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From Economics to Politics: Growing Frictions Between China and the U.S.



Authors: Yao Jiahui &Yang Yizhong

Chinese consulate in Houston ordered to close the U.S. in Houston, Texas, by July 24, in only three days. Different departments from both China and the U.S. have speculated on the reasons for this confusing move, yet the international media statements on its trigger are also disparate. The move was described as “political provocation” by Beijing, while according to the US Secretary of State Mike Pompeo, the decision was taken because China was “stealing” intellectual property. Shortly after a U.S. government closure order for the mission took effect at 4 p.m. Central Time (2100 GMT), a group of men accompanied by a US State Department official was seen forcing open a door at the Chinese consulate in Houston on July 24.

In response, China ordered the United States to shut its consulate in Chengdu on July 24, Friday, which was described by The Washington Post as “another escalation in the dispute between the world’s two largest economies”.[1] The Chengdu consulate of the United States opened in 1985, while the Houston Consulate of China opened as one of the first consulates in the U.S. Regarding its location in southwest China, Chengdu Consulate’s service targets include Sichuan, Yunnan, Guizhou, Tibet and Chongqing. The Ministry of Foreign Affairs of China stated at a press conference on July 24 that some personnel of the U.S. Consulate General in Chengdu engaged in activities that were incompatible with their status, interfered in China’s internal affairs and harmed China’s security interests, which is well aware by the US.

Such “diplomatic reciprocity” raised by the U.S. are not unheard as Mike Pompeo officially announced on the 23rd that the US-China Engagement Policy has “failed” and proposed a “distrust and verification” strategy to encourage The “Free World” joins forces against “Communist China”, in front Nixon Library, of whom was the 37th US President to break the ice of Sino-US relations and stimulate the Policy of Engagement with China. Although it was certain that Nixon had a good reason to start contact with China in the past, and claimed that Nixon’s goal was to “lead China’s transformation,” Pompeo insisted that Nixon’s engagement policy “would benefit China more than the United States.” The engagement pursued did not transform China as the kind of Nixon hoped, but the opposite. Regarding the Trump administration’s new strategy, Pompeo took Reagan’s “Trust, but verify” treatment of the Soviet Union as an example, and proposed to “distrust and verify” China. He believes that the “free world” should guide China’s behavior changes in a “creative and decisive” way.

In recent years, China’s rapid development in the realms of technology, economy, and diplomacy has been witnessed by western countries. On July 23, China’s Tianwen-1 mission launched atop a Long March 5 rocket from Wenchang Satellite Launch Center at 12:41 a.m. EDT (0441 GMT), and the probe is expected to reach Mars in February 2021. As the second-largest economy in the world, such achievements are regarded by the United States as a great threat to its “world hegemony” status.

Therefore, the current US-China situation is often described as the “Thucydides trap” of the 21st century. According to the defense correspondent Johnathan Marcus, it is clear that the Trump administration is determined to step up its very public calling out of Beijing. In the midst of a presidential re-election campaign and with the US economy and society battered by the Covid-19 pandemic, Trump has determined that there is a political advantage in playing the China card.[2]

Currently, rising protectionism and global market contraction become obvious. therefore, the developing mode of economic circulation between domestic and international becomes a significant way to participate in the economic globalization. A brand new development pattern between China and the U.S. is considered to emerge, is the new “Thucydides’s trap” inescapable? Thucydides’s Trap here refers to the dynamic between rising and ruling powers that drive events toward war.[3] However, the connection between China and the United States is different from other cases and there is a great opportunity for both sides to avoid the “destined war”. Considering the various aspects of economy, politics, military and technology and so on, United States is the strongest ruling power, and China is the most spectacular rising power. The rivalry between the two is like a rising state accelerating towards the most comprehensive and determined ruling power, or an unstoppable force accelerating towards an immovable object. Anticipate the grandest collision of all time.

Nobody in Washington thinks they can achieve their goals by having a war with China, nor decision-makers in Beijing. But if the drama ends in a war, there must be some factors from the following three dynamics.

First, the material reality of the seesaw between the U.S. and China shifts to an insatiable position that one side may feel blundering. What if China’s economy continues to grow while the United States keeps stagnation? What if the United States economy reblooms while China slides into a middle-income trap? Second, perceptions and misperceptions, understandings and misunderstandings politics may result in a war, “the historical record has demonstrated that the cause of the war between rising and extant dominant powers is much more complex than the neo-realists have explained. There is nothing foreordained about such a war. Some of them were mainly the result of misperception and the failure of statesmanship, as even the arch-realpolitik practitioner”, argued Henry Kissinger.Third, Third-party action is possibly an inducement for the final war, as discussed before, when one party feels the responsibility to respond to the defiant provocations, the two parties will be dragged into a war that both don’t want. When taking care of US-China competition, both sides should look carefully at potential third-party provocations.

