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How Will the Coronavirus Implicate U.S. – China Relations?

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Authors: Chan Kung and Yu(Tony) Pan* 

To know the impact of the novel coronavirus (Covid-19) on the U.S.-China relations, one must first understand the state that the U.S. – China relationship prior the outbreak. China’s relationship with the United States was already in a rough spot. The rivalry between both countries has gone from one about a specific content in a policy in tactical sense to one concerning the formulation of a policy itself, or the strategic level. As of late 2019, both countries were rapidly developing towards a phase of “strategic co-opetition” with one another, increasingly developing into the aspects of competition and even confrontation.

Following the occurrence of the Covid-19 pandemic, ANBOUND’s research team believes there are couples of things worth taking note of the U.S.-China relationship.

One, on an economic level, the United States and China may decouple from one another “non-strategically” as the pandemic has inadvertently exposed some of the hidden risks in the supply chain. It is now believed that the pandemic could potentially cause globalization to experience a halt or in worst case scenarios, suffer a reversal. There are two reasons to that – First of all, the pandemic has effectively caused the global economy to experience a complete stop. In the words of global economy, it is easy to put the brakes to the economy, but resetting it on the hand, is a huge and arduous journey because the market requires time to recuperate from the shock as well as all supply chains need to be in complete sync with one another in order to ensure the reset can happen smoothly and without interference. This brings us to the second reason, that is the second layout of the supply chain in the post-pandemic. The pandemic has brought many risk factors to the supply chain this time around, particularly in the areas of global distribution and supply chain management. With the outbreak getting finally over in China, the overall focus for many multinational corporations in the country now lies in fine tuning its supply chain so as to ensure they are better equipped to face any risks in the future. Unfortunately, this will only encourage investors to perform further withdrawals of capital from the Chinese market, specifically U.S. capitals. Simply put, the market that serves as an underlying foundation for trade relationship will weaken. As such, the decoupling between both countries is inevitable, and will certainly happen quicker than one realizes.

Two, the “co-opetition” is currently at a critical turning point and it is expected that further “competition (and confrontation)” will be the new norm between U.S. and China, largely because both countries aren’t willing to put aside their major differences to cooperate. While the U.S. may have aided China against Covid-19, the U.S. officials’ remark about how the novel coronavirus may help revive the American industrial scene has upset China greatly. Furthermore, both parties are now pointing fingers at one another given the contagion has escalated into a full-blown pandemic. A high-ranking U.S. administrative official was caught saying something along the line “the pandemic happened because Wuhan did not do a good job at containing it properly early on.” Meanwhile, U.S. President Donald Trump publicly dubbed the novel coronavirus “Chinese Virus”. In response to all the accusations, China’s Foreign Ministry Spokesperson, Zhao Lijian clapped back on social media claiming the virus originated from the U.S. army who came to Wuhan sometime back. It should be noted that ANBOUND does not take side on this. Rather, what we would like to point out is the exchange of verbal blows speaks of a major shift happening between both countries, and it reflects in their trade relationship too. In essence, both governments are foregoing bilateral relations at this point. Truthfully speaking, the U.S. and China were never fully on good terms, though they have always kept their relationship “respectable” so to speak. The current situation, however, is much different and it seems that the “philosophy of struggle” is no longer a form of strategic thought, but a specific policy that is expected to deepen the rift between U.S. and China, thereby leading to further confrontations and weakening the flexibility of foreign policies.

Three, the clash between both countries extends to its social as well as cultural scenes too and decoupling from these two aspects could cause the U.S. and China to enter a “cold war-like confrontation”. The “Thucydides Trap”, or the belief that war arises when a rising power threatens a ruling power, has been a heavily discussed topic within the U.S.-China policy scene in the 21st century. There are considerable economic, cultural and social ties that exist between the two countries that sets it apart from the US-Russia relations, which means a full-scale confrontation is very unlikely to happen. That being said, the fact that things have come to “decoupling” does speak a lot about how things are slowly waning in the U.S. and China, especially on a social and cultural level. At the time of the article’s writing, there already has been many reported cases of xenophobia towards Asians, especially ethnic Chinese living in the American society, with a portion of it involving physical violence. This in turn has caused many in China to respond aggressively and negatively towards the Americans. Despite both country’s communities having legitimate reasons to be upset with one another (like how the Americans and Chinese share differing views on those who wear a mask), ANBOUND believes that most of the negativity arose as result of the fear-arousing pandemic, which has caused both sides to cling onto their ideals of “nationalism” frantically. Clearly, the U.S.-China relation is falling apart at political and social level, all in the name of “nationalism” and such antagonism can bring about many irreconcilable differences.

