium=newsletter&utm_campaign=etenergy_news_2024-07-11&dt=2024-07-11&em=c2FuYS5zYXByYTIyMUBnbWFpbC5jb20.

    [ii]Saurav Anand, “Solar Capacity, EVs, and Nuclear Smrs to Get Budget Boost for Energy Security – ET EnergyWorld,” ETEnergyworld.com, July 11, 2024, https://energy.economictimes.indiatimes.com/news/renewable/solar-capacity-evs-and-nuclear-smrs-to-get-budget-boost-for-energy-security/111648384?action=profile_completion&utm_source=Mailer&utm_medium=newsletter&utm_campaign=etenergy_news_2024-07-11&dt=2024-07-11&em=c2FuYS5zYXByYTIyMUBnbWFpbC5jb20.

    [iii]Shameem Prashantham and Lola Woetzel, “To Create a Greener Future, the West Can’t Ignore China,” Harvard Business Review, April 10, 2024, https://hbr.org/2024/05/to-create-a-greener-future-the-west-cant-ignore-china.

    [iv]“Fact Sheet: President Biden Takes Action to Protect American Workers and Businesses from China’s Unfair Trade Practices,” The White House, May 14, 2024, https://www.whitehouse.gov/briefing-room/statements-releases/2024/05/14/fact-sheet-president-biden-takes-action-to-protect-american-workers-and-businesses-from-chinas-unfair-trade-practices/?utm_source=dailybrief&utm_medium=email&utm_campaign=DailyBrief2024May14&utm_term=DailyNewsBrief.

    [v]Noah J. Gordon et al., “Why US-China Rivalry Can Actually Help Fight Climate Change,” Internationale Politik Quarterly, March 24, 2023, https://ip-quarterly.com/en/why-us-china-rivalry-can-actually-help-fight-climate-change.

    [vi] Simon Evans Hongqiao Liu, “The Carbon Brief Profile: China,” Carbon Brief, November 30, 2023, https://interactive.carbonbrief.org/the-carbon-brief-profile-china/.

    [vii]“Climatechange,” United Nations, accessed July 18, 2024, https://www.un.org/en/climatechange#:~:text=The%20world’s%20largest%20standalone%20public,to%20tackle%20the%20climate%20crisis.

    [viii]Martin Jacques, “China Will Reach Climate Goal While West Falls Short,” Global Times, accessed July 19, 2024, https://www.globaltimes.cn/page/202402/1306788.shtml#:~:text=There%20has%20been%20constant%20low,than%202050%20for%20carbon%20zero.

    [ix] Steven Lee Myers, “China’s Pledge to Be Carbon Neutral by 2060: What It Means,” The New York Times, September 23, 2020

    [x] Simon Evans, Hongqiao Liu et al, “The Carbon Brief Profile: China,” Carbon Brief, November 30, 2023, https://interactive.carbonbrief.org/the-carbon-brief-profile-china/.

    [xi] China | nationally determined contribution (NDC), accessed July 17, 2024, https://www.climatewatchdata.org/ndcs/country/CHN?document=revised_first_ndc.

    [xii] Simon Evans, Hongqiao Liu et al, “The Carbon Brief Profile: China,” Carbon Brief, November 30, 2023, https://interactive.carbonbrief.org/the-carbon-brief-profile-china/.

    [xiii] Steven Lee Myers, “China’s Pledge to Be Carbon Neutral by 2060: What It Means,” The New York Times, September 23, 2020,https://www.nytimes.com/2020/09/23/world/asia/china-climate-change.html.

    [xiv] Steven Lee Myers, “China’s Pledge to Be Carbon Neutral by 2060: What It Means,” The New York Times, September 23, 2020, https://www.nytimes.com/2020/09/23/world/asia/china-climate-change.html.

    [xv] Simon Evans, Hongqiao Liu et al, “The Carbon Brief Profile: China,” Carbon Brief, November 30, 2023, https://interactive.carbonbrief.org/the-carbon-brief-profile-china/.

    [xvi] Matt McGrath, “Climate Change: China Aims for ‘Carbon Neutrality by 2060,’” BBC News, September 22, 2020, https://www.bbc.com/news/science-environment-54256826.

    [xvii] Simon Evans, Hongqiao Liu et al, “The Carbon Brief Profile: China,” Carbon Brief, November 30, 2023, https://interactive.carbonbrief.org/the-carbon-brief-profile-china/.

    [xviii] World Bank Group, “China Country Climate and Development Report,” Open Knowledge Repository, October 2022, https://openknowledge.worldbank.org/entities/publication/ef01c04f-4417-51b6-8107-b688061a879e.

    [xix] World Bank Group, “China Country Climate and Development Report,” Open Knowledge Repository, October 2022, https://openknowledge.worldbank.org/entities/publication/ef01c04f-4417-51b6-8107-b688061a879e.

    [xx] World Bank Group, “China Country Climate and Development Report,” Open Knowledge Repository, October 2022, https://openknowledge.worldbank.org/entities/publication/ef01c04f-4417-51b6-8107-b688061a879e.

    [xxi] Steven Lee Myers, “China’s Pledge to Be Carbon Neutral by 2060: What It Means,” The New York Times, September 23, 2020.

    [xxii]  Steven Lee Myers, “China’s Pledge to Be Carbon Neutral by 2060: What It Means,” The New York Times, September 23, 2020.

    [xxiii] Simon Evans, Hongqiao Liu et al, “The Carbon Brief Profile: China,” Carbon Brief, November 30, 2023, https://interactive.carbonbrief.org/the-carbon-brief-profile-china/.

     

    Feature Image: wionews.com  China leads the charge: Beijing develops two-thirds of global wind and solar projects.

     

  • China has achieved escape velocity: it is now unstoppable

    China has achieved escape velocity: it is now unstoppable

    The 21st century is shaping up to be the Asian, Eurasian, and Chinese century.

    While the Hegemon spent at least $7 trillion – and counting – on unwinnable Forever Wars, China is spending $1 trillion in an array of Belt and Road Initiative (BRI) projects across the Global South: the emphasis is digital/transportation connectivity corridors. Geoeconomic imperatives intertwined with rising geopolitical influence.

    The four-day, twice-a-decade plenum of the Communist Party of China that took place last week in Beijing, designing an economic road map all the way to 2029, was a stunning affair in more ways than one.

    Let’s start with continuity – and stability. There’s no question after the plenum that Xi Dada, or The Big Panda, will stay on the helm until 2029 – the end of the current five-year economic drive.

    And if Xi is healthy enough, he will stay until 2035: the fateful and uber-game-changing target year for China to exhibit a GDP per capita of $30,000, with massive worldwide reverberations.

    Here, we see the confluence between the progression of “socialism with Chinese characteristics” and the defining contours, if not of a Pax Sinica, at least of the non-Hegemon-centric, multi-nodal world (italics mine).

    The proverbial U.S. Think Tankland/Sinophobia axis has been hysterical on China not being able to sustain a 5% a year growth rate for the next few years – the target once again stressed at the plenum.

    The Chinese themselves have not bothered about the growth rate for a long time, since in 2018 they switched to a strategy of so-called qualitative development, that is, not at the expense of traditional industries, but on the basis of high technologies and the creation of new areas, such as the production of new energy sources and artificial intelligence.

    A Russian analysis by the Center for Geopolitical Forecasts makes a crucial point: “The Chinese themselves have not bothered about the growth rate for a long time, since in 2018 they switched to a strategy of so-called qualitative development, that is, not at the expense of traditional industries, but on the basis of high technologies and the creation of new areas, such as the production of new energy sources and artificial intelligence.”

    That’s the rationale behind Made in China 2025 – which is being implemented at breakneck speed: high-tech development leading the way towards a “high-level socialist market economy”, to be consolidated by 2025 and fully constructed by 2035.

