China and the U.S. Strategic Blockade... What to do?
Despite China's relative success in containing the health repercussions of the COVID-19 pandemic in the past two years, the medium-term economic impacts are gradually beginning to emerge, and with it a host of questions about the ability of the Chinese economy to continue its previously impressive growth and thus realize President Xi Jinping's expressed ambition for the country to advance to the top of the world within two decades at the latest.
Indicators of negative impact were gathered in several vital areas, such as electricity cuts due to the decline in the amount of coal used in power generation, the closure of thousands of small and medium-sized factories, and the rationing of electricity hours even for the capital Beijing, which is new for its residents who have been accustomed for the past twenty years to permanent electricity and a largely comfortable lifestyle. Not to mention the crisis of real estate giant Evergrande and its near bankruptcy due to the inability to repay its multi-billion dollar loans. The collapse of this bloated, yet fragile, giant, as a result of loans and ill-considered expansion, is expected to lead to the collapse of many medium and small real estate companies across the country, affect the Beijing Stock Exchange and other global stock exchanges, and most importantly trigger a major social crisis as the savings of small Chinese people who imagined having access to adequate housing are lost.
According to followers of the Chinese economy, there are major government interventions in the work of medium-sized private companies that have led the bulk of technological development in the past three decades, leading to a decline in the work of these companies, some of which prefer to close, and a decrease in the tendency of new investors to work in these vital sectors. Although the Chinese government spends tens of billions of dollars on high-tech industries, especially the chip industry, it relies on 70 percent of foreign imports in the manufacture of technological devices such as computers, batteries and cell phones, and has a negative impact on the Chinese arms industry and many vital sectors.
In the area of environment and pollution control, recent realities are ominous: droughts in many river basins, a drop in agricultural productivity of nearly 30 percent, and China becoming an importer of many basic agricultural products. The situation is exacerbated by the rising proportion of people over 65 years old and the declining proportion of people in the labor force.
In explaining these issues, Western, especially American, reports tend to find a direct link between these crises of a structural nature and three main reasons. The first is the ruling party's power, the absence of social incentives, lavish spending on government institutions and the provision of loans to them at high rates, regardless of the inefficiency of production methods and rates, compared to private institutions, which are restricted for various reasons, as happened with e-commerce giant Alibaba, after its founder spoke about the need to allow more room for innovation without government interference.
The second reason is the strategic vision attributed to President Xi Jinping, who changed the party's bylaws to give him the opportunity to remain president for life, which works to elevate China to a position of world leadership in the shortest possible time frame by expanding foreign markets, linking them all to the Chinese industry and economy, strengthening military capabilities by sea, land, air and space, turning Asia into a launching pad for Chinese global dominance, and controlling the sea lanes close to China, especially the South China Sea. This has raised concerns among many Asian countries, which in the past two decades have rushed to deal with China commercially.
Third, and most importantly, the US strategy of blockading China, instead of the strategy of containment, by dealing with it as a rival country that can be overcome with limited effort, and there is no fear of its technological or economic development or the expansion of its markets. This blockade strategy began with President Obama, expanded with President Trump, and is now being practiced by the Biden administration in a practical form that includes several axes, some of which have already been implemented and are being intensified, while others are being invented. Economic and trade sanctions are a key feature of this strategy with the aim of reducing the growing influence of many Chinese technology companies that have gained an international reputation in the past two decades, most notably Huawei, in addition to incentivizing Western and American companies to reduce their presence in China and move to other places. The same applies to the supply chains for various components and goods, where operations to form new chains away from China, centered on India, Australia, Brazil, Mexico, South Africa, and Egypt, have been underway for a year. The goal is to break the cycle of Chinese influence over production components, especially in the automotive, computer, chemical, pharmaceutical, chip, high-speed rail, and machinery industries.
The blockade strategy includes a direct military component, which expressed itself in weaving new alliances, especially in the Pacific region, such as the "OCOS" trilateral alliance that includes the United States, Australia and Britain, and activating the previous alliance known as "QUAD", which in turn includes the United States, India, Japan and Australia, as well as incentivizing many of the Asian countries surrounding and close to China, such as Vietnam, South Korea, Indonesia, Singapore and Burma, to form naval and land security links supported by the United States to besiege any Chinese military expansion by sea and land such as Vietnam, South Korea, Indonesia, Singapore, and Burma to form US-backed maritime and land military and security links to block any Chinese military expansion by sea or land, and in the same context to strengthen the military capabilities of both Taiwan and Japan, thus preventing any Chinese military adventure against Taiwan specifically.
The U.S. strategic blockade strategy is no secret; all U.S. institutions, including Asian affairs think tanks, talk about it openly and in great detail. It is also quite clear to China and everyone around it. Here, the Chinese reaction can be envisioned on two levels; either rushing to achieve the ambition to dominate the Asian neighborhood before the siege rings are completed, or modifying Chinese policy in a way that provides a major area of reassurance to the Asian neighborhood, preventing this neighborhood from engaging in the US siege strategy. Both levels of the expected Chinese reaction have major consequences and issues.
Rushing towards hegemonic ambitions in anticipation of the tightening of the international blockade would in practice lead to Western security crises and possibly military confrontations that would support the justification of the blockade for those who believe in it, and could evolve into an expanded Sino-Western confrontation. These are potential outcomes that do not incentivize thinking about this policy. Modifying Chinese policy and reassuring neighbors requires fundamental changes in the Chinese mindset at the top of the leadership establishment. Herein lies the real challenge to China's peaceful progress toward a core partnership in the management of the international system.
(Source: Asharq Al-Awsat)
