Sunday, August 21, 2005

US vs China for Global Hegemony

China differs from Japan in '80s: politics combines with potential for growth

The United States' trade deficit with China hit $162 billion last year, making it the largest imbalance ever recorded with a single country. This year's deficit is already running 32 per cent above last year's pace, and political pressure is heating up to put tighter restrictions on imports from China.That is why Chinese currency reforms take on much greater importance, that the Chinese might have learned from the Japanese to resist U.S.-led political pressure for currency revaluation. Japan ran into trouble in the late 1980s, in part by abdicating control over the yen and letting the dollar-yen conversion soar from 259 in 1985 to 121 by the end of 1987. Many blame that for setting the stage for an asset bubble that eventually collapsed in Japan.There are also significant political differences between the two. While the Chinese have been more open to foreign investment than Japan, there are some concerns that the communist political structure means that the Chinese won't embrace all kinds of foreign involvement such as an American company buying a big Chinese company. In addition, Standard & Poor's chief economist David Wyss points out that China's huge population - which he estimates is 10 times as large as Japan's - means that China has the capability of taking over world production of just about everything.


China developed it's Three Worlds Geo Political Policy to combat American and Russian Hegemony back in the 1970's about the same time after Mao's death that the slow privatization of the State began.

Under the post Mao regime, the Three Worlds Policy acted as the basis of China's international relations. The Reforms of Deng Zhao Ping, and others kicked off the transition from a State Capitalist economy, to a mixed market economy. Anyone outside a few misquided Stalinists and Trotskyists who still believes that China is in anyway socialist and not an emerging capitalist economy is sadly deluded.

Chinese stocks surge as government's shareholder reforms advance

You can't have trusts, and stockholders in a socialist economy, these are the symptoms of industrial capitalism as outlined by Marx, Lenin, and Hilferding. China has moved beyond being a state capitalist economy, into being an industrialized monoploy capitalist economy. Which even the old left at Monthly Review has come to recognize.

China and Socialism: Market Reforms and Class Struggle
Martin Hart-Landsberg and Paul Burkett
Monthly Review July-August 2004, Volume 56 — Number 3

Unlike Social Democratic mixed economies in Europe, the Chinese model is not that much different from the MITTA in Japan. Today China is applying the Three Worlds Policy to its economic clout in the world economy in order to bolster its polticial and economic hegemony in the Asian Pacific and into the Middle East, The regions of the Stans, Afghanistan,Kazahstan, Krygistan, etc., and into Africa.

PetroKazakhstan sold for $4.18 billion
CALGARY -- Canadian-based oil company PetroKazakhstan Inc., which placed itself on the auction block, announced Monday it has entered into an agreement to be purchased by a subsidiary of China National Petroleum Corporation in a deal worth $4.18 billion US.

Japan could be defeated because it operates within the global economy. China's isolationism allowed it to do what Japan and Russia couldn't, develop its internal market operations to rely on external investment and distribution while having the backing of the surplus value produced under State Capitalism. China's privatization has the backing of the state, and it is rapidly creating not a free market but monopoly capitalism as a result of large scale fordist industrial production.

Center for International Private Enterprise
Economic Reform Today
Globalization, Trade and Democracy
Number 3, 1997
Reforming China's Trading System
by Will Martin

In other words the surplus value is now becoming exchange value in the global marketplace, while internal reforms have less of an impact on the state and politics, as they do on the new Chinese 'market' of monopoly capitalism. Capitalism does not need democracy to function. And China is proving that. WTO China Updates

China and the world economy
From T-shirts to T-bonds
Jul 28th 2005
From The Economist
Beijing, not Washington, increasingly takes the decisions that affect workers, companies, financial markets and economies everywhere

Hence the urgency of the Americans to secure their place in the Alberta Tar Sands and in the global battle with Chinese capital over oil companies.

US To Raid Oil Sands

Americas Oil Security: Alberta's Tar Sands

Chinese President set to visit Canada
Coincidentally while US VP and Halliburton Consultant Dick Cheney will be visitng Alberta's Tar Sands.

China appears to notch a win in oil race
PetroKaz deal could reinforce country's presence in region

Rudyard Kipling and other 19th century writers called it the Great Game: British-held India and Czarist Russia playing out their imperialist ambitions on the vast and largely uncharted black hole of Central Asia that lay between them. More than a century later, there's a new "Great Game" under way in Central Asia, and the prize is one of the planet's last oil frontiers. Russia to the North, India to the South, China to the East and the United States all want a piece of the oil-rich countries of the Caspian Sea basin, including the mainly Muslim former Soviet republics of Kazakhstan, Azerbaijan, Uzbekistan and Kyrgyzstan. Yesterday, a unit of China National Petroleum Corp. struck a $4.18-billion (U.S.) deal to buy Calgary-based PetroKazakhstan Inc. and its roughly 150,000 barrels a day of oil production in Kazakhstan. The apparent loser in the bidding was India's Oil and Natural Gas Corp.

