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The US Trade War: How China Should React

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During the presidential campaign 2016, Donald Trump had made more than 280 promises. However, the pollpromises were formalized through the “Contract with the American Voter,” on October 22, 2016, listing out about the 60 promises for action, the day President would be in office. Out of these promises, currently the plan to curtail Chinese trade was put in practice by the initiating the trade war with China to bridge up the trade deficit with China. In this context, the new trade war has already been set in by imposing a higher tariff against China, particularly its steel and aluminum. It will remain interesting to see how the trade war will unfolds and how China would react?

Out of the  280 poll promises made during the presidential campaign (2016), Donald Trump formalized the same through the “Contract with the American Voter,” issued on October 22, 2016. Realizing the drastic consequences out of trade deficits with China, Trump rolled out a  plan to curtail Chinese trade was the key plank of “Make US Great Again” policy. At the domestic front, the US administration has repeatedly acknowledged that economic slowdown and unemployment in the country are attributed to the trade deficit with China.Trump criticized frequently the North American Free Trade Agreement (NAFTA). He has taken it as, “the worst trade deal the US has ever signed.” He has also called Trans-Pacific Partnership (TPP) as “the death blow for American manufacturing.” Donald Trump in a video message (November 21, 2016), introduced an economic strategy of “Putting America First.” The main focus of the strategy would be to negotiate  the “fair, bilateral trade deals that bring jobs and industry back to American shores.” Only after the three days after becoming president (January 23, 2017), the President Trump withdrew the US from theTrans-Pacific Partnership with the conviction to strengthen the U.S.economy.

The most serious concern for Donald Trump is China and hence he avowed to turn the trade balance in the US favourby imposing high tariffs and other non-tariff trade barriers to resuscitate its economy and creation of job opportunities.

Trade Between the US and China

As per the office of US Trade Representative (USTR),China is the largest trading partner of the US. China is the largest goods trading partner of the US, the quantum of whichwas standing at $578.2 billion in two way during 2016. The trade in services between the US and China is stood at an estimated quantum of  $70.3 billion (2016). The exports of the services on part of the US is $54.2 billion while the imports of the same were $16.1 billion having services trade surplus in its favour of the value of $38.0 billion (2016).The exports of goods on part of the US is totaled at $115.6 billion, whereas the imports of the same is  $462.6 billion. Therefore, as far as the trade balance is concerned, it is in favour of China,totaled at  $347.0 billion in 2016.

As far as the US export of goods is concerned since 2001, it has shown exponential growth i.e., 503%. In 2016, it was reached to $115.6 billion, however, the same has shown somewhat minor slump i.e., 0.3% ($330 million) during the year of 2015. The top goods include in the export category are agriculture ($ 21 bn); grain, seeds, fruit ($15 billion); aircraft ($15 billion); electrical machinery ($12 billion);  machinery ($11 billion) and vehicles ($11 billion). In the services category, the export was estimatedat$54.2 billion (2016). It is said that it was increased roughly 908% since 2001. The leading services exports from the U.S. to China are intellectual property (trademark, computer software),travel, and transport sectors.

The US is the largest destination for Chinese exports. The Chinese goods export to the US is totaled $462.6 billion (2016). However, it has shown somewhat decline at the rate of 4.3% ($20.6 billion) from 2015, but it has shown continuous increased growth at the rate of  60.8% since 2006. The Chinese contribution in the overall US goods import accounts for 21.1% (2016). The Chinese goods export list included electrical machinery ($129 billion), machinery ($97 billion), furniture and bedding ($29 billion), toys and sports equipment ($24 billion) and footwear ($15 billion). China is the 3rd largest agricultural goods exporter to the US i.e., $4.3 billion (2016).

