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Sino-American relations: Origins of its future history

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Americans performed three very different policies on the People’s Republic: From a total negation (and the Mao-time mutual annihilation assurances), to Nixon’s sudden cohabitation. Finally, a Copernican-turn: the US spotted no real ideological differences between them and the post-Deng China. This signalled a ‘new opening’: West imaginedChina’s coastal areas as its own industrial suburbia. Soon after, both countries easily agreed on interdependence (in this marriage of convenience): Americans pleased their corporate (machine and tech) sector and unrestrained its greed, while Chinese in return offered a cheap labour, no environmental considerations and submissiveness in imitation. Both spiced it by nearly religious approach to trade.

However, for each of the twothis was far more than economy, it was a policy – Washington read it as interdependence for transformative containment and Beijing sow it as interdependence for a (global) penetration. In the meantime, Chinese acquired more sophisticated technology, and the American Big tech sophisticated itself in digital authoritarianism –‘technological monoculture’ met the political one.

But now with a tidal wave of Covid-19, the honeymoon is over.

(These days, many argue that our C-19 response is a planetary fiasco, whose size is yet to surface with its mounting disproportionate and enduring secondary effects, casing tremendous socio-economic, political and psychosomatic contractions and convulsions. But, worse than our response is our silence about it.

It is an established fact that the quintessence of Nazism was not Hitler and the circle of darkness around him. It was rather a commonly shared ‘banality of crime’ atmosphere: an acceptance of ordinary village people living next to Auschwitz, Treblinka, Dachau … The day when questioning stops and silent acceptance becomes a ‘new normal’ is a day when fascism walks in big time. So, our C-19 response illustrates –the argument goes– nothing else but a social pathology: the non-transparent concentration of power and our overall democracy recession; lasting consequences of cutbacks, environmental holocaust, privatisation of key intergovernmental and vital national institutions, ill-fated globalisation on (overly allopathic, mandated drugs -centred) healthcare, and luck of public data commons. Pandemic or plundermic …

Following a simple ratio that the one’s level of health is genetic expression of life-style choices made, there are also growing speculations if the lockdown – as the most notorious expression of monofocal perspective and rejection to any integrated judgment, is invasion or protection: Whether the aim is a herd-immunity or herd loyalty. And,if is there any back-to-normal exit from the crisis or this disaster ‘turned into planetary terror, through global coup d’état’ will be exploited to further something already pre-designed (with a fear, not as a side-effect, but rather as a manufactured tool to gain control) – more related to biotronics and demographics, than to health and economics or any common social purpose.

E.g. Le Monde Diplomatique – while examining the possible merge between tech oligopoly and political monopoly – claims: “Political decisions have been central in shaping this tragedy — from the destruction of animal habitats, to the asymmetric funding of medical research, to the management of the crisis itself. They will also determine the world into which we emerge after the worst is over.” Over the past 30 years, every critical conjecture had a similar epilogue: pardon and enhancement for the capital, a burden and suppression for the labour. The C-19 is no exception to it: Ever since early lockdowns of March 2020, the capital flows unhindered while the labour, ideas and humans are under the house arrest. The XXI century frontline is the right to health and labour, privacy and human rights. (LMD, IV20))

Still to be precise, the so-called virus pandemic brought nothing truly new to the already overheated Sino-American relations and to the increasing binarization of world affairs: It only amplified and accelerated what was present for quite some time – a rift between alienated power centres, each on its side of Pacific, and the rest. Would it be about an expansion of techno-totalitarian model of government as an alternative to liberal democracy? And, is now a time to return to the nation-state, a great moment for all dictators-in-waiting to finally build a cult of personality? Hence, will our democracy be electro-magnetised and vaccinated for a greater good (or greedier ‘god’)?

This text examines a prehistory of that rift; and suggests possible outcomes past the current crisis.

Origins of Future

Does our history only appear overheated, while it is essentially calmly predetermined? Is it directional or conceivable, dialectic and eclectic or cyclical, and therefore cynical? Surely, our history warns(no matter if the Past is seen as a destination or resource). Does it also provide for a hope? Hence, what is in front of us: destiny or future?[1]

Theory loves to teach us that extensive debates on what kind of economic system is most conductive to human wellbeing is what consumed most of our civilizational vertical. However, our history has a different say: It seems that the manipulation of the global political economy (and usage of fear as the currency of control) – far more than the introduction of ideologies – is the dominant and arguably more durable way that human elites usually conspired to build or break civilizations, as planned projects. Somewhere down the process, it deceived us, becoming the self-entrapment. How?

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One of the biggest (nearly schizophrenic) dilemmas of liberalism, ever since David Hume and Adam Smith, was an insight into reality: Whether the world is essentially Hobbesian or Kantian. As postulated, the main task of any liberal state is to enable and maintain wealth of its nation, which of course rests upon wealthy individuals inhabiting the particular state. That imperative brought about another dilemma: if wealthy individual, the state will rob you, but in absence of it, the pauperized masses will mob you.

The invisible hand of Smith’s followers have found the satisfactory answer – sovereign debt. That ‘invention’ meant: relatively strong central government of the state. Instead of popular control through the democratic checks-&-balance mechanism, such a state should be rather heavily indebted. Debt – firstly to local merchants, than to foreigners – is a far more powerful deterrent, as it resides outside the popular check domain.

With such a mixed blessing, no empire can easily demonetize its legitimacy, and abandon its hierarchical but invisible and unconstitutional controls. This is how a debtor empire was born. A blessing or totalitarian curse? Let us briefly examine it.

The Soviet Union – much as (the pre-Deng’s) China itself – was far more of a classic continental military empire (overtly brutal; rigid, authoritative, anti-individual, apparent, secretive), while the US was more a financial-trading empire (covertly coercive; hierarchical, yet asocial, exploitive, pervasive, polarizing). On opposite sides of the globe and cognition, to each other they remained enigmatic, mysterious and incalculable: Bear of permafrost vs. Fish of the warm seas. Sparta vs. Athens. Rome vs. Phoenicia… However, common for the both(as much as for China today) was a super-appetite for omnipresence. Along with the price to pay for it.