Four, the pandemic has stirred up yet another problem, and that is the Chinese who have yet to fully assimilate into the American society, overseas Chinese (American Born Chinese in this case) and foreign exchange students included, further threatens the U.S.-China relations. It was previously thought that these group of people would have been key to bridging the gap between both communities and in doing so, promote racial harmony between one another. It is unfortunate that time has shown this is ineffective and have only caused further gaps to appear between them, so much so as leading to a cultural clash, which brings us back to the topic of how it is becoming increasingly harder to resolve any conflicts happening between both communities.

Five, the pandemic has brought a buffer period for the U.S.-China relations, interestingly enough. Even if the U.S.-China trade relations were to take a turn for the worse and become more confrontational, both countries would lack the time and resources to properly sort out any foreign policy-related matters in 2020. For starters, the highlight of the year is centered around the control and prevention of the epidemic as well as the US Presidential Election that is quickly becoming a hot topic amongst American politicians, which means one can expect little to no drastic movements or changes this year; Also because it wouldn’t do China any good to instigate any confrontation or conflicts presently. Another thing that we at ANBOUND wish to stress too is that any containment efforts that the U.S. raises against China requires the support of its allies to be effective, though the outcome remains very much uncertain. Why? Because Trump is destroying the very alliance system that is making the country whole and the cracks are beginning to show. Plus, the U.S.’ allies located in the Asia-Pacific and European region are currently in no place to partake in the matter either, as they themselves are having a hard time keeping up with the pandemic too. Given the state of things domestically and internationally, it is expected that the U.S. and China will face further instability that can’t be explained in its relationship, which may push “Phase Two” of the trade agreement to a later date though all of this may very well just be the calm before the storm.

And last but not least, the Belt and Road Initiative or BRI, which after being in the works for six years, is now reaching a key point and is urgently needing structural adjustments. Since the second half of 2019, the U.S. has been actively involving Europe, Japan, India and Austria to build an alternative to the BRI that is expected to span across Eurasia. Meanwhile, China’s domestic economy has begun deviating from its “new normal”, a result of the immense pressure calling for the BRI to undergo major changes though like what we have discussed in our previous articles, this is unlikely to happen as the U.S. and its allies lacks the capacity to do so given what short period of time they have, thus providing the aforementioned “buffer period” that the BRI desperately needs for the time being. Another thing to note, Europe is steadily turning into a red zone for the pandemic, which provides an opportune moment for China’s public diplomacy. If China can change Europe’s perception of itself, then the BRI would have one less challenge to face in the future.

Final analysis conclusion:

The U.S.-China relations have been largely affected by the epidemic as a whole and the bilateral relationship that both governments have worked so hard to keep afloat is now perpetually being replaced by a series of confrontations. What more, such events have led China to make a series of changes towards the country’s strategic direction on a feedback-upon-feedback level, domestically at least. Judging by the progress of things, it’s only a matter of time before both countries will eventually descend into another cold war and the ultimate deciding factor in that lies in whether the U.S. can maintain influence over its allies, which is something China will have play into when responding to U.S.’ containment efforts towards the country. 

*Mr. Yu(Tony) Pan serves as the associate research fellow and the research assistantof Mr. Chen Gong, Founder, Chairman, and the Chief Researcher of ANBOUND. He obtained his master’s degree at George Washington University, the ElliottSchool of International Affairs; and his bachelor’s degree in University ofInternational Business and Economics in Beijing. Mr. Pan has published pieces invarious platform domestically and internationally. He currently focuses onAsian Security, geopolitics in Indo-Pacific region and the U.S.-Sino Relations.

Founder of Anbound Think Tank in 1993, Chan Kung is now ANBOUND Chief Researcher. Chan Kung is one of China’s renowned experts in information analysis. Most of Chan Kung‘s outstanding academic research activities are in economic information analysis, particularly in the area of public policy.

