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Rising Dragon, Wounded Eagle

Public Policy

When China`s former vice premier, Qian Qichen, was asked 20 years ago about the future of Sino-US relations, he reportedly responded: `They [Sino-US relations] will never be as good as they should be; and never be as bad as they can be.` This prognosis holds true today for the world`s `most important bilateral relationship`.

Munir Akram

Munir Akram

The largest and second-largest economies are now deeply intertwined and interdependent through trade, supply chains and finance. But the fortunes of the Chinese dragon have been rising; the power of the American eagle has been dented by long wars and economic profligacy. The Greek historian, Thucydides, postulated that when an established power faces a rising one, a clash is almost inevitable.

In its final years, the Obama administration seemed to be rushing towards the Thucydides Trap. Obama`s `pivot to Asia` consisted of: an ef fort to build a string of US alliances around China`s periphery from Japan to India; the deployment of two-thirds of US naval power to the Pacific; a challenge to China`s maritime claims in the South China Sea; and China`s exclusion from the Trans Pacinc(trade)Partnership.

Prospects for Sino-US relations worsened with Donald Trump`s campaign rhetoric against China and threats to slap punitive tariffs on its exports and declare it a `currency manipulator`. In justifying his unprecedented call with Taiwan`s leader, Trump threatened to discard the One China policy unless China agreed to trade concessions.

Tensions were further heightened when the incoming US secretary of state asserted that the US could deny China access to its claims in the South China Sea.

Since then, the Trump administration has walked back, slowly, from its most extreme positions. US Defence Secretary Mattis assured that the South China Sea disputes would have to be resolved through negotiations. In a carefully choreographed call with the Chinese president, Trump af firmed continued US adherence to the One China policy.

The recent Trump-Xi summit in Mar-a-Lago was expected to determine the direction of US-China relations. Although the summit was overshadowedby the US missile strikes against Syria, there was no acrimony, and agreement was reached on a highlevel security dialogue and a 100-day plan to address trade.

However, uncertainty persists due to Trump`s unpredictability. He will not declare China a `currency manipulator`. But Trump has now linked the trade talks to China`s help on North Korea.

In his tweets, President Trump has repeatedly urged China to resolve the threat from North Korea `or the US will`. The US deployment of a US carrier group towards the Korean Peninsula has escalated tensions. But the US is unlikely to conduct a pre-emptive or punitive strike against North Korea (à la Syria) given Pyongyang`s capacity for a devastating response. And, the `window` for such a strike is likely to close shortly if, as expected, the leftwing candidate wins the South Korean presidency and rules out the use of force.

China shares the US aim of denuclearising North Korea, and is deeply angered by Kim Jong-un`s provocative nuclear and missile tests and indifference to China`s wider interests. China is likely to support intensified Security Council sanctions against North Korea, including an embargo on oil sales, if it continues its tests. Yet, China is unlikely to intensify pressure to the extent of triggering the collapse of the North Korean economy or the Pyongyang regime. This could lead to war, massive refugee flows into China and possible absorption of North Korea by the South, bringing US troops to China`s border.

Under the circumstances, the best option may be a resumption of the five plus one (US, China, Russia, Japan and South Korea plus North Korea) dialogue; a de facto `acceptance` of North Korea`s nuclear capabilities; and a f reeze on its nuclear and missile development in exchange for economic aid and assurances of regime survival. Even this outcome will be dif ficult to negotiate.

Given the Korean crisis, it is fortunate that, at least so f ar, the US has not revived the provocative challenge to China in the South China Sea. Absent US intervention, China will probably display flexibility and offer economic cooperation to its Southeast Asian neighbours to resolve maritime disputes. The peaceful resolution of the SouthChina Sea disputes would remove a major source of potential Sino-US friction and confrontation.

Apart from Korea, trade is the other headline issue for Trump in dealing with China. For its part, Beijing wants a more balanced trade relationship with the US, and a reduction of the $300 billion bilateral trade surplus, through trade expansion rather than restriction. To this end, it appears willing to facilitate US agricultural, services and other exports and to stimulate domestic demand in China. But it will also urge the US to lif t the wideranging restrictions on the sale of advanced technological goods and services to China as one way of correcting the trade imbalance.

Xi`s economic trump card may be an offer of Chinese participation in Trump`s plan to restore and modernise America`s aging infrastructure.

China has the finance, expertise and recent experience to make a significant contribution. If Trump`s plans for tax breaks are stalled, he may welcome China`s contribution.

Such cooperation on infrastructure may open the door to US participation in China`s path-breaking One Belt, One Road initiative which its media has dubbed as `Globalisation 2.0`. China has invited US participation in the project. It could be extremely lucrative for US corporations and industry.

A first step in this direction may be active US participation in the China-Pakistan Economic Corridor endeavour. The Asian Development Bank and the World Bank are already financing some CPEC-related projects in Pakistan. American companies are also involved as equipment suppliers for power plants and financial, technical and legal consultants in various projects.

Ever since it arranged Henry Kissinger`s clandestine trip to China in 1971, Pakistan has had a significant stake in the preservation of positive Sino-US relations. Today, if a great power consensus can be achieved on a strategy for stability in Afghanistan and counterterrorism, Pakistan can become the geographical locus for economic and strategic cooperation between the world`s two primary powers. The writer is a former Pakistan ambassador to the UN.

