June 2nd 2018


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COVER STORY The Greens: the political equivalent of bilgewater

EDITORIAL Malaysian election sends shockwaves across South-East Asia

GENDER AND SPORT Transgender playing in women's football league gains attention

CANBERRA OBSERVED Beyond tomorrow a bridge too far for politicians to plan

ENERGY Why renewables destabilise the power grid

LAW AND FREEDOM Exemptions: at issue with Dr Zimmermann

INTERNATIONAL AFFAIRS Behind the U.S.-North Korea rapprochement

INTERNATIONAL AFFAIRS Two to tango: Where to now for U.S. and China?

LIFE ISSUES So, is this not pro-life?

POLITICS AND CULTURE The West won the world but may lose its soul

MILITARY BIOGRAPHY Commanders: the men who resolve questions of life and death

HUMOUR

MUSIC Eurovision: Wailing and gnashing of teeth

CINEMA Superhero movies: A Chestertonian consideration

BOOK REVIEW A man for all seasons and hemispheres

BOOK REVIEW Mid-century gem of Catholic fiction

POETRY

LETTERS

ECONOMICS Vatican document nails some of the causes of the GFC

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INTERNATIONAL AFFAIRS
Two to tango: Where to now for U.S. and China?


by Colin Teese

News Weekly, June 2, 2018

More Western commentators are beginning to think seriously about China. However, thus far, not nearly enough has been heard from the most powerful and influential of them.

Those who don’t know history are doomed to repeat it.

Edmund Burke

Some in the United States may think that such discussion will fall upon deaf ears within the administration of Donald Trump. Perhaps so, but further delaying that discussion will likely harm Western and indeed global interests.

In thinking about China it is, of course, necessary to take note of the advice of Edmund Burke quoted above; but equally important is to recognise that, in the rebirth of China, history can take us only so far.

Myrtle, I can't begin to imagine what those Chinese are up to
in the South China Sea!

Orthodox geopolitical opinion about China’s rise to great power status rivalling that of the United States, tells us that such developments invariably end in war.

As a matter of fact, that’s true. Throughout history, disputes between competing major powers, either over territory or ideology, have ended in war. However, since the middle of the last century, a new element, the destructive power of modern military technology, has intruded itself into the equation.

Accordingly, can present-day or future struggles for supremacy between great powers any longer be resolved by resort to war? Probably not, at least not in the emerging power struggle between the U.S. and China.

A second obvious question emerges: if military confrontation is ruled out, by what means might any conflict between China and the U.S. be resolved?

But let’s not jump ahead. We first need to understand what exactly has happened and is continuing to happen between the U.S. and China, and what so far have been the responses from the opposing sides. We should start by putting aside the various myths that abound in current discussions. The temptation has been to see the rise of China as the beginning of a new cold war; or perhaps as a rebirth of the old Cold War with China replacing the Soviets.

Nothing of the sort is true. These days, the nature of the Cold War with the old Soviet Union is itself a subject of dispute in academic circles. More importantly still, China is no Soviet Union reborn. Yes, it is uncompromisingly communist-led, and we may assume it will remain so as far ahead as we can reasonably look. Neither should we imagine it will move in the direction of a liberal democracy. But there the comparisons with the Soviets ends.

The Soviet Union, for example, was never part of the world economy that was constructed in the wake of World War II, despite the fact that it joined the United Nations (UN) and Russia remains a permanent member of the Security Council alongside the rest of the victorious allies.

The Soviet Union was not, however, part of the International Monetary Fund, the General Agreement on Tariffs and Trade, the World Bank or the Bretton Woods agreement, which together managed the West’s international trade and payments system.

Neither did it participate in the Marshall Plan conceived by the U.S. to reconstruct the economies of war-torn Western Europe. These mechanisms helped to generate unprecedented prosperity throughout the Western world.

The USSR did engage in some trade with Western nations, but neither the Soviet Union nor its Eastern European satellites could ever have been regarded as part of the Western dominated world trading system. The so-called Warsaw Pact countries were a self-contained group.

Throughout the Cold War the Soviets were more or less able to match the U.S. in the development of military hardware, but in the areas of consumer satisfaction, their economies lagged far behind the U.S. and the West. In the end, this latter point helps explain why the Soviet empire finally imploded.