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Americas

Flames of Globalization in the Temple of Democracy

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Authors: Alex Viryasov and Hunter Cawood

On the eve of Orthodox Christmas, an angry mob stormed the “temple of democracy” on Capitol Hill. It’s hard to imagine that such a feat could be deemed possible. The American Parliament resembles an impregnable fortress, girdled by a litany of security checks and metal detectors at every conceivable point of entry. And yet, supporters of Donald Trump somehow found a way.

In the liberal media, there has been an effort to portray them as internal terrorists. President-elect Joe Biden called his fellow citizens who did not vote for him “a raging mob.” The current president, addressing his supporters, calls to avoid violence: “We love you. You are special. I can feel your pain. Go home.”

That said, what will we see when we look into the faces of these protesters? A blend of anger and outrage. But what is behind that indignation? Perhaps it’s pain and frustration. These are the people who elected Trump president in 2016. He promised to save their jobs, to stand up for them in the face of multinational corporations. He appealed to their patriotism, promised to make America great again. Arguably, Donald Trump has challenged the giant we call globalization.

Today, the United States is experiencing a crisis like no other. American society hasn’t been this deeply divided since the Vietnam War. The class struggle has only escalated. America’s heartland with its legions of blue-collar workers is now rebelling against the power of corporate and financial elites. While Wall Street bankers or Silicon Valley programmers fly from New York to London on private jets, an Alabama farmer is filling up his old red pickup truck with his last Abraham Lincoln.

The New York banker has no empathy for the poor residing in the southern states, nothing in common with the coal miners of West Virginia. He invests in the economies of China and India, while his savings sit quietly in Swiss banks. In spirit, he is closer not to his compatriots, but to fellow brokers and bankers from London and Brussels. This profiteer is no longer an American. He is a representative of the global elite.

In the 2020 elections, the globalists took revenge. And yet, more than 70 million Americans still voted for Trump. That represents half of the voting population and more votes than any other Republican has ever received. A staggering majority of them believe that they have been deceived and that Democrats have allegedly rigged this election.

Democrats, meanwhile, are launching another impeachment procedure against the 45th president based on a belief that it has been Donald Trump himself who has provoked this spiral of violence. Indeed, there is merit to this. The protesters proceeded from the White House to storm Congress, after Trump urged them on with his words, “We will never give up, we will never concede.”

As a result, blood was shed in the temple of American democracy. The last time the Capital was captured happened in 1814 when British troops breached it. However, this latest episode, unlike the last, cannot be called a foreign invasion. This time Washington was stormed by protestors waving American flags.

Nonetheless, it is not an exaggeration to say that the poor and downtrodden laborers of America’s Rust Belt currently feel like foreigners in their own country. The United States is not unique in this sense. The poor and downtrodden represent a significant part of the electorate in nearly every country that has been affected by globalization. As a result, a wave of populism is sweeping democratic countries. Politicians around the world are appealing to a sense of national identity. Is it possible to understand the frustrated feelings of people who have failed to integrate into the new global economic order? Absolutely. It’s not too dissimilar from the grief felt by a seamstress who was left without work upon the invention of the sewing machine.

Is it worth trying to resist globalization as did the Luddites of the 19th century, who fought tooth and nail to reverse the inevitability of the industrial revolution? The jury is still out.

The world is becoming more complex and stratified. Economic and political interdependence between countries is growing each and every day. In this sense, globalization is progress and progress is but an irreversible process.

Yet, like the inhumane capitalism of the 19th century so vividly described in Dickens’ novels, globalization carries many hidden threats. We must recognize and address these threats. The emphasis should be on the person, his dignity, needs, and requirements. Global elites in the pursuit of power and superprofits will continue to drive forward the process of globalization. Our task is not to stop or slow them down, but to correct global megatrends so that the flywheel of time does not grind ordinary people to the ground or simply throw nation-states to the sidelines of history.

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Deliberate efforts were made to give a tough time to President Joe Biden

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Image credit: Todd Jacobucci/ flickr

President Trump-Administration is over-engaged in creating mess for in-coming President Joe Biden. The recent deliberate efforts are made to give a tough time are:  naming Cuba a state sponsor of terrorism, designating Yemen’s Houthi rebels as a foreign terrorist organization, Terming Iran as a new home to al-Qaida, and lifting restrictions on contacts between American officials and representatives from Taiwan.