Venezuela's oil company sets sights on China
Venezuela's oil company opened an office in China, a client that is becoming increasingly important to the oil-rich South American country, the state news agency reported yesterday. Oil Minister Rafael Ramirez, who is visiting China, told the Bolivarian News Agency the new office in Beijing will serve as a "bastion for forging relations with new strategic partners." Venezuelan President Hugo Chavez has promoted a closer relationship with China, India and other Asian countries in an effort to secure new markets for oil aside from the United States. Venezuela currently ships 68,000 barrels of oil per day to China, compared 12,300 barrels daily last year. AP

Unlike Japan, China views this as much as an economic war as one by any other name. Or in Clauswitzian terms; War is international economics by any other name, and the USA is no longer the lone hegemon in this field. China unlike the USA plans in terms of long wave strategies, as does Japan, which leaves the US vulnerable to eventual economic, military and political defeat in the Asian Pacific Region as well as in the currently contested region of the 'Stans. US imperialism is subject to the limitation of a national isolationist sensibility, while China has no such compunction.

''Setting the Stage for a New Cold War: China's Quest for Energy Security''
However, just as China has for centuries engaged in competition for leadership of Asia, the developing world and status on the world stage, so the need for energy security has now raised the possibility of further competition and confrontation in the energy sphere. This competition has so far been limited to the economic sphere through state-owned oil and gas companies such as China Petroleum & Chemical Corporation (Sinopec), China National Petroleum Corporation (C.N.P.C.), its subsidiary PetroChina and China National Offshore Oil Corporation (C.N.O.O.C.). However, as oil prices rise and China imports an increasing amount of its energy needs, the competition is likely to spill over into the political and military spheres. There are already indications of this.

China: middle kingdom, world centre
Le Monde Diplomatique August 2005
China has announced that the yuan will no longer be pegged to the dollar; greater currency flexibility will permit Beijing to use monetary policy to control its economy. And the entry of its enormous labour force into the global economy will change the world balance of trade. China wants to bypass the Japanese-United States alliance in Asia and at the United Nations, and, through asymmetrical diplomacy, become a different kind of world power.

China: Containment Won't Work By Henry A. Kissinger
Nevertheless, ambivalence has suddenly reemerged. Various officials, members of Congress and the media are attacking China's policies, from the exchange rate to military buildup, much of it in a tone implying China is on some sort of probation. To many, China's rise has become the most significant challenge to U.S. security.Military imperialism is not the Chinese style. Clausewitz, the leading Western strategic theoretician, addresses the preparation and conduct of a central battle. Sun Tzu, his Chinese counterpart, focuses on the psychological weakening of the adversary. China seeks its objectives by careful study, patience and the accumulation of nuances -- only rarely does China risk a winner-take-all showdown.It is unwise to substitute China for the Soviet Union in our thinking and to apply to it the policy of military containment of the Cold War. The Soviet Union was heir to an imperialist tradition, which, between Peter the Great and the end of World War II, projected Russia from the region around Moscow to the center of Europe. The Chinese state in its present dimensions has existed substantially for 2,000 years. The Russian empire was governed by force; the Chinese empire by cultural conformity with substantial force in the background. At the end of World War II, Russia found itself face to face with weak countries along all its borders and unwisely relied on a policy of occupation and intimidation beyond the long-term capacity of the Russian state

''China's Geostrategy: Playing a Waiting Game''
t is common knowledge that China is the most important ascending world power, and one that has only begun to realize its economic and military potential. Before the World Trade Center bombings on September 11, 2001, neoconservative strategists in Washington identified China as the most significant future threat to U.S. interests and defined the Sino-American relation as one of "strategic competition" rather than "strategic partnership." Although the "war on terrorism" has taken precedence over the longer term conflict with China in Washington's geostrategy, the neoconservatives' pre-9/11 judgment was well founded and remains so.

The "ruling party" -- as the Communists in Beijing now call themselves -- sees China's ultimate interest as becoming the undisputed regional power center in East and Southeast Asia, and a major influence -- along with India -- in South Asia, and -- along with Russia -- in Central Asia. In order to achieve its goals, Beijing will have to edge Washington out of Asia by incorporating Taiwan and rendering Washington's security guarantees for Japan and South Korea less credible. Beijing's strategy puts Washington on the defensive with the expectation that, as time goes on, the balance of power will shift inexorably in Beijing's favor. That is why Washington's current National Security Strategy posits a window of opportunity of about a decade for the U.S. to achieve permanent strategic supremacy in the world.

At present, China is what historian John Gittings calls a "status-quo power that often punches below its weight in international politics." That is a realistic position for a power to take that expects its situation to improve over time, as it builds up its economy and military to full potential. For the moment, Beijing's interests are best served by adopting a "defensive" posture and a foreign policy geared to promoting stability. That is likely to change to a more assertive stance the more that China's power resources increase.


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