Consequently, the Soviets went bankrupt by mid 1980s – they cracked under its own weight, imperially overstretched. So did the Americans – the ‘white man burden’ fractured them already by the Vietnam war, with the Nixon shock only officializing it. However, the US imperium managed to survive and to outlive the Soviets. How?

The United States, with its financial capital (or an outfoxing illusion of it), evolved into a debtor empire through the Wall Street guaranties. Titanium-made Sputnik vs. gold mine of printed-paper… Nothing epitomizes this better than the words of the longest serving US Federal Reserve’s boss, Alan Greenspan, who famously quoted J.B. Connally to then French President Jacques Chirac: “True, the dollar is our currency, but your problem”. Hegemony vs. hegemoney.

House of Cards (Forever r>g) 

Conventional economic theory teaches us that money is a universal equivalent to all goods. Historically, currencies were a space and time-related, to say locality-dependent. However, like no currency ever before, the US dollar became – past the WWII – the universal equivalent to all other moneys of the world. According to history of currencies, the core component of the non-precious metals’ money is a so-called promissory note – intangible belief that, by any given point in future, a particular shiny paper (self-styled as money) will be smoothly exchanged for real goods.

Thus, roughly speaking, money is nothing else but a civilizational construct about imagined/projected tomorrow – that the next day (which nobody has ever seen in the history of humankind, but everybody operates with) definitely comes (i), and that this tomorrow will certainly be a better day then our yesterday or even our today (ii).

This and similar types of collective constructs (horizontal and vertical) over our social contractshold society together as much as its economy keeps it alive and evolving. Hence, it is money that powers economy, but our blind faith in constructed (imagined) tomorrows and its alleged certainty is what empowers money.

Tellingly, the universal equivalent of all equivalents – the US dollar – follows the same pattern: Bold and widely accepted promise. For the US, it almost instantly substan-tiates extraterritorial economic projection: American can print (any sum of) money without fear of inflation. (Quantitative easing is always exported; value is kept home.)

(Empire’s currency loses its status when other nations lose confidence in ability of that imperial power to remain solvent. For the pre-modern and modern history, it happened with 5 powers – two Iberian, Dutch, France and the UK – before the US dollar took the role of world reserve currency. Interestingly, each of the empires held it for roughly a century. The US century is just about to expire, and there are already contesters, territorial and non-territorial, symmetric and asymmetric ones. On offer are tangibles and intangibles: gold, cryptocurrencies, and biotronics/nano-chemoelectricals.)

But, what does the US dollar promise when there is no gold cover attached to it ever since the time of Nixon shock of 1971?

Pentagon promises that the oceanic sea-lanes will remain opened (read: controlled by the US Navy), pathways unhindered, and that the most traded world’s commodity – oil, will be delivered. So, it is not a crude or its delivery what is a cover to the US dollar – it is a promise that oil of tomorrow will be deliverable. That is a real might of the US dollar, which in return finances Pentagon’s massive expenditures and shoulders its supremacy.

Admired and feared, Pentagon further fans our planetary belief in tomorrow’s deliverability – if we only keep our faith in dollar (and hydrocarbons’ energized economy), and so on and on in perpetuated circle of mutual reinforcements.

(Supplementing the Monroe Doctrine, President Howard Taft introduced the so-called ‘dollar diplomacy’ – in early XX c. – that “substitutes dollars for bullets”. This was one of the first official acknowledgements of the Wall Street – Pentagon symbiotic link.)

These two pillars of the US might from the East coast (the US Treasury/Wall Street and Pentagon) together with the two pillars of the West coast – both financed and amplified by the US dollar, and spread through the open sea-routs (Silicone Valley and Hollywood), are an essence of the US posture. Country that hosts such a dream factory, as the US does Hollywood, is easy to romanticize – though other 3 pillars are to take and to coerce.

This very nature of power explains why the Americans have missed to take the mankind into completely other direction; towards the non-confrontational, decarbonized, de-monetized/de-financialized and de-psychologized, the self-realizing and green humankind. In short, to turn history into a moral success story. They had such a chance when, past the Gorbachev’s unconditional surrender of the Soviet bloc, and the Deng’s Copernicus-shift of China, the US – unconstrained as a lonely superpower – solely dictated terms of reference; our common destiny and direction/s to our future/s.

Winner is rarely a game-changer

Sadly enough, that was not the first missed opportunity for the US to soften and delay its forthcoming, imminent multidimensional imperial retreat. The very epilogue of the WWII meant a full security guaranty for the US: Geo-economically – 54% of anything manufactured in the world was carrying the Made in USA label, and geostrategically – the US had uninterruptedly enjoyed nearly a decade of the ‘nuclear monopoly’. Up to this very day, the US scores the biggest number of N-tests conducted, the largest stockpile of nuclear weaponry, and it represents the only power ever deploying this ‘ultimate weapon’ on other nation.

To complete the irony, Americans enjoy geographic advantage like no other empire before. Save the US, as Ikenberry notes: “…every major power in the world lives in a crowded geopolitical neighborhood where shifts in power routinely provoke counterbalancing”. Look the map, at Russia or China and their packed surroundings. The US is blessed with its insular position, by neighboring oceans. All that should harbor tranquility, peace and prosperity, foresightedness.

Why the lonely might, an empire by invitation did not evolve into empire of relaxation, a generator of harmony? Why does it hold (extra-judicially) captive more political prisoners on Cuban soil than the badmouthed Cuban regime has ever had? Why does it remain obsessed with armament for at home and abroad? Why existential anxieties for at home and security challenges for abroad? Eg. 78% of all weaponry at disposal in the wider MENA theater is manufactured in the US, while domestically Americans – only for their civilian purpose – have 1,2 small arms pieces per capita.)

Why the fall of Berlin Wall 30 years ago marked a beginning of decades of stagnant or failing incomes in the US (and elsewhere in the OECD world) coupled with alarming inequalities. What are we talking about here; the inadequate intensity of our tireless confrontational push or about the false course of our civilizational direction? 