The major concern on part of the US is the trade deficit, which is in favour of China. In 2016, the same was stood at $367 billion (2015), however, it was decreased at the rate of 5.5% decrease ($20.2 billion) totaling at $347 billion in 2016. Again, the trade deficit reached $375 billion (2017). The US exports to China were only $130 billion, whereas its imports from China were $506 billion. Moreover, China is the largest lender to the US. The debt of the US from China as of January 2018, is $1.17 trillion. The leadership of the US percieved that it gives a massive political leverage to China over the US fiscal policy.

Trade War Between the US and China

The major root of the trade war been the US and China has been embedded in the trade deficit. Even being a major power, the US has not been able to bridge up the gap of trade deficit. It has been argued that trade war originates from Chinese trade and industrial policies. Apart from these policies, Chinese currency manipulation has further put the both countries on confrontational mode. However, Trupms’s being one plus year in office, the trade deficit has not been showing any positive sign in the US favour. Ultimately, hehad  to launcha salvo of tariffs against China as in the year of 2017, the U.S. trade deficit with China is stood at US$   375 billion in 2017. The  U.S. exports to China is only $130 billion, whereas it imports stood at $506 billion.

The trade deficit of the US vis-a-vis China has been percieved as a consequence of the latters’restrictive trade practices. The restrictions include a wide array of barriers to foreign goods and services. Although, China has introduced its open market economy in 1978 and even expanded the scope of the same after becoming the member of the WTO (2001). However, China  has introduced the market economy but its trade and industrial policies are aimed at protecting the state-owned enterprises by levying the high tariffsover the imports. Moreover, the other restrictions such as theindustries required special permission to import goods, inconsistent application of laws and regulations, transfer of technology from the foreign firmsfor the Chinese market access etc. Apart from these restriction, the lack of transparency and currency manipulation on part of China have been emerging as major concerns for the Trumps’regime. Therefore, it has become a major compulsionon part of the Trump regime to take a hard-line stance against China.

Within the seventy-day in administration, the President Trump  in his administration’s annual trade policy report to Congress (March 2017), had openly challenged the World Trade Organization (WTO)particularly for “China’s unfair advantage.” He went further with the accusation of  Chinese dumping of  steel,  aluminum and chemical products. In the same month, the US Department of Commerce had announced two antidumping (AD) and countervailing duty investigations (CVD)against China. Even the pre-Trump regimes have also been engaged with China over the dumping casesin the WTO. The Obama administration had become frustrated over Chinese economic reforms and increasingly skeptical about the prospect for future reforms. Till date, the US has registered 16 cases against China, to address its concerns such as Chinese Ads, CVDs, industrial policy and the dominance of state-owned enterprises.In this background, China has turned to the Dispute Settlement Mechanism (DSM) of the WTO to address such perceived unfairness use of such investigations. China had filed 11 cases against the US at the WTO as the former percieves per se the leading target of the USs’ AD and CVD investigations. Robert ELighthizer (United States Trade Representative) has also givenan indication that the U.S. may take action against the WTO for its alleged failures not to check the Chinese unfair trade practices.

President Trump has aired portentous signals with the beginning of the year of 2018. The salvo of high tariffs had launched against its trade deficit with China. President Trump by using the Section 301 of the US Trade Act of 1974, had unilaterally imposed trade tariffs on China. In January, he imposed tariffs on solar panels and washing machines. In a tweet issued on March 2, 2018, Trump asserted that “Trade wars are good and easy to win.” President Trump had signed an executive memorandum on 22 March 2018 to enforce  25 percent tariff on steel and a 10 percent tariff on aluminum imports. The measures have been designed to counter the Chinese unfair trade practices as the administration believes that it involves stealing of the US companiesintellectual property. Trump gave signals that the tariffs would cover at least cover  $60 billion in tariffs on Chinese goods.

