Category Archives: Trade

French Finance Minister Issues Declaration of Independence from the U.S.

“Clear Differences Remain Between France and the U.S, French Minister Says,” is the headline to a remarkable  piece appearing in the New York Times today.  The Minister, Bruno Le Maire, is brutally frank on the nature of the differences as the quotations below Illustrate.  (Emphases in the quotations are writer’s.) In fact, they amount to a Declaration of Independence of France and EU from the U.S.

It is not surprising that the differences relate to China after the brouhaha over the sale of U.S. nuclear submarines to Australia and the surprising (to the French) cancellation of contracts with France for submarines.  Mr. LeMaire, sounding very much like a reproving parent, characterized this as “misbehavior from the U.S. administration.”

Mr. LeMaire made it crystal clear that the disagreement over submarines is symptomatic of deeper differences in world view that have emerged not only in France but in the EU as a consequence of China’s rise.  The article states:

The United States wants to confront China. The European Union wants to engage China,’ Mr. Le Maire, a close ally of President Emmanuel Macron of France, said in a wide-ranging interview ahead of the (IMF) meetings. This was natural, he added, because the United States is the world’s leading power and does not ‘want China to become in a few years or in a few decades the first superpower in the world.

Europe’s strategic priority, by contrast, is independence,  ‘which means to be able to build more capacities on defense, to defend its own view on the fight against climate change, to defend its own economic interest, to have access to key technologies and not be too dependent on American technologies,’ he said.

The article continued, quoting the Finance Minister:

The key question now for the European Union, he said, is to become ‘independent from the United States, able to defend its own interests, whether economic or strategic interests.’

LeMaire might have pre-ambled that statement with: “When in the course of human events, it becomes necessary for one people to dissolve the political bonds which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.”

Still, seasoned diplomat that Mr. LeMaire is, he provided some cold comfort to the naughty U.S. administration, saying, the United States remains “our closest partner” in terms of values, economic model, respect for the rule of law, and embrace of freedom.  But with China, he said, “we do not share the same values or economic model.”

The article continued:

Asked if differences over China meant inevitable divergence between the United States and Europe, Mr. Le Maire said, ‘It could be if we are not cautious.’ But every effort should be made to avoid this, which means ‘recognizing Europe as one of the three superpowers in the world for the 21st century,’ alongside the United States and China.

The piece concluded:

One of the biggest lingering points of contention is over metal tariffs that former President Donald J. Trump imposed globally in 2018. Officials face difficult negotiations in coming weeks. Europeans plan to impose retaliatory tariffs on a range of U.S. products as of December 1, unless Mr. Biden pulls back a 25 percent duty on European steel and a 10 percent tax on aluminum.

‘If we want to improve the bilateral economic relationship between the continents, the first step must be for the United States to lift the sanctions in the steel and aluminum case,’ Mr. Le Maire said. ‘We are fed up with the trade wars,’ he added.

Shared values are nice, but shared profits are clearly better.

The post French Finance Minister Issues Declaration of Independence from the U.S. first appeared on Dissident Voice.

Iran:  New Member of the Shanghai Cooperation Organization

On 17 September 2021 Iran became a full member of the Shanghai Cooperation Organization (SCO). It is an extraordinary achievement and new beginning for US and western sanction-badgered Iran. On the occasion PressTV interviewed Peter Koenig on what this move might bring for Iran. See the transcript below.

PressTV: Iran is finally a member of the SCO. It is said this solidifies a block to stand up to the West and US hegemony. Will it be able to do that, and is the era of unilateralism over?

Peter Koenig: First, my deepest and heartfelt congratulations for this extraordinary event – Iran the latest member of the Shanghai Cooperation Organization – SCO.  Bravo!

Yes, this will definitely open new doors, prosperous doors, with new relations in the East. SCO, with the current membership, covers close to 50% of the world population and accounts for about one-third of the world’s GDP.

Being a member of this organization will take a lot of pressure away in terms of western sanctions, western impositions, monetary manipulations via the US dollar as a remedy for payment.

No more.

Iran is now free to deal in her own currency and in Yuan as well as in any currency of the SCO members because western-type trade currency restrictions do not exist in SCO member countries.

This will drastically reduce the potential for US / western sanctions and will increase, on the other hand, Iran’s potential to deal with the East; i.e., especially China and Russia; entering partnership agreements with these and other SCO countries, benefitting from comparative advantages. It may open-up a new socio-economic era for Iran.

