DISCLOSURE: Sourced from Russian government funded media

by Salman Rafi Sheikh, …with New Eastern Outlook, Moscow, …and the Institute of Oriental Studies of the Russian Academy of Sciences, a research institution for the study of the countries and cultures of Asia and North Africa.

[ Editor’s Note: Mr Sheikh has a timely update on the New Cold War, with the needed new coronavirus twist, which could end up being a double twist. Timing is everything in major geopolitical moves, and the court is still out on this one.

With the US and Western economies in the beginning stage of what economists are already predicting to be a decade in returning to 2019 profitability records, it comes as no surprise to see early moves being made to theoretically get ahead of the pack.

Despite all the pomposity coming out of Trump land, the US is not in the driver’s seat, despite its wagging the US military club at every opportunity, currently with the Navy leaning forward in the South China Sea, ending its useless forward projection in the Persian Gulf and Arabia Sea.

The US was drowning in debt before our first virus case appeared, and we are well on our way to a date with a $30 trillion debt with Pelosi’s proposed new bill. Big business cash flows with low stock prices are going to have CEOs marshaling cash, and the easy to declare restructuring of supply chains away from China will take time and eat up working capital. 

Doing this in a worldwide recession, some could say is stupid, as it would be better to see how the virus works out over the next year, especially after the predicted second wave in the fall for a better look at the total economic damage.

Mr. Trump’s twitter geopolitical hallucinations are just that. He does not have a clue as to what is going to happen. He pretends in his classic reality TV show style, but that seems inappropriate for the real world. This is the business genius whose final business disclosures will reveal a house of cards. Americans deserve better, and the world, too.

Of course, pushing China and Russia closer together was already in progress, and any chances of alienating the EU from both is another hallucination. India and a few other countries will try to pick off any new supply chain deals, but their pecking order in the New Silk Road will go down. China is dependent on no one, nor does it want to be.

When the many trillions in virus bills are tallied in the first half of 2021, we will have a look at the various Central bank holdings to see whose currency is worth anything, and what their gold holdings and foreign debt are.

That reality dog will be wagging the tail, not the other way around. Trump will learn that Twitter is not the tooth fairy, and neither is he, maybe even in November… Jim W. Dean ]

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Is Trump in over his head, as he appears to be?

– First published … May 20, 2020

Whereas Trump’s negative portrayal of China goes back to his 2016 election campaign when he directly called out China, saying “because China’s going bad it’s going to bring us down too”, a number of subsequent US officials documents, policy papers and reviews have left no stone unturned in painting China as a ‘bully’, threatening US interests worldwide.

The US president’s recent most threat to cut-off all trade relations with China is thus very much a continuation of the same negative policy.

It has now received an additional boost due to the spread of COVID-19. The fact that the virus spread from Wuhan in China has handed president Trump a convenient opportunity to bash China for political gains, although the core reason for the spread of virus in the US is the Trump administration’s own mishandling and failure to act in time.

Whereas bashing China for the spread of the virus may serve Trump’s purpose in terms of escaping the responsibility, starting a ‘new cold war’ with China may allow the US to divide the world into anti and pro-China blocks, thus preventing an effective materialisation of China’s idea of global “community of shared identity.”

The US strategy behind cutting-off trade ties and creating conditions for a ‘new cold war’ is full-spectrum dominance as against the ever-increasing prospects of a multipolar world in which the US would become just first among the equals.

In fact, the way the US has failed in materialising its strategic objectives in Afghanistan—where the US wanted a permanent military presence against Central Asia/Russia and China—Syria and Iraq shows that the US ability to unilaterally manage its interventions aimed at ‘regime-change’ failed not because the US did not have the capacity to achieve its objectives but because of soft and hard, direct and indirect counter-interventions of its strategic competitors.

Furthermore, China’s successes with its Belt & Road Initiative and its ability to penetrate the world economically have created a strong possibility for a world order that would least need a US dollar dominated global financial system.

As such, the fact that China, along with its allies, is at the heart of tectonic changes taking place globally and threatening a US dominated system explains why Trump is now drum beating a ‘new cold war’ and how roots of bashing China go a lot deeper than an immediate election expediency, although its importance cannot be denied in terms of a strong tendency of US politics to create external enemies for popular consumption.

Only this time, however, this external enemy is likely to serve both domestic and geo-political interest of the US. Whereas talk of cutting-off trade ties with China, the US already is preparing to divide the world into blocks that would strongly resemble a division of the world on the US-Soviet Union cold war era pattern.

A linchpin of this division is, as many reports in the mainstream western media have shown, a US push towards creating an ‘alliance of trusted partners’ based upon a dubious concept of ‘Economic Prosperity Network.’

The idea behind creating this network is to tackle a US vulnerability to China. It aims to convince global US companies and groups to systematically extricate themselves from China and instead partner with members of the so-called ‘economic prosperity network’ to reduce US economic dependence on Beijing.

Whereas the overt purpose is to align multinational companies with US geo-politics, the network of ‘like-minded countries’ becomes relevant in terms of allowing such companies to relocate to countries, if they cannot relocate to the US, which are friendly to the US and where labour is still cheap.

Following the ‘new cold war’ rhetoric and a deliberate demonization of China, many US allies in Europe and elsewhere are already thinking of reviewing their trade relations with China. Accordingly, a debate in the western media has already started with regards to tackling the ‘China challenge.’ This debate, purportedly aiming to draw new lines and follow the US lead in rolling back economic relations with China, is not academic; it is deeply political and proposes conflict.

Even beyond ‘the West’, long-term western allies such as Japan are already pursuing a potential ‘decoupling’ with China by relocating their companiesThis strategy of relocation is being officially funded by the Japanese government, allocating 220 billion yen (US$2 billion) for companies shifting production back to Japan and 23.5 billion yen for those seeking to move production to other countries.

In fact, this funding is coming out of its economic stimulus package dolled out to deal with virus that ‘spread from China.’ What this pattern shows is that the so-called end of the ‘era of off-shoring US jobs is over’ is being followed not just by the US but many of the ‘like-minded’ countries, virtually operationalising the ‘new cold war.’

Will this ‘cold war’ succeed? To begin with, it is happening at a time when the entire world is under the grip of COVID-19. Most of the global economy is in shut down mode. China, however, has not only successfully gotten rid of the virus but its economic growth has relatively been much higher.

Even with COVID-19, China’s trade with Belt and Road nations grew 3.2% in the first quarter of 2010, although it looks insignificant when compared with the 10.8% for the whole of 2019. It means that China, despite being hit by the virus, will come out of the virus-hit world a lot stronger than many of its competitors and far better placed to tackle the ‘new cold war.’

What adds more to it is the fast-growing Sino-Russian strategic partnership, a partnership being unwittingly facilitated by Washington due mainly to its tendency to categorise both states as the two top “threats.”

Salman Rafi Sheikh, research-analyst of International Relations and Pakistan’s foreign and domestic affairs, exclusively for the online magazine “New Eastern Outlook”.


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