The Power Play: USA and China
When the Cold war ended the USA became the undisputed super power of the world. Today, it is widely accepted that the world is heading towards a multi-polar world with many power centers. But even before the stage has reached the USA has some concerns. That is more than validated by the speculative US policy of ‘Pivot to Asia’. The US plans to station close to half of its troops in the countries of the Philippines, Vietnam and Japan by 2050. A superpower does not take such measures until there is a significant development.
Two weeks ago Chinese currency Renminbi (Yuan) entered the Special Drawing Rights (SDR) currency grouping. Currently, USA holds 41.9 percent and China 10.92 percent in the revised SDR basket. SDR refers to the basket of currencies on which a debtor nation could receive loans from the IMF. China has been known as the ‘Workshop of the world’ for its manufacturing sector’s capability. But proceedings in the last few years have cemented China as the nation beyond a ‘manufacturer’ to a nation which will take the challenge to the US in the struggle for global supremacy before the multi- polar world emerges.
China unveiled its ‘One Road One Belt’ initiative few months ago which attempts to create trade infrastructure from China to Africa and Europe. The plan envisages connecting China to Africa through a series of ports beginning from its closest neighbor Malaysia to Senegal in West Africa. The trade route passes through the South China Sea, connects all the south Asian nations and aims to establish ports in ten African coastal countries before reaching Senegal circumventing Africa through Cape of Good Hope. The land route aims to connect China with Europe through Central Asia which could become the longest train journey surpassing the one in Russia.
Most analysts consider the trade initiative as part of China’s policy to ensure a safe passage of its goods through the Indian Ocean. But a considerable number feel that the ports could be developed for supporting military capabilities in future. The argument is well-warranted considering the scramble between USA and China in the African continent. Both nations see Africa as a source of innumerable raw materials and a future market since Africa is expected to stabilize population only in 2100. This is expressed in the USA-Africa and China-Africa investment summits.
In the African context, it would be interesting how things pan out. Though the USA has the lead in establishing diplomatic relationships long before China, the Chinese capability to produce goods and technology at an affordable price gives China an upper hand over the USA. But African nations are also concerned with China’s intention to manipulate the political scenario in nations to their favour. This was evident in the Indian-African summit recently when Africa clearly expressed that they will engage with other nations if their political sovereignty is threatened. This clearly helps the USA.
(Photo courtesy: Futureatlas.com)
With regards to economic growth, USA seems to have stabilized for now with inflation picking up and unemployment rates going down. The Chinese economy which raced in double digit growth for close to two decades is up for a rough landing since the economic policy is moving from an investment-led to a consumption-driven economy. Nevertheless, the Chinese economy still has one of the highest growth rates in the current global scenario. The only concern for USA is the Foreign exchange reserves held by China which is close to US$3500 billion. Japan which stands second holds only one-third of China’s reserves.
Though both nations face threats to national security, the one faced by the USA is on a global scale. The twin tower attacks in 2001 and the recent lone wolf attack in San Bernardino indicate the focus of Al-Qaeda and ISIS on the USA. The USA has extensively been involved in the political affairs of west Asia since Cold War. It increased in the last 20 years with the invasion of Iraq and Afghanistan, involvement in supporting the Arab Spring. Though the USA has not sent ground troops to deal with the crisis in Syria, it has engaged with its allies for fostering its interest.
Threat to Chinese integrity originates from the Xinjiang province located in North West China. Though there have been many attacks by the terrorists, China does not face any global threat. Since the threat stems within its territory it has kept its engagement only to its surroundings especially Central Asia to stop the spread and aid to the terrorists. As one can clearly see, China has been silent on engagement in the international arena since it has its own problems to worry about. Only recently China is trying to play a peace role in Afghanistan and Pakistan. It is a two-pronged approach aimed at reducing extremism in its north west and for setting up an economic corridor. Thus the USA is engaged with many countries for countering terrorist threats on a global scale, while China is only beginning to.
The closer relationship between China and Russia recently is a concern for the USA. The two nations signed agreements for establishing gas pipelines which ensured Moscow that it was not isolated post-crisis in Eastern Ukraine. China also has reasons to worry about the increasing bondage between the USA-Japan-Australia parties with India. Though India and USA are on the opposite sides on the questions of climate change and WTO talks they are on the same page when it comes to counter China. Tension has further escalated with most of Chinese neighbours the Philippines, Vietnam and Japan being USA allies.
The recently concluded Trans-Pacific-Partnership agreement which has a share of 40% of world trade does not include China. But the newly launched Asian Infrastructure Investment Bank led by China had most of USA Allies and European nations joining it against the wishes of the USA. The AIIB aims to rival the IMF and World Bank which is dominated by the USA.
Time holds the answer how scenarios will change in the future. It is widely acknowledged that China does have a long way to go in challenging USA. It has a huge population under poverty. There have been many allegations of human rights violations and assassination of political prisoners in China. Further, China awaits a labour shortage in future. The one child policy was relaxed following an alarming decrease in the fertility rate of 1.4.
But that doesn’t leave the USA to stop bothering about China. Earlier this year China developed missile systems which could breach any defensive anti-missile barriers. And if you are in the USA, you cannot stop worrying whether your system has been hacked by someone from China!
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