I wish that Mark Leonard had developed the thoughts he expresses in his piece at Japan Times about Chinese President Xi Jinping’s strategy more thoroughly. He does a pretty good job in outlining the weaknesses in the U. S. approach but doesn’t do as well in the part I actually read the piece for. Here’s the kernel:
By contrast, China — whose only treaty ally is North Korea — realizes that it cannot win a contest between competing alliances. Xi’s strategy therefore is to appeal to the non-Western world’s general preference for optionality and nonalignment. Presenting himself as the champion of these principles, he has developed a different notion of “democracy†based on the ability of all countries to emancipate themselves from Western dominance. This concept featured heavily in his rhetoric when he met with Putin in Moscow.
The contest between these two visions is deliberately asymmetrical. While the United States is betting on a polarized world, China is doing everything it can to advance a more fragmented one. Rather than trying to replace the U.S., it wants to be seen as a friend and ally to developing countries that want to have a greater say.
One of the problems is that I don’t think that any of that is true. I think that President Xi is trying to promote what he sees as China’s rightful place in the world—as the leading nation to which all other countries give deference.
Can’t blame Xi for boosterism.
If American capitalism has something to offer to the world then it should sell itself instead of threatening force and deterrence as if it’s continually surrounded by enemies.
Again, the so-called experts are wrong-headed in the extreme. North Korea might be China’s only military ally, but China is winning the world diplomatic battle hands down.
Russia might not have a military alliance treaty with China, but it is fully in China’s camp.
Then there is BRICS/SCO. At least 20 countries have applied for membership in those two organizations, including Egypt, Turkey, Saudi Arabia, the United Arab Emirates, Indonesia, Argentina, Mexico, and a number of African countries.
And the free trade agreement RCEP, which does not include the US (Trump’s choice), members are:
(1) all ten members of ASEAN (excludes candidate member Timor-Leste): Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam;
(2) the three East Asian members of ASEAN plus China, Japan, South Korea;
(3) the two Oceanian members of ASEAN, Australia and New Zealand.
Even without the new members, BRICS combined GDP is larger than the G7’s. And Russia plus China have a combined GDP that is more than twice that of the US’, plus a much larger, more modern, and more comprehensive manufacturing sector.
Please look again at those countries that are being drawn into the Chinese sphere of influence. They include several of America’s military treaty allies.
Finally, there is a strong movement to replace the dollar in international trade. This is proving difficult, but the attempt will succeed, because it is an existential necessity for the vast majority of countries.
Here is the bottom line. China offers developing countries trade and economic investment. The US offers war, intimidation, insurrection, and economic exploitation.
Right now, the US is attempting to overthrow the military government of Sudan, using Sudan’s renegade Rapid Support Force. And the US has organized a civil war in Sudan to do so. The goal is to prevent implementation of a treaty between Sudan and Russia that would allow Russia to build a small naval base on Sudan’s coast.
PS. May I recommend you listen to RFK Jr.’s campaign speech given at Boston last week. He has his father’s and uncle’s charisma (which Teddy conspicuously lacked). Despite his creaky voice, he is a gifted public speaker. The upcoming presidential campaign promises to be a wild ride. RFK, Jr., has a very good chance of becoming the next President.
@bob sykes
If you understood anything about the international financial system and/or global trade, you would understand how silly (downright stupid) that idea is. It is like mathematicians pontificating about electromagnetic waves and thermodynamics.
Dollar usage is voluntary. To de-dollarize, one needs to simply stop using the dollar and stop investing in dollar based securities. But, this would require the trade between the countries to balance. Otherwise, you wind up with a lot of useless currency.
I would add that for the yuan to take the dollar’s place it would need to be convertible. That would reduce the CCP’s power. Ain’t gonna happen.
That’s why people variously talk about a “market basket” of currencies or some other currency, e.g. the euro.
The euro is the only possibility, but that is mostly unrealistic.
A hard currency has the same problems today as it did in 1971, and trade imbalances cannot be resolved with cryptocurrencies. Actually, the idea that 21 million bitcoins can supply global trade well over $21 trillion is insane.
In 1971, the US defaulted on the dollar, and dollars became worthless. Any de-dollarization should have occurred then, but it did not. While dollars were worthless, they were still valuable on balance sheets.
Today even more balance sheets are balanced with dollars.
FULL DISCLOSURE: Before I understood more about the finance system, I thought de-dollarization made sense, and while my knowledge of the financial system has increased, I do not fully understand it.