Chinas Reactions

China has reacted very aggressively to the US’s new trade war. It has been seen that China is in assertive mode and not going to budge to the US pressure. The Chinese Foreign Ministry spokeswoman Hua Chunying said, “We don’t want a trade war, but we are not afraid of it.”If we unfold the statement, it clearly conveyed the message to the US, how China is likely going to take the sanctions? Moreover,  the Chinese Commerce Ministry has  also used the same tone and tenor while asking  the Trump regime on 28 March not to go ahead with such planned tariffs. It can be taken as a warning signal to the Trump regime as China could set off a same chain of  reactions. Moreover, the Xi governemnt has given clear signal that China would,“fight to the end.” Although, the US economically and militarly is in stronger position but at the same time China has also been following the suit. China has been emerged a stronger economy, moreover, it is a major lender to the US which gives its stronger position vis-a-vis the US. If the trade war lingers on, the losses or gains are not unilateral. One can percieve  that the US has to suffer more losses as compared to China. The developing countries have already opened up and messed up their economies under the global instituions’ pressure. In this milieu, loss of employment opportunities, health services and education, suicides of the farmers, loss of local industries and many more challanges have become the part and parcel of the people’s life.  In this miliu, it should be left to the individual countries’ decision, how much its economy is to be opened? Moreover, if any country is asked for the same, it should be under the international laws, not as per the invidual countries’s whimsical and impulsive actions.

Dr. Bawa Singh is teaching in the Centre for South and Central Asian Studies, School of Global Relations, Central University of Punjab, Bathinda, India-151001. bawasingh73[at]gmail.com

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East Asia

North Korea’s Nuclear Threat and East Asia’s Regional Security Stability

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Authors: Raihan Ronodipuro& Hafizha Dwi Ulfa*

The East Asian region’s anarchy system is colored by mutual distrust, which makes the countries in this region constantly competitive. There are both internal and external forces driving countries in this area to continue to improve their national security.

North Korea, like other East Asian nations, believes that it must continue to strengthen its armed forces in order to defend itself from external threats. Internally, North Korea is considered to have a juche philosophy, which emphasizes independence from other countries and emphasizes military force as a defensive policy.

Meanwhile, North Korea raises its military strength in self-defense efforts to balance the United States’ defense alliance with South Korea and Japan, where the alliance is perceived as a challenge to North Korea in the region.

Likewise, South Korea sees nuclear North Korea as a major threat to its security as a neighboring nation that threatens international peace and wishes North Korea to abandon its nuclear weapons program.

Since the 1950s, North Korea has been working on developing nuclear missiles. North Korea’s production and testing of nuclear missiles has heightened tensions and fears in the East Asian region. North Korea has performed a series of nuclear missile drills, which are believed to be destabilizing the region’s atmosphere.

In 2006, this nuclear test was performed for the first time. This move attracted a strong reaction from the international community, with several nations, including Russia and China, who have diplomatic contacts with the communist state, condemning North Korea’s test action and urging all parties concerned to show caution in order to prevent regional tensions.China’s active involvement is also expected to have a positive impact, but in reality China always has a double role. Beijing finds itself caught in a dilemma in preventing North Korea nuclear strategist. In this context, China’s relations position with United States as an influential country in the region will have an important role for the nuclear settlement process on the Korean Peninsula.

Furthermore, China and the United States debated the prospect of a UN Security Council resolution in reaction to North Korea’s nuclear test. The international community is still concerned about North Korea’s ongoing nuclear production and research. The production of nuclear missiles by North Korea will strengthen the United States, South Korea, and Japan by improving military technology to fight the North Korean nuclear threat.

The presence of growing mistrust between countries could also spark a traditional arms race in East Asia. North Korea’s defiant posture is shown by the trials it continues to conduct, rendering the situation in the country more complicated and unpredictable. North Korea, South Korea, and Japan all agree that their countries must continue to strengthen their defense in order to protect themselves from external attacks.

North Korea’s nuclear weapons have three kinds of consequences: international stability, proliferation, and the nuclear nonproliferation policy. North Korea’s nuclear weapons production will increase security vigilance in the East Asian zone, potentially making events volatile.