Also, in terms of defense strategy.  Although SCO is not a military defense organization, per se, it offers strategic defense assistance and advice, and as such is a solidifying force for member countries.

SCO also respects countries’ autonomy and sovereignty, and facilitates trade arrangements between member countries.

Having said this, Iran must not lose sight of potentially disrupting internal factors, like the so-called Fifth Columnists – those who will keep pulling towards the west, and they are particularly dangerous as infiltrates in the financial sector, Treasury, Ministry of Finance, Central Bank, and so on. They are everywhere, also in Russia and China. But internal Iranian awareness and caution will help manage the risks and eventually overwhelm it. Russia has gone a long way in doing so and so has China. And so will Iran, I’m confident.

Again, excellent momentum to celebrate.  Congratulations!

PressTV: Iran will also be part of the different regional bodies in neighborhood regions, including Eurasia, that could spontaneously break the “sanctions wall” and lead to diversified fruitful foreign relations. Does this mean the US sanctions will not be as effective?

PK: Yes, absolutely. Regional bodies and trading arrangements within Eurasia – such as The Eurasian Economic Union – EAEU – has an integrated single market of 180 million people and a GDP of some 5 trillion dollars equivalent and growing. It covers eight countries of which 3 have observer status.

Other than trading with the members of the Eurasian Economic Union, the EAEU also has trading agreements as an entity with other countries, for example, with Singapore.

Then there is maybe the most important trade deal in world history, the ten ASEAN countries, plus China, as well as Japan, South Korea, Australia and New Zealand – but not the United States. Thus, no dealings in US dollars, no potential for US sanctions. This Trade Agreement is called The Regional Comprehensive Economic Partnership (RCEP). It was signed in November 2020 on the occasion of the annual summit of the 10-nation Association of Southeast Asian Nations (ASEAN).

RCEP countries have a combined GDP of US$ 26.2 trillion or about 30% of global GDP, and they account for nearly 28% of global trade (based on 2019 figures). Total population of RCEP countries is 2.3 billion, roughly 30% of the world’s inhabitants.

Negotiation of this trade deal took 8 years. The longest ever. And it will, of course, take time to reach the full potential of integrating the sovereign countries’ economies. In contrast to the European Union, RCEP will, to the utmost possible, preserve each country’s sovereignty. This is important in the long-run, especially for conservation of national cultures, ideologies and national development strategies.

There may be a good chance for Iran to negotiate early entry into the RCEP Agreement. It will definitely be a blow to US sanctions – and on the other hand a tremendous opportunity for diversification of markets, production and consumption.

Again, congratulations. Being a member of the SCO is an extraordinary achievement. As, I always say – the future is in the East.

Best of luck to Iran with new partners and new friends.

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Australia Faces the Painful Reality of a Changing Geopolitical Landscape

Relations between Australia and China have sunk to the lowest point since diplomatic recognition was accorded to the People’s Republic of China as one of the first acts of the new Australian government in November 1972. This action caused great consternation in the opposition Liberal party, who were completely unaware of similar moves by then United States government of Richard Nixon to recognise the PRC.

Relations between the PRC and Australia deteriorated sharply in 2018 when the foreign minister openly questioned China as the source of the pandemic then beginning to grip the world. In speaking out as she did, Marise Payne was undoubtedly acting as a mouthpiece for the American administration of Donald Trump. The motives for her speaking out did not interest the Chinese who reacted by beginning a progressive freezing of Australian imports.

The economic warfare was no small thing. China is Australia’s largest trading partner by a significant margin. In 2018 it took more than 40% of all Australia’s exports, nearly double that of Australia’s next largest trading partner, Japan. Replacing the Chinese market will not be easy, there’s no other country that has anywhere near China’s manufacturing capacity.

It was not just Australian imports that China targeted. The government made no secret of its desire that Chinese students should seek somewhere else for their tertiary education. This has had a huge impact on Australia’s university sector, as China has provided the largest number of foreign students by a substantial margin.

Relationships were also not enhanced by the Australian government imposing major restrictions on Chinese investment in the country. Its unilateral banning of Huawei was well publicised, but it was only one of a number of restrictions placed on investment proposals in Australia by Chinese companies. Again, this was no small measure. China in 2018 was the third largest source of foreign investment in Australia, and the loss of Chinese money is having a significant effect.

