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Issue #1834      August 8, 2018

China

Embracing a multi-polar world

BEIJING: Change is taking place exponentially in today’s world. One unmistakable trend is the rapid rise of China and decline of the US as the dominant global power, a place it has held since World War II.

The Belt-Road Initiative will facilitate trade and infrastructure development of countries involved while securing raw materials and resources China needs for its own development.

What does this portend for global economic and diplomatic relations? What new international order might prevail in a multi-polar world? Will it occur peacefully or will the coming years be marked by heightened tensions, turmoil and increased danger of war?

The country is embarking on a new era of ambitious economic and social reforms based on raising productivity through innovation and advanced technology, prioritising production for its domestic consumer market, modernising education and governance systems; extending democracy and grassroots participation in decision-making; and shifting to sustainable development.

They see these reforms as essential to meeting the goal of a “prosperous, modern socialist society” by 2050 which in turn depends on “opening wider and wider” to the global economy, a stable global trade system, partnerships and peace.

By sparking a trade war with China, the Trump administration is signalling its intent to thwart China’s ambitious plans while maintaining its own economic domination. By contrast, China believes the world is entering a fourth era of globalisation that requires a new international order of multipolarity, shared development and cooperation.

The US emerged as the world’s sole economic and military superpower with the introduction of capitalism into the former USSR and Eastern bloc socialist economies in 1989-91. The US sought to ensure its long-term dominance and pre-empt future rivalries by integrating a prostrate Russia and underdeveloped China into the global capitalist system.

At the same time, it continued its Cold War-like foreign policy by expanding NATO eastward and militarily encircling Russia and China.

But things have changed dramatically for both countries. An oligarchic ruling class took power in Russia pursuing its national and global interests. And China emerged as a leading economy with global trade ties.

Mounting crises have shaken the global capitalist system, including the bursting of the tech bubble in 2000, the 2008 global financial crisis, deepening structural crises, deindustrialisation, stagnation, the impact of severe austerity measures and a mounting refugee crisis.

US imperialism experienced strategic setbacks when the neo-con policies of wielding US military pre-eminence to impose economic pre-eminence began to fail, first in Afghanistan and then in Iraq and other places.

Economic nationalism in the US and Europe is threatening to disrupt the global trading system and affect China’s drive for what it counter-poses as openness and reform. Ironically, however, the economic nationalism pushed by the Trump administration, for example, is actually diminishing US influence and facilitating China’s rising influence over the world economy.

In short, the global governance system dominated by advanced capitalist countries in place since WW2 is now fraying.

The neo-liberal globalisation of the 1980s-90s was greatly spurred by China and Russia’s entrance into the global capitalist dominated economy. Rapidly increased trade, deregulation, privatisation, dropping of tariff barriers and a “race to the bottom” were its chief characteristics.

Meanwhile other factors are shaping the emergence of a new stage of globalisation, one referred to as “inclusive globalisation” whose goal is to improve people’s lives. Trade takes place in an increasingly multi-polar world and alternative global financial institutions. The geographical centre of globalisation is shifting to Asia and the emerging economies.

This means global trade is less and less dependent on developed capitalist countries as the defining force.

Up until now, China had followed the late Communist Party of China chair Deng Xioaping’s axiom to “keep a low profile and hide one’s brightness,” while tending to its domestic economy.

Things are different today. China is engaging the global community economically and diplomatically and increasing its influence. In the recent period China played a key role in brokering the Iran Nuclear Deal, the Paris Climate Agreement and in efforts to defuse tensions between the US and North Korea.

China’s “opening policy” is a recognition that globalisation is a fact of life. No country can develop in isolation and must engage in the globalised economy even when the US and other imperialist powers dominate for the time being. China realises its state-owned companies and private corporations must play by the rules set by the global market.

But China is also projecting a new governing concept that fits the coming stage of globalisation called “building a community for a shared future for humankind.”

The concept was first introduced by Xi Jinping in 2013, then newly elected chair of the CPC. It involves “two guidelines”: build a more just and reasonable new world order and jointly maintain international security.

