CC BY
61
Section 4. Political science
Vedeneev Ilia, Chelyabinsk State University, student, the Faculty of Eurasia and the Orient E-mail: [email protected]
The American-Chinese "Cold Economic" War
Abstract: the article is devoted to American-Chinese relationships in trade and investment spheres. There are comparisons of huge American and China's trade blocks (such as One Belt, One Road vs. TPP and TTIP). Conclusions of the article are made in long-term prospects.
Keyword: China, the USA, trade blocks, TPP, TTIP, One Belt, One Road (OBOR), AIIB.
Today we are witnessing some new Cold War which takes place in American-Chinese relationships. In contrast to former Cold War (between the US and USSR) the current global confrontation is focused on issues of the international trade, not an arms race. Chinese government (unlike Soviet leaders) doesn't create any alternative system — it plays according to Western rules.
China's economy is one of the most powerful in the modern world. Moreover, it's connected with American economy very tightly. Thus a possibility of a direct war conflict between China and the US is almost out of the question. Therefore both sides wage the non-military war in economic sphere on the territories of other countries. The unions of American and Chinese allies have the shape of new trade blocks.
The Asia-Pacific region has comprehensive, not only economic importance for both competing sides. China is located here; the US considers the region as a sphere of its integral national interests. Moreover, in his article published this May in Washington Post Barack Obama said that "Today, some of our greatest economic opportunities abroad are in the Asia-Pacific region, which is on its way to becoming the most populous and lucrative market on the planet" [1]. Thus creation of a new trade block close by its strongest economic rival is of utmost importance to Americans. As a result, the US-led TransPacific Partnership (TPP), a trade agreement which
united twelve Pacific Rim countries, was signed on 4 February 2016 in Auckland, New Zealand [2]. The signatories are the US, Canada, Australia, Japan, Singapore, Malaysia, New Zealand, Peru, Mexico, Chile, Vietnam and Brunei. The countries were moving towards the agreement during the past seven years, that means the negotiations were neither easy for the US, nor for any other country of the deal.
In the same article Mr. Obama also said that, "This past week, China and 15 other nations met in Australia with a goal of getting their deal, the Regional Comprehensive Economic Partnership, done before the end of this year" [1]. It means that China makes efforts towards some cooperation between its neighbors. It's notable that the core of the trade block consists ofASEAN-associated countries (Vietnam, Singapore, Malaysia, Brunei, Myanmar, Thailand, Philippines, Indonesia, Laos and Cambodia). Japan, South Korea, Australia, New Zealand, India and China are also members of RCEP [3]. It means that some countries try to play on both play fields. However, at the same time five other regional countries (South Korea, Philippines, Thailand, Indonesia and Taiwan) made open statements about their wish to join to TPP [4].
These facts mean that both sides make efforts to push their interests in the region. But these actions and counteractions of China and the US can be characterized as a "soft interosculation". Neither the US,
Section 4. Political science
nor China have warm sentiments to each other. But they are compelled to coexist in the Asian-Pacific region in the state of "neither war, nor peace". Contradictions between the US and China remain significant, but no side wants to provoke another to make any sharp moves for fear of a blow back, connected with the tight interaction between their economies. Moreover, at least by word of mouth the US in the person ofJohn Kerry, the current Secretary of State, invites China to join TPP [5].
But at the same time in the conclusion of his article the President of America marked that "The world changed. The rules are changing with it. The United States, not countries like China, should write them" [1]. However, this statement was gently characterized by the Chinese side as "very ambitious but unlikely to be fulfilled". The deputy of the Chinese Ministry of Foreign Affairs also said that the TPP and RCEP could become complementary structures in the Asia-Pacific region [6]. It also confirms a thesis about the avoidance of harsh steps.
This contradiction can be estimated as teasing the competitor which tries to choke you to death in a hug. On the one hand, the US is forced to be careful with China. But on the other hand, it must demonstrate force and confidence in the international community's opinion.
But the Asia-Pacific region isn't the only battleground of the current American-Chinese economic war. They also fight in Africa [7] and this struggle deserves a separate consideration. But another Chinese project presents the highest threat to the American global dominance. It's the One Belt, One Road (OBOR) initiative. It was suggested by the Chinese President Xi Jinping for the first time in 2013 during his official visit to Kazakhstan [8] and became the official conception in 2015.
The project consists of two parts: the oceangoing Maritime Silk Road (MSR) and the land-based Silk Road Economic Belt (SREB) [9]. The main goal of the deals is to unite Asian continental countries (first of all China's nearest neighbors, such as Kazakhstan, Russia, India, Pakistan and Iran) on the basis of economic cooperation and trade and investments partnership. The OBOR project is very important to Beijing's strategists because they need to
raise economies of the internal continental Chinese provinces which are very poor (especially in comparison with rich Chinese seaside region). They will try to stimulate domestic demands in China in that way and, at the same time, to strengthen their political and geostrategical influence in the Heartland.
