- (december 2013)
The Coming World Order and the China-Saudi-Pakistan Alliance.
First of all, a quick summary of the world from the viewpoint of China
(See China is a colony of the USA
for the extensive analysis):
China surrounded from all sides by US military bases, whereas there isn't a
single Chinese soldier stationed anywhere near the USA.
At the third plenum of the Communist Party the new president Xi Jinping
outlined an important change in strategy. He clearly stated that China has to
stop relying on cheap exports and start building its own domestic consumer
economy.
Meanwhile, it has been widely advertised that, thanks to new technologies such as fracking, the USA will soon become the world's main producer of oil and gas
(as it was until the 1960s).
These two facts will dramatically change the current balance of power.
Over the last 30 years there is been a de-facto alliance between China, the USA and the Middle East because each one depended on the other for its economic growth.
The USA depends on cheap Chinese goods and on Chinese purchases of US debt.
China depends on exports to the USA.
The USA and China depend on Middle Eastern oil (to be honest, more China than
the USA).
But a China that becomes less reliant on exports will also be a China that depends less on the USA.
And a USA that becomes the world's main producer of oil and gas will be a USA
that depends less on the Middle East.
It is not a coincidence that the foreign policy of both China and the USA seems to be changing, although slowly.
The USA has initiated negotiations with Iran that could bring Iran back
into the world of international business at the expense of the USA's traditional
allies in the Middle East.
This has greatly alarmed both Israel (less and less indispensable to the USA)
and Saudi Arabia (the country that benefited the most from the oil boom of the
1970s and from the various Iraqi and Iranian crises).
China, meanwhile, has created arguments will a lot of its neighbors.
First it quarreled with Vietnam over the Spratly Islands.
Then it complained that India's president visited the state of Arunachal
Pradesh, that China claims it is integral part of Tibet (and therefore of China).
And, finally, China unilaterally extended its air space to include the Senkaku/ Diaoyu islands that Japan claims for itself.
The USA is on a wildly different route, one of peace making and commercial treaties, but that route manages to greatly upset the balance of power in the Middle East. Saudi Arabia must be realizing that soon the USA will not need its oil anymore whereas China still will.
If,
despite the hysterical screams of the comic Israeli prime minister,
the USA ends up allowing Iran some nuclear capability,
the far less
cartoonish Saudi kingdom is likely to look for its own nuclear capabilities.
Saudi Arabia has a long history of friendly relations with Pakistan.
It was Saudi Arabia that funded the Islamists who fought the Soviet Union
in Afghanistan via Pakistan, and it was Saudi Arabia that funded the Taliban,
originating from Pakistan.
Saudi Arabia has built countless madrasas and mosques in Pakistan that have greatly changed the fabric of that society, making it the second most intolerant nation in the world (after Saudi Arabia itself).
Pakistan too is aware that something is changing.
The USA is tired of Afghanistan, and won't need Pakistan once it pulls out of
Afghanistan. The USA clearly prefers India, a multi-ethnic democracy, over
Pakistan, an Islamic republic. Pakistan is also a prime example of a failed
country, torn by all sorts of interests:
many in the USA probably see Pakistan as an insoluble problem.
Alas, Pakistan does have nuclear weapons, and, if the influence of the USA
wanes, it will be tempted to gift the technology to Saudi Arabia,
a much more reliable and durable friend.
Pakistan is also increasingly friendly to China.
China's growing influence in Pakistan is visible.
In february 2013 the China Overseas Port Holding Company was awarded the
contract to build the
new Gwadar port, which may become China's shortcut to the Middle East.
China will fund with $6.5 billion the construction of a major nuclear power
plant in Karachi (begun in november 2013).
So it will be natural for Saudi Arabia, Pakistan and China to forge some kind
of alliance: China gets the oil, Saudi Arabia the nuclear technology and
Pakistan gets the military assistance that the USA is progressively withdrawing.
In this scenario the European Union is simply an accessory to the USA.
Expansion of the EU almost inevitably results in de-facto expansion of NATO,
and, whichever way you spin the story, NATO was originally conceived to
contain the Soviet Union.
Russia is therefore paranoid about Europe's eastern expansion (it is pressuring
Ukraine and Armenia to cancel a treaty with the EU) but that might be an incredibly gross
mistake: Russia is losing to China in Central Asia and South Asia, and will
never be able to compete with China again.
It is China that is building highways and plants in Central Asia, not Russia.
It is China that is operating ports and mines in Central Asia, not Russia.