Indeed, no successful and enduring empire does merely rely on coercion, be it abroad or at home. The grand design of every empire in past rested on a skillful calibration between obedience and initiative – at home, and between bandwagoning and engagement – abroad. In XXI century, one wins when one convinces not when one coerces. Hence, if unable to escape its inner logics and deeply rooted appeal of confrontational nostalgia, the prevailing archrival is only a winner, rarely a game-changer.

How did we miss to notice it before? Simply, economy –right after history– is the ideologically most ‘colored’ scientific discipline of all.

To sum up; After the collapse of the Soviet Union, Americans accelerated expansion while waiting for (real or imagined) adversaries to further decline, ‘liberalize’ and bandwagon behind the US. One of the instruments was to aggressively push for a greater economic integration between regional and distant states, which – as we see now, passed the ‘End-of-History’ euphoria of 1990s – brought about (irreversible) socio-political disintegration within each of these states.

A Country or a Cause, Both or None?

Expansion is the path to security dictatum, of the post-Cold War socio-political and (hyper-liberal) economic mantra, only exacerbated the problems afflicting the Pax Americana, which acidified global stewardship; hence oceans, populations and the relations to the unbearable levels. That is why and that is how the capability of the US to maintain its order started to erode faster than the capacity of its opponents to challenge it. A classical imperial self-entrapment (by the so-called bicycle theory: keep pedalling same way or topple over).

Clearly, the US post-Cold War preponderance is now challenged in virtually every domain: America can no longer operate unrestrained in the traditional spheres of land, sea and air, not in newer ones like the (near and deeper) outer space and cyberspace. The repeated failure to notice and recalibrate such an imperial emasculation and retreat brought the painful hangovers to Washington, the most noticeably, by the last presidential elections.[2]Inability to manage the rising costs of sustaining the imperial order only increased the domestic popular revolt and political pressure to abandon its ‘mission’ altogether. (E.g. during the peak times of its longest – still ongoing – foreign intervention, the US was spending some $110 billion per annum in Afghanistan, roughly 50% more than annual American federal spending on education.) Perfectly hitting the target to miss everything else …

In short, past the Soviet collapse Americans intervened too much abroad, regulated too little at home, and delivered less than ever – both at home and abroad.  Such model attracts none. No wonder that today all around the globe many do question if the States would be appealing ever again. Domestically, growing number of people perceive foreign policy mostly as an expensive destruction, divinized trade and immigration as destroyers of jobsand communities. Its political system is unable to decouple and deconcentrate wealth and power which suffocates the very social fabrics.

Hence, Americans are not fixing the world anymore. They are only managing its decline. Look at their footprint in former Yugoslavia, Afghanistan, Iraq, Pakistan, Georgia, Libya, Syria, Ukraine or Yemen – to mention but a few. Violence as a source of social cohesion is dying out.                             

When the Soviets lost their own indigenous ideological matrix and maverick confrontational stance, and when the US dominated West missed to triumph although winning the Cold War, how to expect from the imitator to score the lasting moral or even a temporary economic victory?

Dislike the relationship with the Soviets Union which was on one clear confrontational acceptance line from a start until its very last day, Americans performed three very different policies on the People’s Republic: From a total negation (and the Mao-time mutual annihilation assurances), to Nixon’s sudden cohabitation.(Withdrawal of recognition from Formosa to Beijing formally opened relations between the two on 1 January 1979. On a celebratory tour to America later that very month, Deng Xiaoping recommended that China and the US were ‘duty bound to work together [and unite] to place curbs on the polar bear’).

Finally, a Copernican-turn: the US spotted no real ideological differences between them and the post-Deng China. This signalled a ‘new opening’ – China’s coastal areas to become West’s industrial suburbia. Soon after, both countries easily agreed on interdependence: Americans pleased their corporate (machine and tech) sector and unrestrained its greed, while Chinese in return offered a cheap labour, no environmental considerations and submissiveness in imitation. However, for both it was far more than economy lubricated by sanctified free trade, it was a policy – Washington read it as interdependence for transformative containment and Beijing sow it as interdependence for (global) penetration.American were left in a growing illusion that the Sino growth is on terms defined by them, and Chinese – on their side – grew confident that these terms of economic growth are only accepted by them.

The so-called Financial crisis 2008/09 (or better to say the peak time of Casino economy) undermined positions of the largest consumer of Chinese goods (US), and simultaneously boosted confidence of the biggest manufacturer of American products (PRC). Consequently, soon after; by 2012, Beijing got the first out-of-Deng’s-line leadership. (One of the famous Asia’s Bismarck dictatums was ‘hide the capabilities, bide your time’ – a pure Bismarckian wisdom to deter any domestic imperialism in hurry.) 

However, in the process of past few decades, Chinese acquired more sophisticated technology, and the American Big tech sophisticated itself in digital authoritarianism.

But,as America (suddenly) returns home, the honeymoon seems over now.

Why does it come now? Washington is not any more able to afford treating China as just another trading partner. Also, the US is not well situated to capitalize on Beijing’s eventual belligerence (especially with Russia closer to China than it was ever before).

The typical line of western neo-narrative goes as: ‘The CCP exploited the openness of liberal societies and particularly its freedom of speech as to plunder, penetrate and divert’. And; ‘Beijing has to bear the reputational costs of its exploitative practices’.

Accelerating collision course already leads to the subsequent calls for a strategic decupling (at best, gradual disengagements) of the two world’s largest economies and of those in their orbits. Besides marking the end of global capitalism which exploded since the fall of Berlin Wall, this may finally trigger a global realignment. The rest of the world would end up – willingly or not – in the rival (trade) blocks. It would not be a return to 1950s and 1960s, but to the pre-WWI constellations.

Epilog is plain to see: Neither more confrontation and more carbons nor more weaponized trade and traded weapons will save our day. It failed in our past; it will fail again any given day.

Entrapment in Imitation

Interestingly, China opposed the I World, left the II in rift, and ever since Bandung of 1955 it neither won over nor (truly) joined the III Way. Today, many see it as a main contestant, a leader from the global South. But, where is a lasting success?