    The next step will be to attain the status of “modernized socialist power” by 2049, at the 100th anniversary of the People’s Republic of China (PRC).

    The plenum proved once more that “socialism with Chinese characteristics” – or, for the recalcitrant, Chinese-modified capitalism – is “people-centric”. The supreme values are national interest and the people’s interests – attested by the fact that large private corporations remain under the strategic control of the CPC.

    It’s idle to try to find in the final communique at the end of the plenum any restrictions on private capital on the path to “universal prosperity”. The key point is that the role of capital should always be subordinated to the concept of “socialism with Chinese characteristics”.

    Watch the reform ship steadily sailing

    Everything is explained here in nearly didactic terms, chronicling the birth of the “Decision of the CPC Central Committee on further comprehensive deepening of reforms to promote Chinese modernization”.

    What is now already referred to colloquially all across China as “The Decision” spreads across 15 parts and 60 articles, divided into three main sections, proposing more than 300 important reforms.

    “The Decision”, in full, has not yet been published; only the road map of how Beijing planners got there. Of course, this is no mere policy paper; it’s a quintessentially CPC-style dissertation in which the details of economic and political measures are obscured by clouds of images and metaphors.

    Take a look, for instance, at this passage:

    “To ensure that the reform ship sails forward steadily, the ‘Decision’ proposes that further comprehensive deepening of reform must implement the “six principles”: adhere to the party’s overall leadership, adhere to the people-centred approach, adhere to the principle of maintaining the integrity and promoting innovation, adhere to system building as the main line, adhere to the comprehensive rule of law, and adhere to a systematic approach.”

    Most of the “Decision” – 6 parts in a total of 13 – is about economic reform. Will China pull it off? Of course, it will.

    Just look at the precedents. In 1979, the Little Helmsman Deng Xiaoping started to transform a nation of farmers and peasants into a well-oiled machine of efficient industrial workers. Along the way, GDP per capita was multiplied by no less than 30 times.

    Now, the ramifications of Made in China 2025 are turning a nation of factory workers into a nation of engineers. Of 10,5 million university graduates a year, a third are engineers.

    The emphasis on AI has led, among other examples, to the automobile industry being able to produce a $9,000 EV in complete automation and make a profit. China is already a global leader in EVs (BYD building plants in Brazil, Thailand, Turkey, Hungary), solar power, drones, telecom infrastructure (Huawei, ZTE), steel, shipbuilding – and soon, also semiconductors (thank you, Trump sanctions).

    While the Hegemon spent at least $7 trillion – and counting – on unwinnable Forever Wars, China is spending $1 trillion in an array of Belt and Road Initiative (BRI) projects across the Global South: the emphasis is digital/transportation connectivity corridors. Geoeconomic imperatives intertwined with rising geopolitical influence.

    Hegemon hysteria aside, the fact is the Chinese economy will grow by a whopping $1.7 trillion only in 2024. That is more than in all but the last three years – because of the Covid effect.

    And Beijing borrowed exactly zero yuan for this growth. The U.S. economy, by comparison, may grow by $300 billion in 2024, but Washington had to borrow $3.3 trillion for that to happen.

    Researcher Geoff Roberts has compiled a very useful list of what China is doing right.

    And when it comes to the nitty gritty, the numbers are staggering. Here are just a few, apart from GDP growth:

    • Foreign goods trade is up 6.1% to $2.9 trillion year-on-year.
    • The trade surplus is at $85 billion, up 12% compared to 2023.
    • ASEAN trade is up by 10.5% to $80 billion; China is the number one trade partner of individual ASEAN members.
    • China had a record crop of 150 million tons of cereal grains.
    • The courier sector handled 80 billion parcels, up 23% year-on-year.
    • SMIC is the world’s number two pure-play foundry after Taiwan’s TSMC.
    • China Telecom paid $265 million for 23% of QuantumCTek, the patenter of Micius, the world’s first quantum communications satellite.
    • Commercial aerospace launched 39% of China’s 26 rockets.
    • Invention patents rose 43% to 524,000. China is the first country with 4 million domestic invention patents in force.
    • Baidu’s 1,000 robotaxis in Wuhan will break even in Q4 and will be profitable next year.
    • China has 47% of the world’s top AI talent. It added no less than 2000 AI courses to school and college curricula since 2019.
    • On world-class institutions doubling as research leaders, 7 out of 10 are Chinese, including the top one: the Chinese Academy of Sciences, ahead of Harvard.

    Exceptionalist China “experts” believe their own fantasy that the U.S. allied with occupied Japan, Germany and South Korea would be able to match and surpass China’s pull with the Global Majority, because they have more resources and more capital.

    Nonsense. Even more nonsense is to believe that the Hegemon’s NATO “partners” – as in vassals – will follow the leader in creating cutting-edge technology.

    The high-speed train that matters has already left the station. The 21st century is shaping up to be the ‘Asian, Eurasian, and Chinese’ century.

     

    Feature Image Credit: The Diplomat

    The article is republished from the Strategic Culture Foundation.

  • “And Now to some serious Governance”

    “And Now to some serious Governance”

    A time comes for each leader and government to rise above pettiness, discarding ill will and hatred towards all. For the BJP, now uniquely in its third term, this is the time to show the nation that it is a party with a difference. For the opposition equally, this is the time to cooperate with the government on critical issues impacting the country.  

     

    Since my retirement from active service, I have avoided politics and political writings like the plague, but the avoidable happenings of the past few months have caused me, like am sanguine would have to millions of our countrymen, pain and a sense of despair.

    India has conducted over 18   general elections to its Parliament since 1952 with a lot of fury and vibrancy, but the Lok Sabha 2024 general elections were indeed an example of abysmally low-level politics transcending our better senses.

            How the world’s largest democracy indulged in its Lok Sabha 2024 elections was hardly complimenting to it considering the unquestionable fact that among the emerging nations in the world, call it from the Global South, the conduct of our elections showed some among those participating in poor light. Between competing political parties, enlightened debates and mutual civility were sadly lacking.   India has conducted over 18   general elections to its Parliament since 1952 with a lot of fury and vibrancy, but the Lok Sabha 2024 general elections were indeed an example of abysmally low-level politics transcending our better senses. India, which carries a fair amount of moral authority and is considered an example of a true and vibrant democracy, cannot let its hallowed image be sullied attributable to the selfish electoral games of some of its political leaders. The party in power at the Centre, the principal Opposition party and all those regional parties at the helm in the states have to display adequate maturity and a modicum of propriety and civility towards each other and not politicize each and every aspect of governance or national issues impacting India. The opposition, as it shows the mirror to the government on critical issues of governance, must not criticise each and every act of the government as a matter of routine.

             With the outcome of the general elections now done and dusted and the previous BJP government back in power, albeit with a clear reduction in its seats tally from 303 down to 240, it must get down to the exacting business of good governance from the Centre. That the same government, with its experience of the last ten continuous years in power, fielding more or less the same faces in the Cabinet in critical ministries and importantly serviced by the same bureaucrats should have, relatively speaking, not such an arduous task in governance. However, the thrust for fair, equitable, and sensitive handling of all critical matters across the nation has to come from the top political leadership. All our states must never feel discrimination by the Centre, especially in financial allocations urgently required for developmental works and disaster management. Additionally, the new government must take stern measures to keep rising inflation and unnecessary governmental expenditure under check before the economy takes a severe nose-dive.

             The Modi government, with the continuous experience of the last ten years, will have more than a good idea of the systemic improvements required and about areas needing additional financial resources and effort. It is unnecessary to worry too much about criticisms from the opposition but to carry on regardless in developmental works, without fear or favour, and with impartiality towards all the states in the true spirit of federalism. A time comes for each leader and government to rise above pettiness, discarding ill will and hatred towards all. For the BJP, now uniquely in its third term, this is the time to show the nation that it is a party with a difference. For the opposition equally, this is the time to cooperate with the government on critical issues impacting the country.