China is slowly but steadily kicking Russia out of Central Asia.
Instead of moving Russia towards Europe, Putin is trying to distance Russia
from Europe.
But that doesn't make sense: Europe is Russia's main customer.
You usually try to create stronger bonds with your best customers.
Putin saved Obama's face in Syria, but Obama's reapproachment with Iran may
make the whole Syrian issues irrelevant (Assad is still in power only because
Iran supports him). Russia cannot end the civil war in Syria but Iran can.
Then Russia would find itself empty handed just like in many previous crises
(remember when it defended Serbia only to see Serbia eventually apply for membership in the EU?)
Israel's clownish prime minister Benjamin Netanyahu went to visit Russia,
possibly in "retaliation" to Obama's secret negotiations with Iran,
but that would be an unlikely alliance.
Russia is most likely out of Europe, out of the Middle East and out of Asia.
In the foreseeable future Russia and China will witness the closer integration
of Europe, North America, the Far East, Australia and India, which
increasingly constitute
one huge economic, political and (last but not least) military union.
The only battlefield in which they can dominate is Central Asia, and they will
devour each other over it.
The chances of Russia and China in other regions of the world are slim no matter
what they do. The case of Moldova is significant. Moldova is a tiny and poor
nation squeezed between Romania and Ukraine. The
economic and political agreement with the European Union
(the "Eastern Partnership") that Ukraine and Armenia refused
to sign under pressure from Russia was signed by this much weaker nation
that greatly depends on Russian supplies.
Besides Ukraine, Armenia and Moldova, the EU's "Eastern Partnership" targets
Georgia (that has already signed), Azerbaijan
and even Belarus (the last dictatorship in the European continent).
It is easy to predict that all of them will eventually sign. Russia's appeal is
very low, no matter what it does. Analysts frequently fail to appreciate that
the "Western" block has been expanding more rapidly thanks to multi-national
agreements devised by the European Union than by the various wars and treaties
devised by the USA.
One can view a near future in which on one hand there is a large
economic-political-military block consisting of the USA, the European Union,
North America, the Far East, Australia and (probably) India; on the other hand
there is a new alliance among China, Saudi Arabia and Pakistan; and finally
there is a completely isolated Russia.
TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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- (november 2013)
The Chinese Dream.
Here is a symbol of China's high-tech but tightly coontrolled society:
free Internet terminals at all major airports but no Facebook, no Twitter, no BBC and... no scaruffi.com
The "American Dream" is about individual liberty and happiness.
The "Chinese dream" may have more to do with dignity than ideology.
In this the Chinese are more similar to the Arabs than to the Westerners.
The Chinese whom i met are ferociously racists against Muslims but the two
worlds have much in common: traditionally both political systems have been
based on the acceptance of a caliph/emperor sent by god/heaven as long as
the caliph/emperor takes good care of his people.
Unlike the Arabs, the Chinese don't need to stage the equivalent of an
Arab Spring because so far their government has delivered.
Millions of people have been lifted out of poverty, restoring them to a
dignified existence after the devastation of the Mao years,
and mainland China has become again a world power.
In retrospect, that's why Sun Yat-sen and Mao got the following they got: they were fighting to restore Chinese dignity after centuries of foreign dominationx
(first the Mongols, then then Manchus, plus the humiliations inflicted by Western and Japanese invasions from the Opium War to World War II).
You cannot visit a national monument without reading a plaque informing you in excruciating detail of how Westerners or Japanese humiliated the Chinese in
this or that episode.
The Chinese corretly feel that they suffered major injustice at the hands of
evil foreigners. Think of Britain forcing the Chinese to keep opium legal (the
equivalent of, say, Afghanistasn bombing the USA to make heroin legal and
widely available) or think of the atrocities committed by the Japanese in 1937.
The "Chinese Dream" is not (yet) an individual pursuit of hapiness but a
collective one. Those who only want the former can emigrate to the USA like
they have been doing since the 1850s. The others content themselves with the
news of China's newly found role in the world as the second superpower.
Far from simply seeking revenge, China has learned to selectively borrow from
other countries.
The signal that Confucious was no longer the only game in town came from Sun
himself and then even from Mao:
their socialist and communist ideologies came rom Europe, the first time in
Chinese history that China borrowed ideas from the West (it had borrowed
Buddhism from India but that was it).
Mao's brutal dictatorship (and sheer madness) probably delayed China's boom by
30 years (China could have developed at the same time as Japan) but it may have
helped eradicate old practices and beliefs, starting with the racial prejudice
that Chinese things are always better than foreign things.
