By Hasan Habib
At the end of the Cold War, the United States of America comfortably became the sole superpower with no serious contender. At the end of the Cold War, with Europe as its ally and the Russia out of the race, the USA exhibited its might in the First Gulf War (1991) and other theaters of war. There was no possibility of disagreement with the U.S. amounted to blasphemy, the world exhibited great caution in their behavior towards the superpower.
In the post-World War II era, several countries aligned with the U.S. to seek security from the perceived "communist menace." Also the U.S., largely untouched by WWII, was the only country that supported the developing or devastated countries. The twentieth century alliances such as NATO, SEATO, CENTO, ANZUS, NORAD, Five Power Defense Arrangements (FPDA) and more, all had one common item; the U.S. military might. With the disappearance of the communist threat and relative stability in the world, new alliances became essential. Enter the People's Republic of China (PRC).
China's economic reform of the 1980s achieved miraculous results by pulling out some 500 million people from below the poverty line. The unique Chinese development was largely consumerism driven and remained urban centric. Beijing only recently started the processes ensuring a trickle-down effect for the rural masses.
The Chinese rise had many friends as it extended trade and economic cooperation to the developing countries. Affordable Chinese products made life easier for many who could not buy expensive U.S., Japanese or European automobiles, electronic products, machines etc. With trade, Chinese influence was also creeping in Africa, Asia and Latin America especially countries that were non-U.S. priority regions. Many countries considered China, a historically non-hegemonic state, a pleasant replacement for a bellicose U.S.
But some neighboring Asian countries like Korea, Japan, India, Australia, Vietnam, and the Philippines etc. became afraid of rising China and sought support of the U.S. The main cause of their apprehension was negative propaganda against China, the situation on the Korean Peninsula and issues surrounding the South China Sea. China appeared a belligerent neighbor especially for Japan, Vietnam and the Philippines. The merits of Chinese claims in the South China Sea were never properly investigated.
As China rose to become the 2nd largest economic power, its military might lagged far behind the US. As a matter of policy, China designed the emerging competition with the U.S. in new dimensions of economy, propaganda and foreign policy. It kept modernizing People's Republic Army and also extended economic cooperation with every willing country. It planned an economic campaign where even enemy countries were not ignored from trade and investment plans. India is a good example. But the most important aspect of this war remained the emerging battle for the currency.
The U.S. dollar is the prime currency of the trade and banking World. Nearly all the State reserves are built around the dollar and every transaction makes the U.S. stronger. The Chinese started investing in the U.S. Treasury and purchased almost one trillion worth of Treasury Bonds making it the second such buyer after Japan. But China remained unhappy with the U.S. dollar and started promoting the Chinese Yuan as international swap currency backed by its stable economy. It concluded several agreements with countries for Chinese Yuan (CNY) exchange. Some of these agreements are in the implementation phase and others are being vigorously pursued. This move is supported by Russia. The enhanced use of alternate currency will undermine U.S. financial might as in the future the U.S. dollar will be used mostly internally depriving financial benefits being made out of international banking transactions. Further, great use of CNY will reduce U.S. capacity to print currency in case of deficit.
The new swap arrangements can further isolate the U.S. from the EU, Asia and developing countries. The U.S. is increasingly being viewed as a country looking into others private domain; an idea strengthened by German Chancellor Angela Markel phone hacking, and the Snowden Affair. Both Russia and China can very easily exploit these issues to their advantage at the cost of U.S. credibility. They have good tools for propaganda against US.
The alliances are shifting fast as old ones are considered politically not correct and unequal. Now, EU probably does not fully appreciate the utility of the NATO security umbrella as the Russian Bear is defanged and Europe is largely free from internal conflicts. The estrangement between the EU and the U.S. creates great opportunity for developing relations for China. China is looking for cooperation in fields that are neutral or non-political such as agriculture, education, science and technology, industry etc. In focusing on the EU, China has increased exchanges with France, Portugal, Greece, Spain, Germany, and the UK. Everyone expects that China with its non-hegemonic history will be a responsible, less violent and constructive superpower compared to the U.S.
