US-China trade war: Could Capitalist China bears the end of World Capitalism?

By Sarah Safa


A new phase of reconciliation could finally begin to define the US relations with China after nearly two years of commercial and economic tensions. Those tensions have been shaking the balance and stability of the international system, what brought on the surface divergences for the first time between the US and its historical allies.
The US-Chinese bilateral relationship could be described as one of the most critical and complex relation, this is due to the largest interdependence that characterizes the nature of the economic model between the two major powers. Needless to say, but since decades, The US along with the European countries and the UK use China as the basement of all but not only their manufacturing industries. The biggest corporates all moved to China because of the low costs and cheap labor, since more than two decades now.
Beginning of 2018, tensions started to grow, under the Trump administration. Years after that China have acquired a high tech that enabled it to compete with the world major powers on the international stage, the US administration announced tariffs on Chinese imports, worth at least $50 billion. According to Trump, China had to pay first for the trade deficit between the two countries, then it has to be punished for its theft of U.S technology and intellectual property.
In such a context, tensions increased even much more, leading to a major diplomatic crises between US and Canada from one side and China from the other after the arrest of Meng Wanzhou, the CEO of Chinese tech giant Huawei. And Huawei was blacklisted from the American market.
In the meantime, China has always retaliated by waging a currency manipulation war and cutting off on some main imports from US and Canada, and definitely through developing relations with the US allies from one side as well as with their enemies from the other.
Activating its soft diplomacy through the increasing number of diplomatic visits of President Xi Jinping, who shows a clear determination and dedicated efforts for his belt and road initiative in which around 100 countries are involved. Another Chinese strategy lies in the creation of a parallel exchange system through a number of accords with countries to ban the use of the US dollars in their trade.
Tensions didn’t remain economic, by 2018, in the next year; it was transformed into a more direct involvement, not through military confrontations, but through chaos that erupted in almost every continent, and in the many countries where China has gained influence over years of strategic expansion. This was the case for example, first inside China itself, where protests erupted in Hong Kong for over months now, and we started to witness a remarkable involvement of the US in the internal affairs of China. The US picked the card that couldn’t keep China going with its containment policy. Threatening the Chinese national security will be the most efficient strategy that China fears and that might bring about large compromises. For this, the US passed legislation on Hong Kong that aimed at backing the protesters and threatening China with possible sanctions on human rights. What could bring about more autonomy to the former British colony, a threat to Chinese unity and to its constitutional principle of “one country two systems”. In the same time, Washington proceeded as it usually does to sell weapons to Taiwan, an act of provocation to show China that Taipei is an independent state backed by the US who believe that without Taiwan it would be not possible to contain China by limiting its movement in the Western Pacific area.
And finally, the US started to provoke China again by the pretext of human rights abuses by bringing to the surface, the very critical issue, concerning the treatment of the Muslim Uighurs and criticism over their mass detention and violent treatment.
On the other part of the globe, Africa was not spared, now without getting into much detail, the continent is facing political turmoil in a large number of countries, which are being subject of foreign ambitions of the same superpowers again.
For instance, by 2017 Chinese investment in Africa reached up to 56 billion dollars.
Now, perhaps that the most huge indirect confrontation was to be in the American continent, where Latin America is facing something similar to the “Arab Spring” but which is involving a power struggle between right and left wing parties amid economic crises across the continent. And in that struggle, The US and China are being in somehow a direct confrontation against each other. China turned itself to be the largest Latin America’s creditor and its growing influence at the “backyard” of the US is considered to be worrisome. Those tensions have had clear repercussions and resulted in major changes in Latin America, regime changes that sometimes served the US interests but other times failed. This was the case for example in Venezuela where the US failed to bring about a regime change by ousting Nicolas Maduro. Another vital country for China, Argentina has been facing a severe monetary crisis since 2018 characterized by a devaluation of the Argentine Peso. Lately protests erupted to demonstrate against the economic situation, inflation, unemployment, and rising food prices after times of instability and a pull and push game between the center right represented by Mauricio Macri and its opponent Fernandez who assumed office two weeks ago.
Demonstrations in Latin America were not only motivated by the catastrophic economic situation but also tagged the US involvement and interference in regime changes, what is considered unacceptable by the people in a region that had to historically face a very hard fate from what was to be the US involvement during the years following the forced democratization of Latin America. And yet, the leftist Bolivian leader, Evo Morales had to flee to Mexico as his life was at risk, according to the BBC1, days after his reelection. Morales declared that this was a fomented coup because he was democratically elected with a majority of vote.
With similar scenarios in the Middle East, Syria’s war doesn't seem to have come to an end yet with a regime who is still struggling to fight terrorist mercenaries in its north and northern eastern borders and with the latest developments in Lebanon which is currently facing an economic genocide waged by the corrupted policies and the rule of the banking sector who is confiscating people’s accounts and exerting very strict policies, devaluation of the Lebanese pound without any hope for a close institutional or structural change.
In such a context, countries especially in the EU have been wondering or trying to assess the consequences and possibilities of whether it’s time to turn east. Between the US and China... it’s not an easy decision to be made especially for countries with great economic interdependence with the US. But perhaps that the new phase of the first agreement reached between the two major powers, would bring about some compromises and might help to decrease tensions. With large compromises from the Chinese part, the US will have to partially ditch its sanction policy and accept more a share of power with the new emerging superpowers, since this time, wars waged are a matter of survival for each nation, since the capitalist system has come to an end, and is no more vital for any system of governance, with economies failing, markets reaching their limits, wealth concentration with the few and more than 90% of people living on a “survival mode” or getting impoverished, we have already entered in the post capitalist era in which capitalists need to destroy capitalism and turn into another economic system. This explains why today the situation was reversed and the United States is favoring a protectionist model after realizing that it’s time to destroy Capitalism while China is insisting about promoting Capitalism through its calls for multilateralism when accusing the US of taking protectionist stance on foreign investment… what the US used to accuse China for, for almost decades.
So will the Chinese model of capitalism will survive in the context of a general economic collapse?



Sara Safa is a journalist and researcher in international relations. Sent from Beijing, the 24th of December 2019






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