             New Delhi’s hands will be full of the nation’s diverse and formidable challenges, requiring attention and effectiveness. On the foreign policy front, India will have to walk the tightrope of maintaining strategic autonomy and sustaining its good relations with both the US and Russia. However, as it determinedly confronts an overly assertive China, India needs to use its economic clout and sophisticated diplomacy to get its South Asian neighbourhood closer to it and each other, avoiding the debt trap diplomacy and financial machinations of China.

    The number of terror-related incidents in J&K has gone up substantially in the last three months, and Pakistan will have to be kinetically chastened.

          India must, at the appropriate level, convey to China that their confrontationist attitude towards us will be harmful to the Chinese, too and may propel India to rethink its existing Tibet policy. Nevertheless, India must maintain the utmost vigil along the 3485 km Line of Actual Control/ IB, which it shares with  China. Meanwhile, Pakistan once again needs to be cautioned against stepping up terror activities in J&K  or elsewhere in the Indian hinterland. India is in full knowledge of Pakistan’s many fault lines. Still, it has refrained from exploiting these, and Pakistan must also cooperate in ensuring a peaceful and prosperous South Asian neighbourhood independent of China’s wily stratagems. The number of terror-related incidents in J&K has gone up substantially in the last three months, and Pakistan will have to be kinetically chastened.

    Meanwhile, India’s preparations to successfully improve its security capabilities to confront a two-front war must go ahead with realism and an unfailing determination. Measures to augment capital expenditure for major defence acquisitions must be identified. Transformative defence reforms like the introduction of integrated theatre commands will need the attention of the Centre. In addition, India must take all steps to restore peace in our restive NE states.

             The Modi government has come in for some criticism abroad on its human rights record and dealings with its Muslim population. This unjust criticism must be dealt with judiciously and with maturity. India’s overall inclusiveness and celebration of its diversity are unique examples for the entire world, especially the nations of the Global South. We must never deviate or be even seen to shift from this noble orientation.

    Reduction of the yawning gap between the countless ultra-rich and those millions in abject poverty is essential as we boast of becoming the 5th largest economy in the world. The many human indices where we are faltering also need to be addressed.

             As economic strength is the pillar that propels and sustains progress, the Modi government must take measures to improve our economic health. Reduction of the yawning gap between the countless ultra-rich and those millions in abject poverty is essential as we boast of becoming the 5th largest economy in the world. The many human indices where we are faltering also need to be addressed.

             By all yardsticks, India is deservingly on the cusp of acquiring a seat on the global high table. Let us not squander away this golden opportunity by internal squabbling but instead work together in addressing crucial issues that affect our nation; we must seize this opportunity.

    Feature Image Credit:  vskbharat.com    

    Cartoon Credit: Times of India

  • Globalisation’s Sunset

    Globalisation’s Sunset

    Are we witnessing the end of globalisation and the rise of economic nationalism? Who is responsible for this state of affairs? For many, the villain is clearly the US and its allies in the West. The reason is the rise of China as the world’s manufacturing and technology superpower. China is beating the West at its own game, and the US is shaken by the visible signs of the end of its hegemony and the dominance of the West.  Globalisation is being throttled by the West in a futile attempt to end China’s rise. The result will be catastrophic for the Global South in its aspirations for accelerated development. Former Venezuelan ambassador and Princeton scholar Alfredo Toro Hardy analyses what he sees as the sunset of globalisation.

    – Team TPF

     

    Economic globalisation was the offspring of the neoliberal ideology that prevailed after the collapse of the Soviet Union. The globalisation process took off in the mid-nineties, as was identified by the firm support given to it by leaders such as Bill Clinton and Tony Blair, particularly the former, who commanded the world’s largest economy.

                Its most emblematic expressions would be the Washington Consensus, the creation of the World Trade Organization in 1995, and China’s entry into these organisations in 2001. The first resulted from the convergence of positions between the U.S. Treasury Department and International Financial Organizations based in Washington. It would translate into a ten-point recipe called to set in motion the economic liberalisation of distressed and closed economies, chiefly the previous communist ones. The second involved the global homogenisation of rules in matters as diverse as manufacturing, agriculture, services, labour standards or intellectual property, as well as the abandonment by its members of industrial policies and protectionism. The third represented the insertion into the global labour market of more than a billion human beings whose working costs were but a fraction of those in developed countries. This would be accepted and even promoted by the United States under the assumption that a China open to the world’s economy would eventually open itself to the values of liberal democracy as well.

                The importance of neoliberal ideology, as a determining factor of this process, would be key. As a matter of fact, for a long time the leading force in the world economy, America’s economy, was characterised by its industrial policies, protectionism, and vertical integration of its corporations. The federal government’s industrial policies became a catalyst for economic development, either through direct investments and engagement or through incentives for the private sector to follow a particular course of action. The countless products and services incorporated into the American technological repository resulting from NASA’s R&D efforts exemplify these policies. They still represent the broad shoulders on which the country’s private technological sector stands. Protectionism expressed itself through tariffs and non-tariff barriers to protect domestic production from foreign competition. Vertical integration, on its part, involved direct control by U.S. corporations in their production and distribution channels. Hence, outsourcing did not figure in their strategies. It is worth adding that even President Reagan, despite his deregulatory crusade, supported his country’s industrial policies and imposed protective barriers against Japanese competition (Foroohar, 2022).

    Globalization in question

                For decades, globalisation has represented an unchallenged paradigm. Under its course, China reached the anteroom of world economic supremacy, numerous cheap labour economies, particularly in Asia, emerged strongly, and large corporations relying on the revolutions in information technology, communications and transports outsourced and dispersed their production and services (again mainly in Asia). Actually, it was in the emerging Asian countries where, in nine of every 10 cases, the great beneficiaries of globalisation were concentrated. Moreover, it was estimated that between 2020 and 2030, the global middle class would jump from 3,300 million to 4,900 million people, with 80% of that jump taking place in Asia (Milanovic, 2018, p. 19; OCDE, 2010). However, for some time now, globalisation has been under serious questioning. Among the reasons behind this, the following should be outlined: the emergence of powerful populist movements in the Western World; climate change distortions upon trade and the impact on climate itself, resulting from maritime trade over long distances; and economic and political nationalism in China.

                Populism is, to a large extent, directly related to the immense social upheavals caused by the massive outsourcing of jobs to the cheapest labour economies. In 2000, Clinton predicted that globalisation would allow the export of products without exporting jobs. Exactly the opposite happened, though, seriously affecting the social fabric of the United States and its European counterparts. This significantly eroded their democratic systems. Climate change, with hurricanes, floods, and other incidents, has increased the risk of global supply chains, resulting in annual revenue losses of up to 35% for companies. (McKinsey and Company, 2020).

    Conversely, the massive mobilisation of supertankers worldwide generates up to 14% of the total greenhouse gas emissions affecting the planet. (Prestowitz, 2022). Indeed, “the ultimate buyer [of final products] remained an ocean or a continent away” (O’Neil, 2022, p. 113). In addition, contrary to what American promoters of China’s emergence had suggested, the country’s economic prosperity has led to an increasingly nationalistic and authoritarian model. Far from getting closer to U.S. values, China has emphasised its economic nationalism and geopolitical aggressiveness within the context of a growing rivalry with the United States.