The recent One Belt One Road (OBOR) initiative has opened new vistas of cooperation among almost 60 countries from China to Italy. The road connectivity is less worrisome for the U.S. and its allies as it passes through countries that have lots of uncommon agenda. The belt part brings in the military might from China. Already a Chinese base in Africa is bothering USA. The possibility that the ports of Mambantota (Sri Lanka) and Gwadar (Pakistan) could host a Chinese naval presence is a nightmare for India and US.
The apex project of the OBOR, the China-Pakistan Economic Corridor (CPEC) is passing through the region that is internationally disputed and has pushed India to seek international support through media. The responses to Indian objections about CPEC from the World community, is at best muted. It is a fait-accompli and a Chinese victory.
The Chinese influence is likely to expand as the U.S. is increasingly engaged in its internal political, administrative and social issues. In the Trump Presidency, the serious international affairs are taking second seat. China is more than willing to fill this vacuum.
The new economic might also enhances China's capacity for greater defense spending. In numbers it is reducing troops but the military was becoming "leaner and meaner" in terms of fire power and capacity to respond to new international threats. Globally, the Chinese army has been providing crucial support in natural calamities and disasters; a role traditionally only the U.S. or Europe was undertaking. As the U.S. is retreating in Iraq, Syria and Afghanistan, the World needs stronger players for the hot spots and against rogue players. Russia and China are now willingly playing stronger roles. China is also looking to play a lead role in the fight against sea piracy in Africa. It will serve several purposes; securing trade routes, gaining experience in naval operations and flying its flag on international waters.
The 2013, joint Russia-China naval exercise in Great Bay near Vladivostok was the biggest foreign deployment of the Chinese naval forces. It is regularly conducting anti-terrorism drills with many countries. Is this Asian Dragon's slow awakening? Fearsome but only time will tell.
The author a career diplomat has served in China, Iran, the Netherlands, Morocco, Switzerland and North Korea. He speaks Chinese and focuses on issues related to China and Far East Asia. Currently, he is a senior fellow at the Centre for Policy and Area Studies, Institute of Business Management, Karachi, Pakistan. Recently, he has contributed several articles on the political situation in Asia. He regularly appears on TV shows as an expert on foreign relations.
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In the post-World War II era, several countries aligned with the U.S. to seek security from the perceived "communist menace." Also the U.S., largely untouched by WWII, was the only country that supported the developing or devastated countries. The twentieth century alliances such as NATO, SEATO, CENTO, ANZUS, NORAD, Five Power Defense Arrangements (FPDA) and more, all had one common item; the U.S. military might. With the disappearance of the communist threat and relative stability in the world, new alliances became essential. Enter the People's Republic of China (PRC).
China's economic reform of the 1980s achieved miraculous results by pulling out some 500 million people from below the poverty line. The unique Chinese development was largely consumerism driven and remained urban centric. Beijing only recently started the processes ensuring a trickle-down effect for the rural masses.
The Chinese rise had many friends as it extended trade and economic cooperation to the developing countries. Affordable Chinese products made life easier for many who could not buy expensive U.S., Japanese or European automobiles, electronic products, machines etc. With trade, Chinese influence was also creeping in Africa, Asia and Latin America especially countries that were non-U.S. priority regions. Many countries considered China, a historically non-hegemonic state, a pleasant replacement for a bellicose U.S.
But some neighboring Asian countries like Korea, Japan, India, Australia, Vietnam, and the Philippines etc. became afraid of rising China and sought support of the U.S. The main cause of their apprehension was negative propaganda against China, the situation on the Korean Peninsula and issues surrounding the South China Sea. China appeared a belligerent neighbor especially for Japan, Vietnam and the Philippines. The merits of Chinese claims in the South China Sea were never properly investigated.
As China rose to become the 2nd largest economic power, its military might lagged far behind the US. As a matter of policy, China designed the emerging competition with the U.S. in new dimensions of economy, propaganda and foreign policy. It kept modernizing People's Republic Army and also extended economic cooperation with every willing country. It planned an economic campaign where even enemy countries were not ignored from trade and investment plans. India is a good example. But the most important aspect of this war remained the emerging battle for the currency.
