The world’s largest economic powers are in a battle for dominance complicated by the pandemic and Trump’s escalation.
Story Transcript
This is a rush transcript and may contain errors. It will be updated.
Marc Steiner: Welcome to the Real News. I’m Marc Steiner, to have you with us.
Now, some call it the new Cold War, but this growing confrontation between China and the United States is fundamentally different than the Cold War with the Soviet Union, which ended in the downfall of most communist nations. This is a 21st century rivalry between the world’s two largest economies, for global domination and control of the international marketplace. Some, as our guest today, see there’s the growing state capitalist giant in China locked in economic struggle with what some see as the waning, reigning economic free market capitalist giant, the United States. The Trump administration now has clearly escalated this conflict and this looming economic and potential military confrontation. So we welcome Kevin Lin, who is a Chinese labor activist and researcher, and recently coauthored with Ashley Smith an article called, China And The United States: A New Cold War for New Politics magazine.
And Kevin Lin, good to have you with us once again and welcome back.
Kevin Lin: Thank you, Marc.
Marc Steiner: And thank you for joining us at this midnight hour. So, I appreciate that. So, tell us what your analysis is about what brought us to this point of confrontation? One of the things you point out in the article, is that George Bush, the senior, announced the rise of this new world order and U.S. World hedge money, but the fall of the Soviet Union led to this kind of flood gates of capitalism, kind of consuming the world and dominating the world, and now China and the U.S. are the center of it. So talk a bit about that. How did we get here? Exactly, what do you think is going on?
Kevin Lin: Yeah, absolutely. The first thing to say is this is obviously not just a repeat of the Cold War between the United States and the Soviet Union. For one thing, China is not a socialist country right now. So it’s not an ideological conflict, but China is also much, much more economically strong than the Soviet Union was at the end of the Cold War. And China and U.S. are much, much more economically entangled, so that the conflict could be much, much more destructive and detrimental to the peoples of both countries. But how did we get here?
After the end of the Cold War in the late 1980s and early 1990s, that was a period of neoliberal, globalization and U.S. companies flooding to China, making a huge amount of profit by manufacturing cheap commodities. So there was a period of very warm diplomatic relations between the U.S. and China. But what changed is in the 2000s, the United States, certainly the U.S. companies, felt they had been shut out of, squeezed out of Chinese markets.
They don’t enjoy as much access to Chinese markets as they think they will, and they started lobbying the US government for a much more confrontational approach with China. And you may remember all this talk about currency manipulation? That was just one sign of the start of that conflict. And then under Obama, you may remember that the pivot to Asia, which is also pretty much an economic strategy, the TPP, the Transpacific Agreement is very much a strategy to isolate China economically and put pressure on China to open up more of its markets. But by today, I think there is a more or less a consensus in the U.S. around China, which is that they are going to go really, really hard on China.
Marc Steiner: But this is a really complex thing that we’re facing in the world, I mean, right now you’re seeing the Trump administration really escalating this war with China and trying to get major international corporations based in the U.S. and Western Europe, not to have dealings with the Chinese government or the Chinese businesses. You’ve got China now, as you point out, is the world’s largest creditor and challenging the West and Japan for digital dominance, and that’s part of the new kind of capitalist warfare going on. And we’re seeing Trump push for decoupling the economies between China and the U.S., so if you take all those ingredients, this is a really complex affair. I mean, A) because it seems almost impossible to decouple really, but they are in this huge worldwide battle for dominance. So, talk a bit about how you see that. Why is it exploding so deeply in this moment and where do you think that’s going to take us?
Kevin Lin: Yes, first of all, this is as you said, Marc, this is such an all encompassing conflict. It’s not just high tax rates, it’s not just manufacturing or trade, or investment, or geopolitics, or even military hedge money in Asia. It’s all of those things. And that makes it really, really complex, but also really, really dangerous because it’s not going to go away easily.
Even if the Democrats win the presidential election, it’s not at all clear that the Biden administration will shift its policy fundamentally, because the underlying issues remain the same. But with regard to what pushed the conflict to this point, I think the pandemic really played a big role. I think that’s a moment where the Trump administration saw a opportunity or saw the need to blame someone for the devastation in the U.S. and China is obviously the easy targets. But it’s also a moment where, leaning toward the election, I think Trump administration is increasingly frustrated with the lack of [inaudible 00:05:43] with regard to China. For example, the trade discussion, the trade halts, is stocking so-called phase one, and who knows how many phases they’re going to be before there’s any concrete outcomes. So I think it also reflects the frustration or the impatience of the Trump administration dealing with China.
Marc Steiner: But I want to get back to exactly what’s going to happen, what’s happening with this conflict. I mean, it seems to me that what we’re watching here is, as I said in the beginning, is this rising economy in China, even though both economies are faltering at the moment because of the pandemic and the worldwide recession, but China seems to be… Is rising, and some people argue the U.S. is waning, but still it reigns as the leading economic power on the planet.