    The triggering elements

                However, even if disappointment with globalisation continued to grow, the triggering elements that would end up clearly tilting the balance against it were still missing. COVID and Russia’s invasion of Ukraine took care of it. Twenty trillion U.S. dollars in goods rely on global supply chains. Especially so as the disaggregation of production translates into millions of components, parts and final manufacturers moving in every direction. (McKinsey and Company, 2020). This vertiginous dissemination of productive processes led to unexpected, sudden, and massive disruptions during the pandemic. As a result, global economic interdependence choked. The endless Zero COVID policy implemented in China, the geographic nerve centre for global trade, exponentially aggravated this situation. The result was none other than inflation that brought to mind the seventies and has not yet been controlled.

                This was joined shortly afterwards by the impact of the invasion of Ukraine by Russia. One that not only disrupted vital energy and food supply chains but fundamentally brought geopolitics back to the global scenario through the main door. As if the emerging Cold War between China and the U.S. had not already been enough to undermine faith in globalisation, events in Ukraine made security the central component of the international order. It was a sort of fall of the Berlin Wall in reverse. One that brought down the relevance of economics and propelled that of politics. Olaf Scholz’s “global zeitenwende” clarified that a new strategic culture and national strategy would become his country’s new priority (Scholtz, 2023). Under such circumstances, placing economic security in distant and potentially hostile hands was no longer a rational option.

    Back to the past

                Not surprisingly, the United States began reverting to policies that preceded globalisation. That is, to industrial policies, to protectionism, and the vertical integration of its corporations. Indeed, before losing the House of Representatives to Republicans in November 2022, Biden’s Democrats passed several laws that embody industrial policies. A perfect example is the so-called energy revolution, with 490 billion dollars being involved in incentives to guide private investment towards generating clean energy sources. It also allowed the federal government to intervene in medicine prices through direct negotiations with the pharmaceutical industry. In the same direction went the laws that stimulated competitiveness and innovation, the superconductors industry, and infrastructural development. In parallel, the “Buy American” policy, subsidies to the domestic industry, and the maintenance of the tariffs imposed by Trump represented an evident protectionist impulse. Meanwhile, American corporations, in tune with these policies and in reaction to the risks of dismembering their production and services on a global scale, are opting for vertical integration and direct control of their activities. This implies, by its very nature, a production centred on the local or the regional.

    Getting back home

                All of the above factors contribute to industries’ onshoring and supply chains. In 2021, of the 709 large U.S. manufacturing corporations consulted, 83% responded that they would very likely or probably return their production operations to the United States. (Ma, 2021). Numerous leading American and foreign corporations are opting to produce in the U.S. to benefit from the new incentives put in motion by the Biden administration. This list includes, among many others, Intel, GM, US Steel, Taiwan Semiconductor Manufacturing (TSMC), Toyota, Samsung and Micron Technology. The amount of their investments, in tens of billions of dollars in many cases, speaks for itself. The motivation behind this impressive move was well reflected in the words of the larger-than-life founder of TSMC, Morris Chang: “Globalization and free trade are almost dead and unlikely to return”. (Cheng, 2022; Doherty and Yardeni, 2022). However, together with this on-shoring move, there are also parallel movements of near-shoring or friendly shoring nature, where manufacturing and supply chains are being circumscribed to neighbours or traditional allies that do not represent a security risk. With the world’s largest economy becoming protectionist, it will be difficult for globalisation to retain its influence, especially as Europe rapidly evolves in the same direction.

    Globalization last hope

                Until recently, an area of globalisation seemed to be relatively protected from these kinds of upheavals: the digital ecosystem. According to a 2016 report, the rapid flows of international trade and finance that characterised the 20th century appear to have flattened (…), yet globalisation has not reversed. Indeed, digital flows are growing very quickly.” (McKinsey Global Institute 2016). However, a few months ago, Brookings published a highly pessimistic report regarding the future of this sector. According to it: “Historically, the arrival of the global web created an opportunity for the interconnection of the world under a global digital ecosystem. However, mistrust between nations has led to the emergence of digital barriers, which imply their focus on controlling their digital sovereignty (…). These developments threaten current forms of interconnectivity, causing high-tech markets to fragment and retract, to varying degrees, upon national states”. (Brookings, 2022). Thus, the last sector of globalisation, which still showed significant dynamism, is also reversing under the impact of geopolitics. Globalisation, no doubt about it, seems to be experiencing sunset.

     

     

    References

    Brookings (2022). “The geopolitics of AI and the rise of digital sovereignty”, December 8.

    Cheng, Ting Fang (2022). “TSMC founder Morris Chang says globalization is ‘almost dead’, Nikkei, December 7.

    Doherty, J. and Yardeni, E. (2022). “Onshoring: Back to the USA”, Predicting the Markets, February 5.

    Foroohar, Rana (2022). Homecoming. New York: Crown.

    Ma, Cathy (2021). “83% of North American Manufacturers are Likely to Reshore Their Supply Chains”, Thomas, June 30.

    McKinsey & Company (2020). “Could climate change become the weak link in your supply chain”, August 6.

    McKinsey Global Institute (2016). “Digital Globalization: The New Era of Global Flows”, March.

    Milanovic, Branko (2018). Global Inequality. Cambridge, Mass.: The Belknap Press of Harvard University Press.

    OCDE (2010). “The Emerging Middle Class in Developing Countries”, Working Paper Number 285.

    O’Neil, Shannon K. (2022). The Globalization Myth. New Haven: Yale University Press.

    Prestowitz, Clyde (2022). “Is the U.S. Moving Out from Free Trade? Industrial Policy Comes Full Circle”, Clyde’s Newsletter, December 12.

    Scholz, Olaf (2023). “The Global Zeitenwende”. Foreign Affairs, January/February.

     

    Feature Image Credit: worldcrunch.com (Globalization as Ideology is Dead and Buried).

    Image Credit: Gulliver’s Travails (Paresh Nath, The Khaleej Times, UAE) www.uncommonthoughts.com

  • The Perils and Promise of the Emerging Multipolar World

    The Perils and Promise of the Emerging Multipolar World

    The world economy is experiencing a deep process of economic convergence, according to which regions that once lagged the West in industrialisation are now making up for lost time.

    We are therefore entering a post-hegemonic, multipolar world.

    The World Bank’s release on May 30 of its latest estimates of national output (up to the year 2022) offers an occasion to reflect on the new geopolitics. The new data underscore the shift from a U.S.-led world economy to a multipolar world economy, a reality that U.S. strategists have so far failed to recognize, accept, or admit.

    The World Bank figures make clear that the economic dominance of the West is over. In 1994, the G7 countries (Canada, France, Germany, Italy, Japan, U.K., U.S.) constituted 45.3% of world output, compared with 18.9% of world output in the BRICS countries (Brazil, China, Egypt, Ethiopia, India, Iran, Russia, South Africa, United Arab Emirates). The tables have turned. The BRICS now produce 35.2% of world output, while the G7 countries produce 29.3%.

    As of 2022, the largest five economies in descending order are China, the U.S., India, Russia, and Japan. China’s GDP is around 25% larger than the U.S.’ (roughly 30% of the U.S. GDP per person but with 4.2 times the population). Three of the top five countries are in the BRICS, while two are in the G7. In 1994, the largest five were the U.S., Japan, China, Germany, and India, with three in the G7 and two in the BRICS.

    The core U.S.-led alliance, which includes the U.S., Canada, U.K., European Union, Japan, Korea, Australia, and New Zealand, was 56% of world output in 1994, but now is only 39.5%. As a result, the U.S. global influence is waning.
    As the shares of world output change, so too does global power. The core U.S.-led alliance, which includes the U.S., Canada, U.K., European Union, Japan, Korea, Australia, and New Zealand, was 56% of world output in 1994, but now is only 39.5%. As a result, the U.S. global influence is waning. As a recent vivid example, when the U.S.-led group introduced economic sanctions on Russia in 2022, very few countries outside the core alliance joined. As a result, Russia had little trouble shifting its trade to countries outside the U.S.-led alliance.
    The world economy is experiencing a deep process of economic convergence, according to which regions that once lagged the West in industrialization in the 19th and 20th centuries are now making up for lost time. Economic convergence actually began in the 1950s as European imperial rule in Africa and Asia came to an end. It has proceeded in waves, starting first in East Asia, then roughly 20 years later India, and for the coming 20-40 years in Africa.