The reaction of the Australian government to these restrictions has been one of hurt surprise. The foreign and trade ministers have publicly complained that they have been unable to get their telephone calls to China answered or returned. That this should come as any sort of surprise is a measure of the government’s naivete.

It is not just in trade that the Australian government goes out of its way to offend China. Australia has long been little more than a lackie for United States foreign policy with an ever eagerness to join the United States’ wars of aggression wherever they occur in the world. The involvement in Afghanistan, only recently abandoned with little notice or consideration to its Afghan allies followed a nearly 20-year involvement in pursuing United States imperial ambitions.

Australia still has troops involved in Iraq, which is a country of even less geopolitical importance to Australia then Afghanistan. A demand by the Iraqi government 18 months ago that they should leave was simply ignored, once Australia had determined that the United States was similarly going to ignore Iraqi demands. The local media shows a remarkable lack of interest in reporting on Australia’s involvement in that blatantly illegal war.

Australia’s latest act of folly with the Chinese was to join yet another United States misadventure by signing up to the so called “quad” of four nations.  Along with the United States, Japan and India, that constitutes what is a blatantly anti-China political exercise. The folly was matched by the involvement of Australia’s Navy in an exercise practising the blockading of the Straits of Hormuz. This narrow waterway hosts 80% of China’s seaborne exports. It was correctly perceived by the Chinese as an unfriendly act. It signalled Australia’s willingness to become involved in a United States led war against China.

To describe all of these hostile actions by the Australian government against China as mindless is an understatement. It would be extremely difficult to find any other country in the world that follows a policy designed to ignore its most important trading partner’s sensitivities and wishes. Yet that is what the Australian government is doing.

One of the surprising features of the mindless and self-defeating policy is that there is almost no local reaction against it. The opposition Labor Party has maintained a deathly silence against the government’s perilous policies. To understand the likely reasons for this one has to look at Australia’s history.

The 1972–75 Labor government of Gough Whitlam greatly annoyed the United States by pulling his troops out of the Vietnam war, another foolhardy exercise on behalf of its American masters. It earned the enmity of Australia’s governor general John Kerr, a long-term American asset who also acted against his government’s interests in secret communications with Buckingham Palace. Those are only now being revealed after a lengthy legal fight.

The Whitlam government fought for its three years in power against this internal fifth column, being defeated after only one term in office. That loss had a salutary effect upon the Labor Party which has been careful not to annoy the United States ever since. It has just been revealed that a later Labor Prime Minister Bob Hawke was in constant and secret communication with the Americans during his term in office.

That tradition continues with the present Labor Opposition almost completely silent on the misadventures in the South China Sea, and indeed on Australia’s progressive destruction of the once close and beneficial Chinese trade. Relationships with China are unlikely to improve as long as Australia maintains its adherence to the United States alliance.

The geopolitical world has changed in the past two decades and with it the once dominant role of the United States in influencing Asian affairs. Australia shows no sign of recognising that shift in the world geopolitical structure, much less changing its policies to accommodate the reality of these changes in literally its own backyard.

There will be further painful costs to be met before the pain eventually forces an overdue recognition of Australia’s real vital interests.

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China’s Post-Pandemic Growth:  Reaching Out and Developing Internal Markets and Well-being

“Post-Pandemic” for many countries, especially western countries, is a dream. The west will have to wake up fast, if it doesn’t want to fall prey to a destructive plan of chaos, unemployment, bankruptcies, and, yes, famine – shifting of capital from the bottom and the middle to the top – and leaving misery at the bottom.

Not so for China.  For China, the post-pandemic era is well under way.

When SARS-CoV-2, later renamed by WHO to Covid-19, hit Wuhan in January 2020, China was prepared. Chinese authorities proceeded with warp-speed to prevent the spread of this new corona disease, by a radical lockdown of Wuhan and extending it to Hubei Province. Later, other areas of risk were locked down, including about 80% of China’s production and manufacturing apparatus. The result was astounding. Within a few months, by about mid-2020, China was in control of Covid, and gradually started opening up crucial areas, including the production process, all the while maintaining strict protection measures.

By the end of 2020 China’s economy was practically working at full speed and achieving, according to IMF’s very conservative account, a 2.6% growth for the year. China’s own, and perhaps more realistic projections, were closer to 3.5%. IMF growth projections for China in 2021 stand at 8.4%. China’s economic expansion in 2022 is projected at 5.6%. This is way above any other country in the world.

Compare this with 2020 economic declines way into the red for the US and Europe, of 25% to 35%, and 10% to 15%, respectively. These are real figures. Not necessarily the published ones.