This nuclear proliferation has a major effect on the stability of regional security in the East Asian region, and it has the potential to ignite a nuclear arms race among regional countries, as well as the expansion of capabilities among other countries with nuclear weapons, such as the United States, China, and Russia, as well as the rise of interest in nuclear weapons by a nation that does not have one.

To maintain equilibrium in an anarchist international system, such as the viewpoint of realism, a balance of power is needed. This power balance is complex in nature, and it can move in response to changing developments at both the national and international levels.Apart from the United States interests as an influential country in the East Asia geopolitics and geostrategy, it is hoped that United States can implement policies that maintain the stability and security of the East Asian region.

In the end, an equilibrium will arise, either through peace or through war. This is consistent with East Asia’s complex balance of power, in which one country’s defense policy affects other countries in the region, causing mistrust between countries to surface and color their relationship. Because of their mutual mistrust, these countries are able to use military force or wage war in the East Asian region.

In a realist perspective, the state is a rational actor, and the interactions carried out by the state are nothing other than the interests of the state itself, which is not unusual if the greedy existence of this state then creates a confrontation if there are gaps of interests between nations. In this situation, the public interest may be viewed as a weapon used by the state to accomplish its goals.

A state’s national interest also serves to defend its citizens and its territories. North Korea’s interest in nuclear production is motivated by a desire to strengthen its country’s defense in the face of external challenges, especially from the United States and South Korea. In this situation, it is clear that North Korea is attempting to amass as much strength as possible within its boundaries.

Then it is related to the theory of National Security, which is characterized as the allocation of resources for the development, execution, and implementation of what is known as a coherent facility, which is used by the state to achieve its country’s interests. North Korea’s nuclear program is designed to strengthen its national security defense and negotiating power. The presence of this nuclear weapon force, however, allows for the rise of an arms race and has an impact on security stability, especially in the East Asian region.

*Hafizha Dwi Ulfa is a Research Assistant of the Indonesian International Relations Study Center with focus analysis in ASEAN, East Asia, and Indo-Pacific studies.

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East Asia

The Galwan Conflict: Beginning of a new Relationship Dynamics

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The 15th June, 2020 may very well mark a new chapter in the Indo-Chinese relationship and pave the way for totally new politico-strategic equations, shaping the way for a more complex and unstable world order in the near future. On this night, a bloody, violent and unusual armed clash took place between two of the world’s fiercest armies, Indian and Chinese, at the heights of Galwan Valley in Ladakh. Officially, India has admitted losing 20 of its soldiers, including a senior officer while China, continues to be discreet about PLA casualties and after a good 8-months hiatus, came up with a what everyone knows a blatant lie– a 4-death figure.

This border conflict however, has made the situation volatile between the two Asian powers. The borders between the two, almost 3,400 Kms continue to remain unclear and non-demarcated in the form of Line of Actual Control (LAC) and that is something the Chinese side, is quite keen to continue with. It is the Chinese strategy that it has employed since 1950s to continue occupying territories without firing a single bullet. From Tibet to Aksai Chin to South China Seas, China has gained territories by portraying itself as a great military power but not really able to showcase its military might anywhere.

However, the efficacy of its military remains questionable on certain credible grounds. It is well known that the Chinese PLA comprises of officers and troops who are recruited on account of their loyalty and service to the Chinese Communist Party (CPC) and not entirely on professional grounds and hence, is a politicized force. Internal reports leaked out from China have also indicated of massive restructuring and training exercises for the PLA to keep it as a proper fighting force, being initiated on direct orders of the Chines President, Xi Jinping.

The PLA again does not have a distinguished military track record. In 1954, it occupied Tibet, a free, sovereign country till then who had at best, a medieval age, security force to defend itself. In 1962 border conflict with India, it won due to the impuissance of Nehru and his lack of politico-strategic vision and leadership. However, the border conflict at Nathu La with India in 1967, proved to be its undoing with PLA losing more than 300 soldiers against Indian losses of 80 troops.