    These and some other regions are growing much faster than the Western economies since they have more “headroom” to boost GDP by rapidly raising education levels, boosting workers’ skills, and installing modern infrastructure, including universal access to electrification and digital platforms. The emerging economies are often able to leapfrog the richer countries with state-of-the-art infrastructure (e.g., fast intercity rail, 5G, modern airports and seaports) while the richer countries remain stuck with aging infrastructure and expensive retrofits. The IMF’s World Economic Outlook projects that the emerging and developing economies will average growth of around 4% per year in the coming five years, while the high-income countries will average less than 2% per year.

    It’s not only in skills and infrastructure that convergence is occurring. Many of the emerging economies, including China, Russia, Iran, and others, are advancing rapidly in technological innovations as well, in both civilian and military technologies.

    China’s capacity for innovation and low-cost production is underpinned by enormous R&D spending and its vast and growing labor force of scientists and engineers.

    China clearly has a large lead in the manufacturing of cutting-edge technologies needed for the global energy transition, including batteries, electric vehicles, 5G, photovoltaics, wind turbines, fourth generation nuclear power, and others. China’s rapid advances in space technology, biotechnology, nanotechnology, and other technologies is similarly impressive. In response, the U.S. has made the absurd claim that China has an “overcapacity” in these cutting-edge technologies, while the obvious truth is that the U.S. has a significant under-capacity in many sectors. China’s capacity for innovation and low-cost production is underpinned by enormous R&D spending and its vast and growing labor force of scientists and engineers.

    Despite the new global economic realities, the U.S. security state still pursues a grand strategy of “primacy,” that is, the aspiration of the U.S. to be the dominant economic, financial, technological, and military power in every region of the world. The U.S. is still trying to maintain primacy in Europe by surrounding Russia in the Black Sea region with NATO forces, yet Russia has resisted this militarily in both Georgia and Ukraine. The U.S. is still trying to maintain primacy in Asia by surrounding China in the South China Sea, a folly that can lead the U.S. into a disastrous war over Taiwan. The U.S. is also losing its standing in the Middle East by resisting the united call of the Arab world for recognition of Palestine as the 194th United Nations member state.

    Yet primacy is certainly not possible today, and was hubristic even 30 years ago when U.S. relative power was much greater. Today, the U.S. share of world output stands at 14.8%, compared with 18.5% for China, and the U.S. share of world population is a mere 4.1%, compared with 17.8% for China.
    The trend toward broad global economic convergence means that U.S. hegemony will not be replaced by Chinese hegemony. Indeed, China’s share of world output is likely to peak at around 20% during the coming decade and thereafter to decline as China’s population declines. Other parts of the world, notably including India and Africa, are likely to show a large rise in their respective shares of global output, and with that, in their geopolitical weight as well.

    We are therefore entering a post-hegemonic, multipolar world. It too is fraught with challenges. It could usher in a new “tragedy of great power politics,” in which several nuclear powers compete—in vain—for hegemony. It could lead to a breakdown of fragile global rules, such as open trade under the World Trade Organization. Or, it could lead to a world in which the great powers exercise mutual tolerance, restraint, and even cooperation, in accord with the U.N. Charter, because they recognize that only such statecraft will keep the world safe in the nuclear age.

     

    This article was published earlier in commondreams

    Feature Image Credit: The World Financial Review

  • The United States as an Empire in Decline: A Talk by Jeremy Kuzmarov

    The United States as an Empire in Decline: A Talk by Jeremy Kuzmarov

    The Peninsula Foundation organised a webinar titled ” World Order Turmoil: The Reality of American Empire” on the 19th of January 2024. The main talk was given by the Chief Guest Jermey Kuzmarow and further comments was provided by the Discussant, Mohan Guruswamy. The event led to excellent discussions with critical comments from both the speakers. The discussions were moderated by Air Marshal M Matheswaran, President-TPF.

    Jeremy Kuzmarov is Managing editor of CovertAction Magazine and author of five books on U.S. foreign policy. His website can be accessed here. Mohan Guruswamy is our Governing Council member and a Distinguished Fellow and a prolific writer on economics, security, and geopolitics.

     

    Given below is the text of jeremy Kuzmarow’s talk, along with questions and answers.

     

    (Source: tunnelwall.blogspot.com)

    In September, I attended a talk sponsored by the Tulsa Committee on Foreign Relations by an inside-the-beltway pundit named Ali Wyne, a former senior fellow at the pro-NATO Atlantic Council and David Rockefeller fellow at the elitist Trilateral Commission.

    Wyne told the audience in so many words that the sun had not yet set on the American empire; that the Biden administration was outmaneuvering the evil Putin in Ukraine; and that the U.S. was still a beacon of hope for the rest of humanity.

    Toward the end, Wyne personalized the talk, discussing how his family had migrated to the U.S. from Pakistan with nothing, and that through hard work he was able to achieve the American dream.

    But Wyne seemed oblivious to the fact that that dream is increasingly unreachable for the majority of people in an increasingly stratified society marred by a decline in civilian manufacturing and public services and skyrocketing education costs.

    Wyne also failed to point out that the American dream historically was achieved at the expense of Third World nations that were looted by U.S. corporations, and by endless wars that killed millions of people.

    Wyne’s delusional worldview is underscored in a new book by Fadi Lama, Why the West Can’t Win: From Bretton Woods to a Multipolar World (Atlanta: Clarity Press, 2023), which shows that the American Century has ended and that a new multipolar world order has been established in which economic dynamism lies primarily in the East.

    Lama is an international adviser for the European Bank for Reconstruction and Development (EBRD) and geopolitical consultant with a Ph.D. in mechanical engineering from the Georgia Institute of Technology (Georgia Tech).

    He points out at the beginning of his book that in 1500, prior to the era of Western colonialism, there was a relatively fair political-economic world order with a close equilibrium between population and wealth generation. But by the end of World War II, the West accounted for only 30% of global population but 60% of global Gross Domestic Product (GDP).

    When many colonized nations gained their independence, the West imposed a neo-colonial framework that enabled their resources to be exploited by Western multinational corporations.

    Some countries on the front lines of the Cold War, such as West Germany, Japan and South Korea, were allowed unhindered development as part of a geopolitical strategy designed to keep them within the Western orbit and curb the advance of Communism. However, being pseudo-independent states, when the political necessity was removed, they were cut back to size.

    The liberation of China in the 1949 Communist-led revolution (an event known in the U.S. as the “loss of China”) was a historical turning point that began to reverse the Western monopolization of wealth and power and set the stage for the re-empowerment of the Global South.

    By 2017, China—known as the “sick man of Asia” in the 19th century following its de facto colonization of Great Britain following the Opium War—was the world’s number one economy with its real goods production amounting to 24% of global real goods production.

    Under CCP leadership, China regained its sovereignty and lifted 770 million people out of poverty, with homelessness now being practically non-existent.

    According to Lama, China’s staggering economic success resulted from a centralized political system in which commercial banking was dominated by the public sector. Central bank financial and monetary policies were further put under the control of the Chinese government, which implemented policies serving the national interest rather than those of the Western financial oligarchy.

    China’s economic success contrasts markedly with the growing economic stagnation in Western countries and the U.S. resulting from the neo-liberal economic model in which the private sector is elevated above the public sector.

