Tag Archives: Trade

Why the US will start a war with China (perhaps)

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La_bataille_de_Palikiao
The Battle of Palikiao (Baliqiao), 21 December 1860 during the Second Opium War (1856-1860), Emile Bayard

In my first post on this blog I predicted that the US will one day provoke a war with China in an attempt to maintain its global hegemony. The formulation was deliberately provocative and, of the three reasons to be pessimistic about the future that I outlined, it has provoked the most scepticism, both on Facebook and to my own, physical face, although not, unfortunately, in comments on the blog (hint, hint).

For the last couple of years I’ve asked my students at Paris 13 University to debate this question. It’s always difficult to find someone to support the proposition and at the end the vote against is overwhelming.

They put forward plenty of good arguments against. But I think there are also strong arguments for and perhaps a tendency to think that it won’t happen simply because we really don’t want it to.

Here’s the strongest argument for a decisive confrontation between the US and China:

GDP WOrld

The World Bank predicts that China will be the world economy’s top dog by 2050 … and that by a very long way.

Chinese growth has averaged 10% for the last 30 years and, although it’s slowing down, it will continue to outstrip the older-established industrial economies unless there is a sudden and dramatic reversal of fortunes.

The US is losing its economic hegemony of the planet and, although the Chinese leadership appears to have no aspirations to global political or military hegemony at the moment, I don’t see how Washington can keep hold of the latter if it ceases to have the former.

We’re witnessing the decline of an empire and that is never a peaceful process.

The US has reacted to the decline in its economic status in time-honoured fashion – competing with China economically with the creation of a free-trade partnership around the Pacific, recruiting “allies” that it hopes will be dependent on its support in the region and encircling China with military bases, some equipped with troops and boats, others with drones.

Here’s the US-initiated Trans-Pacific Partnership – countries in dark green are already members, those in light green have expressed an interest, those in blue, according to the designers, are potential future members (China – really?).

TPP
Graphic: Public domain/ “TPP enlargement” by en:User:Japinderum, en:User:Phospheros, en:User:Orser67 – en:File:TPP enlargement.png (based on File:World map model.png). Licensed under CC BY-SA 3.0 via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:TPP_enlargement.png#/media/File:TPP_enlargement.png

If all goes as planned, the US will have sewn up a trading partnership across what Washington now regards as the “centre of gravity” of world economic activity, an area that produces 60 per cent of the world’s GDP and represents half of world trade – “a posse to get China,” according to Sydney Morning Herald editor Peter Hartcher.

But, of course, Washington knows that it can’t prevent its new friends dallying with China economically – Taiwan thinks it’s the real Republic of China but that hasn’t stopped its capitalists taking the plane to the People’s Republic (PRC) for self-enrichment purposes. No more can US companies afford to renounce doing business with Beijing.

In 2011 on a visit to Australia Barack Obama announced a “pivot to Asia”.

It hasn’t quite gone as planned, what with the hoped-for disengagement from the Middle East and Afghanistan proving more difficult than Washington’s finest minds imagined.

Nevertheless, there has been a frantic diplomatic offensive, which has involved bringing Myanmar/Burma out of the cold, sucking up to India’s Narendra Modi and cultivating every country that has a territorial bone to pick with China, which just happens to be every one of its neighbours to the east and south.

Here are the principal points of friction in the South China Sea:

  • The Spratley Islands,which are rich fishing grounds and, probably,have significant oil and natural gas reserves, are claimed in part or entirely bythe PRC, Vietnam, Malaysia, the Philippines, Brunei and Taiwan, all of whom, apart from Brunei, have military forces on one or more of the otherwise uninhabited rocks;
  • The Paracelislands, more good fishing and probable oil and gas, are controlled by the PRC but claimed by Vietnam and Taiwan;
  • The Senkaku/Diaoyuislands, more rocks with fishing, oil and shipping lanes, controlled by Japan but claimed by the PRC and Taiwan; Things got nasty in 2012-13 when Japan bought three of the islands from a “private owner”, sparking demonstrations in China, and the PRC declared an east China Sea flight identification zone; A US-Japan security treaty obliges the US to intervene in case of threat to Japan’s sovereignty over the islands;
  • Japan – a lot of history here, as with the rest of east Asia, and a focus for Chinese nationalism, which sometimes threatens to escape Chinese Communist Party control; Right-wing Prime Minister Shinzo Abe is an aggressive nationalist who wants to renounce Japan’s post-war limits on its military role – he has increased defence spending, created a new national security council and beefed up alliances with neighbouring countries.
  • Taiwan, like the People’s Republic, claims the right to control the whole South China Sea; it also claims to be the official government of all China, although that policy is the subject of much political controversy, while the PRC claims that Taiwan is part of its territory and 2,000 missiles pointed at the island. In 2011 the US agreed to a US$5 billion upgrade to Taiwan’s F-16 military airplanes.

No-one’s going to be short of a casus belli here.

Now it so happens that one-third of the world’s maritime trade and half its traffic in oil and gas takes place in the region and major petroleum and other mineral deposits are believed to lie beneath the seabed.