Under these three dynamics, U.S. and China are taking care of the fragile relationship cautiously. How could the US and China escape Thucydides’s trap and avoid a possible collision? The following two juxtaposing approaches are believed apposite and feasible for both sides.

On the one hand, both United States and China should recognize the fact that systematic vulnerability of the international system that a possible destined war may be the end of the relationship between the status quo state and the rising state. Therefore, it is reasonable for both to reinforce their communication on many levels, including Head Summit, Ministry level and dialogues between armies. Both the United States and China should possess joint scenarios for the coming crisis, so that they could prevent the crisis from happening, and even if the crisis is unavoidable, they could manage those crises immediately. The two great powers shall be very much cautious about a possible third party that could drag them into a war, like Taiwan province, Korean peninsula, East or South China Sea countries, etc..

On the other hand, aside from externalizing problems and communication, a rivalry partnership is almost certain for both sides to deal with the intricate and complex relationship. They have to acknowledge that their relationship is a mutually beneficial connection, and necessary competition is inevitable. But they need to collaborate on their common interest.

[1]China tells U.S. to shut consulate in Chengdu, in retaliation for Houston closure, ByAnna Fifield, Carol Morello and Ellen Nakashima. July 24, 2020, The Washington Post.

[2]Chinese consulate in Houston ordered to close by US, 23 July 2020. BBC News

[3]Allison, Graham T. 2017. Destined for War : Can America and China Escape Thucydides’s Trap? Boston: Houghton Mifflin Harcourt.

B.A of Public Administration and Spanish, Rutgers University, Specialist at International Department, China Biodiversity Conservation and Green Development Foundation.

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The hegemony of knowledge and the new world order: U.S. and the rest of the world



In today’s world, knowledge and technological advantages determine – to a large extent – differences in the management of international policy. The increase in a country’s intellectual power directly defines an increase in its economic power, thus changing its position in the international competition for dominance.

The power policy, first in the agricultural age and later in the industrial age, was characterised by military and then economic hegemony, while the power policy in the information age gradually reveals the characteristics of knowledge hegemony at both the scientific and intelligence levels.

The hegemony of knowledge in contemporary international relations manifests itself specifically as unequal exchange in international trade, exploitation of high-value information and various conditions related to technological production. Hence, we see the transfer of polluting industries from privileged to poor countries: energy-consuming and high-intensity activities.

Western culture and values are disseminated vigorously, through the so-called soft power in information and mass media, and take on obsessive and oppressively hypnopedic forms.

Developed countries have patents in the use of outer space, as well as in the development of deep sea resources and in the production of environmental resources that pollute, while developing countries can only sigh as they look at other’s oceans and satellites, which fly around, do reconnaissance activities and monitor them.

The resources of the great and deep seas – which should be shared by mankind as they belong to everybody like the air, the moon and the sun – are instead exploited by the developed countries. On the contrary, they freely and ‘democratically’ share with the wretched ones only the evil consequences of environmental pollution.

With specific reference to sanctions and armed interference in international relations, the technique of violent and conscious bullying is adopted: whoever is militarily stronger imposes the validity of their interests, also at legal level.

The root cause for generating knowledge hegemony lies in the polarisation of the intellectual status of the nation-State. Western developed countries have already crossed the threshold of an information society, while developing countries are still struggling to climb towards industrial civilisation from the most primitive and closed state of existence. Although developing countries hold most of the world’s natural and human resources (just think of Africa), they are far behind in science and technology. Just look at the continental histogram of the 207 Nobel Prizes in Physics from 1901 to 2017 (winners are counted by country of birth except for the Algerian Nobel Prize winner Claude Cohen-Tannoudji [1997], who was born when Algeria was a French territory):

Source: Nadua Antonelli <<Africana>> XXIII (2017) page 12

If they have no means to study, even the greatest and most brilliant brains cannot make discoveries or file patents, looking only at the sky and the earth.

About 80 per cent of science and technology staff and their achievements are concentrated in developed countries. The knowledge advantage gives developed countries the right to set the rules of the game and of communication for all global knowledge production and dissemination. In particular, the developed countries’ knowledge advantages in the military and high-tech media enable them to expand their influence on the civil and military fronts and achieve their strategic objectives.

Developing countries wander between traditional society, modern industrial civilisation and post-industrial civilisation, and are often challenged and oppressed by the third party’s hegemony of knowledge.

The new economy created by the information revolution is still a ‘rich-country phenomenon’, the core of what is called ‘advantage creation’, under the cover of ‘competitive advantage’, or rather: competitive towards those who cannot compete.