The concept shares aspects of the USSR foreign policy of peaceful co-existence between different social systems but differs in some important respects.

It calls for increased multilateralism, relations based on mutual respect regardless of size, social system, fairness and justice in the global economy, and win-win economic cooperation. The new approach to globalisation should take into account protection of both the environment and workers’ rights.

It calls for working out disputes through dialogue and sees deeper economic interdependence as an important factor contributing to peace relations.

It is based on non-involvement in the internal affairs of other countries, and eschews Cold War type economic and military alliances and blocs in favour of collective security.

It is a recognition that no one country can solve problems of development, climate change, peace, poverty, disease, resource allocation, or security on their own in this era of globalisation.

It doesn’t see international relations through the lens of a global competition between socialist and capitalist systems, but rather state-to-state relations and partnerships.

It is a recognition that development must be inclusive and sustainable. Diversity is celebrated and cultural exchange elevated.

It involves restructuring the international order, and reforming global governance and financial systems established after WW2 such as the United Nations, IMF and World Bank.

China has built alternative international networks and relationships since the fall of the USSR including the Shanghai Cooperative Organisation (SCO), BRICS (the association of five major emerging economies: Brazil, Russia, India, China and South Africa) and alternative financial institutions to facilitate trade and development including the Asian Infrastructure Investment Bank.

China’s foreign policy will increasingly impact economic development and global governance. A case in point is the Belt-Road Initiative (BRI) – US$1 trillion investment in road, rail, and maritime ports, energy pipelines, power grids, refineries, connecting 65 countries (in particular Asia and Africa) with trade and cultural exchange. Once complete, the BRI, called the largest infrastructure project in modern history, could boost global trade by an estimated 12 percent.

The BRI will facilitate trade and infrastructure development of countries involved while securing raw materials and resources China needs for its own development, theoretically a win-win.

The BRI is also meant to create alternative shipping and transport routes from China’s east coast and through the Strait of Malacca, made urgent with the Trump containment policies.

The US and other capitalist countries charge the BRI is fostering “debt traps” for developing countries and projects don’t employ workers from their own countries. This is disputed by China.

India also fears encroachment into its sphere of influence with implementation of the China-Pakistan Economic Corridor that will bring economic development throughout the region. India is disputing the BRI because it passes through Kashmir.

The Trump administration declared China a strategic rival and largely junked the Obama administration’s “pivot” to Asia which emphasised engagement and cooperation. Trump is also abandoning the “One China” policy with respect to relations with Taiwan.

The new Trump administration policy favours what it calls the “Free and Open Indo-Pacific strategy” first enunciated by Japan. While the new approach hasn’t fully taken shape, it includes scrapping the Trans Pacific Partnership trade pact, downgrading diplomacy in the region and reviving cooperation with some traditional allies.

US imperialism has long attempted to shape China’s development path and restrict its maritime access to the Pacific with a string of military bases. China is now challenging this containment by increasing trade and building its military presence in the South China Sea. This has led to territorial and maritime disputes with its neighbours including Vietnam. While tensions remain, Vietnam and China are seeking a diplomatic resolution to their differences.

In the past year the Quadrilateral Security Dialogue involving the US, India, Australia and Japan, but better described as a “diplomatic carcass,” has been revived with the express purpose of a Cold War containment of China.

The Trump administration is also promoting India as a regional power alternative and partnering with Japan, India and other countries to actively thwart and counter the BRI with competing infrastructure projects across the Indo-Pacific region. But this has little meaning without massive funding to back it up.

Trump’s approach is full of contradictions that make it unsustainable. The EU including Germany and the UK, Russia, India, Australia and other countries are fostering economic trade ties with China. The EU is China’s largest trading partner and China is the EU’s second largest trading partner after the US. China is Russia’s largest trading partner.

The world can ill afford a conflagration between China, the US and other powers that could turn into a nuclear catastrophe. Delaying cooperation to address the climate crisis or continuing to allow vast economic inequalities between nations and people leads to nothing good for the human race. “Building a community for a shared future for humankind” seems to make a lot more sense.

People’s World

Next article – Superheroes of the East

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