Even in the Vietnam war, it failed to emerge as a clear winner against the tiny Vietnam. Since then, it has had no real time fighting exposure. In one of the highly embarrassing episodes, a unit of the PLA as part of the UN peacekeeping duties, ran away leaving their weaponry and armaments, in Sudan in 2016. In the very recent Galwan fight-off with the Indian border troops, again the PLA failed to show it in a gallant light as in spite of a virtual 4:1 ratio against Indians, it failed to ensure a victory and in fact had to concede the area to Indians it had occupied surreptitiously a few weeks ago.

It is true that since the commencement of economic reforms in China in early 1980s, the single party political dictatorship has helped China to grow economically and emerge as the manufacturing hub of the world. The impressive economic turnaround has helped China to enhance its political stature in the comity of nations while also providing with enough money to use them for furthering its politico-strategic objectives. From making huge investments in national economies of Europe, US, Canada to Africa, South and South-East Asia to becoming a major player in global capital and bond markets, China has strategically made its presence felt.

With Xi Jinping’s accession as the Chairman of CCP, ambitions of China got a new fillip. The highly ambitious politico-strategic initiative, in the form of debt diplomacy, the much-touted Belt and Road Initiative (BRI) emerged as the innovative neo-colonialist Chinese weapon to secure the political and military control of the world. Already many countries beneficial of Chinese strategic benevolence like Pakistan, Sri Lanka, Congo, Senegal, Kazakhstan are feeling the pinch. Their politico-strategic sovereignty is under a severe threat from China. No wonder, other countries like Bangladesh, Myanmar, Maldives and many others are trying to balance their politico-strategic relationship with the middle kingdom.

Subsequent to the Galwan fiasco, after the Doklam setback in 2017 China seems to be in a catch-22 situation. It is not in a position to go for even a limited war with India while compelled to a negotiated settlement with India, has affected its perceived military capability adversely. While losing the political and military trust of India in a hurry, it has made India more emboldened and cautious.

India has suddenly gone into a military build-up overdrive with scores of new missiles and armaments that have been tested in recent months. On the politico-strategic front, much to China’s dismay, QUAD is getting into a shape while the US Navy and Air Force is constantly increasing its presence in South China Seas. Taiwan too, is getting bold and willing to face China, with the US as its protector.

Japan that till recently maintained its dependence on the US alone for its security, too has opened up and started bolstering its defences with China in mind. Countries in the region like Philippines, Indonesia, Vietnam are getting into strategic dialogues with India to counter China’s strategic dominance. They are also opening up to arms imports from India. And most importantly India has started seeing itself as a strategic rival to China, more explicitly. Voices in New Delhi regarding getting closer to Taiwan, are undoubtedly a pointer in that direction. And so is the Chinese reactions when its embassy is seen publishing full page advertorials in Indian media, cautioning against abandoning the so-called One-China policy.

While military and diplomatic negotiations on disengagement and de-escalation continue between India and China, it will remain debateable if China actually gained out of its latest incursions in Ladakh. While its PLA had an element of aura till Galwan, since then questions repeatedly are being raised on the capability and leadership of the entire PLA. How far those assessments are correct or otherwise need to be seen but it seems absolutely certain that China has lost much in the process. It will have to prepare for a new, emerging politico-strategic dynamics that could well be not to its liking.

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Sino-US rivalry and the myth of Thucydides Trap

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The writer of the view that are an outcome of complex phenomena. One can’t understand them through the lens of Thucydides trap which he considers nothing short of a China-bashing myth. He points out that nuclear capability itself is a great deterrence to war adventurism.  He stresses that wars are outlandish in terms of postulates of Modern theory of Conflict Management; that states conflict is not spread by a black sheep but it is natural to human relations. It can’t be eliminated by eliminating the blacksheep. The key to success lies in keeping the conflict to its minimal point while remaining peacefully engaged with one’s adversary.