The country leading the information revolution is the United States, which is the biggest beneficiary of these achievements. The digital divide highlights the status of the US information superpower. In the global information sector, in 2000 the central processing unit production in the United States accounted for 92%, and software production for 86%.

IT (Information & Technology) investment in the United States was 41.5% of global investment, Microsoft’s Windows system accounted for 95% of global platform applications, while the US Internet users accounted for more than half of global Internet users, and 58% of all e-mail goes through US servers.

E-commerce is worth 75% of the global total and US commercial websites account for 90% of the planet.

Currently, there are almost three thousand large-scale databases in the world, 70% of which are in the United States. There are 13 top-level domain name servers in the world and 10 of them are located in the United States.

The above figures far exceed the share of US GDP, which is 28% of the world total. The United States is far ahead of all countries in the world, including the other developed countries. The leading position in information technology allows the United States to control the basics in the field of information with its strong economic and talent advantages, as well as to master the actual rights, and to set standards and formulate rules and regulations.

The status as cradle of the information revolution has brought enormous wealth and development benefits to the United States. Since the 1990s, the development of information technology and the rise of the related industry have become an accelerator of further economic advancement in the United States.

In the growth of US GDP – from 1994 (the beginning of the Internet) to 2000 – the share of the information industry in the value of the country’s total output has caused the economy to rise from 6.3% to 8.3%, and the contribution provided by the information industry development to the actual US economic growth is estimated at 30%.

At the beginning of the 21st century, the United States – with its strong national-global power and the relative hegemony of knowledge/information – was already ready to build a new world order.

Knowledge is also the soul of military hegemony. Since the 1990s the United States (after the USSR’s demise) has taken advantage of its absolute leadership in information technology to vigorously promote a new military revolution and equip its armed forces with a large number of modern sophisticated weapons, especially cyber weapons: an overwhelming advantage in the conventional field, clearly overtaking the Third World, as well as its Western allies.

The US superiority in equipment ranges from one to two generations (i.e. from 15 to 30 years) over developing countries and from 0.5 to one generation over allies. All this has established the hegemonic status of the United States as the world’s number one military power.

Gulf Wars II (1991) and III (2003) (the first was the Iran-Iraq War in 1980-88), the Kosovo War (1999), the Afghanistan War (2001- still ongoing), and the Iraq War (2003-2011) were four localised wars that the United States fought to establish a new world order after the Cold War. During those events, the US hegemony was strengthened on an unprecedented scale and its attempt to establish a new order made substantial progress.

Moreover, backed by strong military advantages (scattering the planet with its own bases and outposts), as well as economic and technological advantages, those events ensured that the United States had and still has a leading position in the world, thus making the White House a planner and defender of the new world order. (1. continued)

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Hardened US and Iranian positions question efficacy of parties’ negotiating tactics



The United States and Iran seem to be hardening their positions in advance of a resumption of negotiations to revive a 2015 international nuclear agreement once Iranian President-elect Ebrahim Raisi takes office in early August.

Concern among supporters of the agreement to curb Iran’s nuclear program which former US President Donald J. Trump abandoned in 2018 may be premature but do raise questions about the efficacy of the negotiating tactics of both parties.

These tactics include the Biden administration’s framing of the negotiations exclusively in terms of the concerns of the West and its Middle Eastern allies rather than also as they relate to Iranian fears, a failure by both the United States and Iran to acknowledge that lifting sanctions is a complex process that needs to be taken into account in negotiations, and an Iranian refusal to clarify on what terms the Islamic republic may be willing to discuss non-nuclear issues once the nuclear agreement has been revived.

The differences in the negotiations between the United States and Iran are likely to be accentuated if and when the talks resume, particularly concerning the mechanics of lifting sanctions.

“The challenges facing the JCPOA negotiations are a really important example of how a failed experience of sanctions relief, as we had in Iran between the Obama and Trump admins, can cast a shadow over diplomacy for years to come, making it harder to secure US interests,” said Iran analyst Esfandyar Batmanghelidj referring to the nuclear accord, the Joint Comprehensive Plan of Action, by its initials.

The Biden administration may be heeding Mr. Batmangheldij’s notion that crafting sanctions needs to take into account the fact that lifting them can be as difficult as imposing them as it considers more targeted additional punitive measures against Iran. Those measures would aim to hamper Iran’s evolving capabilities for precision strikes using drones and guided missiles by focusing on the providers of parts for those weapon systems, particularly engines and microelectronics.

To be sure, there is no discernable appetite in either Washington or Tehran to adjust negotiation tactics and amend their underlying assumptions. It would constitute a gargantuan, if not impossible challenge given the political environment in both capitals. That was reflected in recent days in Iranian and US statements.