The US, through its navy and its allies hopes to have a stranglehold on virtually all of China’s oil supply through control of the South China Sea and the Straits of Malacca,  one reason, perhaps, for Beijing’s relatively good record of investment in renewable energy  but also for its antsiness when it comes to islands near shipping lanes.

So, although the Chinese leadership may not aspire to world hegemony, it very definitely wants hegemony of east Asia, especially the South China Sea.

And the US definitely doesn’t want that, witness the map of US bases in the region, now featuring new, added US troops in Australia:

US bases s ch sea

Of course, there are plenty of US troops to the west of China, too, notably in Afghanistan – albeit in reduced numbers – and Kyrgyzstan.

However, as historian Alfred McCoy points out, China seems to be in the process of outmanoeuvring the US by extending its influence westwards, with an ambitious network of transport and pipelines. Gas and Oil pipelines will soon link China to the Caspian Sea, via Kazakhstan and Turkmenistan, to the Bay of Bengal and the Arabian Sea and thus to the Gulf via Myanmar and Pakistan, and to Siberia.

China transport pipelines
China-Central Asia Infrastructure (doesn’t include Sino-Myanmar pipeline) Source: Stratfor

According to McCoy, China, working with Russia with which it has created a bloc in the Shanghai Cooperation Organisation, is working on the domination of “Eurasia”, the land mass that strategists have for over a century regarded as key to world domination.

Now, the US may not have colonies but insofar as it imposes its will on the whole world it is an empire, the most powerful empire in history.

And the economic predictions show that that empire is now on the decline, for a loss of military and political hegemony must surely follow a loss of economic hegemony, even if the speed of that process is open to question.

In general empires don’t bow out peacefully.  After two world wars and a wave of colonial revolts, the European empires did give up without a confrontation with their successor, choosing, especially in the case of the UK, to tag onto Washington’s coattails.

But is there any likelihood of the US agreeing to go quietly? Despite not having a war on its own soil for well over a century, it is a militarised society with what is euphemistically called a “defence” budget reaching an enormous  $496 billion for 2015.

That feeds a vast military-industrial complex whose profits largely depend on a permanent war mentality, as do the jobs – 3.6 million, according to interested parties – in the sector.

“Led by Lockheed Martin, the biggest U.S. defense companies are trading at record prices as shareholders reap rewards from escalating military conflicts around the world,” reports the Portland Press Herald.

“As we ramp up our military muscle in the Mideast, there’s a sense that demand for military equipment and weaponry will likely rise,” says Jack Ablin, chief investment officer at Chicago-based BMO Private Bank, who oversees $66 billion including Northrop Grumman and Boeing shares. “To the extent we can shift away from relying on troops and rely more heavily on equipment — that could present an opportunity.”

So much for the material interest. Then there’s ideology and national psychology.

Can any US leader – or even any mainstream American politician – renounce the manifest destiny doctrine? Yet accepting the rise of an equal or greater power means doing just that.

The Tea Party would look like – well, a tea party – compared to the reactionary movement that would be whipped up by shock-jocks, Fox News, the Republican right wing, in response to a president who proposed that the US accept playing second fiddle on the world stage.

And the Democrats are a thoroughly bourgeois party, as committed to the American ideology as the Republicans, while much of the labour movement seems easily recruited to the patriotic cause.

True, large parts of the US economy have everything to lose by upsetting China and the PRC holds about 8.0% of US government debt, not as much as some people seem to believe but still a healthy slice. But is US capital sufficiently united in its interests to drop its pretensions to world domination and rein in the populist right?

US_Public_Debt_proportions_March_2013
http://www.businessinsider.com/chart-us-trade-deficit-with-china-2013-4

Another persuasive argument against starting a war is the nuclear one. But the balance of terror nearly didn’t work during the Cuban missile crisis, can we be sure that it will when the US empire feels itself to be in terminal decline?

Cyberwarfare is also a growing threat to the US. Is that a new balance of terror? Perhaps, but, the way Washington has reacted to it so far, it could also be a casus belli.

Nor can we be sure that China’s ambitions will remain as modest as they are today. Already XI Jinping appears to be more aggressive about his country’s international role than his predecessors and the CCP’s legitimacy is now primarily nationalist. Rank-and-file nationalism could be a strong pressure on the country’s leadership in the event of a confrontation over territorial claims.

And a territorial claim, combined with a stiff dose of rhetoric about human rights and a little bit of imperial-minded racism, could easily provide a pretext for the US becoming involved in a military confrontation, perhaps limited at first but possibly spiralling out of control.

The real reasons for wars are rarely if ever openly declared – a pretext involving much moral indignation and national affront is usual and the US has particularly fine form in this field  – think of the USS Maine in Cuba, the Gulf of Tonkin incident and, as for Iraq, let’s not even go there.

So a scenario of Washington intervening on behalf of one of its clients and the PRC leadership being unable or unwilling to back down on nationalist grounds doesn’t seem so unrealistic to me

I wouldn’t bet the $1.2 trillion of US debt China holds against it.

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