[Photo: Shanghai Skyline (Adi Constantin, 2016)]

Ramzy Baroud, PhD

China is a ancient civilization and it didn’t thrive for this long by being impetuous. China plans long range and for many ends. The U.S. barely plans and those plans seem to focus around greed and power. For decades, China has been buying land around the world to ensure food and resources for its people. Much as Japan spent decades buying up unmilled timber from the U.S., and taking them home to sink into the mud. Why? they recognized that such timbers would not come again unlike Americans who have used it and largely trashed it into landfills.

China’s investments in Africa are a case in point when looking at planning. A picture is worth a thousand words.

As we can see, in just the two areas -oil and minerals – China has much of Africa covered. In fact, China has replaced the United States as the largest economy on the planet. Further, coming out of the COVID-19 global shutdowns, the U.S. economy is expected to grow 3.1% and China 8.6% according to the IMF World Economic Outlook. Currently, China’s growth rate is over 18%.

China is also the second leading holder of U.S. government debt (over $1.1 trillion), This is problematic for both countries, but I think that China is more willing to take the loss than the U.S. is able to absorb China calling in that debt.

In short, it would be better to be smarter in how we deal with China. It is not some lesser country, and its infrastructure is being rebuilt much faster than our own. It would also show wisdom to take a much longer (and reality-based) view of our planning and implementation moving forward. 

Ramzy Baroud, PhD

Why does the US advocate a free market while doing its utmost to stifle it? The current US-China economic war is a perfect example of this perplexing question.

The legacy of Milton Friedman, the founder of America’s modern political economy, was a representation of this very dichotomy: the use, misuse and manipulation of the concept of the free market.

Through the Chicago School of Economics, whose disciples have proved most consequential in the formation of the American approach to foreign policy, especially in South America, Milton constantly championed the virtues of the free market, emphasizing a supposed link between freedom and capitalism and insisting that governments should not micromanage markets.

But theory and practice are two different notions that hardly meet.

The ‘Chicago Boys’ – South American economists who were mostly educated under Friedman himself – were dispatched in the 1970s and 80s to advise some of the continent’s most notorious dictatorships on how to manage their economies. They selectively advocated free-market economics that seemed to only serve the interests of the US and, to a lesser degree, the ruling classes of various South American nations. The bloodbath that ensued in much of the continent during those years can still be felt to this day, from Chile to Argentina and elsewhere.

Friedman died in 2006, after receiving accolades from his own government, in addition to the British government during the reign of Margaret Thatcher. However, his supposed wisdom continues to shape the mindset of mainstream US economists to this day, thus allowing for the unresolved dichotomy to persist: how can the US government ‘stay out’ of the free market while, simultaneously, intervening to control this very free market whenever the outcomes do not suit its interests? A perfect case in point is the ongoing US economic war on China.

Contrary to the common perception, this war was not initiated by the Trump Administration when the US President slapped a series of tariffs on Chinese exports to the US, starting in June 2018. Indeed, it has existed for much longer. Even the supposedly more amiable Barack Obama Administration was engaged in this war. We could argue that Obama’s Pivot to Asia in 2012 was a renewed war declaration.

When the new Joe Biden Administration declared a major ‘reset’ in its foreign policy, Biden did not see the need to engage with China through friendly diplomatic channels. The hostilities continued between both countries simply because this ‘conflict’ has been the status quo ante for decades.

Last April, a bipartisan push at the US Congress raised the heat on Beijing by linking the latter’s human rights record with its economic practices, proposing to funnel billions of dollars into the US economy to, essentially, micromanage the ‘free market’ in favor of the US and to challenge China’s ascendancy.

On May 25, the Chairman of the US House of Representatives Foreign Affairs Committee, Gregory Meeks, introduced the 470-page Bill, entitled, “Ensuring American Global Leadership and Engagement Act.” This EAGLE Act “addresses a range of issues, including increased investment to promote U.S. manufacturing, trade, work with allies and partners, re-engagement in international organizations and recognition of the treatment of China’s Uyghur Muslim minority as genocide,” Reuters reported.

The Bill advanced after a Senate vote two days later, and is expected, once finalized and signed into law, to serve as the legal and political foundation of Biden’s economic war on China. Like previous administrations, Biden’s is motivated by the Chicago Boys’ mentality, i.e. free market that suits the interests of the US and economic war when this ‘free market’ deviates from its ultimate goal.

One of the most baffling aspects of the US-Chinese economic war is that both countries are similar in terms of economic ambitions. In some ways, the Chinese copied various aspects of the American economic model of yesteryears. China is a capitalist country though it is managed by a ‘Communist Party’. The Party’s intervention in the economy, though it uses unique ideological justification and political discourse, is similar to the US government’s management of the US economy, especially during times of crisis, for example, the 2008 recession.

This ‘conflict’ is hardly motivated by an ideology or human rights violations, but by the fact that China’s economy continues to soar, thus increasing its share of the global economic largesse. With an 18.3% growth in the first quarter of 2021 – the biggest jump in GDP since 1992 – the Chinese momentum is eclipsing the performance of the US economy and its European allies. With economic power, political influence follows, with China now hoping to rearrange global alliances, not just in Asia, Africa and South America, but also in Europe.

According to many mainstream analysts, such as Stuart Anderson, writing in Forbes in June 2020, Trump’s economic war on China has failed. That failure is the direct result of, as Panos Mourdoukoutas concludes, also in Forbes, “the lack of clear direction of what the American side wants from China.” This lack of clarity continues to “give Beijing an upper hand.”

The ill-defined US objectives in China continue to also characterize the new Administration. Even the massively expensive Congressional Bill, once it becomes law, will not be able to answer the simple question: what is the US endgame in China?

Ramzy Baroud, Ph.D. has been writing about the Middle East for over 20 years. He is an internationally-syndicated columnist, a media consultant, and author of several books and the founder of PalestineChronicle.com. His books include ‘Searching Jenin’, ‘The Second Palestinian Intifada’ and his latest ‘My Father Was a Freedom Fighter: Gaza’s Untold Story’. His forthcoming book is ‘The Last Earth: A Palestinian Story’ (Pluto Press, London). He earned a Ph.D. in Palestine Studies from the University of Exeter and is a Non-Resident Scholar at Orfalea Center for Global and International Studies, UCSB. Follow him on his website www.ramzybaroud.net.