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Neoliberalism in Chile and the cost of human life

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Henry Kissinger meeting with Pinochet

Neoliberalism in Chile has a long history of failed promises, repressive policies, and authoritarian ideologies that cost the lives of thousands of Chilean citizens. Chile was praised for its new reforms and adoption of neoliberalism that promised more equality for everyone. In reality, an oppressive regime was born on the back of these promises that terrorized the people of Chile for seventeen years. Neoliberalism was born in Chile in 1973 and it died the same day, when human rights and human dignity were sacrificed in the name of economy and for the ideas of a few people that decided to overlook the terrorizing situation in Chile, just to prove a point about their economic thoughts. There is no miracle in Chile, and the thousands that died and suffered in Chile are the proof.

The Downfall of Salvador Allende

On September 4, 1970, presidential elections were held in Chile. Salvador Allende, the candidate of the Popular Unity coalition won with 36.2% of the votes. Upon assuming the presidency, Allende carried on a socialist platform that aimed to nationalize large-scale businesses in Chile, such as copper mining, telecommunications, and banking. Besides that, Allende wanted to drastically improve the socio-economic situation of the poorest people of Chile by implementing new policies to support socio-economic welfare, provide employment in new public work projects or the newly nationalized industries. Salvador Allende served as the President of Chile from 1970 until the military coup d’etat in 1973. He was the first Marxist elected President in a liberal democracy in Latin America. He was described by his friend Fernando Alegria as a tireless fighter and a bold president that was defeated by a two-headed enemy: The United States of America and local military saboteurs (Alegria, 1994).

The local military saboteurs were under the command of Augusto Pinochet. Augusto Pinochet was the Commander-in-Chief of the Chilean Armed forces. On September 11, 1973, he overthrew the democratically elected President Salvador Allende. The presidential palace was shelled while Allende was in it. It is believed that Salvador Allende committed suicide. Pinochet was the lead plotter of the coup while his position as Commander-in-Chief allowed him to coordinate with both the military and the national police. Following the coup, a military junta, with the help of the U.S was established that exercised both legislative and executive power in the new government of Chile. The constitution and the Congress of the country were suspended, all political parties and activities were banned and a curfew and strict censorship were imposed. Augusto Pinochet self-declared himself as the President of the Republic, becoming de facto dictator of Chile until 1990. The U.S backed military coup and Pinochet’s seventeen-year dictatorship, are seen as aberrations in Chile’s twentieth-century history of multiparty democracy and institutional stability, two parameters that were very unusual in Latin America (Joseph & Grandin, 2010, pp.121-122).

The Implementation of Neoliberalism

The new military junta under the influence of foreign third parties and individuals implemented a new economic liberalization. Chile was the first country where its citizens were forcefully subjected to a new economic system that was called neoliberalism. Neoliberalism was first mentioned by the Austrian-British economist Friedrich Hayek. Hayek’s ideas were divided into two parts. In the first part, Hayek suggested that the concept of free markets responds to the needs of every individual. As a result, markets had to be operated freely, while the government would be limited to allow order to arise spontaneously in society. In the second part, which is depicted in his book The Road to Serfdom (1944), Hayek suggested that central planning of an economy does not respond to the needs of the individual. The two parts are interconnected and result in only one possibility according to Hayek. A totalitarian regime. Hayek believed that the government should have its limitations. He promoted the idea that the central role of the government should be to maintain the rule of law with as little intervention as possible. It must be projected as a civil association that provides a framework for every individual to follow their own projects (Hayek, 1960).

Friedrich Hayek’s remarks and ideas were highly influential for politicians like the President of the United States of America, Ronald Reagan, and the Prime Minister of the United Kingdom, Margaret Thatcher. Thatcher, in particular, based the ideology of the British Conservative Party on the ideas of Friedrich Hayek. She championed the ideas of unfettered free markets, the idea of shrinking the government and cutting taxes alongside state-provided services. However, the ideas of Friedrich Hayek about the implementation of free markets and his opposition towards totalitarian regimes made him a controversial figure. Naomi Klein, a Canadian author, and journalist describes his ideas as a shock doctrine, where people are forced to accept a new reality for their own good either through economic hardship or brutal government policies (Klein, 2007). His free-market ideology is associated directly with the totalitarian regime of Augusto Pinochet, since he was one of the key economic advisors, together with Milton Friedman that was close to Augusto Pinochet. He always thought that no one is qualified to have unlimited power, yet he was standing behind a dictator. While he is championed by many right-wing politicians as a defender of liberty, he is despised by many left-wing politicians who see him as a hypocrite that stood behind a murderous dictator whose forced economic implementations brought misery and pain to thousands of Chilean citizens.

The Involvement of the United States of America

It is important to remember that the situation in Chile did not happen without the help of the U.S. The involvement of the U.S in Chile happened for two reasons. To implement the idea of the domino theory and to protect the interests of U.S companies in Chile. The domino theory was the predominant Cold War theory for the U.S. It suggested that if one country in a region would eventually become communist, then the surrounding countries and regions would follow up in a domino effect. The first time that the domino theory was mentioned was back in 1954 in a press conference when the U.S President Dwight D. Eisenhower referred to communism in Indochina.

