Not One but Two Great Powers

While the world grappled with the uncertainty of dealing with an unprecedented pandemic, great power politics between the US and China did not cease. There is little love lost between the two countries; tit-for-tat tariff impositions, and the power competition, if it continues to grow, could foreshadow a global pandemonium.

Irrespective of its failure in ‘flattening the curve’, the US refrained from cooperating with China. It will be difficult for the US in a post-COVID world to abandon its global leadership; however, the competition for power will always be present – and growing.

Great powers have always sought influence and exclusive economic control. Before World War I, the economic markets were interdependent. This interdependence did not preclude the European countries from laying claim to territories not already spoken for, which led to preemptive imperialism. The competition between the European imperialists gradually grew, which sparked tensions in the continent. 

After World War I, Japan and Germany made efforts to gain economic privilege over other nations, provoking World War II. During the Cold War, the exclusive spheres of influence in Europe and Northeast Asia and superpower competition between the United States and the Soviet Union were contributing factors in a conflict that lasted for about forty-five years. However, the desire for exclusive economic control or its fear was not the prime cause, but a principal constituent in instigating catastrophic wars.

It is obvious that the yearning for economic privilege and influence has contributed to precipitating global wars despite economic interdependence. It drives the great power competition between states, and is a vicious cycle difficult to stop. 

Contemporary great power competition is dominated by economic and political spheres. However, alongside the continued politicking, strategic maneuvering for power and dominance is underway. The strategic significance of Southeast Asian states and China’s substantial influence in the region has compelled the US to revamp its foreign policy in the past decade. China, on the other hand, has strictly opposed US interference and growing partnership with regional states, many of whom lay claim to disputed territory with China. 

Even as the world is encompassed by the pandemic, China and the US are conducting naval exercises in the South China Sea. In mid-April 2020, two US carriers, the Theodore Roosevelt and the Ronald Reagan, were docked at the port because of the COVID-19 cases among the crew. A Chinese aircraft carrier and five warships reportedly sailed into Taiwan waters and through the Miyako strait. This was seen as a threat to Taiwan’s security because of its territorial dispute with China and the latter’s continuous threats of military advancement. In response to China, the US navy and air force did a runway show of strength. 

More recently there is the clash over Hong Kong’s ongoing anti-government protests and Trump’s continuous meddling. Trump’s vow to end the special status accorded by the US to Hong Kong if China were to impose new national security laws on the city, started a new chapter of the same quest for regional and global hegemony.

Given the proliferating great power competition which can be mutually destructive, what can both countries do to avoid an escalation of tensions and ensure a mutually beneficial market? Unlike the extreme views of conservatives and liberals in both countries, neither conflict nor cooperation is inevitable. Neither country can neglect the fact that their policies and extravagant economies affect the international economy. What can be done for the world system to accommodate not one but two great powers?

On the China side, it should liberalise its domestic market for foreign as well as national firms and reduce non-tariff barriers on western firms. It should ensure openness and free trade of capital goods across the borders, thereby diminishing the risk of manipulating firms for economic incentives by the government. Secondly, it should build economic consortia with western firms for joint partnerships in areas where it is increasing its influence. For instance, openness and free movement in the South China Sea for western and national firms will be a pragmatic approach to reducing tensions in the region. It should also encourage consortia in regions linked to the Belt and Road Initiative (BRI) project. 

On the US side, the Trump administration should encourage China for joint cooperation, and thereby, it will have to participate in the Chinese market. It should not make the mistake of opposing progressive initiatives as President Obama did with the Asia Infrastructure Investment Bank. The administration should eschew protectionism and the protectionist ‘America first’ policy (when necessary) to uplift the liberal international market in practice. Finally, the US needs to restructure its domestic markets to welcome global market change. 

Nothing is inevitable in international politics. If the US refrains from protectionism and China embraces openness, we may see a new global order emerging.


US-China Trade War Amidst COVID-19: A Step Towards a New World Order

Sino-US clashes have been in play since the founding of People’s Republic of China. Intricacies of their cultural and economic rivalry have been researched immensely in the past and present. The conflict continues during the COVID-19 pandemic, even as the international community is talking about unity and cooperation to control the virus.  

Their diplomatic relations were not established until Nixon’s era during the 1970s. China’s consistent and unconditional support to socialist economies and their rise as an economic power has been a problem for the US. Washington’s involvements in the Taiwan issue, its intrusion in the South China Sea, and violations of international agreements have displeased Beijing. 

Despite their huge differences, their trade stood at around $700 billion prior to the COVID-19 pandemic. Primarily, this is because China and the US have no other potential market of their size for the thousands of goods they produce, everything from meat to musical instruments, footwear to telephones. Both needed a market of great magnitude.

In the present scenario the situation has worsened, particularly with the Trump in the Oval Office. He has been accusing China of unfair trading practices such as intellectual property theft and currency manipulation from the very first day. During the election campaign, as reported by BBC News on May 02, 2016, he promised Americans that he will “avenge Chinese rape of the US economy”. Initially, it was considered an election stunt by the world. But he did what he promised, and around $360 billion Chinese goods were slapped with 30% tariffs from July 2018 onwards. As of now, US tariffs are applied exclusively to Chinese goods worth US$550 billion.

China gave a befitting response and imposed tariffs on US goods worth $110 billion at 25% in 2018; the worth of Chinese goods facing US tariffs has now increased to $185 billion. Yet, Washington did not learn its lesson and is still trying to destabilize Beijing’s economy further by placing sanctions against Iran. China is the largest importer of the Iranian oil and – the Trump administration has already threatened China if Beijing continues to import it.

It is now widely believed that China has won the third world war – which is economic in nature. It has successfully detracted the economic performance of its competitors. China cannot afford a direct nuclear war with its most advanced and nuclear rivals. It would cost China a huge loss; it would be unwise to go into such a situation when it is nearing economic supremacy and reorienting the world order through huge investments in Belt and Road initiatives across the world.

All of Europe and the US have realized that their neo-liberal economic model is unfit and failed to protect the lives and money of their people. A new world order ‘made in China’ is going to appear after COVID-19. It will include only those countries that accept Chinese terms and conditions. China is going to apply it first in Asia, then everywhere else. The SCO member markets will cater to such a purpose. Member countries such as Russia, India and Pakistan have huge potential which China is not harvesting.  It can be forecasted that Beijing will not need the European market for its goods as good opportunities exist at its doorstep. Especially after Brexit, now Grexit and the long-standing euro-zone crisis, the future of the European market is uncertain. Sino-Indian economic ties will also be improved post-COVID-19. US sanctions will no longer be respected by SCO states if China introduces its new order. This is most probable.