This story was originally published by Dawn, Pakistan

12 Comments on "Rising Dragon, Wounded Eagle"

  1. bobinget on Tue, 18th Apr 2017 1:49 pm 

    Because China (and India) representing such a huge chunk of the current and future world populations,
    these two will require more and more of the world’s oil and gas just to survive, never mind growth.

    Safe to say, the West is still technically ahead in oil and gas recovery. US and China can partner in hydrocarbon recovery in South China Sea and elsewhere.

    Like the farmer said about a three legged sheep that saved an entire family from a terrible late night fire.
    “Any animal that smart you don’t eat all at once”.

  2. bobinget on Tue, 18th Apr 2017 2:35 pm 

    (well that’s a relief)

    When U.S. officials claimed two weeks ago that an American aircraft carrier was heading toward waters near North Korea, it was actually sailing in the opposite direction, The New York Times and Defense News report.

    Facing growing tensions between the U.S. and North Korea, an American official told Reuters on April 8 that the U.S. had sent a Navy strike group to the Korean Peninsula as a show of force directed at the regime of Kim Jong Un.

    U.S. National Security Adviser H.R. McMaster told Fox News the next day that the group was being rerouted from Singapore toward the Korean Peninsula as a “prudent” show of force.

    But Defense News pointed out on Tuesday that photos released by the U.S. Navy showed the USS Carl Vinson passing through the Sunda Strait in Indonesia, about 3,500 miles from the Korean Peninsula, last Saturday. The carrier was moving away from North Korea when the Pentagon had said it was moving toward the peninsula, the Times confirmed on Tuesday.

    This story is developing story and will be updated.

    Posted note:
    Another (fake news report?) had two ADDITIONAL carrier groups headed to NK.

    Not sure today what to believe. Par for this White House.

  3. You Don't Want to Know Me on Tue, 18th Apr 2017 3:19 pm 

    “Not sure today what to believe”

    Start with not believing anything you read on the internet.


    The internet – the greatest disinformation and propaganda machine ever invented.

  4. makati1 on Tue, 18th Apr 2017 5:10 pm 

    BobInget, the U$ has to keep is corporate nose OUT of the South China Sea. And anywhere else in the world that they do not belong. The S.C.Sea is Asia’s to manage and utilize.

    The sooner the U$ is forced by finances to pull back it’s military and close its 800 corporate security (military) bases around the world, the better for the rest of us. I wake up every morning hoping to see the Stock Market Casino in free-fall and the end of dollar supremacy. Someday, it will happen. Soon, I hope.

  5. makati1 on Tue, 18th Apr 2017 5:17 pm 

    You Don’t Want, most of the internet articles and sources are more correct than anything you will read in the US MSM “news”. You just have to look at the source and its sponsors for the spin. Most of the world does not have access to the internet and could learn a lot if they did. The internet could have been used to educate the masses, but it is used to sell shit, free porn for the weak and bored and as a propaganda tool by the 1%. It is a tool to be used with care, like anything else that can hurt or kill you. Misinformation is everywhere these days.

  6. You Don't Want to Know Me on Tue, 18th Apr 2017 5:41 pm 

    Couldn’t agree more Makati

  7. makati1 on Tue, 18th Apr 2017 5:47 pm 

    U$ Depression: “Real U.S. debt is well above $20 trillion. Real U.S. GDP is down around $10 trillion. Without this extreme, permanent accounting fraud and years and years of falsifying GDP, it would be impossible for the U.S. government to pretend that the United States wasn’t already bankrupt. Other Western economies are only in marginally better condition – while their Traitor Governments run these economies into the ground as quickly as possible.

    Look at the extreme, reckless (criminal) interest rates across the Western world. Understand what those rates mean. Look at the anemic energy demand across the Western world. Understand what it means.

    The Western world is mired in a Greater Depression. To people who are paying attention, it couldn’t be more obvious.”

    Not looking good for America.

  8. Sissyfuss on Tue, 18th Apr 2017 10:23 pm 

    The sheeple don’t understand Zirp, Nirp, or the White House twerp.

  9. GregT on Tue, 18th Apr 2017 10:57 pm 

    “The sheeple don’t understand Zirp, Nirp, or the White House twerp.”

    Well if they did, they wouldn’t be sheeple, now would they.

  10. DerHundistlos on Wed, 19th Apr 2017 4:18 am 

    @ Siss

    Lovin’ ya more and more!!!!

  11. Davy on Wed, 19th Apr 2017 4:59 am 

    Sinophile playfulness. The facts are both are huge countries that have sectors that are both growing and declining. Both have problems that can’t be fixed. Both are mired in debt and economic malinvestment. Both have huge unfunded liabilities. Where China is screw, blued, and tattooed is overpopulation and compounded by a new a dangerous mega urban modernism. China in so many ways has bumped up to ecosystem limits especially soil, water, and clean air. Food security is in decline. This author is a status quo’er. Many here likewise game their emotional status quo agendas dismissing and or embellishing facts to their personal preferences.

  12. Jef on Wed, 19th Apr 2017 9:58 am 

    I’m not so sure that economic collapse is ever going to happen without a real world physical constraint trigger.

    I understand that this is not the conventional position but money/debt doesn’t seem to matter as much as believed. They can make it come and go at will.

    Central banks around the world are buying, lending, selling to each other and even buying each others stockmarkets. This is no solution and it is totally not productive but it can and will keep things in stasis until something real comes along.

    The US wining wwII allowed us to dictate terms of massive growth and expansion to our great advantage. Who ever wins WWIII will get to dictate the terms of collapse/powerdown.

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