So how is this conflict going to play out? And where are the conflict points? Because you’ve already seen the United States, as you point out in your article as well, throwing its military might into the Western Pacific, as did Obama. That’s escalating more weapons to Taiwan. So, these flashpoints can become really dangerous, both economically and militarily. So talk a bit about what you see is at the heart of this conflict.
Kevin Lin: Yeah. As you said, Marc, the U.S. remained the predominant economic power, but also even much more so, the military power and the U.S. has been pursuing the so-called Indo-Pacific strategy, which is a way of encircling China in the region and it’s been building alliances with the U.K., With Australia, New Zealand, and Canada, all the traditional us allies in order to conquer China’s influence in the region and globally.
But this is also really, as you said, it’s so complex because its two economies are the biggest in the world. And on one hand you have the U.S. economy winning and the Chinese economy are actually now also running into problems. So there are both potential issues with both economies. And this is actually going to fill also nationalism, both in the U.S. and in China, that overtime may favor some sort of conflict. And as you alluded to the possibility of some accidental military conflict, it’s pretty real, especially in the South China Sea region, which for example, Australian government recently came out and said, we don’t recognize any sovereignty that is claimed by China in the South China Sea, and that is very dangerous rhetoric.
Marc Steiner: But you also have, it’s normal what we’re facing here in the world. You’ve got China owns a lot of U.S. Treasury Bonds, they’re the world’s largest creditor, they have trillions of dollars invested in Africa, other parts of Asia, and in Europe as well. And then you have this growing military, the possibility of military confrontation. I mean, how dangerous is what we’re facing and what do you think this means to have what some would argue is an authoritarian state capitalist nation and a free market capitalist nation moving towards the right in the United States? I mean, I think that given the pandemic, everything that was going on, most Americans and people around the world are losing sight of the potential danger, a huge danger, that the world faces.
Kevin Lin: I think the conflicts are structural. Again, they’re not going to be diffused or go away just in the next few years. It’s probably going to be building up, continuously building up, in the next few decades, if the present trends continues. And again, as you said, the two countries are so entangled economically, and it’s really, really hard to see the decoupling, but the potential for military conflict is still real. And I think, as progressives, we should be preparing for that eventually even though probably neither country wants a war right now. But I think that positionality is very much there.
Marc Steiner: So finally, when you think about, as you concluded in your article, that when you talked about how left movements around the world should confront this and address it, I mean, there’s a real issue. We had, as I told you before we started the conversation today, we had a really interesting and deep debate on an episode of Stir Crazy, a show here at the Real News on the wars between China and the United States. I was arguing that China is a state capitalist nation, not a socialist nation, so this confrontation is about economic dominance. So how do you respond? How do movements respond? How does labor respond? I mean, there’s labor unrest in China. It may be even to a greater degree than there is labor unrest in the United States at the moment. So, how does the left respond?
Kevin Lin: We definitely need plenty of clarity in this moment, as you said, Marc. I think the first thing to acknowledge is China’s now socialist. People make arguments that why Chinese are socialists, because the government’s intervention in the economy, or the government ownership of state owned enterprises, but that’s not assigned socialism, it’s assigned state capitalism. I think we need a clarity on that.
But second of all, we definitely should reject both the U.S. and Chinese state. And obviously I think for leftists in the U.S., The enemies at home, the primary responsibility is to oppose the U.S. States. But at the same time, that should now give you excuses to make excuse for the bad behaviors of the Chinese state. The sort of solidarity and alliance is with the Chinese people and with social movement in China and labor movement in China, not with the Chinese state. I think that’s so fundamental, but so important for the lefts in the U.S. and elsewhere to bear in mind.
But also, I think there’s things you can do within the U.S. For example, start to build alliance with Chinese-American community groups and organizers who are very similarly concerned about U.S.-China rivalry and the conflict. And also they are concerned about the recent racism and xenophobia in the U.S. itself.
So building those alliances, both against racism and nationalism, but also longterm against the possibility of military conflict is something that the left in the U.S. could do even within the U.S.
Marc Steiner: So in closing with his quote, you pulled out from your article, which I found really interesting from the Economist, which is the Neo-liberal journal of record, I think, in the world, and the quote was, “Wave goodbye to the greatest era of globalization and worry about what’s going to take its place. That is where we are.”
Kevin Lin: Yes, absolutely, and it’s a much more dangerous world and we should be prepared.
Marc Steiner: Well, Kevin Lin, it’s always a pleasure to talk with you. Get some rest, it’s late at night, and we look forward to talking to you again and reading what you come up with next.
Kevin Lin: Thanks Marc.
Marc Steiner: And I’m Marc Steiner here, The Real News Network. Thank you all for joining us and take care.