#86 China’s Overseas Policy: Part 2
Conclusions arising from China’s Global infrastructure on the world stage are still difficult to assess. Do Chinese world policies create a new form of Imperialism as part of the anti-China rhetoric suggests?
That the USA resents the rise of China as a contender for world power is obvious. China is different as a contender state when compared to Germany before 1914 and the USSR after 1945. It is worth our time to consider these large questions?
The Collapse of the USSR 1989-1991 and the American Approach
When the Soviet Union collapsed in 1991, a host of new relatively smaller states were set up in eastern European and Central Asia. If China had failed in 1991, the way forward for the USA to maintain and develop its world dominance would have been clear. The USA had this option after the collapse of the USSR. I remember this moment in history vividly. Books like The End of History and others were written at this time.
By 1991, it seemed that the USA had achieved everything it had been working for since 1945, that is the destruction of socialism in the USSR. The prospects of world dominance without a competitor faced the USA for the first time. For a few short years, it seemed that this situation might happen and that we could have a world free of tensions and war.
Sadly, but perhaps not surprisingly, this opportunity was wasted. America did not know how to support other economic and political systems. From where America stood, being the dominant world power did not involve overtly supporting massive development around the world. For the previous 200 years, the USA had been taking other peoples’ economies by violence and force of arms. First, she eviscerated her own indigenous peoples. In her first wars after 1945 in Korea and Vietnam, she used force as she used against her own indigenous peoples. She killed men women and children to win her objective by extreme violence. It is simply not in the US character or history to support other people’s economics and political development. The most recent example is in Afghanistan, where the people have been left in dire poverty and need of food after 20 years of occupation.
So, as it was in the USSR after 1991. The USA only knew how to extract wealth and almost the entire population of the Russian continent suffered and was impoverished until Putin took over power. It was obvious for anyone who had eyes to see, and who was not weighed down with the prejudices of our day, that USA was the arch imperial nation of the day. She wished to extract surpluses from all nations that were weak enough not able to defend their economy from the predatory desires of American capital.
The opportunity for a peaceful world was lost for at least another generation.
The Chinese Response
As a consequence, China and Russia have made a new strategic alliance which has been described as ‘a full spectrum geo-strategic symbiosis between two ancient civilization realms'. If that should hold together, then the USA faces a deep threat to its global authority. The ‘geographical pivot of history’ first discussed by Halford John Mackinder in 1904 may be about to occur in the 21st century.
The new strategic alliance is being tested by the war in Ukraine as I write this blog. The alliance is perhaps the greatest threat to USA world ascendancy since the struggle against the USSR. It appears as if Russia will be forced to trade with China because of this war. The result would be a dagger at the throat of the USA’s SWIFT system of foreign exchange. We will have to wait a bit longer to find out.
The basis of the USA’s world ascendency is, first, her undoubted global military dominance, which includes air, sea and land power, and outer space. Her expenditure on things military is still years ahead of every other state on the globe. This dominance includes a huge number of small military outposts across the world, from islands to bases in major countries. The USA has an unrivalled military hegemony across the world.
On top of this, the USA has control of the world's trading currency, the US dollar. This provides the USA economy with an unrivalled advantage. As she lends money to every state across the world, to facilitate their trade, she commands a small rate of interest. As a result, she is the only country that can be oblivious to her own balance of trade. The USA manufactures the dollars for the world’s trade and charges interest on the loan. Moreover, every country using US dollars must have an account in Washington and keep her dollars in the USA.
These two dominant factors ought to give the USA sufficient might to rule the world. Certainly, the USA thinks so. When country X or Y steps out of line, the USA sends in the IMF to sort out their economy. If they continue to insist on stepping out of line the US imposes sanctions on their economy and may threaten the state itself. Sanctions are the denial of dollar balances held in Washington. That country ceases to have the wherewithal to trade internationally.
The maintenance of this dollar-denominated trading system has been a central strength since 1945. When Iraq threatened to sell her oil in Euros, she was invaded, and the country was destroyed. Similarly, when Libya threatened to introduce a Gold Standard for African neighbours she too was invaded. Both these instances illustrate just how important the Americans consider their world dollar-trading system.
The recent growth of the China-Russian alliance, which may be joined by other large nation-states, poses a threat to American global dominance. The threat to trade in renminbi’s across wide areas of the globe creates an existential threat to US dominance, like no other. The Ukrainian war will redirect Russian oil and gas toward the East. Europe will be severely weakened if the Russian trade moves eastwards to Asia. These are possible outcomes, but it would be foolish to predict any outcome with a degree of certainty as the war still rages.