Future expansion in China takes into account that much of the projected growth over the coming years will be internal “horizontal” growth,  helping China’s interior and western provinces catching up with infrastructure, research and development, as well as education facilities – increasing the overall level of well-being to reduce the gap with the highly-developed eastern areas.

China’s economic recovery and her industrial apparatus working at full speed is good for China and good for the world, because China had become in the past four decades or so the western principal supply chain, mainly the US and Europe. We are talking crucial supplies, such as medical equipment, medication and ingredients for medication.  About 80% – 90% used in the west comes from China.

China’s rapid economic growth may be mostly attributed to two main factors: large-scale investments – financed by predominantly domestic savings and foreign capital and rapid productivity growth. These two features appear to have gone hand in hand.

China remains attractive for investors. In addition to medical equipment, China supplies the west and the world with electronic equipment and is meant to become one of the key developers and exporter of Artificial Intelligence (AI) to accelerate and facilitate research and manufacturing processes, while minimizing negative environmental impacts.

China’s outlook for the future is bright. However, a number of anormal factors have to be considered, for instance:

(i) The unresolved covid issues in the west, which may be reducing demand naturally or by force – possibly import restrictions for goods from China as a way of constant pressure on China;

(ii) Continuation of a direct and indirect trade and currency war on China. To the detriment of the US-dollar, China’s currency, the yuan  and soon the digital yuan as international payment currency, independent from western controlled monetary transfer modes, is gaining rapidly in status as an international reserve money. According to some estimates, in five years the yuan may account for up to 30% of all world reserves. As a parenthesis, the US-dollar in the early 1990s amounted to more than 90% of worldwide reserve denominations; today that proportion has shrunk to less than 60%; and,

(iii) The west, led by Washington, is intent to harm China in whatever way they can. It will not succeed. Washington knows it. But it is a typical characteristic of a dying beast to lash around itself to destroy as much as possible in its surroundings before it collapses.

Just as an example which the world at large is probably unaware of, China is presently surrounded by about 1,400 US military bases, or bases of other countries which host US military equipment and personnel. About 60% of the US navy fleet is currently stationed in the South China Sea.

Just imagine what would happen, if China or any other super-power, would be surrounding the US with military basis and an aggressive Navy fleet!

China is constantly harassed, sanctioned and slandered with outright lies. One of the prevalent examples of defamations, is her alleged inhuman treatment of the Uyghurs in Xinjiang province. Total population of the Xinjiang Uyghur Autonomous Region in Northwestern China is about 26 million, of which some 12 million are Uyghurs, mostly of Muslim belief.

Uyghur Muslims are regularly recruited by US secret services from across the border with Afghanistan, sent to fight the Jihad in the Middle East, and when some of them return, China makes an effort to re-school and re-integrate them into society.

Could the real reason for this western aggression be that Xinjiang province, the largest and western-most province of China, is also a principal hub for the two or more main routes of the Chinese Belt and Road Initiative (BRI) – trans-Asia Routes, by rail through Pakistan to the Gwadar Port in the Persian Gulf, and possibly by road through the newly to become autonomous Afghanistan, connecting China with Iran?

China is perceived as a threat to western hegemonic thinking – to western-style globalization, which is the concept of a One World Order over a borderless western corporate and banking-controlled world – and because China is well positioned to become the world’s number one economy in absolute terms within a few years.

These are challenges to be kept in mind in planning China’s future economic development.

In fact, already today China is number one in PPP-terms (purchasing power parity), which is the only indicator that counts, namely how much of goods and services may be acquired with a unit of currency.

Taking these challenges into account, and following her non-aggressive and non-expansive moving-forward style, China may be embarking on a three-pronged development approach. Overarching this tactic may include China’s 2025 Plan and 2035/2050 vision: A strong emphasis on economic and defense autonomy.

(i) Outreach and connecting with the rest of the world through President Xi Jinping’s Belt and Road Initiative, also called One Belt One Road (OBOR) which is patterned according to the ancient Silk Road more than 2,100 years ago, a peaceful trade route connecting Eastern China through Asia, Europe and the Middle East.

On a global scale, OBOR embraces currently more than 130 countries and over 30 international organizations, including 18 countries of the European Union. OBOR offers their partners participation – no coercion. The attraction and philosophy behind OBOR is shared benefits – the concept of win-win. OBOR may be the road to socioeconomic recovery from covid consequences and cross-border cooperation for participating countries.