Mao's main accomplishment was to wipe out 5000 years of Chinese civiliazation
(like no invading enemy army would have dreamed of doing).
The other unspoken influence (taboo in China) is Japan. The Japanese occupation of China was brutal but it perobably left the very idea of progress.
Japan was already industrialized and was becoming a world power, a lesson that
was not lost on many Chinese intellectuals.
Taiwan, a former Japanese possession, was able to capitalize on that influence from the beginning.
Compare today's mainland China with Japan and Taiwan, two countries in which traditions are still very strong. Taiwan still writes in the old chinese language and temples are still full every day.
Japan still has its own unique polytheistic practices and its unique ethical code. All of this is gone in mainland China.
Alas, Taiwan also shows how destructive Mao was. In his last decade of rule on mainland China, right-wing dictator Chiang Kai-shek enacted reforms that were leading to rapid economic deveopment; when Mao seized power in 1949, Chiang was left with only Taiwan, and only Taiwan continued to reap the benefits of those
policies while Mao scrapped them from the mainland.
Restoring the "Chinese dream" has turned out to be quite easy once China reopened to the world after the isolation of Mao's decades.
The achievement of that dream was saymbolized by the 2008 Olympics,
which, in the mind of the average Chinese person, weigh a lot more than the
1989 Tiananmen Square massacre of pro-democracy demonstrators.
Attitudes towards democracy are in fact, ambivalent at best. It is not terribly easy to convince ordinary Chinese people that the messy ineffective incompetent
bickering democracy of Washington is to be preferred to the ordered efficient,
competent, disciplined dictatorship of Beijing.
The Chinese leadership can point to a wealth of evidence that they are functioning
better than any other leadership, starting with economic growth rates, but not
only. For example, the "parliament" of China (the Congress of the Chinese
Communist Party, which is the only party in China) has a much higher approval
rating than the Congress of the USA.
The truth is that democracy became popular after the USA overran any other
country of the world to win World War II, become one of the two superpowers,
and eventually win the Cold War too and become the sole superpower.
People forget that in the 1930s distinguished intellectuals and economists
thought that fascism was a better system (not on moral ground) and that
throughout the 1980s many Westerners believed that the West should copy from
the Soviet Union rather than viceversa (after all, progress in the Soviet
Union had been dramatic, given where Russia was when the czars were deposed).
So the intrinsic value of democracy has never conclusively been proven.
What has prevailed is the system that people perceive as working best.
Until very recently there was no doubt that the USA had such a system,
and even today many in China itself think so. However, clearly China has
been performing better: China's economic boom has de facto demolished the
dogma that only Western-style capitalist democracies yield economic
progress. That notion has been shattered by the sheer numbers.
No wonder that, according to the 2013 Pew Poll, a stunning 85% of
Chinese approval of the direction of their country, compared with a meager
31% of US citizens who feel the same about their country.
China's system is totalitarian but it is a sort of "enlightened"
totalitarianism. For example, the leaders of the country are chosen via a
system of meritocracy that brings to the top only those technocrats
who are competent, highly educated and have a record of successes.
China's system would never produce presidents like George W Bush and
vicepresidential candidates like Sarah Palin.
The Chinese regime rigidly controls public opinion but at the same time
it seems to be more sensitive to it. Any mass complaint is taken much more
seriously in China than in democratic USA (where it is routinely spoken of
much more than it is actually tackled, unless an election is coming up).
The Chinese regime can also act much more rapidly and effectively than
a democratic regime, especially one like the USA where the two parties have
created a perpetual gridlock and one like India (the world's largest
democratic experiment) which is mired in endless corrupt bickering.
The Chinese regime can also count on much more competent politicians than
the USA, where gerrymandering is prevalent, a system that almost guarantees
the reelection of the incumbent and can be viewed as the exact opposite of
a meritocracy.
The decisions of the Chinese regime can hardly be influenced by outsiders,
whereas politics in the USA is heavily ifluenced by lobbyists, i.e. money can
buy democracy more easily than it can buy China's kind of dictatorship.
China's success has probably been influential in undermining democracy around
the world: Putin looks more and more like a new czar, and several Latin American
countries have chosen authoritian left-wing leaders (starting with Chavez).