    By 2014, the top 0.1% in the U.S. owned as many assets as the bottom 90%, an obscene inequality ratio accompanied by a dramatic rise in poverty, which had been reduced massively in China under more socialist-oriented policies.

    China’s superior state-centric economic model is currently being followed by Russia which has withstood record U.S. sanctions under Vladimir Putin’s leadership through a renewed commitment to economic autarky (self-sufficiency) and investment in local industries and technologies.

    Following the collapse of the Soviet Union, U.S. strategic planners saw a golden opportunity to reduce Russia’s status to that of a fourth-rate power and to enable the plunder of its bountiful natural resources.

    The overzealous policies backfired, however, pushing Russia into alliance with China that signifies the birth of a new multi-polar world order that holds the potential to restore the global economic parity from 1500—before Western colonization took root.

    Lama emphasizes the fact that Russia now provides food aid in Afghanistan and Africa and fertilizer to poor countries, and has forged growing relations with both China and Iran, the latter having gained independence from Western colonial tutelage in 1979 when the Shah was overthrown.

    Lama finds significant economic synergy and growing win-win cooperation in the economic, cultural, scientific and military fields between China, Russia and Iran, which he says are “de facto allies in the struggle for a ‘Fair World.’”

    Russia and China today are leading the way in space exploration, clean energy technologies as well as cutting-edge missile technologies at a time that U.S. weapons systems are proving to be extraordinarily costly and inefficient owing to a Byzantine Pentagon contracting system and under-skilled workforce due to the skyrocketing costs of higher education.

    Today’s shifting power balance can be compared with 1997 when “‘the empire’ had control over three of the top four energy reserves: Venezuela was a U.S. vassal, Russian energy resources were under control of the Money Powers (Western financial oligarchs) via their proxy Russian oligarchs, and Saudi Arabia was a compliant U.S. tributary. Of the top four, only Iranian reserves were out of the Money Powers’ control.”

    By 2022, Lama writes, “the Empire had lost control of the top three reserves, Venezuela, Iran and Russia, while Saudi Arabia is no longer as compliant as it was in 1997.”

    What happened in the interim was a period of heightened military intervention and imperial overreach resulting in a counter-mobilization that signifies the end of the era of Western empires dating back to the 16th century.

    Bretton Woods: From Military to Financial Colonialism

    The imperial framework after World War II was established through the Bretton Woods economic system, which Lama says was designed to “lock countries into a financial structure controlled by the West.”

    Lama writes that this structure “requires central bank governors be independent of their governments, but dependent on rules established by the Bank for International Settlements (BIS), at the top of the pyramid in the Bretton Woods system.

    Established in 1930 to handle reparations payments imposed on Germany at the Versailles Conference after World War I, BIS had helped finance Hitler’s rise to power and was owned by central banks, setting policies for them that directly influenced the global economy.

    Franklin D. Roosevelt had proposed liquidating the BIS due to its cooperation with Nazi Germany, though the resolution that he sponsored to that effect at the July 1944 Bretton Woods Conference at which the post-World War II monetary and political global structure was being set, was revoked after Roosevelt’s death.

    John Maynard Keynes addressing the July 1944 Bretton Woods Conference in New Hampshire. [Source: centerforfinancialstability.org

    According to Lama, when some newly decolonized countries tried to adopt an alternative economic arrangement to Bretton Woods, their leaders (Togo’s Sylvanus Olympio, Egypt’s Nasser; Indonesia’s Sukarno; Democratic Republic of Congo’s Lumumba; Iran’s Mossadegh; Ecuador’s Jaime Roldos; Panama’s Omar Torrijos) were eliminated by wars, coups or assassinations [over a 25-year span].

    Economic hit men would descend on developing countries offering loans for infrastructure projects whose real purpose was to plunge these countries into debt so they would become dependent on foreign creditors and their economies could be restructured along neo-liberal lines and in the service of multi-national corporations.

    A pillar of the Bretton Woods system was that the U.S. dollar was established as the international trade currency, which was convertible into gold at the fixed rate of $35 per ounce of gold.

    With the decline of U.S. competitiveness in the 1960s, the Nixon administration froze the convertibility of the U.S. dollar in gold and, instead, made it convertible to oil, provided that oil was sold only in U.S. dollars.

    This led to a dramatic increase in the price of oil and petrodollar arrangement with Saudi Arabia by which the U.S. provided military protection and weapons to the Saudis in exchange for the promise of them trading their oil in U.S. dollars and using income from oil to buy U.S. Treasury bills. Interest on these sales was then spent by the U.S. Department of the Treasury on infrastructure projects in Saudi Arabia to be executed by U.S. companies.

    The fact that other countries had to hold reserves in U.S. dollars to cover their oil imports allowed the U.S. to incur high trade deficits bred by deindustrialization in the neo-liberal era without causing a depreciation of the U.S. dollar.

    However, this is no longer sustainable in the long term and Russia and China are spearheading a shift in the global economy by which oil and other commodities are no longer being traded in U.S. dollars, ushering in the end of the American Century.

    The Money Power

    Lama’s book includes discussion of the growth of the Western financial oligarchy, or what he calls the Money Power, who are the major shareholders of the leading hedge funds (BlackRock, Vanguard and State Street) and have become the absolute rulers over society.

    According to Lama, the Money Power is well placed to control elections in Western democracies and control mass media in all its forms, print, TV and social media platforms.

    They support free trade agreements designed to usurp what little is left of national sovereignty and a neo-liberal vulture economy in which all aspects of the economy are privatized in order to maximize corporate profits.

    The U.S. decline has been fueled by the Money Power’s recognition that maintaining a strong manufacturing base was no longer necessary when trade deficits could be offset by currency manipulation owing to Nixon’s convertibility of the U.S. dollar to oil and the trade in oil around the world in U.S. dollars.

    The U.S. economy is increasingly dominated by the financial sector which flourishes at the expense of other vital economic sectors, leading to the high wealth concentration and impoverishment of society made worse by austerity measures entailing cutbacks in social and other government services.

    Russophobia, Sinophobia and the End of an Era

    The intense Russophobia cultivated in the U.S. media over the last decade is the result of the Money Power’s lust for Russia’s immense wealth, which it was starting to gain access to in the 1990s before Vladimir Putin reasserted national control over Russia’s economy.

    The anti-Russia propaganda has had the greatest impact on the educated classes, as 77% of Americans with post-graduate degrees considered Russia an enemy in a March 2022 poll, compared to 66% with high school education or less.

    Russophobia has been combined with an ascendant Islamophobia and Sinophobia, whose purpose is to mobilize public support for confronting the troika of powers (Russia, Iran and China), which threaten Western hegemony.

    According to Lama, if a date were to be identified for the end of the U.S. empire, it would be January 8, 2020, when Iran avenged the assassination of General Qasem Soleimani by attacking a U.S. air base in Iraq and displaying Iran’s weapons capability.

    Afterwards, the U.S. Central Command (Centcom) significantly relocated its headquarters from Doha, Qatar, just 125 miles from Iranian shores, to safety in Tampa, Florida.

    While the current U.S. war in Gaza has created a renewed pretext for expanded U.S. military intervention in the Middle East, Lama’s book makes clear that the U.S. could not win a war against Iran for regime change.

    Contrary to Wyne’s analysis, the U.S. has also been outmaneuvered in Ukraine, whose army is in a state of disrepair after a failed counteroffensive. It is further being outmaneuvered by China, which is winning hearts and minds through the Belt and Road Initiative (BRI) that provides low-interest loans to countries for infrastructural development with no strings attached.