It is true that in the first decade and a half of the Cold War, the U.S. tended to see the two communist powers as a joint enemy. The U.S. went so far as to deny legitimacy to Communist China; indeed, it maintained the fiction that Taiwan was the “real” China, enjoying a permanent seat on the UN Security Council as if it had been one of the victorious powers in the war against Japan.

This came to an end when U.S. President Richard Nixon formally recognised the existence of Communist China some 23 years after the communists under Mao Zedong’s leadership took control.

Embroiled in post revolutionary consolidations, Communist China struggled to make an international impact in its early years, in very much the same way as had been the case with the Soviets. Both communist leaderships made many mistakes and their long-suffering peoples paid a terrible price.

Looking back, the USSR struggled to the very end, unsuccessfully, to make an isolationist form of communism work. China under Mao seemed to be headed in the same direction. But on Mao’s death, his successor Deng Xiaoping realised that if China’s communist leadership were to survive, China could not continue on the same path.

Deng figured out that China needed to become part of the world economy, and this meant changes; actually, a revolution. Opening up the possibility of trade with the U.S. was a first step.

In 1979 Deng concluded a deal with U.S. President Jimmy Carter that gave China access to the U.S. market. To achieve this, important concessions had to be made. Some at least of the trappings of a Western market had to be embraced, including the chance for foreign businesses (especially U.S.) to establish themselves and operate in China.

Among other things, China accepted certain realities about the value of markets and the need for privately owned enterprises.

The experiment benefitted both parties, though spectacularly more for China, which has now become the world’s biggest trading nation. By 2005, Chinese exports to the U.S. accounted for 10 per cent of Chinese gross domestic product (GDP) (now it is down to 4.5 per cent). U.S. exports to China remain where they have been for all of this century: less than 1 per cent of GDP.

However, that disparity understates the importance of China to the U.S. economy even as China becomes the largest exporter in the world. Trade is becoming ever less important to China: domestic consumption now drives 65 per cent of Chinese growth. About 800 million Chinese have already been lifted into middle-income status. The economic advance is still proceeding.

Chinese manufacturing is now almost as large as the that of the U.S., Germany and Japan combined. But China sees its future in technology more than in manufacturing. The U.S., for obvious reasons, is concerned that China is winning the race for technological superiority by the use of subsidies to its tech companies.

China will go on doing what it is doing; indeed it aims to surpass the U.S. in the coming years. Besides, it knows well that the U.S. subsidises its technology sector by way of military expenditure to U.S. companies.

Both sides understand that the race for supremacy in technology is likely to bring further tension to the U.S./China relationship. In one sense it is nothing special, just another dimension to the sense of threat that the U.S. associates with the rise of China.

The problem remains as it was from the start, buried in unstated beliefs and expectations on both sides about outcomes.

On the U.S. side, the understanding was that China would emerge as had Japan and South Korea into an important ally, embracing liberal democratic capitalism and accepting U.S. leadership. Important U.S. commentators wrote frequently to endorse the expectation that China, under the right terms of encouragement, would willingly choose to follow this course. Yet that was never the intention, also unstated, of the Chinese leadership, right from the start.

The Chinese Communist Party and the political structures that flow from it were always an inseparable part of China’s future. Adjusted, of course, to take account of necessary and desirable elements of market economies. It wasn’t going to follow the Soviets down the wrong path. Martin Wolf, economics editor of London’s Financial Times, recently visited China. It was pointed out to him that 60 per cent of China’s population still favours Mao’s view of the world, while 40 per cent favour the reforms of Deng Xiaoping.

Rather than Western models, the Chinese favour the idea of technocratic elites of highly trained bureaucrats under Party control. Rather like what the European Union is trying unsuccessfully to do without party oversight.

The Chinese say they have no world superpower hegemony domination aims; their own internal development problems are as much as they can handle. Such assurances are unpersuasive. All the more so when we observe the global links they are establishing across Central Asia and into Europe.

Whatever may be China’s intention, the fact remains that the mere acquisition of great power carries with it the necessity of maintaining and building that power. That being so, there is a kind of certainty that China will exercise a greater influence on events beyond its own borders than it has at any time in modern history. The question of how this might be reconciled with the fact of existing U.S. pre-eminence must therefore be confronted.

 If we rule out a military confrontation, the only example of a solution one might point to is the example of the British conceding power to the U.S. after World War II.

Is it possible that the U.S. will similarly find a way of accommodating an emerging China? Yes, but it would have to happen as it did with the British, with neither side having to concede that anything had changed.




























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