OBOR is also aiming at a multi-polar world where partner countries would equally benefit through infrastructure, industrial joint ventures, cultural exchange, exploration of new renewable sources of energy, research and education projects working towards a joint future with prosperity for all.

Here is the distinction between the western and Chinese meaning of “globalization”. In the west, it means a unipolar world controlled by one hegemon, the US of A, with one army called NATO which forcibly holds the west, mainly Europe, together. NATO, with its 2.5 billion-dollars official budget – unofficially a multiple of this amount reaching into the trillions – spreads already with its tentacles into South America, Colombia.

Together the west, or Global North, is a conglomerate of NATO-vassal-countries with little autonomy as compared to Chinese globalization – meaning a multi-polar connection of countries, all the while OBOR-linked countries maintain their sovereignty. This is “globalization” with Chinese characteristics.

(ii) In a precautionary detachment from western dependence, China is focusing trade development and cooperation with her ASEAN partners. In November 2020, after 8 years of negotiations, China signed a free trade agreement with the ten ASEAN nations, plus Japan, South Korea, Australia and New Zealand, altogether 15 countries, including China.

The so-called Regional Comprehensive Economic Partnership, or RCEP, covers some 2.2 billion people, commanding about 30% of the world’s GDP. This is a never before reached agreement in size, value and tenor.

China and Russia have a longstanding strategic partnership, containing bilateral agreements that also enter into this new trade fold. The countries of the Central Asia Economic Union (CAEU), consisting mostly of former Soviet Republics, as well as members of the Shanghai Cooperation Organization (SCO), are likewise integrated into the eastern trade block.

The RCEP’s trade deals will be carried out in local currencies and in yuan – no US dollars. The RCEP is, therefore, also an instrument for dedollarizing, primarily in the Asia-Pacific Region, and gradually moving across the globe; and,

(iii) China will focus much of her future development on her internal and western regions – increase the standard of well-being of populations, infrastructure, research and development – industrial development, joint ventures, including with foreign capital. To achieve a better equilibrium between eastern and western China is crucial for socioeconomic sustainability.

This dual development approach, on the one hand, external trade with close ASEAN associates, as well as with OBOR partners; and on the other, achieving internal equilibrium and well-being, is a circular development, feeding on each other, minimizing risks and impacts of western adversary aggressions.

China’s achievements in her 71 years of revolution speak for themselves. They are unmatched by any nation in recent history. From a country largely ruined by western-influenced colonization and conflicts, China rose from the ashes, by not only lifting 800 million people out of poverty, but also by becoming food, health and education self-sufficient.

Coinciding with the 4 March 2021, opening of the Chinese People’s political Consultative Conference (CPPCC), Robert F. Kennedy Jr., late President John F. Kennedy’s nephew, asked the pertinent question, “Can We Forge a New Era of Humanity Before It’s Too Late?” – His answer is simple but lucid: “Unless we move from a civilization based on wealth accumulation to a life-affirming, ecological civilization, we will continue accelerating towards global catastrophe.”

This understanding is also at the forefront of China’s vision for the next 15 to 20 years – and beyond. A China-internal objective is an equitable development to well-being for all; and on a world-scale, a community with shared benefits for all.

The post China’s Post-Pandemic Growth:  Reaching Out and Developing Internal Markets and Well-being first appeared on Dissident Voice.

In Foreign Policy Australia Proves to be a Slow Learner

Quod deus vult perdere prius dementat. (Whom the Gods wish to destroy they first make mad).

One of the more enduring mysteries of Australian foreign policy is its continued adherence to the American way of war. One has only to look at the history of the post-World War II period to be presented with a host of examples of where Australia has followed the United States into one war after another where a compelling Australian national interest is impossible to identify.

This history of adherence began in Korea in the war that raged in that country between 1950 and 1953. It will be recalled that for years following World War II both the North and the South of Korea waged a guerrilla campaign against each other. The war commenced when the North invaded the South and made major moves on the Southern capital of Seoul and were on the verge of capturing it.

The United States, already alarmed at the Communists taking over China the previous year, reacted to the North’s invasion of the South.  Taking advantage of the temporary non-presence of the Russians in the Security Council, and with China’s seat still held by the defeated Nationalists (a disgrace that lasted a further 22 years) the United States pushed through a resolution in the Security Council authorising military intervention.