    In sum, the Great Game for world domination appears to be up and the Money Power has lost. That is why they are behaving so erratically in manufacturing crisis after crisis as they desperately attempt to sustain a fading world order defined by profound inequality and injustice. For the rest of my talk, I will try and further answer some of the questions that were posed prior to the seminar:

    Question 1) This dealt with consistent U.S. war making as a tool in which the US tried to sustain its hegemony, and growing pushback with the rise of BRICS, Shanghai Cooperation Organization and Rise of China? How will all this shape the future world order?

    Answer: There is the threat of a world war breaking out provoked by the U.S. as the U.S. cannot tolerate geopolitical competition or being relegation to a second rate power, and will respond violently—as it is already doing. Currently, the U.S. is provoking wars simlutaneously with Russia, China and the Middle East, with catastrophic consequences already for the people of Ukraine, Russia and Gaza. The great Australian journalist John Pilger produced a documentary in 2016 warning about the U.S. military buildup in the Asia Pacific and coming war with China, which would be catastrophic for everyone involved.

    It is instructive to look back in history to the 1930s when Japan challenged U.S. and Western empires in the Asia Pacific with the establishment of the Greater Economic Co-Prosperity Sphere. This challenge and effort by Japan to establish an alternative yen bloc in Southeast Asia and to supplant the Western colonial powers led directly to the Pacific War. Records from the time reveal how the U.S. manuevered Japan into firing the first shot (an explicit goal of U.S. policy as outlined by Secretary of State Henry Stimson) by imposing a naval buildup in the South China sea and crippling oil embargo that threatened to cut off Japan’s oil supply and undermine its empire in the Asia-Pacific.

    There is evidence that FDR knew about the impending Pearl Harbor attacks but allowed them to take place because the American public would only support military intervention if America were attacked and the attack was made to look like a sneak attack by a dastardly enemy.

    History could easily repeat itself today; the U.S. military is in fact preparing for war in the Asia Pacific; building a new military base in Micronesia in the middle of the Pacific Ocean, and training soldiers in jungle warfare in Hawaii while studying military battles in the Pacific War, like the Battle of Guadalcanal.

    Gen. Charles A. Flynn, the commander of U.S. Army Pacific, was quoted in The New York Times stating that China had been on “an incremental, insidious and irresponsible path for decades.” Now more than ever, the “total Army,” he said, needs to prioritize relevant Pacific experience.

    U.S. soldiers being trained to fight a 21st Century Pacific War—this time against China. [Source: nytimes.com]

    After provoking a war with China, like with Japan in World War II, the U.S. would surely make it look like China started it and that it was somehow innocent. This has been a feature of US imperial wars going back to the era of the Indian Wars.

    Question 2: The first half of the 20th century was essentially a contest of empires. The two World Wars were fundamentally European wars or a contest of colonial empires. While the European empires were destroyed, the gain was for the U.S. as it emerged as the most powerful actor.

    Answer: Agreed. I would add that the U.S. defeated the Japanese empire in the Pacific theater of World War II, which enabled the U.S. to establish a chain of military bases in the Asia Pacific as a linchpin of U.S. imperialism. U.S. strategic planners had long considered the Asia Pacific key to world domination because of its economic vitality and rich resources and geography and this is why the U.S. cannot accept any rival powers there, including Japan, and now China.

    Question 3: Did the U.S. foresee this and plan its rise to a position as the pre-eminent power ensuring the destruction of the European powers?

    Answer: Yes, absolutely. As one example of dispacing European empires, I was just reading a book about U.S. policy in Congo in the 1960s by David Gibbs, The Political Economy of Third World Intervention. The book showed how U.S. mining tycoons (Maurice Templesman and Harold Hochschild) came to oppose Belgian colonialism so American corporations could replace Belgian ones in controlling and profiting from Congo’s lucrative mineral wealth. Templesman and Hochschild financed CIA front organizations and supported the murder of Patrice Lumumba who wanted to nationalize Congo’s mines after independence. They cultivated very close ties with Joseph Mobutu; Lumumba’s replacement and murderer, who cultivated the image of a Pan-Africanist devoted to African culture, but who sold out Congo and its economy to foreign interests. The CIA funded Mobutu’s security apparatus so he could crush a secessionist movement in the diamond rich Katanga province backed by the Belgians. The goal was for Mobutu to consolidate his control over Congo and for U.S. corporations to take over the mines from Belgians in Katanga. Here is U.S. neocolonialism at work, and muscling out of the Europeans.

    Question 4: The U.S.-led post-1945 world order rests on its control of the three pillars – political, economic, and security ( Allies/Vassals, Economic Control through Bretton Woods systems + USD as the global reserve currency, and the UN Security Council+NATO). Is Western Europe an Ally of the US or is it an unequal relationship?

    Answer: I would say its an ally of the U.S. to a point, as we see from the example of the Belgians in Congo. Many Europeans are starting to question alliance with the U.S. and whether the US has the best interests of European countries in mind. The U.S. involvement in Ukraine and destruction of the Nordstream II pipeline, for example, has been deterimental to European economies, including especially that of Germany that relied on cheap Russian natural gas imports. With the destruction of the pipeline, they were forced to purchase natural gas at a much higher cost from the Middle East and from U.S. natural gas suppliers in Texas and elsewhere who were financing politicians in the U.S. that supported the copious military aid to Ukraine along with the weapons contractors. European countries historically benefited from trade with Russia, so the war in Ukraine has generally hurt their economies and it is not clear for how much longer their populations will put up with this and just go along with the New Cold War.

    Question 5: Decolonisation was superficial as the U.S.-led West retained much of the colonial and imperial controls. Is it right to say that the U.S., in effect, has been an expanding empire since the American-Spanish War? The Cold War was a check on the American expansion.

    Answer: Decolonization was indeed superficial as the U.S. used clandestine and sometimes not so clandestine means toinfluence and control postcolonial leaders across much of the Third World and to sustain neocolonial economic relationships where Third World countries exported raw materials to the West and purchased products that were manufactured there, or had their resources owned and controlled by U.S. corporations.

    I would suggest that the U.S. was an expanding empire from the formation of the country. Historian Richard Van Alstyne wrote an important book in 1960 entitled The Rising American Empire. The book shows how the American founding fathers all conceived of the U.S. as an empire and had ambitions of eclipsing the British and Roman empires at their height. Van Alstyne also addresses how the pacification of the Native Americans and takeover of their resources and land and massacre of those who resisted previewed what the U.S. would do to other peoples around the world.

    As far as the Cold War, my book, The Russians are Coming, Again with John Marciano shows that rather than being a check on U.S. expansion, the Cold War served to validate heightened U.S. intervention across the Third World under the pretext of fighting and combatting communism. In fact the real communist threat, as Noam Chomsky has emphasized, was a threat to U.S. business interests and ability to encourage development of an alternative state-centered model of governance that would prevent corporate pillage and the kind of neoloconial arrangements that prevailed quite widely in this period and beyond.

    Question 6: The end of the Cold War and American unipolar dominance unleashed the push for the American Empire—through GWOT and a series of wars.

    Answer: Absolutely: We have the U.S. empire on steroids with the Global War on Terror. It has given a pretext for the U.S. to invade and bomb many Middle-Eastern countries. And it has been totally ridden with contradictions, as the U.S. has supported leading terrorist states like Saudi Arabia and committed large scale terrorist acts based on standard definitions of terrorism as acts of violence targeting civilians with the purpose of affecting a political goal or political change.

                                                                                                                                                              Source: goodreads.com

    Question 7: NATO Expansion – conflict with Russia and anti-China strategy – a clear case of imperial overstretch and suicidal?

    Answer: Yes I think so. Back in 1996, George Kennan, the father of the containment strategy and original Cold War, warned about NATO expansion, stating: that NATO expansion would amount to a “strategic blunder of epic proportions” and the “most fateful error of American policy in the entire post-Cold War era,” as it would “inflame the nationalistic, anti-Western and militaristic tendencies in Russian opinion, restore the atmosphere of the cold war to East-West relations,” and “impel Russian foreign policy in a direction decidedly not to our liking.”