The consequence may turn into dire situations, like a return to cold war era tension. Efforts were made to resume Cuba-US relations to normal for decades and were expected to sustain a peaceful co-existence. Any setback to relations with Cuba may destabilize the whole region. Pompeo’s redesignation of Cuba as a sponsor of state terror will possibly have the least material impact, but it signifies a personal loss to Biden and a momentous political win for Trumpism. In doing so, Trump is hitting the final nail in the coffin of Barack Obama’s efforts to normalize relations with Cuba.

Yemen issue was a creation of Arab spring sponsored by the CIA, and after realizing the wrongdoings, the US was trying to cool down the tension between Saudi Arabia and Yemen, but with the recent move to name Yemen’s Houthi rebels as a foreign terrorist organization, may open new hostilities and bloodshed. It has been designated by UNICEF as the “largest humanitarian crisis in the world, with more than 24 million people — some 80 percent of the population — in need of humanitarian assistance, including more than 12 million children.” Such statements may halt humanitarian assistance and may result in a big disaster.

The history of rivalries with Iran goes back to 1953 when the UK and the US jointly overthrew the legitimate government of Prime Minister Mossadeq. But the real tension heightened in 2018 When President Trump withdrew from JCPOA. But the recent allegation that Iran as a new home of al-Qaida may take a new turn and give a tough time to Joe Biden–Administration. Although there is no evidence, however, Secretary of State Pompeo made such an allegation out of his personal grudge against Iran. It can complicate the situation further deteriorate and even may engulf the whole middle-east.

Lifting constraints on contacts between American officials and representatives from Taiwan, is open violation of “One-China Policy.” Since Washington established formal diplomatic relations with Beijing in 1979, it has resisted having official diplomatic associations with Taipei in order to avoid a confrontation with the PR China, which still comprehends the island — home to around 24 million people — as part of China. Chinese are very sensitive to the Taiwan issue and struggling for peaceful unification. However, China posses the capabilities to take over by force, yet, have not done so far. Secretary of State Mr. Pompeo’s statement may be aiming to instigate China and forcing toward military re-unification. It might leave a challenging concern for Joe Biden-Administration.

Raffaello Pantucci, a senior fellow at Singapore’s S. Rajaratnam School of International Studies, said, “The Trump administration is locking in place a series of conflicts that change the starting point for Biden walking into the office on the world stage.”

Even Mr. Pompeo had a plan to travel to Europe to create further hurdles for in-coming administration, but fortunately, some of the European countries refused to entertain him, and desperately he has to cancel his trip at the eleventh hours.

It is just like a losing army, which destroys all ammunition, weapons, bridges, infrastructures, etc., before surrendering. Although President Trump’s days in office are numbered, his administration is over-engaged in destruction and creating hurdles for the next administration. He is deliberately creating hurdles and difficulties for President-Elect Joe Biden.

President Joe Biden has many challenges to face like Pandemic, unrest in the society, a falling economy, losing reputation, etc. Some of them might be natural, but few are specially created!

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Latin America and the challenges for true political and economic independence

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Latin America – and its core countries, namely Brazil, Argentina and Mexico – has become a region of high global strategic value due to its vast territory, abundant resources, great economic development, unique geographical position and active role in global and regional governance.

Factors such as history, geography and reality, combined with the complexity of the region’s internal political logics, have once again made Latin America a place where major powers pay attention to and play key games.

Latin America’s cooperation with ‘external’ powers has become ever closer, leading to unfounded suspicions and malicious provocations among the countries of the region concerned.

What bothers ‘democrats’ and ‘liberals’ is the presence in the area of countries without a colonialist and exploitative past.

Historically, Latin America and the Caribbean were the coveted location of various Western forces. Since the Latin American countries’ independence – and even today – large countries inside and outside the region have competed in this area.

The complexity and uncertainty of the current global political and economic situation in Latin America lie behind the competition between the major powers in geopolitics and international relations.

Latin America’s vast lands and resources are linked to global food security, the supply of agricultural and livestock products, and energy security. It is an important ‘product supplier’ that cannot be neglected.

Latin America has a huge surface of over 20 million square kilometres, covering four sub-regions of North America (Mexico), the Caribbean, Central America and South America, with 33 independent countries and some regions that are not yet independent, as they are tied to the burden of the old liberal-colonialist world.

Latin America is blessed with favourable natural conditions. For example, it has become a well-known ‘granary’ and ‘meat provider’ because of its fertile arable land and abundant pastures. It is an important area  for the production of further agricultural and livestock products. At the same time, other countries in the region have huge reserves of natural resources such as oil and gas, iron ore, copper and forests, and have become important global suppliers of strategic materials.