There is a near consensus among the economists that China owes its economic success to three fundamental factors. Firstly, it is that the People’s Republic embraced an imitative economic policy (much like Japan, Singapore, Taiwan or ROK did before) through Deng-proclaimed opening. Second goes to a modest domestic consumption, and German-like thick home savings. Finally, as the third factor that the economists attribute to Chinese miracle, is a low production costs of Sino nation – mostly on expenses of its aging demography, and on expenses of its own labor force and country’s environment.[3](And that Beijing mixes up its nearly obsessive social control, environmental negligence and its dismal human and minority rights with the right to development.)

Therefore, many observers would agree that the so-called China’s miracle is a textbook example of a highly extractive state that generates enormous hidden costs of its development, those being social, environmental and health ones as much as expanding and lasting. And indeed, energy-intensive exports (especially carbon footprint) from China as well as its highly polluting industrial practices (overall ecological footprint) were introduced to and then for a long while tolerated in People’s Republic by the West.

Further on, China accepted a principled relation with the US (Russia, too), but insists on transactional one with its neighbors and BRI (Belt and Road Initiative) clients.

None of the above has an international appeal, nor it holds promise to an attainable future. Therefore, no wonder that the Imitative power fights – for at home and abroad – a defensive ideological battle and politics of cultural reaction. Such a reactive status quo has no intellectual appeal to attract and inspire beyond its borders.

So, if for China the XIX was a “century of humiliation”, XX “century of emancipation”, should it be that the XXI gets labeled as a “century of imitation”?

(The BRI is what the most attribute as an instrument of the Chinese planetary posture. Chinese leaders promised massive infrastructure projects all around by burning trillions of dollars. Still, numbers are more moderate. As the 2019The II BRI Summit has shown (and the forthcoming BRI Summit of November 2020 may confirm), so far, Chinese companies had invested USD 90 billion worldwide. Seems, neither People’s Republic is as rich as many (wish to) think nor it will be able to finance its promised projects without seeking for a global private capital. Such a capital –if ever – will not flow without conditionalities. The Asian Infrastructure Investment Bank (AIIB) and the BRICS or ‘New Development’ – Bank have some $150 billion at hand, and the Silk Road Infrastructure Fund (SRIF) has up to $40 billion. Chinese state and semi-private companies can access – according to the OECD estimates – just another $600 billion (much of it tight) from the home, state-controlled financial sector. That means that China runs short on the BRI deliveries worldwide. Ergo, either bad news to the (BRI) world or the conditionalities’ constrained China.)

How to behave in the world in which economy is made to service trade (as it is defined by the Sino-American high priests of globalization),while (preservation of domestic jobs and) trade increasingly constitutes a significant part of the big power’s national security strategy? And, how to define (and measure) the existential threat: by inferiority of ideological narrative – like during the Cold War; or by a size of a lagging gap in total manufacturing output – like in the Cold War aftermath. Or something third? Perhaps a return to an inclusive growth.

If our civilizational course is still the same – the self-realization of mankind; than the deglobalization would be a final price to pay for re-humanization of labor and overall planetary greening. Are we there yet?

Promise of the Schumann Resonance

Earlier in this text, we already elaborated on imperial fictions and frictions: Empires and superpowers create their own realities, as they are not bound to ‘situation on ground’. For them, the main question is never what they can but what they want in international conduct.

For sure, there is no intellectual appeal in a growth without well-being, education that does not translate into fair opportunity, lives without dignity, liberalization without personal freedom. Greening international relations along with a greening of social fabrics and its economy – geopolitical and environmental understanding, de-acidification and relaxation is that missing, third, way for tomorrow.

This necessitates both at once: less confrontation over the art-of-day technology and their de-monopolized redistribution as well as the resolute work on the so-called Tesla-ian implosive/fusion-holistic systems. That would include the free-transfer non-Hertzian energy technologies (able to avoid life in electromagnetic technologically generated soup of unbearable radiation toxicity, actually able to de-toxicate our troposphere from dangerous fields, waves and frequencies emittance- drawingus closer to Schumann resonance);carbon-sequestration; antigravity and self-navigational solutions;bioinformatics and nanorobotics. Surely, with the bioinformatics and nanorobotics being free from any usage for eugenics’ ends (including the vaccination for microchipping purpose).

In short, more of initiative than of obedience (including more public control over data hoovering). More effort to excellence (creation) than a struggle for preeminence (partition).Leader of the world needs to offer more than just money and intimidation.

‘Do like your neighbor’ is a Biblical-sounding economic prophecy that the circles close to the IMF love to tirelessly repeat. Indeed, it is hard to imagine a formidable national economic prosperity, if the good neighborly relations are not built and maintained.[4] Clearly, no global leader has ever in history emerged from a shaky and distrustful neighborhood, or by offering a little bit more of the same in lieu of an innovative technological advancement.

(Eg. many see Chinese 5G – besides the hazardous electrosmog of IoT that this technology emits on Earth’s biota – as an illiberal innovation, which may end up servicing authoritarianism, anywhere.[5]And indeed, the AI deep learning inspired by biological neurons (neural science) including its three methods: supervised, unsupervised and reinforced learning can end up by being used for the diffusion of digital authoritarianism, predictive policing and manufactured social governance based on the bonus-malus behavioral social credits.)

Ergo, it all starts from within, from at home; socio-economically and environmentally. Without support from a home base (including that of Hong Kong, Xinjiang and Tibet), there is no game changer. China’s home is Asia. Its size and its centrality along with its impressive output is constraining it enough.

Conclusively, it is not only a new, non-imitative, turn of socioeconomics and technology what is needed. Without truly and sincerely embracing mechanisms such as the NAM, ASEAN and SAARC (eventually even the OSCE) and the main champions of multilateralism in Asia, those being India Indonesia and Japan first of all, China has no future of what is planetary awaited – the third force, a game-changer, discursive power, lasting visionary and trusted global leader.[6]

If there was ever in history a lasting triumph, this is over now. In the multipolar world of XXI century dominated by multifaceted challenges and multidimensional rivalries, there is no conventional victory.  Revolution or restauration?

