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The sweet and sour war
Publication Date : 03-09-2012
The 44-year US-Soviet Cold War was so called because it stopped short of a shooting conflict. The superpowers — each with over 20,000 nuclear weapons — were deterred from direct confrontation by the declared doctrine of Mutual Assured Destruction (MAD). But despite the Soviet Union’s demise, the competition between Washington and Moscow has not entirely ended.
However, President Obama’s announcement earlier this year of the US "pivot" to Asia was a public declaration that the prime focus of strategic contest would be China. This Eastern rivalry is very different from the old Cold War. There is no iron curtain dividing the realms of capitalism and communism, no massed armies facing each other, no distinct and separated economic systems operating in parallel, and, so far, no proxy wars waged by client states.
In fact, America and China are intensely interdependent. What China produces, America buys. US corporations have invested heavily in China to produce the cheaper consumer goods which enable the average US consumer to maintain the American way of life. This trade marriage is reinforced by mutual financial bondage. China has accumulated US$3 trillion in trade surpluses.
The US needs China to keep buying its debt to finance its own growth and consumption. China cannot divest its dollar holdings since this would result in the dollar’s drastic devaluation, a staggering financial loss and the erosion of China’s trade competitiveness.
In the aftermath of the financial crisis, China’s accumulated capital has become essential for investment not only in developing countries, but also in Europe and the United States.
Indeed, America’s crumbling infrastructure could be quickly rebuilt by Chinese finance and its fast-moving construction companies.
China has also served as a responsible partner in helping contain conflicts and disputes in Korea, South Asia, Sudan and elsewhere in Africa and in addressing global issues such as terrorism, climate change and the financial crisis. Nor has China exploited America’s strategic mistakes in Iraq and Afghanistan. Beijing’s focus has been on its own national and regional issues, particularly on maintaining economic growth and political stability.
For almost 30 years, despite periodic eruptions, Chinese-American differences on Taiwan, Tibet, human rights and arms control have been kept under control by both sides. However, the Sino-American relationship has clearly soured since the advent of the Obama administration.
First, the political and media diatribes have escalated. In the US, China is accused of taking US jobs through currency manipulation and unfair trade, of a massive military build-up that threatens Asian and US interests, of cyber warfare and human rights violations. While projecting the Chinese danger, American commentators, somewhat contradictorily, prophesy China’s imminent economic and political collapse.
The Chinese media and academics respond that China’s growth will be sustained and serves US and global interests, that China’s military expenditures are less than one-tenth of America’s, and that the US interferes in China’s internal affairs and seeks to exacerbate its regional problems. They also project America’s strategic mistakes, domestic political, economic and social failures, and double standards.
Some analysts discount this public sparring and rhetoric as a reflection of US presidential electoral politics and the delicate leadership transition under way in China.
However, this time the differences may be deeper. Last year the Pentagon identified China, besides Iran, as a US adversary. Obama’s Asian pivot involves the deployment of most of the American navy to the Pacific. US naval exercises are conducted with Japan, South Korea, Australia and India, often provocatively close to Chinese shores.
The Sino-US rivalry is becoming territorial. The US is strengthening alliances around China with Japan, South Korea, Australia, Mongolia, Vietnam, the Philippines, India and Afghanistan. US military bases have been reinforced in Korea, Japan, Guam, Australia, Afghanistan, Kyrgyzstan and the Gulf. China’s seeks to maintain its friends in North Korea, Pakistan and, to an extent, Sri Lanka. It recently lost Myanmar. Thailand, Indonesia and Bangladesh sit on the fence. The Central Asians are being pulled in several directions: heavily back towards Russia, but also by China, Turkey, Iran and the US.
In this growing contest for influence, China operates under a self-imposed handicap — its policy of non-interference in the internal affairs of other states. In the Arab Spring, Beijing was unable to shift its long-term support for the incumbent rulers before their fall, while the US not only changed allegiances but become actively involved in supporting the emerging forces in Tunisia, Egypt, Libya and now in Syria. Of course, these are tactical setbacks. In the long term, national interests will dictate the external affiliations of the new regimes. The Chinese will wait to build relations with the new leaderships in these countries by offering them tangible support for economic revival rather than promises of electoral democracy and free speech.
The prospects of escalating tension in the Sino-US relationship are greater also because of a revival of nationalist sentiment in China. The current demonstrations against Japan over the islands dispute are one example. Contrary to Western assumptions, these displays of public anger are state-allowed but not stage-managed. The blogosphere has empowered a younger generation of educated and proud Chinese whose nationalist sentiments are vigorously expressed. The leadership is obliged to accommodate these sentiments, as evident from China’s new assertiveness on its territorial disputes.
The future direction of this sweet and sour relationship will be determined by the leadership changes in the offing in both Washington and Beijing and the policies the new leaders will adopt. The putative president and prime minister of China have both displayed a pragmatic posture towards the US. However, in the US presidential elections, the anti-China rhetoric has been encompassing and aggressive.
If some of the threats are carried out, such as to declare China a currency manipulator, the consequence could be a trade war and a certain slide into recession in the West. Hopefully, rationality will prevail over rhetoric. Yet history is replete with strategic blunders committed by intelligent political leaders. The sour could well win over the sweet in the China-America relationship.
The writer is a former Pakistan ambassador to the UN