Wars end in ceasefires, “grand concerts’, and realisation that they were avoidable. That they were cumulative upshot of reciprocal stupidities of belligerents.  Post-World War II period has not witnessed any war between major powers as they realise that how destructive a nuclear war would be. The potential belligerents nowadays enjoy armchair warfare blaming one another of hostile intentions.

Fallacy of thinking templates

The best way to analyse why a war broke out in the first place is to interview the key warriors or belligerents. But, most of them stand perished in wars unable to tell their part of the story. As such, major powers rely on thinking templates like Thucydides Trap to create imaginary rivals to fit in the crucible of their templates.

Thucydides’s Trap comes about “when a rising power threatens to displace an established power. Graham Allison, in his Destined for War (page vii) says, ‘As a rapidly ascending China challenges America’s accustomed predominance, these two nations risk falling into a deadly trap  first identified by the ancient Greek historian Thucydides…He explained: It was the rise of Athens and the fear that this instilled  in Sparta that made war inevitable’. Though key players may abhor wars “unexpected events by third parties or accidents that would otherwise be inconsequential or manageable, but even ordinary flashpoints in foreign affairs, can act as sparks that trigger large-scale conflict”.  Thucydides trap could perhaps be rephrased as stupidities trap.

Arnold Toynbee once said” history is something unpleasant that happens to other people”. Through their myopic decisions rulers sleep walk into the vortex of war. They are sure that their enemies would perish both they would survive. Yet the outcomes are quite pungent. Look at the outcomes of the World War I (1914-18) and II (1939-45). When the World War I ended  in 1918, the Austro Hungarian Empire had vanished, German Kaiser ousted, Russian Tsar shown the door, France, Britain and so many other countries were left to mourn loss of depletion of their treasuries and extinction of youth  capital (scientists/engineers/doctors/teachers/intellectuals-to be). At the end of the World War II, Germany could not replace the United Kingdom. Two unexpected hegemons the erstwhile Soviet Union and the USA were born out of the womb of the war. The UK lost the fifty colonies that Hitler much talked about in his fiery speeches.

Before committing suicide, Hitler must have reminisced ‘ I was mistaken not to have thought about eliminating England as they were sons of a German tribe l’anglais who migrated to britain due to vagaries of nature’. ‘I was a fool to have ventured into the freezing Russia’. John Fitzgerald Kennedy rejected the dictum “better dead than Red”. Yet many of his decisions pushed closer and c loser to a nuclear confrontation with the Soviet Union. During post-WWII, McCarthyism had blurred American vision so much that they saw red in everywhere.

Classical versus Modern theory of conflict management

Relations and conflicts between states  

Thucydides trap takes a simplistic view of relations and conflicts between states.Thousands of years back Chanakya posited his mandal (interrelationships) doctrine.

One of his most misunderstood postulate is ‘all neighbouring countries are actual or potential enemies’. So they have to be subdued. Little attention is paid to another of his counter-balancing postulate, mandal (interrelationships) doctrine. In mandal, Chanakya thinks in terms of intersecting and just touching circles. He focuses on intersecting section of two intersecting circles like in mathematical solution set theory.

Even Kissinger, Kafka, et al, believed in establishing effective ‘spheres of influence’. Rich, powerful and progressing countries could but would not shun their poor pals in the comity of nations.

History shows that weakness invites aggression. Often militarily strong countries have attacked weaker nations with ‘litany of problems’ on one pretext or another. Economic motive could be unearthed in both modern and ancient wars. For instance, the Trojan War (1250 BC) was caused by an economic rivalry between Mycenae and Troy. Grants by Persia of good western Anatolian land to politically amenable Greeks, or to Iranians, created a casus belli for wars with rivals.

Yet all wars are justified by the now discarded  Classical Theory of Conflict management, and rejected by the Modern Theory of Conflict management.

According to modern theory of conflict management, terrorism or any conflict for that matter is not really caused by a few black sheep, as assumed under the Classical Theory of Conflict Management.