Post Scriptum:

To varying degrees, but all throughout a premodern and modern history, nearly every world’s major foreign policy originator was dependent (and still depends) on what happens in, and to, Russia.So, neither a structure, nor content or overall direction of world affairs for the past 300 years has been done without Russia. It is not only a size, but also a centrality of Russia that matters. That is important as much (if not even more), as it is an omnipresence of the US ora hyperproduction of the PR China. Ergo, that is anuninterrupted flow of manufactured goods to the whole world, it is a balancing of the oversized and centrally positioned one, and it is the ability to controllably corrode the way in and insert itself of the peripheral one. The oscillatory interplay of these three is what characterizes our days.

Therefore, reducing the world affairs to the constellation of only two super-players – China and the US is inadequate – to say least. Itis usually done while superficially measuring Russia’s overall standing by merely checking its current GDP, and comparing its volume and PPP, and finding it e.g. equal to one of Italy. Through such ‘quick-fix’, Russia is automatically downgraded to a second-rank power status. This practice is as dangerous as it is highly misleading. Still, that ill-conceived argument is one of the most favored narratives which authors in the West are tirelessly peddling. What many analysts miss to understand, is in fact plain to see; throughout the entire history of Russia: For such a big country the only way to survive – irrespectively from its relative weaknesses by many ‘economic’ parameters – is to always make an extra effort and remain great power.

To this end, let us quickly contrast the above narrative with some key facts: Russia holds the key positions in the UN and its Agencies as one of its founding members (including the Security Council veto right as one of the P5); it has a highly skilled and mobilized population; its society has deeply rooted sense of a special historic mission (that notion is there for already several centuries – among its intellectuals and enhanced elites, probably well before the US has even appeared as a political entity in the first place). Additionally and tellingly, Moscow possesses the world’s largest gold reserves (on surface and underground; in mines and its treasury bars); for decades, it masters its own GPS system and the most credible outer space delivery systems (including the only remaining working connection with the ISS), and has an elaborate turn-key-ready alternative internet, too. 

Finally, as the US Council of Foreign Relations’ Thomas Graham fairly admits: “with the exception of China, no country affects more issues of strategic and economic importance to the US than Russia. And no other country, it must be said, is capable of destroying the US in 30 minutes.” (FAM, 98-6-19, pg.134)


[1]Flow and irreversibility (as well as the non-directionality and the Boltzmann’s unfolding) of time is one of the fundamental principles that governs visible (to say; comprehensible) universe. If and when so, the Future itself must be certain, but unshaped. Hence, Future is a manifestation of the second law of thermodynamics (one of the fundamental principles of chemo-physics that governs us), but it also has to be (a net sum of) our collective projection onto the next: Collapse of the (multivectoral) probability and its realisation into (a four dimensional) possible tomorrow.

[2]Average American worker is unprotected, unorganised/disunionised, disoriented, and pauperised. Due to (the US corporate sector induced) colossal growth of China, relative purchasing power of American and Chinese labourer now equals. At present, the median US worker would frictionlessly accept miserable work conditions and dismal pay, not too different from the one of the Chinese labourers – just to get a job.The first to spot that and then wonderfully exploited it was the Trump team.

[3]High tech and know-how appropriation via mandated/forced technology transfers and copy-cats, joint ventures, discriminatory patent-licencing practices and cross-sectoral state-led industrial modernisation have lifted China up the value chain. No wonder that its GDP per capita has jumped from $194 (1980) to over $9,000(2019). Beijing is modernising its navy, and is engaged in international economic expansion and geopolitical projection via its Belt and Road Initiative, and so far has bought, built or is operating 42 ports in 34 countries. In the meantime, Washington is publicly lamenting return to a ‘worker-focused trade policy’ – as the US Trade Representative Robert E. Lighthizer calls it – and openly objecting to both ‘market-distorting state capitalism in China and a dysfunctional WTO’. “No trade policy decision since the end of WWII proved more devastating to working people than the extension of permanent normal trade relations to China in 2000. Despite President Clinton’s predictions… , the opposite occurred” – he concludes. (FAM, 99/04/20)

[4]Fully aware of it, China and Russia (in their historical and yet still ongoing rapprochement) are pushing on a new Asian continental/regional security organisation. Building on the best legacy of comprehensive pan-European security mechanism – that of the Vienna-based OSCE (Organisation for Security and Cooperation in Europe), these two are committing themselves to and inviting their neighbours to join with the CICBMA (Conference on Interaction and Confidence Building Measures in Asia), architecting the CSTO (Collective Security Treaty Organisation) and the QCCM (Quadrilateral Cooperation and Coordination Mechanism). It is on a top of already elaborate SCO (Shanghai Cooperation Organisation) and well-functioning economic FORAs – China-run AIIB (Asian Infrastructure Investment Bank) and Russia-backed EAEU (Eurasian Economic Union). Hence, in a matter of just two decades the central section of Eurasian continent became the most multilateralised – and therefore stabile, region of the world. The collective one is far better than the bilateral or selective/Ad Hoc security arrangement preferred by the US in the Asia-Pacific. Alliances are built on shared interested, solidified by formulated principles and maintained on reliability and predictability – hence, are structural stabilisers. 

[5] Seems that China leads but is not alone with its much-criticised bonus-malus social credit system powered by facial recognition technology. Human Rights monitory agencies (including the US Carnegie Endowment’s AI Global Surveillance Index) report that practically each and every of the G-20 countries extensively uses the AI-enabled surveillance appliances, including variety of facial recognition programs, aimed at social ‘predictability’. Not to mention that such new technologies are particularly dangerous for weak democracies since many of their digital tools are dual use technology.

[6]Over the past few months, People’s Republic has upped the ante in nearly all of its many territorial disputes and even provoked new ones, in another departure from past practice. Beijing has also reversed course when it comes to its national periphery. “Past Chinese leaders, notably Deng Xiaoping and Jiang Zemin, believed in the institutionalized processes of collective leadership. Xi has disabled or neutralized many of these channels. The world may now be getting a sense of what China’s decision-making looks like when a singularly strong leader acts more or less on his own -noted Campbell-Rapp-Hooper recently (FAM, 4/2020). That of course triggers constant shockwaves all over Asia. While Indonesia is contemplating the NAM’s reload and the ASEAN block strengthening, others are reactive. India and Japan, two other Asian heavyweights, are lately pushed to sign up on the so-called Indo-Pacific maritime strategy with the United States. However, none of these three has any coherent plan on what to do on the Asian mainland. They all three differ on passions, drives and priorities. This is so since the truly pan-continental organization is nonexistent in Asia.