Australia was one of the countries that willingly joined this ostensible United Nations action to restore the status quo in Korea. An expeditionary force was rapidly gathered and succeeded in expelling the North from the South of Korea. The United States commander Douglas MacArthur was not content with restoring the status quo. He invaded the North and moved all the way to the Chinese border. We now know that his intention was to invade China and endeavour to restore the Nationalist government. That, of course, was never mentioned at the time.

The United States presence on their border brought the Chinese into the war and they rapidly succeeded in pushing the United States and its allies, including Australia, back south of the border. Stalemate then ensued for the next two years until an uneasy peace deal was reached. This has never been ratified and the North and South of Korea are still technically at war.

Australia’s next involvement in United States aggression was to take part in the war on Vietnam which was precipitated by the South of the country refusing to allow a national election that would undoubtedly have been won by the North’s Ho Chi Minh.

Australia’s involvement in that fiasco lasted more than a decade before the election of the Whitlam Labor government in 1972 saw that government withdrawing Australian troops. That action earned the animosity of the Americans, who together with their agent, the Governor General John Kerr,worked tirelessly for the defeat of the Whitlam government which they achieved in November 1975. Since that time no Labor government has dared to cross the United States. Australia’s foreign policy is an unbroken chain of adherence to United States aggression ever since.

This manifested itself in 2001 when Australia joined the attack on Afghanistan. That commitment ended only two weeks ago when Australian troops were unilaterally and suddenly withdrawn from Afghanistan. The fate of the hundreds of Afghanis who worked with Australian troops during that 20 years is still undecided. They appear to have been abandoned, although public pressure may force a change of heart by the government.

One of the least mentioned features of that conflict was that the Labor Party, although opposing the initial engagement, did nothing to withdraw Australian troops during the six years they were in government during that 20 year involvement.

Similarly, Australia was among the first of the western nations to join the entirely illegal invasion of Iraq. Again, the Labor Party retained that commitment when they were in power, although they initially opposed it. The Australian troops still occupy that country despite a unanimous resolution of the Iraqi parliament demanding that they leave. The Australian government does not bother to justify its position to the Australian parliament and in that they are unchallenged by the Labor opposition. That commitment is also rapidly approaching the 20th anniversary.

Australia’s most recent show of support for United States aggression has been to join the so-called “freedom of navigation” exercises in the South China Sea. It is in Australia’s willingness to join in blatantly anti China exercises that the gap between self-interest and adherence to United States aggression is most marked. China is Australia’s largest trading partner by a considerable margin, although the future of that relationship is now seriously in doubt. There can be no clearer example of a country pursuing a foreign policy that is manifestly at odds with its national interest than the Australian government conflict vis-à-vis China.

The United States alliance goes beyond joining a succession of wars of minimal national interest to Australia. The United States has a number of military bases in Australia, of which arguably the most important is the electronic spying facility at Pine Gap in the Northern Territory. This base had also been targeted by the Whitlam Labor government. It is absolutely no coincidence that the sacking of the Whitlam government by the attorney general John Kerr occurred the day before Whitlam was to announce to the Australian parliament his government’s intention of closing the Pine Gap facility.

That also is a policy that has been abandoned by the Labor opposition. Their foreign policy is not indistinguishable from that of the Liberal government. The fate of the Whitlam government, the last to demonstrate even an inkling of foreign policy independence, is a lesson has been well absorbed by the president Labor leadership.

Even the ignominious United States withdrawal from Afghanistan has been insufficient to encourage even a modicum of rethinking Australia’s foreign defence stances. It can only be a matter of time before Australia follows the United States into yet another war of aggression somewhere in the world. There is no reason to believe that the eventual outcome of that conflict will differ in any way from the experience of the past 70 years: vast expense, huge loss of human life and eventual humiliating retreat.

China may eventually demonstrate to the Australians that there is a price to pay for this endless adherence to the violence of a fading empire. It is a price that Australia will not bear lightly.

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The West Has Trouble Adapting its Behaviour to Cope With China’s Role

One of the more interesting phenomena at the present time is the campaign against China, to try to portray it as some sort of evil force determined to rule the world in its own image. The timing of this phenomenon is interesting. For much of the post-World War II period China was largely ignored. “China” in the eyes of the world was represented by the Nationalist regime that clung to China’s permanent seat in the United Nations Security Council.