The Classical Theory says that “conflict is created by a blacksheep. If he is eliminated the conflict is eliminated there and then”. The modern theory, on the contrary postulates “No matter what you do conflict cannot be eliminated. It is natural to relations. However, through effort, it could be kept at its minimal point. And the minimal point is the optimal point”.

Fallacy of rising Dragon

It appears that Joe Biden is not a prisoner to Thucydies trap. He views rivalry with China as intense competition not as confrontation. He calls the shots but then quickly defuses the situation. For instance, to pacify furious China about `freedom of navigation’ in the South China Sea, he dispatched USS Pal Jones into the Lakshadweep waters. The aim was to send the message, that China need not fume and fret much about the Quad. The USA still thinks in terms of some principles.

Neither Sparta nor Athens was a nuclear power. If so, they would have perhaps preferred to remain engaged in a long period of cold war. In the ancient Greek world, it was Athens that threatened Sparta. In the late 19th Century, Germany challenged Britain. Today a rising China is believed to be challenging the United States. But, neither China nor the USA is structurally similar to Sparta or Athens. For ease of thinking we liken the two states to either China or the USA.

Today’s China is more inspired by Song dynasty which pushed economic progress through peace rather than wars like some other dynasties. China remarkably grew in terms of Gross Domestic product, imports, exports and reserves. But it still lags behind the USA.

China’s GDP of 7%  as a percentage of the United States’  in 1980 rose to 61 % in 2015, imports from 8%to 73%, exports from 8% to 151%, and reserves from 16% to 3140%.  Chinese economy doubled every seventh year. Still, it is no match for the USA. Chinese workers have become more productive. Yet they are quarter as productive as the American.  China still lags behind the USA in major economic indicators. Look at Chinese economic size in terms of GDP:  year 2000 ($ trillion 1.211), 2010 (($ trillion 6.101), 2016 (($ trillion 11.199). Corresponding figures for the USA are: U.S. 2010 ($ trillion 10.285), 2011 ($ trillion 14.964), 2016 ($ trillion 18.624). GDP per capita ($) for the aforementioned years from 2010 to 2016: China 940.  4,340, 8,250. U.S. 36,070, 48,950, 56,810. Researchers in R&D (per million people) China: 547.3, 903, and 1176.6. Corresponding figures for the US:  3475.7, 3868.6, and 4232. R&D expenditure (% of GDP) China:  0.896, 1.71, and 2.066. U.S.: 2.617, 2.734, and 2.794.

True, China has been the fastest-growing economy since 1979. Yet, it is nowhere near surpassing the USA even on one account that is gross Domestic Product. Heretofore are China and US figures of economic growth for the years 1977, 1987, 1997, 2003, 2008, and 2019. China: China 843,097, 1,883,027, 3,706,647,   6,187,983, 8,908,894, US$ trillion) 14.4.  USA: USA: 3,868,829, 5,290,129, 7,109,175, 8,431,121, 9,485,136, and 21.44.

Engagement not containment

Wars precede isolation. A benign corollary of Sino-US rivalry is that they are not isolating from one another but engaging in multi-dimensional economic relations.

Mr. Trump was viscerally predisposed to viewing China as a looming military threat to peripheral countries, in general, and the USA, in particular. True, Mr. Biden is also viewed as an America Firster.

Biden realises that China is much behind the USA in economic and military prowess. China trails behind the USA in terms of expenditure on its defence forces and possession of actual military equipment. Despite ongoing modernization, China spends approximately $ 5 billion in arms export far below US exports of about $ 46.5 billion. China’s sales are about three per cent of global sales while the USA’s are about 79 per cent.

The US has over 8,000 operational and inactive warheads as against China’s 240 mostly non-deployed.  The US has 2,000 nuclear weapons with strategic/intercontinental-range compared with China’s twenty. The US have sixteen ballistic missile submarines compared with China’s one, and more than 1000 US nuclear cruise missiles, compared with none for China.