Modern Diplomacy Advisory Board, Chairman Geopolitics of Energy Editorial Member Professor and Chairperson for Intl. Law & Global Pol. Studies contact: anis@bajrektarevic.eu

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Possible Directions for U.S. Policies in the Biden Era

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Official White House Photo by Adam Schultz

Authors: Chan Kung and He Jun

On January 20, 2021, a new page will be turned in the history of the United States when Joe Biden becomes the 46thPresident. What will happen to U.S. domestic and foreign policy as a result of the transition from the “Trump Era” to the “Biden Era”? What will be the impact of this on the U.S., the world, and China? After the tumultuous Trump Era, we believe that this is an issue of great concern to international governments and markets.

The “ANBOUND 100+” high-end discussion platform and the macro team have been continuously tracking the news of the imminent Biden Era and possible policy changes. To this, we have made a number of key predictions. In the historic moment when Joe Biden is about to take office, it is important to review and summarize the relevant research to understand the changes that the new U.S. President will bring.

First, we shall look at the American political landscape in the Biden Era.

An overall judgment is that Democrats are taking control, but “Trumpism” is still unlikely to disappear from U.S. politics any time soon. The ANBOUND team had judged on November 11, 2020, that Donald Trump’s various policies had in fact left Biden with a number of political and diplomatic “legacies”, and that Biden actually had considerable autonomy over whether to “inherit” these “legacies”. Objectively, whether inherited or not, these “legacies” can be used as a bargaining chip for the Biden administration. On the issue of Trump himself, ANBOUND once said on December 20 that Trump will be in trouble because he had “gone too far” and that the future Biden team might carry out a complete reckoning with Trump and his team. Judging by the fact that Trump is facing a second impeachment and the investigation into the storming of the Capitol, such a reckoning is happening. In this regard, ANBOUND has summed up Trump’s influence remains and its trajectory to be: Trump -> Trumpism -> Trumpism without Trump.

In the Biden Era, the two-party political landscape in the U.S. will be unbalanced, with the Democrats dominating U.S. politics and rapidly gaining the upper hand, and the Republicans facing an internal split, as ANBOUND judged on January 10, 2021. On this basis, we believe that there is a clear trend towards “bipartisanship”, with the Democrats becoming the dominant party in this cooperation. In this context, the Biden administration is likely to complete domestic integration faster and turn its focus to foreign policy sooner. It is also possible that with less resistance at home, the Democrats will give more focusat home, and the U.S. society will become more integrated than in the past, with some of the major domestic issues, such as welfare and environmental protection, to likely make significant progress over the next four years.

Then, there are the U.S. economic issues and economic policies in the Biden Era.

The United States faces many problems in the economy, but the core problem lies in the distribution of wealth, which is the cause of many social problems. The research team of ANBOUND pointed out in November 2019 that the wealth of the United States is still in the process of being accumulated in large quantities, and the real problem of American society lies in the distribution of wealth. Part of the backlash against globalization in the U.S. is also related to the distribution of wealth in American society. On this basis, we believe that welfare will be an important aspect of U.S. economic policy that needs to be addressed in the future. On November 22, 2020, we further pointed out that the transition to a welfare state could usher in a new super-boom for the United States. Contrary to the view of many that welfare is a “simple spending” policy, we believe that welfare, if properly used, will create new consumption space. In terms of health insurance, education, and consumption in the United States, we expect that a full-scale welfare transition in the U.S. would create a USD 10 trillion mega-consumer market that would potentially bring the U.S. into a new phase of rapid development while resolving social tensions.

Based on the above analysis, we believe that the core of the so-called “Bidenomics” is about the distribution of wealth and the “welfarization”. From what has been observed so far, the basic logic of “Bidenomics” is to solve the public health crisis, save jobs, reconfigure the industrial chain, overhaul infrastructure, promote an environmental agenda, build a better social security system, and promote social equality. This logic is likely to be the “core” of economic policies in the Biden Era. There were similar signals that emerge before Biden officially took over the presidency. Biden has proposed USD 1.9 trillion stimulus package to deal with the impact of the pandemic on the U.S. economy and society. Biden’s Treasury Secretary nominee Janet Yellen also called on the U.S. Congress to act more aggressively to deliver economic aid without worrying too much about the debt. “Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big,” Yellen said. “I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time,” Yellen added. Yellen also stressed the need to rebuild the U.S. economy “so that it creates more prosperity for more people and ensures that American workers can compete in an increasingly competitive global economy.”

Concerning the foreign policy issues in the Biden Era, as mentioned above, Biden will not completely abandon Trump’s diplomatic “legacies”, rather he would build on it with some kind of “pullback”. In this process, institutionalization and systematization will be the most prominent characteristics of American diplomacy in the future. A top foreign policy priority for the Biden administration will be to rebuild relations with its allies, particularly Europe, restoring stability to the transatlantic alliance and healing the rifts that have emerged over the past few years. We believe that such rapprochement will certainly play a role and the U.S.-EU strategic alliance will not change, but it will be difficult to fully restore to the levels of the past. On many issues, such as economy and trade, market space, security, and digital sovereignty, the EU will have a stronger “sense of autonomy”. As for U.S.-China relations in the Biden era, we have argued that we should not expect the U.S. government to adjust its hardline position on China, but that the Biden administration would be more predictable in its approach to policy games, returning to the character of “the establishment”. In fact, as early as October last year, the ANBOUND’s research team pointed out in its outlook on U.S.-China relations in the Biden era that the Biden administration’s approach to several aspects of domestic and foreign affairs would generally differ from that of the Trump administration, and that while its strategic positioning of China and the policy of inhibiting the rise of China in the long term would remain unchanged, in terms of specific approaches, the Biden administration would seek a certain degree of order and geopolitical discipline to implement and enforce its policies.