The U.S. dollar is the prime currency of the trade and banking World. Nearly all the State reserves are built around the dollar and every transaction makes the U.S. stronger. The Chinese started investing in the U.S. Treasury and purchased almost one trillion worth of Treasury Bonds making it the second such buyer after Japan. But China remained unhappy with the U.S. dollar and started promoting the Chinese Yuan as international swap currency backed by its stable economy. It concluded several agreements with countries for Chinese Yuan (CNY) exchange. Some of these agreements are in the implementation phase and others are being vigorously pursued. This move is supported by Russia. The enhanced use of alternate currency will undermine U.S. financial might as in the future the U.S. dollar will be used mostly internally depriving financial benefits being made out of international banking transactions. Further, great use of CNY will reduce U.S. capacity to print currency in case of deficit.
The new swap arrangements can further isolate the U.S. from the EU, Asia and developing countries. The U.S. is increasingly being viewed as a country looking into others private domain; an idea strengthened by German Chancellor Angela Markel phone hacking, and the Snowden Affair. Both Russia and China can very easily exploit these issues to their advantage at the cost of U.S. credibility. They have good tools for propaganda against US.
The alliances are shifting fast as old ones are considered politically not correct and unequal. Now, EU probably does not fully appreciate the utility of the NATO security umbrella as the Russian Bear is defanged and Europe is largely free from internal conflicts. The estrangement between the EU and the U.S. creates great opportunity for developing relations for China. China is looking for cooperation in fields that are neutral or non-political such as agriculture, education, science and technology, industry etc. In focusing on the EU, China has increased exchanges with France, Portugal, Greece, Spain, Germany, and the UK. Everyone expects that China with its non-hegemonic history will be a responsible, less violent and constructive superpower compared to the U.S.
The recent One Belt One Road (OBOR) initiative has opened new vistas of cooperation among almost 60 countries from China to Italy. The road connectivity is less worrisome for the U.S. and its allies as it passes through countries that have lots of uncommon agenda. The belt part brings in the military might from China. Already a Chinese base in Africa is bothering USA. The possibility that the ports of Mambantota (Sri Lanka) and Gwadar (Pakistan) could host a Chinese naval presence is a nightmare for India and US.
The apex project of the OBOR, the China-Pakistan Economic Corridor (CPEC) is passing through the region that is internationally disputed and has pushed India to seek international support through media. The responses to Indian objections about CPEC from the World community, is at best muted. It is a fait-accompli and a Chinese victory.
The Chinese influence is likely to expand as the U.S. is increasingly engaged in its internal political, administrative and social issues. In the Trump Presidency, the serious international affairs are taking second seat. China is more than willing to fill this vacuum.
The new economic might also enhances China's capacity for greater defense spending. In numbers it is reducing troops but the military was becoming "leaner and meaner" in terms of fire power and capacity to respond to new international threats. Globally, the Chinese army has been providing crucial support in natural calamities and disasters; a role traditionally only the U.S. or Europe was undertaking. As the U.S. is retreating in Iraq, Syria and Afghanistan, the World needs stronger players for the hot spots and against rogue players. Russia and China are now willingly playing stronger roles. China is also looking to play a lead role in the fight against sea piracy in Africa. It will serve several purposes; securing trade routes, gaining experience in naval operations and flying its flag on international waters.
The 2013, joint Russia-China naval exercise in Great Bay near Vladivostok was the biggest foreign deployment of the Chinese naval forces. It is regularly conducting anti-terrorism drills with many countries. Is this Asian Dragon's slow awakening? Fearsome but only time will tell.
The author a career diplomat has served in China, Iran, the Netherlands, Morocco, Switzerland and North Korea. He speaks Chinese and focuses on issues related to China and Far East Asia. Currently, he is a senior fellow at the Centre for Policy and Area Studies, Institute of Business Management, Karachi, Pakistan. Recently, he has contributed several articles on the political situation in Asia. He regularly appears on TV shows as an expert on foreign relations.