“You have broader considerations that might follow what you would call the “falling domino” principle. You have a row of dominoes set up, you knock over the first one, and what will happen to the last one is the certainty that it will go over very quickly. So you could have a beginning of a disintegration that would have the most profound influences”. Dwight D. Eisenhower.

The domino theory was used by various U.S administrations to justify and American intervention around the world. Richard Nixon used the same theory for his foreign policy and to justify his intervention in Chile. In 1977, he defended the U.S actions to destabilize Allende’s Chile. In an interview with British journalist David Frost, Nixon stated that a communist Chile and Cuba would create a “red sandwich” that could entrap Latin America between them (Qureshi, 2010, p.56). After Richard Nixon, Ronald Reagan followed the same rhetoric to justify the situation in Chile while he expanded in Central America and the Caribbean region.

The protection of the interests of U.S companies in Chile was the second reason why the U.S intervened in Chile and why it was supporting the Pinochet regime. Back in 1970, before the presidential elections, neither the Richard Nixon administration, nor the current Chilean government, nor U.S. companies with businesses in Chile such as the Anaconda Copper Mining Company or the International Telephone & Telegraph, wished to see an Allende presidency because of his alleged communist sympathies. Threatened by the nationalized acts of Salvador Allende, the two major U.S companies, the Anaconda Copper Mining Company and the International Telephone & Telegraph expressed their dissatisfaction for the Allende government through the Nixon administration. Henry Kissinger was the national security advisor to Richard Nixon. According to declassified files from the CIA, Kissinger met with high-level officials to discuss the future of Chile that depended on the 1970 elections. The elections represented the potential for important economic relations to collapse or continue. After the complaints of the U.S companies that had economic interests in Chile, Richard Nixon was left with two choices: political maneuvering or brute force. He chose the first option. Based on the declassified notes that were given from Richard Nixon to Richard Helms the director of CIA, there were direct orders to “make the Chilean economy scream” during the Allende presidency by conducting a campaign to create a deep inflation crisis, funding opposition leaders and encouraging the Chilean military to overthrow Allende. In the end, the U.S achieved its goal and Salvador Allende was overthrown and a more American friendly government was installed. From that point, the neoliberal policies were implemented and Chile was used as an experimental country for radical economic reforms.

The Role of the Chicago Boys

These economic reforms were imposed by a group of Chilean economists known as The Chicago Boys. They were all educated at the Department of Economics of the University of Chicago under the guidance of the neoliberal economist Milton Friedman. Friedrich Hayek was also a member of the Chicago Boys helping them implement his neoliberal ideas. After the coup in 1973, many of them returned to Chile and were appointed in high government positions by Augusto Pinochet as economic advisors. They are credited with transforming the economy of Chile into the best performing economies in Latin America and into one of the most business-friendly in the world. However, there is also a lot of criticism against them. Some economists, such as the Indian economist and philosopher Amartya Jumar Sen have argued that their policies did not provide any help to the population of Chile but were intended to serve the interests of U.S companies in Chile and Latina America.

The neoliberal reforms of the Chicago Boys can be divided into two phases. The first phase expanded from 1973 until 1982 and has been described by the author Naomi Klein as the Shock Therapy period. At this phase, most of the radical reforms were implemented. The Chicago Boys adopted a laissez-faire economic system, where transactions between private parties did not have any economic intervention from the state (regulations and subsidies). They promoted the idea of a free, neoliberal market in contrast to the centrally-planned economy and nationalization plans that were advocated by Salvador Allende. As a result, Chile was transformed into a liberal and world-integrated economy. Besides that, businesses were re-privatized, price controls were abolished and the capital flows were deregulated. Their main objective was to lower the inflation rates at the expense of a sharp recession. They met their objective as they managed to lower the inflation rate from 508.1% in 1973, to 20.7% in 1982. The economy expanded for a while from 1977 up until 1980. Milton Friedman described this reorientation of the Chilean economy as the Miracle of Chile in 1982. In an interview back in 2000, Milton Friedman said:

 “The Chilean economy did very well, but more importantly, in the end, the central government, the military junta was replaced by a democratic society. So the really important thing about the Chilean business is that free markets did work their way in bringing about a free society”. Milton Friedman.

However, his remarks regarding the Chilean economy did not represent the reality of a miracle. From 1975 up until 1980, the economic growth rate was below the potential growth rate of Chile (Ffrench-Davis, 2002). In the early 1980s, Latin America was hit with a devastating debt crisis that paralyzed all the Latin American countries. Chile was hit the hardest with a GDP decline by 14% in comparison to other Latin American countries that had a GDP decline by 3.2%. This debt crisis led to a bank run which led to the devastating economic crisis of 1982. It was clear that the economic shock therapy did not work, and the miracle that Friedman was cheering for was not that real after all.