In regard to the Korean Peninsula issue, we believe that in the Biden Era, it is possible for the United States and North Korea to reach a phased nuclear abandonment agreement. On Iran, the main concern is still the Iranian nuclear issue. We believe that the United States will amend Trump’s extreme policies on the issue of the Joint Comprehensive Plan of Action (JCPOA), or the Iran nuclear agreement, and some adjustment will take place. However, even if the United States can return to the Iran nuclear agreement, Iran may have to make certain concessions on the 2015 version. One of the key points may be that Iran needs to further restrict its support to the militia in the Middle East on the basis of the original version. This means that Iran’s influence in the Middle East will be significantly reduced. Regarding the issue of returning to Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), we believe that returning to CPTPP is quite attractive to the Biden administration, but it is also quite difficult. Fluctuations in U.S.-China relations will affect the process of the United States returning to CPTPP; the worse the U.S.-China geopolitical relationship gets, the less resistance the United States will have to return to CPTPP.

In addition, ANBOUND’s researchers also believe that looking from the standpoint of historical development, the Biden administration may be a transitional period for the United States to return to “normal” from the Trump Era. From Biden’s personality, age, situation and environment, we tend to think that the Biden administration is likely to be a “presidential accountability system under the leadership of Secretaries”. In such a government, it is the Secretaries of various departments, the Department of State, and the new cooperation pattern of the two parties in Congress that play a key role, rather than relying mainly on the President. In particular, Janet Yellen, the new Treasury Secretary who had served as the Chairperson of the Federal Reserve, could very well have crucial impact on the U.S. economic policy in the Biden Era.

Final analysis conclusion:

With the transfer of executive power, the United States will bid farewell to the “Trump Era” and usher in the “Biden Era”. The United States under Joe Biden will undergo considerable adjustments and changes, which are reflected in many aspects of the United States’ domestic politics, international geopolitics, economy, and foreign policy. The world will watch the new changes in the United States, and China will see a new pattern of U.S.-China relations. Changes in the United States will not only affect the world but also China’s development strategy.

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Removed Diplomacy: Why U.S. Sanctions Against Russia Have Gone Stale

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Since 2014, Russian and American diplomacy has been defined by economic sanctions. This has become the default, expected option for U.S. policymakers—but Russia has refused to concede, repent and ask for forgiveness. The U.S. had hoped Russia would experience just enough economic hardship that they would revert their course, retract their reunification with Crimea, and end any involvement in Eastern Ukraine. Almost seven years later, there is no evidence to suggest that Russia has any intention of buckling under the pressure and denying its national interests.

What the United States has failed to realize is that sanctions work on highly dependent countries. Russia is an independent country and has become more economically autonomous as a result of U.S. sanctions. The Russian domestic industry has flourished since sanctions were first imposed. Sanctions imposed by the United States are predicated on some combination of the following: either the United States has enough of an economic relationship prior to sanctions, so the loss of the United States as a trade partner alone is hugely detrimental to the target economy, or the United States can influence other countries who share a more extensive economic relationship with the target country to carry out the same policies.

Venezuela is a country that has been grievously affected by U.S. sanctions, as one would predict, given the country’s dependence on the exportation of crude oil, particularly to the U.S. With oil comprising roughly 95 per cent of exports and their petroleum industry making up 25 per cent of overall GDP, Venezuela is considered very resource dependent when engaging in international trade. Venezuela has also been plagued by Dutch Disease, which has largely prevented its economy from diversifying for the past century. In 2013, the United States brought in 29.5 per cent of Venezuelan exports and delivered 23 per cent of the county’s imports. Strangely, despite the sanctions imposed in 2014, Venezuela has grown more dependent on the United States. By 2018, 39.2 per cent of Venezuelan exports and 52.9 per cent of Venezuelan imports were in trade with the U.S. With this increased dependence on the United States after the implementation of U.S. sanctions. It is no wonder that Venezuela has been increasingly devastated beyond comprehension since sanctions were first imposed in 2013. Venezuela’s trade balance through this period has consistently been in surplus. However, the volume of trade has shrunk USD 101.9 billion, from USD 143.76 billion in 2013 to USD 41.86 billion in 2018. The country has been rocked by astronomical inflation, reaching as high as 344 509 per cent. Is it the same case for Russia? No, which is due, in part, to Russia’s Soviet legacy. The vast territory and harsh climate have also helped the Russians develop a much more diverse and independent economy. Additionally, the United States is simply not one of Russia’s main trade partners.

As illustrated by data from the Observatory of Economic Complexity, Russia and Venezuela couldn’t be more unalike. Russia’s largest trade partners for the past 20 years have been Germany and China. In 2014, when the sanctions were first imposed, Russia’s economy and international trade figures were at an all-time high. In that year, Russia exported USD 454 billion and imported USD 296 billion, a trade surplus of USD 158 billion. This year, the United States only accounted for 5.58 per cent of Russia’s imports and 3.87 per cent of Russia’s exports. In 2018, with even stricter sanctions imposed, Russia exported USD 427 billion and imported USD 231 billion, increasing the trade surplus from USD 158 billion in 2013 to USD 196 billion in 2018. Russia’s trade balance from 2013 to 2018 still experienced a shrink of USD 92 billion. A key difference between Russia and Venezuela is that from 2014 to 2018, Russian trade decreased by just 12 per cent, compared to Venezuela’s loss of 71 per cent. What does Russia have working to its advantage that Venezuela is lacking? Remember, for sanctions to work, they require high economic dependence from either the country issuing the sanctions.

Russia and Germany have an interesting codependency on one another. The Nord Stream project has been a source of tension between the U.S. and Germany; a recent Bloomberg article points out that there is an anticipated clash between newly elected president Biden and German Chancellor Angela Merkel. The German chancellor openly supports the completion of the second pipeline because the project is a means for securing German influence over Western Europe, as they will maintain their status as energy distributors once the pipe project is complete. Merkel also understands that the German economy depends on Russian energy. Nord Stream has become the only option since the Ukrainian pipelines have gone cold. Merkel has received criticism from those close to her, including from Norbert Röttgen, the head of the foreign affairs committee in German parliament. In September of 2020, he is quoted saying, “We need to respond with the only language that Putin understands, the language of natural gas,” Meaning the one thing that Germany has at its disposal is the ability to back out of the Nord Stream deal to pressure the Kremlin into correcting their behaviour to satisfy western leaders. The only problem is that Germany is dependent on Russian natural gas. Germany has been falling behind other European countries in environmental efforts and has grown more dependent on coal power to supplement energy demand when renewable sources fail to meet the needs of the German people.