Iranian Spiritual Leader Ayatollah Ali Khamenei suggested that agreement on the revival of the nuclear accord was stumbling over a US demand that it goes beyond the terms of the original accord by linking it to an Iranian willingness to discuss its ballistic missiles program and support for Arab proxies.

In a speech to the cabinet of outgoing President Hassan Rouhani, he asserted that the West “will try to hit us everywhere they can and if they don’t hit us in some place, it’s because they can’t… On paper and in their promises, they say they’ll remove sanctions. But they haven’t lifted them and won’t lift them. They impose conditions…to say in future Iran violated the agreement and there is no agreement” if Iran refuses to discuss regional issues or ballistic missiles.

Iranian officials insist that nothing can be discussed at this stage but a return by both countries to the nuclear accord as is. Officials, distrustful of US intentions, have hinted that an unconditional and verified return to the status quo ante may help open the door to talks on missiles and proxies provided this would involve not only Iranian actions and programs but also those of America’s allies.

Mr. Khamenei’s remarks seemed to bolster suggestions that once in office Mr. Raisi would seek to turn the table on the Biden administration by insisting on stricter verification and US implementation of its part of a revived agreement.

To achieve this, Iran is expected to demand the lifting of all rather than some sanctions imposed or extended by the Trump administration; verification of the lifting;  guarantees that the lifting of sanctions is irreversible, possibly by making any future American withdrawal from the deal contingent on approval by the United Nations Security Council; and iron-clad provisions to ensure that obstacles to Iranian trade are removed, including the country’s unfettered access to the international financial system and the country’s overseas accounts.

Mr. Khamenei’s remarks and Mr. Raisi’s anticipated harder line was echoed in warnings by US officials that the ascendancy of the new president would not get Iran a better deal. The officials cautioned further that there could be a point soon at which it would no longer be worth returning to because Iran’s nuclear program would have advanced to the point where the limitations imposed by the agreement wouldn’t produce the intended minimum one year ‘breakout time’ to produce enough enriched uranium for a bomb.

“We are committed to diplomacy, but this process cannot go on indefinitely. At some point, the gains achieved by the JCPOA (Joint Comprehensive Plan of Action) cannot be fully recovered by a return to the JCPOA if Iran continues the activities that it’s undertaken with regard to its nuclear program…The ball remains in Iran’s court, and we will see if they’re prepared to make the decisions necessary to come back into compliance,” US Secretary Antony Blinken said this week on a visit to Kuwait.

Another US official suggested that the United States and Iran could descend into a tug-of-war on who has the longer breath and who blinks first. It’s a war that so far has not produced expected results for the United States and in which Iran has paid a heavy price for standing its ground.

The official said that a breakdown in talks could “look a lot like the dual-track strategy of the past—sanctions pressure, other forms of pressure, and a persistent offer of negotiations. It will be a question of how long it takes the Iranians to come to the idea they will not wait us out.”

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Wendy Sherman’s China visit takes a terrible for the US turn



Photo: Miller Center/ flickr

US Deputy Secretary of State, Wendy Sherman, had high hopes for the meeting in China. At first, the Chinese side did not agree to hold the meeting at all. The reaction had obvious reasons: Antony Blinken’s fiasco in Alaska left the Chinese disrespected and visibly irritated. This is not why they travelled all the way.

So then the State Department had the idea of sending Wendy Sherman instead. The US government actually needs China more than China needs the US. Sherman was in China to actually prepare the ground for Biden and a meeting between the two presidents, expecting a red carpet roll for Biden as if it’s still the 2000s — the time when it didn’t matter how the US behaved. Things did not go as expected.

Instead of red carpet talk, Sherman heard Dua Lipa’s “I got new rules”. 

That’s right — the Chinese side outlined three bottom lines warning the US to respect its system, development and sovereignty and territorial integrity. In other words, China wants to be left alone.

The bottom lines were not phrased as red lines. This was not a military conflict warning. This was China’s message that if any future dialogue was to take place, China needs to be left alone. China accused the US of creating an “imaginary enemy”. I have written about it before — the US is looking for a new Cold War but it doesn’t know how to start and the problem is that the other side actually holds all the cards

That’s why the US relies on good old militarism with an expansion into the Indo-Pacific, while aligning everyone against China but expecting the red carpet and wanting all else in the financial and economic domains to stay the same. The problem is that the US can no longer sell this because there are no buyers. Europeans also don’t want to play along.

The headlines on the meeting in the US press are less flattering than usual. If the US is serious about China policy it has to be prepared to listen to much more of that in the future. And perhaps to, yes, sit down and be humble.

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