The second phase of the neoliberal reforms is described as Pragmatic Neoliberalism that expanded from 1982 up until the end of the dictatorship in 1990. With the ongoing crisis, the Chicago Boys’ radical economic rhetoric was replaced by a pragmatic approach. The new economists had to apply pragmatic measures to reverse the situation. They socialized two major Chilean banks and seven more that were at the edge of collapse. The Central bank of Chile socialized much of the foreign debt. Many critics of this policy compared these actions with the presidency of Salvador Allende. However, this pragmatic policy brought economic growth, questioning the radical methods of the Chicago Boys. The GDP growth went higher after the 1982 crisis and continued to surpass other economies in Latin America. The Chilean economist Ricardo Ffrench-Davis has a critical evaluation of the situation:

“The unnecessary radicalism of the shock therapy in the 1970s caused mass unemployment, purchasing power losses, extreme inequalities in the distribution of income, and severe socio-economic damage. The 1982 crisis as well as the success of the pragmatic economic policy after 1982, proves that the 1973–1981 radical economic policy of the Chicago boys harmed the Chilean economy” Ricardo Ffrench-Davis.

The Dark Side of Economic Liberalization

The history of neoliberalism in Chile is not just about economic reforms. Unfortunately, it is also a history of state terrorism and human rights violations by the Pinochet regime. The forced economic reforms and the intervention from the U.S allowed Augusto Pinochet to promote his state terrorism towards the people of Chile. According to a 2004 report from the National Commission on Political Imprisonment and Torture or Valech Commission, the number of victims of human rights violations accounts for around 30.000 people that were tortured while at least 2.500 were executed. Also, almost 200.000 people were forced to exile while many people experienced illegal detaining from the regime forces. Prisoners of the regime were exposed to different methods of torture, like electric shocks, waterboarding, beatings, and sexual abuse. The central instrument of terror was the disappearing subversives, where people were disappeared by the Pinochet regime. People that were considered leftists, socialists, or communists were the main target. In addition to the horrors, Pinochet was infamous for detaining people and throwing them out of helicopters. Around 1300 people disappeared, and still even today hundreds of them are yet to be found. The systematic suppression of any political ideology that went against the regime was described by historian Steve J. Stern as political genocide, as a systematic project aiming to destroy an entire way of doing and understanding politics and governance (Stern, 2010). The regime was extremely brutal to leftists and often portrayed them as the enemies of the state. The fake portrayal of leftists as dangerous revolutionaries resulted in the legitimization of the Pinochet regime. For seventeen years, Augusto Pinochet with the support of the U.S managed to use effective brainwashing propaganda to portray leftists as criminals and as the enemies of Chile. Unfortunately, Augusto Pinochet was never formally convicted for his crimes against humanity, as he died in 2006 before he was tried. Today the portraits of the victims of the brutality of Augusto Pinochet and the people that disappeared and still haven’t been found are displayed in the Museum of Memory and Human Rights, in Santiago Chile.

The Long Road of Democracy 

In 1990, when the regime fell and democracy was restored, the people of Chile were promised that this time the economic reforms will benefit the people. The citizens of Chile believed their government and waited patiently for a more equal distribution of the wealth of Chile. Thirty years later, Chile is in flames, and it seems that the neoliberal model has once again failed the people of Chile. On October 18, 2019, the largest and most extensive citizen mobilizations took place in Santiago, the capital of Chile. The mobilization began when the President of Chile Sebastián Piñera, announced that the fare for a metro ticket in Santiago would rise from 800 Chilean Pesos to 830 (USD 1.15). The news hit Chilean people, and they took to the streets to protest against the decision. “This is not just about 30 pesos, it is about the last 30 years,” said an angry protester. Thousands of protests share the same view. For the last thirty years, while Chile’s GDP has grown, making the country the wealthiest in South America, people wonder why the situation in the country remains the same. In a country where the minimum wage of at least 70% of the population barely reaches USD 700 and where it is estimated that almost 36% of the population in the cities lives in poverty, people question their government and the implementation of neoliberal policies. While the wealth is growing for the large corporations and foreign companies with interests in Chile, protesters come to realize that neoliberalism was born and will die in Chile.

The history and the progress of neoliberalism in Chile is a controversial concept. Many economists praise the efforts of the Chicago Boys and follow the same rhetoric as Milton Friedman, calling for a Miracle in Chile. However, thousands of people that suffered under the regime of Augusto Pinochet, people that lost their jobs and their land due to privatization processes, people that could not feed their families, victims of the brutal state terrorism, and families that still have not found their relatives after so many years, strongly disagree with the opinions of a few privileged economists that see people as statistics and not human beings. In reality, there is no miracle in Chile. While the country is wealthy, the people are poor and social unrest is rising in the country. Neoliberalism in Chile was born on a dark October day in 1973, on the back of a ruthless dictator and bureaucratic economists, and it died on a stormy October day in 2020, filled with rage, frustration, and disappointment. The future lies in the hands of the Chilean people.

Bachelor's Degree in International Relations & Political Science. Columnist focusing on Global Affairs

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

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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

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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

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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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