China and Russia can easily point at the failure of democratic revolutions in
the Arab world: Libya fell into anarchy, Syria fell into civil war, and Egypt
is falling into another military dictatorship. Meanwhile, Thailand has to
confront anti-democracy demonstrators, a minority that wants to impose its
will on the majority implying that the majority is too stupid to be given
the responsibility of electing a government to run the country.
China could even point out that the most strategic decisions in the West were
not taken democratically: did France ever allow a referendum on its nuclear
program? did the eurozone countries ever allowed referendums on the euro? (The
two governments that did, in Denmark and Sweden, were defeated by the voters).
The entire process that led to a more and more integrated Europe was achieved
by carefully avoiding the mistake of letting people vote.
In the USA the president of the USA has quasi-dictatorial powers to carry out
military actions against other countries and even to assassinate its own citizens abroad.
For a long time the "American dream" has been a universal dream. The USA was
obviously the model to emulate. China's dream might have vast repercussions
on what the rest of the world dreams too.
The presidents of China may not be as famous as Clinton, Bush and Obama (and may not win a Nobel Prize even before inaugrated) but they do deliver.
TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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- (march 2013)
Did anybody noticed it?
The most astonishing thing about the recent meeting of Russia's and
China's leaders is that almost nobody noticed it.
China's president Xi Jinping visited Russia's president Vladimir Putin and
delivered a strong speech in favor of a multipolar world warning against
foreign interference in the domestic affairs of other nations, i.e. against
the USA's influence on world affairs.
The reason the world ignored them is that nobody believes that a multipolar
world is anywhere close to happen. Despite all the talk, the fact is that
world affairs move only when the USA and/or its allies in NATO move.
Everybody else just talks. And nobody listens. When the USA and NATO talk,
everybody listens.
If you live in the USA and have cable television, check how much Russia Today
talks about the actions of the USA and then check your favorite news channel
(BBC, CNN, Fox News, MSNBC, Al Jazeera, whatever) for how much coverage they
provide of Russian actions or Chinese actions.
China is, in fact, part of the reason that the USA matters so much and that
the world is not moving towards a multipolar situation: China is a rising power
and will continue to be so only insofar as the USA supports it. China is totally
dependent on the economy of the USA, and, in fact, it mostly does what the USA
tells it to do. See
China is a colony of the USA.
Russia, on the other hand, offers an honest alternative to the USA. Russia's
power does not depend on the economy of the USA. Russia is much closer system
than China's. However, the appeal that Russia has on the rest of the world, even
on the countries that it has helped like Serbia and the Ukraine, is very low.
Russia is viewed (and quite correctly so) as an anarchic nation in which
ruthless organized crime rules, a hierarchy of mafias with Putin's mafia at
the top. No country in the world feels safe doing business with Russia, and no
country in the world would want Russia to be its defense partner. China itself
seems reluctant to sign real cooperation treaties with Russia, the way an honest
hardworking businessman is reluctant to make a deal with a notorious crook,
no matter how lucrative the contract looks on paper.
If you think
there is a little trust in the USA, it's because you never focused on how little
trust there is in Russia. Russia has also made a point of antagonizing the USA
in all the popular revolutions of recent times, or, better, the USA has been
smart enough to make Russia always side with the most unpopular side. If you
think Iraqis hate the USA, it's because you don't realize how much more they
hate Russia (that supported Saddam Hussein). If you
think Afghans hate the USA, it's because you don't realize how much more they
hate Russia (that killed many more civilians in a much bloodier invasion).
If you think the Arab public opinion hates the USA, it's because you don't
realize how much more they hate Russia (that sided with Qaddafi and is now
siding with Assad). In many of these cases Russia has been forced to side with
unpopular dictators by apparently suicidal Western turnabouts (for example,
against Mubarak and Qaddafi) without realizing that the net outcome of those
turnabouts has been to completely remove Russia from the landscape.
Hence, it is not so much that Russia doesn't matter. It could matter a lot
(you do matter if you have thousands of nuclear weapons). The problem is that
most of the world is indifferent or hostile to Russia's opinions.
The world does care about China, and is eager to make deals with China, a much
more credible partner. But China is de facto obeying the USA, rarely challenging
the USA other than in generic propaganda. And, in fact, the Chinese leaders must
be painfully aware that China's credibility stems in large part precisely from
being a loyal de facto ally of the USA. If China ever truly antagonizes the USA,
every partner China has would withdraw its warm smiles and handshakes.
Russia and China combined have 1.5 billion people and cover 27 million square
kilometers. It is astonishing how little their meeting matters.
TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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- Articles about China before 2013
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