Secondly, the Latin American region has a relatively high level of economic development and has brought together a number of important emerging economies – a significant global market that cannot be ignored.

The Latin American region plays an important role in global economy. Brazil and Mexico are not only the two largest economies in Latin America, but also the top 15 in global economy.

At the same time, recent calculations on 183 countries (regions) with complete data from the World Bank and related studies show that the group consisting of Brazil, Mexico, Argentina, Chile, Peru, Colombia, etc., has entered the ranking of the “30 emerging markets” (E30) worldwide. According to World Bank statistics, Latin America’s gross domestic product (GDP) in 2018 was about 5.78 trillion dollars and the per capita GDP exceeded 9,000 dollars. With the exception of a few, most countries in Latin America are middle-income and some have entered the high-income ranking.

Therefore, Latin America has become a large consumer market that cannot be ignored due to its relatively high level of economic development, high per capita income and a population of over 640 million people.

Indeed, as Latin American region with a high degree of economic freedom and trade openness, it has been closely connected with the economies of other regions in the world through various bilateral and multilateral agreements, initiatives and free trade mechanisms.

Thirdly, Latin America’s unique geographical position has a significant impact on global trade, shipping and climate change.

Latin America is situated between two oceans. Some countries border on the Pacific, or the Atlantic, or are even bathed by both oceans. This special position gives the Latin American region the geographical advantage of achieving ‘transpacific cooperation’ with the Asian region or building a link of ‘transatlantic cooperation’ with the European region. Thanks to the Panama Canal, it is the fundamental hub for global trade.

Besides its strategic relevance for food security and clean energy production, the Amazon rainforest, known as the ‘lungs of the earth’, has a surface of over six million square kilometres, accounting for about 50% of the global rainforest. 20% of the global forest area and the vast resources covering 9 countries in Latin America have become one of the most important factors influencing global climate change.

Finally, as an active player in the international and regional political and economic arena, Latin America is a new decisive force that cannot be neglected in the field of global and regional governance.

Firstly, as members of organisations such as the United Nations, the World Trade Organisation, the International Monetary Fund and the World Bank, the major Latin American countries are both participants in and creators of international rules.

Moreover, these countries should be considered from further aspects and viewpoints of multilateralism.

The major Latin American countries, particularly regional powers, such as Brazil, Mexico and Argentina, are members of the G20. Brazil belongs to both BRICS and BASIC.Mexico, Chile and Peru are within the Asia-Pacific Economic Cooperation. Mexico, Peru and Chile are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), while Mexico and Chile are members of the Organisation for Economic Cooperation and Development (OECD).

They are playing an irreplaceable role in responding to the economic crisis and promoting the reform of global governance mechanisms; in promoting the conclusion of important agreements on global climate change; in advancing economic cooperation between the various regions; in leading ‘South-South cooperation’ between developing countries and in holding a dialogue on the main current issues (opposition to unilateralism, protectionism, protection of multilateralism, etc.).

It must also be said that Latin American countries are naturally also active in regional organisations and institutions – such as the Organisation of American States, the Inter-American Development Bank, etc. – so that they can participate directly and try to oppose U.S. hegemonism.

Within the Latin American region, these countries first initiated a process of cooperation and integration and later established various sub-regional organisations -such as Mercosur (Mercado Común del Sur-Mercado Comum do Sul) and Alianza del Pacífico (Mexico, Colombia, Chile and Peru) – to cooperate with other regions of the world and shake off the unfortunate definition of “America’s backyard”.

Located in the Western Hemisphere, where the well-known superpower is present, Latin American countries have long been deeply influenced by the United States in politics, economics, society and culture.

In 1823, the United States supported the Monroe Doctrine and drove the European countries out of Latin America with the slogan ‘America for the Americans’, thus becoming the masters of the Western Hemisphere.

The Monroe Doctrine also became a pretext for the United States to interfere in the internal affairs and diplomacy of Latin American countries.

In 2013, 190 years after the aforementioned declaration, the United States publicly declared that the Monroe Doctrine era was over and emphasised the relationship on an equal footing and the shared responsibility between the United States and Latin America.

Nevertheless, the current Latin American politics shows once again that the end of the so-called ‘Monroe Doctrine’ era is nothing more than a common myth.

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