    Kennan’s prediction proved to be true and look where we are today: in a new Cold War, with the U.S. having torn up the arms control treaties of the 1980s; initiated a proxy war with Russia that could lead to a full-blown war between the two countries and nuclear conflict. If the latter transpires, the NATO expansion surely will have been suicidal. Already it is diverting badly needed resources towards the military and a senseless new arms race, much like in the original cold war, where it produced heavy deficits and Third World type living conditions in the U.S. with astronimical inequality levels, underfunded edcuation and health care system, and abysmally poor public services, including in areas like mental health treatment, and programs to assist the homeless. One consequence is the extremely high crime rates in the U.S. and overcrowded prisons.

    George F. Kennan: if only U.S. leaders in the 1990s and 2000s had listened to him [Source: artsandculture.google.com

    As far as China, the provocations by the Biden administration may be even more insane than with regards to Russia, as a) the U.S. depends on Chinese purchasing of U.S. debt; b) the U.S. economy is quite dependant on China’s; and c) China has superior military technology capabilities that would give it the edge in any war with the U.S.

    Charles Freeman is a retired diplomat who served as Nixon’s translator when he famously visited China in theearly 1970s to reestablish U.S. diplomatic relations during the Cold War. Freeman told me when I interviewed him that China was in no way a military threat to the U.S., but the U.S. sees it as a threat because its economy has been growing and slowly surpassing that of the U.S. The U.S., however, should not view China as a threat of any kind, and should consider its economic growth an opportunity for the U.S. if it tried to harness China’s economic growth to its own. This would mesh well with the win-win strategy advocated for by Chinese Premer Xi Jinping in which China and the U.S. would cooperate to mutual economic benefit.

    Charles Freeman [Source: globaltimes.cn]

    Instead, the U.S. has sought to a) encircle China militarily, b) arm Taiwan to the teeth in violation of the “One China” policy and incite Taiwanese separatist elements, c) try and undermine Chinese interests throughout Southeast Asia, and d) provoke it by launching drone surveillance missions over its borders and in Chinese controlled waters off Taiwan, and e) sailing U.S. naval ships in Chinese waters.

    This is in addition to a) the propaganda directed against China in the U.S., b) the persecution of Chinese scientists; c) support for separatist elements in Xinjiang and Tibet; and d) the waging of an economic war on China and efforts to sabotage China’s economy—a policy that had been pursued by the FDR administration against Japan that directly provoked war with it.

    Question 8: Are current wars in Ukraine and Gaza—a sign of major turbulence in the World Order?

    Answer: Yes absoutely. These wars were both easily avoidable and were a direct result of U.S. foreign policy and its extremism.

    1. In the case of Ukraine, the U.S. was intent on using Ukraine as a battering ram directed against Russia. The U.S. orchestrated the 2014 Maidan coup and empowered and armed far right, Russophobic elements who triggered the war with Russia by a) attacking the ethnic Russian population in Eastern Ukraine; and b) reneging on any commitments in the Minsk peace agreements that would have given greater autonomy to the Luhansk and Donetsk provinces. The U.S. aim was similar to Afghanistan in the 1980s where they wanted to draw the Russians into a military quagmire and trap and discredit Putin and cripple his regime by ratcheting up economic sanctions against him (which it was believed would create disaffection with his rule and trigger a movement for regime change). This strategy was born of desperation because Putin was succeeding in strengthening Russia and blocking the neoconservative designs to control Eurasia and its rich oil and gas reserves, which was only possible with a weakened Russia.
    2. Gaza: The U.S. has long used Israel as an outpost of its power in the Middle East, recently establishing secret military bases in the Negev. The neocons in Washington have long sought regime change in Iran and see Israel as their vehicle to help achieve that. They also wanted regime change in Syria and to ensure Israeli control over the Golan Heights, where oil reserves have been discovered. U.S. weapons have emboldened hardliners in Israel and enabled Israeli aggression in Gaza and now Lebanon with disastrous human costs for the civilian population that people are comparing to a new Holocaust.

    Question 9:  With the rise of China, India, and the BRICS—is this a Power Transition moment?

    Answer: Yes. We are seeing major historical changes in real-time. China’s achievements through the One Belt, One Road initiative were so impressive they led to a copycat effort by the Biden and Boris Johnson admiinistrations that never really got off the ground. The SCO is enabling countries also to get around the World Bank and IMF by offering loans with no strings attached. China’s rise is epitlmized by its trading alliance with Russia and influence throughout Africa, where China is clearly winning the Great Game. While Chinese labor practices may be bad in many places, China is bringing tangible benefits to African countries through the building of impressive infrastructure, whereas all the U.S. offers is drone bases and IMF structural adjustment programs that push economic austerity measures and reinforce social inequality.

    Question 10: Is this a sign of the end of Western dominance of the last 500 years?

    Answer: I believe that yes, we are seeing major historical shifts. It may take some more time as empires often do have lasting power and can linger on even when their legitimacy has been eroded, but change is coming about.

    Question 11: In its entire history, the USA has been at war for all but 15-20 years. Is the USA a war-mongering state?

    Answer: Sadly, yes. It goes back to the founding of the country as a settler colonial state rooted in the military conquest and genocide of the Native Americans. The colonial mentality is so deep that the U.S. names a lot of its weapons systems after native tribes that were vanquished, like the Apache helicopter for example. The Operation to kill Osama bin Laden was called Operation Geronimo after the Apache chief who was vanquished in the 19th century. Noam Chomsky once asked; imagine the nazis had won World War II, and named weapons: “gypsys” and ‘Jews.”

    [Source: telegraph.co.uk]

    This reflects something rotten at the core of imperialism and a deep imperial mentality that is hard to vanquish and is passed on generation after generation. This mentality and the war like culture in the U.S. is seen in a hero worship of soldiers and the military at sporting events, and in the denigration and marginalization of peace activists in popular and intellectual culture.

    That the military culture is a largely top down phenomenon though should be emphasized as since Vietnam, the U.S. government has dared not reintroduce the draft, lest it face a societal revolt remniscent of the 1960s counter-culture movement. So a lot of Americans see through the lies and are not so hawkish—that’s why the government has to distance the public from the wars; lie to them repeatedly about what they are all about; and develop new technologies and AI that could ensure a reliance on machines in fighting wars rather than the American people who often see through the lies and will protest an unjust war—particularly if there are a large number of U.S. ground troops potentially being put in harms way (like in Vietnam).

    Question 12: What is the future of 21st century world order? Barry Posan says the era of Superpower is over. Has the multipolar world emerged? what would be its shape?

    Answer: I think we are indeed seeing the birth of a new multipolar world order in which the center of economic power in the world increasingly lies in the East and in which China is a powerhouse and Southeast Asia is a key motor of economic growth in the Global economy. The U.S. is sliding more towards authoritarianism and potentially even a civil war, and may be further weakened by domestic unrest as it loses its economic supremacy and the U.S. dollar ceases to be a main currency of global trade. U.S. military interventions may focus more on South America and Mexico (which some Republicans want to bomb now to stem the immigration tide) and the U.S. army may have to be deployed more often to contain domestic unrest and right wing estremists/neofascists and to control armies of homeless people who are a product of a failed economic model.

    Related to the last question about U.S. adaptation to the new realities, a great danger is that the U.S. won’t accept reality, and will attempt to violently reimpose its hegemony, triggering a new Pacific War or world war that would result in millions of deaths.

    The recent escalation of conflict in Ukraine and the Middle East as well as U.S. saber rattling towards China and over Taiwan, makes this threat all too real and ominous.

    Feature Image Credit: iai.tv