VIEW: US decline is China’s opportunity — I —S P Seth - Monday, July 26, 2010

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While the US has been busy in Afghanistan and Iraq, and the war against terrorism in general, China has steadily built up its image as an emerging superpower

While terrorism continues to hog the limelight as an international issue, there is much more happening in the world that is not receiving due attention. One is the progressive decline of the US’s power in global affairs. Indeed, there is a correlation between the two. The 9/11 tragedy in 2001 was also the beginning of the US war on terrorism, leading to its invasion of Afghanistan.

As if Afghanistan was not enough, the US opened another front in Iraq in 2003 to rid it of Saddam Hussein, and foster democracy in that country. Indeed, the ‘shock and awe’ military campaign announced the practical workings of President Bush’s pre-emptive war strategy, with Iraq as a demonstration model of what might be in store for other regimes in the Middle East (like Iran, Syria and others) if they stood in the way of the US ‘vision’ of the world. But, as we know, things did not work out quite like that and the US is seeking to extricate itself from these disasters.

The new Bush administration, at the turn of the new century, was keen to remake much of the world to suit its strategic priorities. There was a sense that the previous Clinton administration had squandered the US power and opportunities to remake the world. The leading figures of the Bush administration already had a blueprint ready to make up for the lost time under Clinton. This was an administration in a hurry and convinced that the US should behave and act like the sovereign of the world. Because, in the ultimate analysis, what was good for the US was good for the world.

The 9/11 tragedy, horrible as it was, simply spurred the new Bush administration to fix the world. Their invasion of Afghanistan, against the backdrop of 9/11 and the Taliban and al Qaeda link, seemed understandable to many countries. And the follow up in Iraq was an opportunity to solve the US’s Middle Eastern headaches by making an example of Iraq.

But its long involvement in these two wars, particularly in Afghanistan, with no satisfactory conclusion in sight, has damaged its global image as well as the reality of its power. It has overstretched its resources, both militarily and economically. That a superpower, with all its military muscle, has failed to produce a successful outcome against the Taliban insurgents in Afghanistan is an invitation to all the ragtag irregular militias anywhere in the world to pinprick the US and its allies.

The Somali insurgents of al-Shabaab are an example in point. They recently struck in Uganda, killing 75 people watching a World Cup Soccer match. Al-Shabaab sees Uganda as a US proxy in Somalia. And by killing Ugandans they were, in a way, challenging the US power. The US, at times, appears like a giant groaning under its own weight and unable to turn around to reposition itself to its changing situation.

At the economic level, the war has seriously drained the US treasury. The cost of these two wars varies from $ 1 trillion to $ 3 trillion. The latter estimate tends to include all the societal, medical and related expenses resulting from the war operations.

Aside from the two wars, the Bush administration’s free market fundamentalism has also contributed to the US decline. For instance, it has brought the US economy to its lowest point since the 1930s’ depression and infected most western economies that bought into sub-prime US housing loan packages of dubious value. The merry-go-round of almost limitless cheap credit seemed to have created the illusion of a new economy, where all the assets (secured or unsecured) seemed to have only an upward trajectory.

And when the bubble burst, as it was bound to at some point, the American economy (and other western economies) found themselves without any shock absorbers. With no rational solutions in sight, they all took recourse to huge borrowings to stimulate their downbeat economies to prevent a precipitous rise in unemployment, to revive failing and failed banks and so on. By socialising private losses of banks, financial institutions and insurance companies, the crisis is now assuming the form of sovereign debts. Greece is the leading example of this, with others to follow.

The US is struggling with all these economic issues, while still mired in Afghanistan and, in a limited way, in Iraq. How this will all end is anybody’s guess. But it certainly has created an image of a US that is struggling to find its feet, while still acting as the global sheriff.

While the US has been busy in Afghanistan and Iraq, and the war against terrorism in general, China has steadily built up its image as an emerging superpower. In a sense, terrorism created a shared concern between the two countries with China eager to brand the Uighur separatists in Xinjiang as terrorists. It won an important concession from the US on this by labelling the East Turkestan Islamic Movement as a terrorist organisation.

Uighur separatism, alongside Tibet, was a major issue of human rights violations that the US had often raised with China to its discomfiture, and as an exercise, Beijing believed, in encouraging separatism in China. After the US declared war on terrorism, it softened on the human rights question in China as well as on trade and political issues.

The trade between the two countries expanded, and the general tone of exchanges between them was marked by cordiality. China appeared to have gained a certain respectability, buttressed further by its rapid rate of economic growth of about 10 percent annually. China was becoming the factory of the world, with its exports of manufactured goods rising and creating sizeable trade surpluses in its favour. For instance, China’s trade surplus with the US is reportedly at about $ 200 billion a year, and another $ 100 billion with the rest of the world. It has amassed around $ 2.45 trillion of foreign currency reserves and rising.

(To be continued)

The writer is a senior journalist and academic based in Sydney, Australia

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