Warning To The West: Don't Let China Hijack Global Capitalism
The U.S. has a long history of inhibiting Chinese expansion in Asia. Now, Donald Trump is handing them the keys.
PARIS — Donald Trump makes it clearer by the day that he is the best gift the United States could have ever given to China. Thanks to the new American administration, Xi Jinping — with his successful blend of absolutism, nationalism and economic modernization — is accelerating the reconfiguration of the infrastructure networks and trade relations that shape globalization.
The chaos that has taken hold in Washington contrasts with the long-term strategy conducted by Beijing that aims not only to surpass the United States but also to impose a new global leadership. The U.S. has become the weak side of the strategic Beijing-Moscow-Washington triangle with the country's power and credibility continually compromised by the erratic behavior of Donald Trump.
The protectionist shift, reaffirmed within the G20, was solidified mainly by the United States' withdrawal from the Trans-Pacific Partnership, which was the key to the economic containment of China in the Asia-Pacific region. The commercial and monetary war declared against China has petered out, limited to a modest agreement last month on food and agriculture. It is being reduced to the opening of a $2.5 billion market to American farmers compared to a commercial deficit of $347 billion in 2016. The situation is all the more absurd in that the real reasons for this deficit lie in the inadequate savings, investment and competitiveness of the American production system, which Donald Trump is in no way resolving.
The U.S. is paralzyed, Europe powerless
At the same time, China has very skillfully used North Korea to reinforce the pressure on the United States and to undermine the guarantee of security granted to their Asian allies. The survival of the Pyongyang regime depends on their international trade, 80% of which is with China. Far from participating in international sanctions, Beijing supports the acceleration of North Korea's nuclear and ballistic program, which is exerting increased pressure on Japan and South Korea and decisively weakening the United States' deterrent capability in Asia by developing the means to strike American territory. The United States has shifted toward favoring the diplomatic option in which China plays a central role. But this has already been coupled with the suspension of American Navy patrols near the disputed islands in the China Sea, notably Scarborough Shoal, thus endorsing their takeover by Beijing.
The diplomatic and strategic errors of the United States contrast with China"s methodical construction of its domination of Asia and the vital infrastructure of globalization. While the United States is completely curled in on itself in Washington, China is accelerating its globalization ambitions with the launch of a kind of 21st-century version of the Marshall Plan, namely the New Silk Road project it dubs with the motto OBOR: "One Belt, One Road."
The plan aims to touch 60% of the planet's population and 30% of the its GDP and already involves more than 900 programs with a total budget of some $800 billion. Its financing is backed by the Asian Infrastructure Investment Bank with Xi Jinping having just pledged an additional $113 billion. The objectives are manifold: to control the vital networks of globalization; to sell surplus Chinese steel, aluminum and cement; to create outlets for exports; to guarantee access to raw materials and energy sources; to establish debt dependence and to spread the uniquely Chinese totalo-capitalist model.
Today the United States is paralyzed and Europe powerless against Chinese expansion. Protectionism constitutes the worst of the responses, of which the only result is leaving the field free for China. It would be more effective to take them at their word while obliging them to follow the rules of the free trade that they invoke, notably in terms of opening their markets and protecting their investments.
Keep in mind, Beijing's newfound global ambitions leave it exposed to great economic costs and considerable financial risks. Support for such national champions as electric car manufacturers is being subjected to massive diversions of aid for research into speculative real estate investments. The financing of non-viable infrastructure or bankrupt regimes can become ruinous, as in the case of the tens of billions of dollars swallowed up in Venezuela since the Hugo Chavez regime. Meanwhile, Chinese neocolonialism is generating more and more resistance, from Africa to Asia.
The United States and Europe must urgently reformulate a coherent strategy against the rise of China. Failing that, Donald Trump will prove that Karl Marx was right when he announced that the last capitalist would sell the rope that would be used to hang him. And history would always remember that an American billionaire handed over control of 21st-century capitalism to a Chinese communist for nothing.