The project has great scale and prospects. It can unite a lot of Asian countries and Chinese leaders have established financial institutions for maintaining and strengthening the OBOR: the Silk Road Fund [10] and Asian Infrastructure Investment Bank (AIIB) [11]. Moreover, some European countries (such as the United Kingdom, Germany and France) also became cofounders ofAIIB [12]. It means that this China-initiated Bank has found global scale.
The facts make a threat to American global dominance. However, the economic union of Asian nations is not the worst for the US. The worst for it, in the long-term, is the final aim of the OBOR — the UN markets.
At the same time American government is trying to conclude Transatlantic Trade and Investment Partnership (TTIP) treaty with the leaders of the UN. This means conforming to American interests which lie in closing of European economics from their Chinese, Russian and Turkish partners to strengthen American economy, as well as political influence in Europe. And current penalties against Russia also consent to this aim.
But concerns over TTIP are rising in Europe. Lots of people are discontented by the treaty because according to TTIP conditions European high standards in spheres of the environment and food safety must be moderated in favor of big American business [13]. In light of this and other reasons Britain has declared its exit from the UN [14].
Thus, current confrontation between the US and China has global scale and concerns a lot of countries in the world, both in Asia and Europe. Herewith American initiatives (especially in regard to Europe) face obstacles represented by the European lobbies and public opinions. Although in the current conditions the position of the US is stronger than that of China, in the long-term prospect China has advantage because of the fact that the US have so far not taken effective economic containment measures
against its most dangerous economical competitor. At the same time China creates new effective regional economic integration mechanisms, which are interesting not only for its nearest neighbors but for European countries too. This state of affairs is a
serious challenge for American dominance — the most serious from the collapse of the USSR and the end of the previous cold war. If the current trends don't change, now time for a new system of international relations will come.
References:
1. President Obama: The TPP would let America, not China, lead the way on global trade/Washington Post (May 2, 2016) URL: https://www.washingtonpost.com/opinions/president-obama-the-tpp-would-let-america-not-china-lead-the-way-on-global-trade/2016/05/02/680540e4-0fd0-11e6-93ae-509%20 21721165d_story.html
2. Trans-Pacific Partnership (TPP)/Global Affairs Canada URL: http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/tpp-ptp/index.as px?lang=eng
3. RCEP: The next trade deal you need to know about/CNBC (October 14, 2015) URL: http://www. cnbc.com/2015/10/14/tpp-deal-pressures-rcep-trade-talks-in-busan-china-keen-for-progress.html
4. Стапран Н. Битва за интеграцию: Транстихоокеанское партнерство и «Один пояс, один путь» как главные экономические проекты года/Портал МГИМО университет (11.01.2016) URL: http://mgimo.ru/about/news/experts/bitva-za-integratsiyu-transtikhookeans koe-partnerstvo-i-odin-poyas - odin-put-kak-glavnye- ekonomichesk/
5. Kerry invites Russia, China to join TPP on condition of raising country standards/Interfax (November 2, 2016) URL: http://www.interfax.com/newsinf. asp?id=630420
6. Китайское предупреждение Обаме/Военные пенсионеры за Россию и ее вооруженные силы http://militariorg.ucoz.ru/publ/ukraina_krym_rossija/kitajskoe_preduprezhdenie_obame /17—1 — 0-61730
7. America vs. China in Africa/Foreign Policy in Focus (December 1, 2011) URL: http://fpif.org/america _vs_china_in_africa/
8. Xi Suggest China, Central Asia Build Silk Road Economic Belt -Xinhua/English.news.cn (September 7, 2013) URL: http://news.xinhuanet.com/english/china/2013-09/07/c_132700 695.htm
9. One Belt, One Road/CaixinOnline (October 12, 2014) URL: http://english.caixin.com/2014-12-10/100761304.html
10. ФондШелкового пути приветствует участие китайскихизарубежныхинвесторов/Consortium "Chem-ico" URL: http://www.chemico-group.com/ru/index.php?option=com_ content&id=575&Itemid= 136
11. Минфин Китая: Испания, Южная Корея и Австрия стали учредителями AIIB/РИА Новости (11.04.2015) URL: https://ria.ru/east/2015 0411/1057920016.html
12. Why US Allies Are Happy to Loin China's AIIB/The Diplomat (June 30, 2015) URL: http://thedip-lomat.com/2015/07/why-us-allies-are-happy-to-join-chinas-aiib
13. Concerns rise over US-EU trade talks/BBC News (October 11, 2014) URL: http://www.bbc. co.uk/news/business-29572475
14. What is Brexit? What will happen now Britain has voted quit the EU?/Daily Express (August 24, 2016) URL: http://www.express.co.uk/news/politics/645667/Brexit-EU-European-Union-Referendum-Da-vid-Cameron-Economic-Impact-UK-EU-exit-leave