The US has ten aircraft carriers plus one under construction attached to the Fifth and Seventh Fleet. China currently has two aircraft carriers, with a third in early construction, and a fourth planned for sometime in the mid-2020 or 2030s. Their first carrier, the Liaoning was commissioned by the PLAN in 2012, though it was first laid down in the early 1990s.

Shades of China’s critics

China critics in the USA are not monolithic. They have many shades including `Engagers’, `Realists’, `Duopolists’, ` China Lead’, `Declinists’ and so on.

The `Critics’ have an un-reconcilable antipathy toward China because of its repression of a wide spectrum of human rights (religious, labour, media and ethnic minority).

The `engagers’ lookup for common ground with China as a matter of national interest. The `engagers’ are optimistic that globalization, economic interdependence and rules of multilateral trade will lead to democratisation in China.

`Realist engagers’ are convinced that China has learnt lessons from the collapse of the former Soviet Union about the dangers of imperial overstretch. As such, China understands the realities of the current international system and limited capacity to change it.

`China Duopolists’ believe the USA and China could cooperate to bring into being a Chimerica (G-2), being the two most important countries.

The `China lead’ school believes China is already on the verge of replacing the USA as the world’s number-one power.

The `Declinists’ believe that the demise of the US global leadership already occurred as `Washington consensus’ has been replaced by `. It is now Beijing, not Washington that is dictating new rules to govern the international economy.

Joseph Biden belongs to the `America Firster’ School that China can’t replace the USA as number-one, even if it tries to. After visiting China, Biden wrote `the United States has nothing to fear from China since it is far ahead of China in size of the economy, per capita income, scientific innovation, and educational excellence among other indicators’ (Biden, China’s Rise Isn’t Our Demise, New York Times, September 7, 2011, online ed.).

Global Leadership

At present, China lacks the soft and hard power to supplant the USA.  To do so, China needs to:

(a) Command loyalty of the majority of the countries. (b) Initiate, innovate and articulate policies, programmes and activities, including dispensing rewards and punishments. (c) Being a `model’, worth emulating, of values, culture, language, laws, and social and political practices. (d) Excel in soft-power resources such as educational and public-health systems

Concluding remarks

Thucydides traps is a china-bashing myth. Biden is a whiff of fresh air, though he has no magic wand to change the climate and trade atmosphere.  He has promised to rebuild America’s decrepit infrastructure, spend more on health and education, and ease immigration.  He has pledged to raise tax on firms and the wealthy.

He is no revolutionary though his policies are tilted to the left of what Trump did. His job is to re-unite fractious American democracy. He is inclined to shun the personalized style of his predecessor’s rule, scorning decency and truth.

Joe understands China better than his predecessor. But, it remains to be seen how the USA would set right the topsy-turvy alliances that Trump had interwoven. Confrontation with China will make it difficult for Biden to deliver his promises to the American electorate.

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The World Bank today published new research on decarbonizing the maritime transport sector with findings that indicate significant business and...

Development5 hours ago

ADB, Habitat for Humanity to Support Housing Microloans for Vulnerable Communities

The Asian Development Bank (ADB) has teamed with Habitat for Humanity International to help microfinance institutions (MFIs) deliver housing loans...

Reports6 hours ago

COVID-19 spending helped to lift foreign aid to an all-time high in 2020

Foreign aid from official donors rose to an all-time high of USD 161.2 billion in 2020, up 3.5% in real...

Reports8 hours ago

Export competitiveness key to Nepal’s green, resilient, and inclusive recovery

After contracting for the first time in 40 years in FY2020, Nepal’s economy is projected to grow by 2.7 percent...

Africa Today9 hours ago

The Gambia Secures More Funds for COVID-19 Vaccines

World Bank Board approved $8 million additional financing from the International Development Association (IDA) to provide The Gambia with safe...

coronavirus people coronavirus people
Reports10 hours ago

Policy reset can deliver a stronger, equitable and sustainable post-pandemic recovery

The COVID-19 pandemic has brought social and economic disruption worldwide, but is also providing governments with the opportunity to put...

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