It’s important to consider is the continuation of oil trade between the Netherlands and Russia. If the West is so concerned about preserving its ideals, why hasn’t this trade been pressured? Likely because Nord Stream 2 is a relatively recent development, but the arrangement between the Dutch and Russia has been around for some time. What is odd, however, are the numbers. Between the Netherlands and Russia, there is hardly a difference in the dollar value of Russian exports in various petroleum products. It has maintained an average of about USD 33 billion for the past decade. This spans time both before and after sanctions. How does the West expect itself to be taken seriously if it is hyper selective about the battles it chooses to fight even when concerning sanctions. What is more comical about this particular deal is that the Netherlands supplies much of Western Europe’s oil. Henceforth, further defending the point of Western Europe’s dependence on Russian energy.

In conclusion, Russia has proven to be very resilient over the past six years. It shouldn’t be implied that the sanctions have not affected the Russian economy. However, Russians have faced pervasive negative externalities, such as inflation and decreased average national income, despite the sanctions having been designed only to affect a select group of individuals. Even so, the Russian economy is growing and proving to be insulated and resilient against increased trade barriers. At first, the sanctions appeared to have a tremendous effect on the Russian economy, shrinking it by 44 per cent from USD 2.292 trillion in 2013 to USD 1.272 trillion in 2016. Since 2016, however, the GDP has steadily stabilized and gained back 42 per cent of losses from 2013 figures at USD 1.7 trillion as of 2019. It can be surmised that if the U.S. continues to impose sanctions on Russia for years to come, the Russian economy will continue to grow, develop, and become more independent.

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The World Should Get Rid of “Trump Inertia”

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Official White House Photo by Shealah Craighead

Authors: He Jun and Chan Kung

A new chapter is about to begin for the politics of the United States as the “Trump Era” will soon give way to the “Biden Era”. As the United States still has major global influence, any shift in the American politics would therefore inevitably change the global geopolitical landscape as well as international investments and the trade environment. After four years of extreme policies in the Trump Era, coupled with the impact of the COVID-19 pandemic, countries around the world hope to see change and a return to relative normalcy.

However, the end of the Trump Era does not spell the end of “Trumpism.” The many marks, characteristics, and ideological trends brought about by Donald Trump will continue to influence the world for some time. However, in the real economic field, countries may need to startridding itself of the environment characterized by unilateralism, America First, and the politicization of economic issues. Researchers at ANBOUND call these remaining Trumpist characteristics and their effects on countries’ behavior “Trump Inertia”.

“Trump Inertia” has many specific manifestations. The deterioration of the relationship between Australia and China is a clear example of this. Australia followed the Trump administration’s side by choosing and adopting many extreme politicization practices against China despite China being Australia’s largest trading partner, largest export destination and largest source of imports. In 2019, Australia-China trade volume totaled approximately US$158 billion; Australia’s trade surplus with China was approximately US$48.83 billion, and its exports to China totaled US$103.90 billion, accounting for 38.2%

During the Trump Era, Australia followed the United States in adopting antagonistic approaches against China, which is understandable. Yet, though the Trump Era is coming to an end, Australia’s attitude towards its largest trading partner is still considerably arrogant and hostile. While it is true that there are differences in ideology and values, such paranoia is still unreasonable and there is a lack of political insight in recent shift of international exchanges.

China too, has retaliated against Australia. On the one hand, it has adopted countermeasures in economic and trade, and imposed trade restrictions on the import of coal and a variety of agricultural products. On the other hand, China has also adopted tit-for-tat approaches against Australia in diplomacy.

With the withdrawal of Trump from the political arena, it is puzzling as to why there are lingering disputes between Australia and China as theirrelationscontinue to deteriorate. Trump might even feel proud if he sees that the two countries are still at odds even after he steps down. For China and Australia, this means that they have fallen into the quagmire of “Trump Inertia”.

Though being a member of the Five Eyes alliance (FVEY) like Australia, New Zealand’s approach is far different. Damien O’Connor, New Zealand Minister of Trade and Export Growth and Minister of Agriculture, stated that strong global demand for dairy products, especially in the Chinese market, will offset the adverse effects of weak dairy prices. It is estimated that in the year ending June 2022, New Zealand’s dairy products export revenue is expected to reach NZ$ 20.1 billion. At the same time, forestry exports are showing a recovery trend. The New Zealand Government’s Situation and Outlook for Primary Industries (SOPI) report predicts that in the year to June 2021, the export revenue of primary industries will exceed NZ$47.5 billion; in the year to June 2022, this figure will reach the NZ$ 49.2 billion record. It is worth noting that New Zealand’s Foreign Minister Nanaia Mahuta also publicly stated that New Zealand is willing to help China and Australia achieve peace talks.

The policies and flexibility shown by New Zealand which differs from Australia’sreflect a normal response of a rational country. This is also something that China should learn from. In the current situation, geopolitical relationship between China and Western countries is tense, and this is seen as the most “successful” part of the Trump administration, all due to “Trump Inertia”. For both Western countries and China, it is necessary to get rid of “Trump Inertia” as soon as possible.

Though the attitudes of other countries cannot be controlled by China, China is able to adjust and change its own actions. As the Biden Era is approaching, all countries need to adjust to the new changes and find new consensus points in terms of diplomacy, trade, multilateral cooperation, and global climate change. China is a major power with huge national interests. For that reason, it should have long-term visions and goals. China will need to adjust certain foreign policies and practices in accordance with the overall national situation and long-term interests to pave the way for its future development.

Final analysis conclusion

The Trump Era is about to end, but Trumpism will still linger for some time to come. In the face of the “political switch” in the United States, China and many Western countries need to adjust their strategies, get rid of “Trump Inertia” as soon as possible, and return their diplomacy to a rational and normal track.

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