Friday, 22 May 2020

The New Cold War is here.

After the fall of the Soviet Union, and the end of the Cold War, the world breathed a sigh of relief. Unfortunately while the West look forward to peace and economic growth, they ignored the rise of China as a world threat, and in fact helped them to this place of power. How did China do it?
Globalization and the expansion of trade created wealth in industrialised countries. To do so many industrialised countries used the enormous pool of cheap Chinese labor to produce goods. As a means to encourage Chinese participation the World Trade Organization (WTO) granted China the status of ‘developing country’ and with it came many privileges. Furthermore China manipulates its currency to obtain and maintain a competitive advantage.  Since the country is governed by an authoritative regime, there is complete control of the economy. Industries are managed and operated by the State, and production is dictated by the goals of the Chines Communist Party.
Given the complete control of the economy, most if not all, contracts between western corporations and Chinese producers must have the imprimatur of the government. Hence delegations from western governments often visit China to make deals, resulting in more concessions to get access to the closed Chinese market while giving more Chinese access to western markets.  These trade deals gave China greater access to western technology, and they also became one of the greatest infringers of copyrights. Chinese counterfeits flooded western markets and they also used the power of government control to increase ‘dumping’   of many products, mainly steel.
Furthermore, the obsession with climate change brought a new dimension to the reliance on Chinese production. In an attempt to reduce their ‘carbon footprint’ in their countries to placate the environmentalists, many countries increase their shift from home manufacturing to production in China. This shift did nothing to improve Carbon emissions, but in fact just transferred it to China, which at the same time received preferential treatment in new climate change treaties. They can pollute but the western world has to pay for their use of fossil fuels and increase in CO2 emissions. So what is the result of all these concessions?
First the trade deficits between China and the rest of the world grew. More significantly the trade deficit between the U.S and China got completely out of hand. The reliance on Chinese goods meant that China was exporting more than they were importing. They started to accumulate foreign currencies and in fact became the second largest holder of U.S debt. With that came monetary power and the authoritarian regime started to do something that was not contemplated, but in fact ignored by the West. China started to invest heavily in developing countries.  Africa and South America   became targets and their resources were acquired and exploited. These investments did not only provide monetary, but also political influence in these countries, and provided support for China’s influence on many global organizations like the WHO, UNESCO and the like. These expansion polices were ignored, as the west turned a blind eye and continued to focus on the war in the Middle East and the rise of terrorism.
All the while, China and its ally Russia were playing a different game. Russia under Putin and his new found wealth from oil and gas, and Xi entered into an alliance to engage in proxy wars. While using their ‘veto’ powers on the U.N Security Council, they covertly supported war in different parts of the world. As Obama, obsessed with appeasement took a back seat, the new Cold War allies extended their involvement in the Middle East, and supported Iran in the failed Nuclear deal. China used its proximity and long-time relationship with North Korea to support the regime, and in fact encouraged Kim Jung Un to become a thorn in Trump’s administration. In the meantime China started building islands in international waters in the South China Sea and built bases which extended its military reach in the region.
Another factor for the growing Chinese geopolitical power is the use of Chinese immigrants and students in many western countries. Many immigrants to countries like Canada still have ties with the communist regime. As they invested in the western world they also gained influence in political and corporate arenas. Many huge corporations are now either controlled or are partners with Chinese investors who still report to the government. Huawei is one example, and the continued relationships between large tech companies and China is a growing threat.
 In Canada, the increasingly worrisome Trudeau government and his relationship with China, is cause for concern.  Not only is the inability for this government to confront the Chinese government, but it is the constant acceptance of the acquisition of resource and technology companies by Chinese entities that should raise a red flag.  China has acquired many Canadian companies for example TMAC Resources, Continental Gold, Asia Pacific marine Container, Nexen etc.  It is not the investment that we should be worried about, it is the investor. With an obsession to gain a seat on the U.N Security Council, Trudeau has virtually given up any semblance of protecting Canadian sovereignty.
In the United States, it is apparent that China has not only got a foothold in many universities but also in many tech companies. Google and Apple are so reliant on business on mainland China that they are reluctant to support Trump’s policy of re-alignment with the belligerent and combative Chines regime.
Trump has been criticized for many things, one of which I did not support- the use of tariffs to bring China to the negotiating table, in retrospect he was right. However, it seems that the Covid-19 pandemic has given him the unfortunate opportunity to gloat. Or was the pandemic a means of Chinese retaliation?  On the other hand, China has been exposed and placed itself in a defensive position that nobody could have visualized some 18 months ago.  As more details are coming out about China’s role in the pandemic, western countries and many smaller developing countries are reconsidering their relationship   vis-à-vis the autocratic regime and leader for life Xi.
China with the blind complicity of the western world has been preparing itself to dominate the world as it builds itself into a supreme   military power. They have stolen and continue to steal technology; they have coerced global organizations through bribes and massive funding of smaller countries to get votes at the international levels. If there is one thing positive about Covid-19, it is that it was able to expose the Chinese duplicity. Is the world going to recognize the rise of China as a threat, or are we going to coalescence around a dislike for Trump and continue on our merry way and increase our dependency on trade with China?  The west should bring back their manufacturing home or expand into South Korea, India and other free Asian countries.
The new Cold War is here, make no mistake about it. Russia will align itself with China. To counteract this dangerous alliance, NATO countries should expand their membership or the world will face a greater problem, than terrorism or climate change – economic collapse.

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