There is the old African aphorism: “When elephants fight, it is the grass that suffers”. We should have learnt this lesson as it applied to international affairs when the USA and the USSR were locked in mortal combat over “spheres of influence” after WWII. The US Monroe Doctrine had carved out the Western Hemisphere as theirs in 1823, when Britain was the dominant world power. So, when, by 1960, the USSR obtained a toehold in the Western Hemisphere with a communist ally Castro in Cuba, they faced the US’ kickback. In the not-so-Cold War, when Dr Jagan equivocated on his ideological leanings, he was ousted. He forgot Sparta’s advice to the pipsqueak Melians: “The strong do what they can; the weak suffer what they must.”
Whether we like it or not, we will be forced into making that choice once again in the present struggle for influence between the two global behemoths – the US and China – to be the hegemonic power going forward. There are several great ironies in this eventuality, not least being that China’s rise from being a poster boy for poverty at the end of WWII was facilitated by the US. After several disastrous missteps under its leader Mao – while attempting to repeat the USSR’s move to wrench their nation from a peasant base into an industrialised state – relations between the two communist nations became strained.
The anti-communist US President Richard Nixon, in 1972, saw an opening to drive a further wedge between them, to gain an advantage over the USSR by recognising Communist China and facilitating its entry into the UN and Breton Woods family of institutions. By 1978, when the leadership of China fell into the hands of the pragmatic Deng Xiaoping, who abandoned the dogmatic Maoist centralised economy, US businesses were ready to invest. They appreciated Deng’s philosophy of “it does not matter whether the cat is black or white, once it catches the mice”, that meant they could now take advantage of the seemingly infinite cheap labour of China.
The profits were stratospheric, and the US policy makers – lobbied by its business class – went along with the degutting of the US industrial manufacturing base, that had previously supplied the world with manufactured goods and brought them unheralded prosperity. By 2000, vast swaths of mid-America became a “Rust Belt” because of the factories abandoned, as China became the “factory of the world” through injections of American finance and technology. The global economy underwent a seismic shift, as manufacturing, trading networks, and supply chains that had once been dominated by the U.S., Japan, and Germany now gave way to Chinese dominance. By 2021, China’s manufacturing capacity was greater than that of the US and EU combined.
However, by the middle of the last decade, the Trump Administration, which was panned for favouring the rich, realized that China was not only about to overtake it as the largest economy in the world, but had built its economy to be less dependent on western technology, while boosting its military capabilities. Unlike other Third World economies, that had been exploited for cheap labour but had remained trapped in a middle-income trap, China was strategically preparing to regain its historic place as the “middle kingdom”, around which all other countries revolved. While using capitalism in its economic institutions, it had retained the centralized command of the Government to insist that decisions ultimately redounded to their country’s interests.
The Trump Administration slapped tariffs on a wide range of Chinese goods, and while this pushed up the cost of those goods in the US, the effects were felt much more gravely in China. China, in the meantime, had worked its way up the value chain, and the US has not weakened it fundamentally. The Biden Administration has continued to discourage US businesses from investing in China; and, for instance, has prevented chipmakers from supplying Chinese companies with this key input into almost every modern manufactured good.
This strategy of “war by other means” will force us to choose sides.