Even after the resumption of China’s seat on the Security Council had occurred, China still had a small role in world affairs. Its rapid growth to economic prominence began in the 1980s, but at that time its economy was still a fraction of that of the United States. It was not perceived as any sort of economic power, much less a threat to the economic dominance of the United States.

It was only when China’s economy began to dominate that the attitudes of the West also began to change. The Chinese themselves publicly downplayed their increasing dominance in the world’s economy. They still persist in referring to themselves as the world’s second largest economy, and in nominal terms that is true. A far more accurate indicator of relative economic position, however, is to measure an economy in terms of its purchasing power. By that measure China is the world’s largest economy and has been so for several years.

The second indicator of China’s growing economic influence was the development of the Belt and Road Initiative, commenced in 2013. Again, the Western nations took little initial notice of its development. It has expanded rapidly and now includes more than 140 countries from all parts of the world.

The United States has publicly refuted any possibility of becoming a member itself, loyally followed as always by its Australian acolyte. An initiative by the Australian State of Victoria to sign an agreement with China was this year publicly quashed by the federal government when it passed laws to give itself the power to kill the deal.

The attitude of the Australian government to the BRI is curious. China is by far Australia’s biggest trading partner taking around 40% of total exports. The antipathy of the Australian government to participation in the BRI can only be interpreted as not wishing to upset the Americans, whose antipathy to the BRI is well known.

At this year’s meeting of the Group of Seven nations in the United Kingdom, they resolved to start their own effort providing an alternative to the BRI. The source of funds for this exercise are unclear, although it seems that it is being left to private investment. It is difficult to take this initiative seriously. Most of the world’s major companies already have strong economic links to China. They are highly unlikely to become parties to a rival scheme and thereby jeopardise their relationship with the People’s Republic of China.

Apart from the worldwide BRI, China is also a party to a host of alternative arrangements. These include the BRICS nations of Brazil, Russia, India, China and South Africa on the one hand, and more particularly its Asian neighbours through the ASEAN grouping of 10 nations with close proximity to China’s borders.

Russia and China recently marked the 20th anniversary of the China – Russia Treaty of Good Neighbourliness and Friendly Cooperation. Trade between these two countries has accelerated in recent years. In 2010 China surpassed Germany as Russia’s largest trading partner, and the relationship has accelerated in recent years. In 2020 the value of trade between the two nations reached $110 billion, which while a substantial sum is still a lot smaller than Russia’s $260 billion of trade with the European Union.

What is particularly noticeable is that as China has steadily increased its economic influence, the more it has attracted political criticism. This has been especially true of its alleged treatment of its Uighur population in northern China. China vigorously denies these accusations. The more lurid accusations include one of genocide against the Uighur people. It is an accusation that is refuted by the census data, that shows that the total Uighur population is, in fact, increasing at a faster rate than in the rest of China.

The persistence of the allegations of ill-treatment of the Uighurs points to a different political agenda being pursued by the Western critics. Not the least of their motives is influenced by the fact that the Xinjiang region is enormously rich in natural resources, including recently discovered massive reserves of oil. An estimated 900 million tons of oil and gas was found in the Terim Basin in northern Xinjiang. This find makes China a source of oil on a par with Russia and the United States.

The find has done nothing to reduce the flow of criticism of China. That criticism has little in the way of an objective foundation. China is unique in modern history in refusing to use its economic power to influence the domestic policies of countries with which it has a trading relationship. This is in marked contrast to the behaviour of the for

mer colonial powers, especially the United Kingdom and France, and the behaviour in more recent years of the United States.

The United States has not hesitated to use its power to try and influence nations that had resources they coveted, or they simply occupied parts of the world in which the United States had a geopolitical interest. This involved active interference in the political decisions of multiple countries, economic warfare, economic coercion through the role of the United States dollar as a major world currency, and when all else failed resorting to military intervention.

As the Cuba experience graphically illustrates, getting rid of an unwanted occupying power has proven an impossible task. The dismay of the Cubans at the unwanted American occupation is made worse by the fact that the Guantánamo Bay facility is a major vehicle for the holding of United States’ perceived enemies. For all its pretentions to democracy and the rule of law, the endless detention of its perceived opponents without trial or other resolution of their status makes a mockery of the United States’ claims to be a Government of law and justice.

No such charges can be advanced with any conviction against China. It is unique in modern history in resisting the temptation to match economic power with any sort of political coercion. This has not stopped Western criticism of China’s alleged faults which perhaps tell one more about the conscience of its accusers than it does about legitimate complaints of China’s actions.