Conclusion
I started by asking whether Chinese policies are a new form of Imperialism as some people argue in the West. Any answer which says yes or no will be too simple, at least for me. In the end, this depends on your own understanding of imperialism. In the 19th and first half of the 20th century and well before these centuries, imperialism was extractive. Extracting surplus from one country or another. Slavery is an obvious example, which I don’t think needs elaborating. 20th and 21st imperialism on the USA model is also extractive. US company ownership of resources and the export of profits, weakening many other countries. The use of the dollar for global trade leads to countries’ need for dollars. If these are denied, countries are impoverished.
By these measures, China is not imperialistic. I would argue that China sees that by supporting countries to grow their economies, providing the necessary skills and loans and increasing trade between the two, both countries are enriched. But this is all a bit simplistic for my liking. China’s own recent experience of being at the end of Western imperialism could lead to the conclusion that China is unlikely to repeat to others what threatened her.
Looking at China’s stated intention in the Belt and Road Initiative (BRI), this does not appear to be imperialistic. Yet even if the loans are relatively soft compared to IMF and World Bank loans, there are always circumstances where the recipient cannot repay and the provider of the loan takes control of the property. This has occurred in the BRI portfolio and looks uncomfortably like Western behaviour. As always with these types of arguments, there is no simple conclusion.
Further reading
There is a wide choice of sources for a wide-ranging series of blogs on China like this one. China fascinates many scholars in the West. I tend to prefer sources where the author reads Chinese. As China is in the eye of an ideological storm, no one writes about China without a view, so this is worth bearing in mind.
This blog has leaned heavily on several sources which include:
Renminbi: A Century of Change, by Sit Tsui, Qui JIansheng, Yan Xiaohui, Erebus Wong, and Wen Tiejun, Monthly Review, November 2018.
The Enigma of China's Growth, by Zhiming Long and Remy Herrera, Monthly Review, December 2018.
Xi Takes Full Control of China's Future, Michael Roberts, October 2017.
Alfred McCoy, The Global War of 2030, Tom Dispatch, 26.9.2017,
Will Doig, High-Speed Empire: Chinese Expansion and the Future of Southeast Asia, Columbia Global Reports.
Books:
Anchee Min’s novels: Empress Orchid and The Last Emperor.
Jung Chang's Wild Swans, a story of three generations of Chinese women, one of the novels’ is in English that did so much to denigrate Chairman Mao in English people’s eyes.
Stewart Gordon’s When Asia was the World: Travelling Merchants, Scholars, Warriors and Monks, Da Capo Press, 2008.
Simon Winchester, Bomb, Book and Compass: Joseph Needham and the Great Secrets of China, Viking 2008.
Robert Temple Intro Joseph Needham, The Genius of China: 3000 Years of Science, Discovery and Invention Prion 1986.
Sandra Halperin, Re-Envisaging Global Development: A Horizontal Development, Routledge 2013.
Peter Frankopan, The Silk Road: A New History of the World, Bloomsbury 2015.
Mingi Li, The Rise of China and the Demise of the Capitalist World Economy, Pluto Press 2008.
Amitav Ghosh in Antique Land, Granta Books 1992, Laitaifa describes the Synagogue Benezra and details the large cache of documents deposited at the back of the synagogue dating from the times of the Silk route.
Rana Mitter, China's War with Japan: 1937-1945, The Struggle for Survival, Allen Lane 2013.
Julia Lovett, The Great Wall: China Against the World, 1000 BC-AD 2000, and Maoism: A Global History.
Edgar Snow, Red Star over China; The Classic Account of the Birth of Chinese Communism, Grove Press 1938 (reprinted 2018).
Note: On the issue of invasions of Iraq and Libya and sale of oil in non-dollar currency: it is impossible to be categorical and obtain clear evidence of the associations between these invasions and the assertions in this blog. Yet it is widely stated in the literature, mentioned in British Guardian, and Hillary Clinton’s emails that were leaked. Qatar, it is said, has conducted $86 billion worth of transactions in Chinese yuan via Iran
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The peoples of Western Europe had risen from one world of relative poverty and had learnt how to take the wealth from the Americas and transfer it to their own countries. This was slavery and latterly until 1920, indentureship. A whole set up of banks, shipping companies, and insurance companies had arisen to make these transfers possible. From the 1750s the European invaders turned their attention to Asia and systematically began the colonisation process anew. At the same time, as they attempted to colonise and extract the wealth of Asia, the colonising countries began the process we now recognise as industrialisation alongside the rapid growth of cities. The surplus resources extracted through colonisation were used to finance the growth of new industries.