The world has changed radically in the past 20 years. The sooner the West understands that fact and adjusts its behaviour the safer we are all likely to be.

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The Russia-China Relationship Points to a Better Future for the World

The United States is openly stating its desire for a better relationship with Russia. At the recent meeting in Reykjavík, Iceland, United States secretary of state Blinken and his Russian counterpart Lavrov held what has been termed as a cordial meeting. It is well known that United States president Biden is anxious for a meeting with his Russian counterpart Putin. The Russians are correct to be cautious about such a meeting. Biden has some lost ground to make up. His television interview shortly after being elected in which he agreed with the interviewer that Putin was a “killer” has not been forgotten in Moscow.

The Americans have made other gestures to signify that they are interested in a better relationship with Russia. Among these gestures is the dropping of United States attempts to stifle the completion of the Nord Stream 2 project that will bring electricity from Russia to Germany. That deal is due for completion later this year and will probably be delivering Russian power to Germany by September.

United States opposition to the deal always had a high level of self-interest as they wished the Europeans to buy their own, much more expensive, electricity. The Germans were never interested in that deal, for multiple reasons, not the least being that it would place German industry even more susceptible to United States influence than is already the case.

Although Nord Stream 2 now looks highly likely to be completed, it is not yet a done deal. There is some significant opposition within Germany itself, somewhat surprisingly, coming from the Green Party who are currently polling well is advance of September’s elections. It is surprising because the Green Party attitude placed them in line with the American view, which is one indicator of how far the Greens have travelled from their early days.

The support of German industry is likely, however, to be decisive, regardless of the outcome of September’s elections. The election also marks the retirement of Chancellor Angela Merkel who has been the dominant German leader for the past 15 ½ years, making her Germany’s third longest serving leader.

The United States gestures toward improved relationships with Russia has, of course, a subtext. The Americans have decided that the greatest threat to their continued domination is the rise of China. If the Americans are to compete with China, they see the need to separate Russia and China.

It is a fact that the Russian-China relationship has grown markedly in recent years. In trade terms alone, Russia’s trade with China grew 20% in the first quarter of this year. Apart from trade there are a number of other areas where the two nations are building an ever-closer relationship, not least in their bilateral trade, but also through the joint membership of the Shanghai Corporation Organisation and other international organisations.

Those organisations have a common interest in developing strong trade relations, freed from the often-suffocating embrace of the western dominated financial institutions that have dominated world international trade for the past 70+ years.

China has been at the forefront of developing this new system. It is exemplified, for example, by its Belt and Road Initiative, which now embraces more than 140 countries around the world, having representation in all of the world’s regions including Africa and Latin America. Those two regions have historically been under the heavy influence of the British and the Americans respectively.

It is no surprise that the United States is a prominent non-starter with the Belt and Road Initiative, seeing it as a threat to their earlier domination. Unsurprisingly, they are joined in this antipathy by Australia whose federal government recently blocked moves by the state of Victoria to participate in the BRI. The Australian government has gone out of its way to antagonise the Chinese in recent years, which, to put it mildly, is a singularly stupid policy to pursue with one’s largest trading partner by a considerable margin.

Australian ministers have recently complained that their phone calls to Chinese counterparts go unanswered and not returned. According to the Australian government it is all China’s fault, which tells one more about the Australian mindset than it does about the reality of the relationship.

China in the meantime continues its relentless advance. As measured by the more reliable indicator of parity purchasing power, rather than gross domestic product, China is now the world’s largest trading entity, having passed the United States some years ago. One of the reasons for China’s success, in the BRI and elsewhere, is that they base their relationship with their trading partners on what Chinese leader Xi calls a “win-win” situation.

Unsurprisingly, this approach, so different from the West’s way of doing business, is one that finds favour with a vast number of countries. United States attempts to contain China and limit its ever-growing influence around the world is therefore unlikely to succeed.

That does not make the United States challenge any less serious and one fraught with potential risks. United States has had things its own way for so long, and has used and abused that power with virtual impunity, that it will not take the emergence of a serious competitor lightly. Therein lies the greatest danger to the world.

The Chinese are not going to allow any return to the dark years when they were dominated by Western influence. If the Americans do something stupid, like a military response to their declining power and influence around the world, then the Russia-China close relationship will doom that effort to failure. The majority of the world’s countries who are benefiting from the new form of partnership will certainly lend their influence to ensure the return to the old days of United States dominance remains very much a matter of the past.

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