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Graham Perry
Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.


In this Issue – #507 – of Good Morning From London the focus is on Imperialism. There are two prominent views; first, Paul Kennedy CBE, a Professor of British History at Yale University and, second, Irwin Stetzer who writes a weekly column in the Sunday Times.

Kennedy has focused on UK foreign policy and the struggles between the competing Great Powers. He notes how declining economic power leads to reduced military and diplomatic weight.  In 2012, Professor Kennedy began teaching a course at Yale entitled “Military History of the West Since 1500”, elaborating on his presentation of military history as inextricably intertwined with economic power and technological progress.

His most well-known book is the Rise and Fall of the Great Powers in which he argues that economic strength and military power have been highly correlated in the rise and fall of nations since 1500 – contending that expanding strategic commitments lead to increases in military expenditures that eventually overburden a country’s economic base and cause its long-term decline.

He suggests that the United States and the old USSR have both experienced the same historical dynamics that previously affected Spain, the Netherlands, France, Great Britain, and Germany, and that the United States must come to grips with its own “imperial overstretch”. The failure of the USSR to maintain a policy of “Guns and Butter” – military and economic power – left the US as the sole superpower.

A separate view – more generous to Washington but contested in academic circles – is that the US thinks further ahead and in broader, more systemic terms than other states; and that the US uses its pre-eminent position to organize other large countries to promote the public good, reaping benefits along the way thanks to their direction of events. The US, it is argued, is a positive and constructive force.

Irwin Stetzer has a different gloss from Kennedy. Stetzer contends that “Trade is war by different means. No shots fired, no body bags with the winner selling more cars and T-shirts in its domestic and global markets. Traditional weapons are deployed – tariffs, subsidies, subtle and not-so-subtle barriers to trade such as prolonged inspections of imports of perishable goods”

Stetzer continues “the current trade war between communist China and capitalist America has a new dimension, national security. The loser will find itself with an economy dependent on its adversary, supply chains in peril, its currency weakened, and living in a world in which those that would do it harm set the rules governing the world order. The winner will have the best chips, the strongest currency, the most successful and secure economy.”

Stetzer concludes “All America’s wars have been opposed by often well-intentioned pacifists. This trade war is no different. The “pacifists” are advocates of free trade who hesitate to surrender their delusions under which they operated while China waged an unopposed attack on American industry”

Stetzer focuses on the decision to admit China to the WTO. He does not say so but this was a gamble by the West led by Clinton and Blair. Recalling the decline and fall of the USSR, they reasoned that embracing China and making its future dependent on trade with the West would fundamentally change China’s political structure and make it “safe” for the US/EU and the world. The Communist Party of China, they calculated, would be dethroned as a bulging middle class would bring about their economic advance and their growth of political power at the expense of China’s Communist Party. But China was alert to the challenge and managed to surge forward, create prosperity and strengthen – and not undermine – the role of the Party. The West’s calculation was very astray

Stetzer then turns his attention to China’s parallel decision to increase its military power. He mocks China’s embrace of its Century of Humiliation at the hands of the UK, France, Germany, the US and Japan between 1842 and 1949 and argues that China “has made itself a threat to the liberal world order, including most importantly the United States”.

Warming to his theme Stetzer continues “Xi Jinping knows he is in a war. He has ordered IBM, Cisco Systems and Dell equipment along with Microsoft and Oracle office tools to be replaced with stuff made by Chinese competitors. Microprocessors from Intel, and Advanced Micro Devices are to be replaced. Officials and executives of state-backed companies may not bring Teslas or iPhones to their offices”

Stetzer now turns his focus back to the US “Biden, too, knows he is in a war. He has retained Trump’s tariffs, ordered export controls to prevent tech reaching China, and is ladling out billions to subsidise US chip factories.”

Significantly, Stetzer continues “But he [Biden] is also pursuing policies that weaken his two most potent weapons: King Dollar, a reserve currency, and King Oil. The deficits resulting from his continuation of Trump’s profligacy are causing investors to wonder just how safe a haven the dollar provides. Biden’s pledge to destroy American oil in pursuit of a greener world and a contented left wing will cripple an industry that gives the US a valuable trade advantage. His refusal to permit the construction of facilities  to export liquidified natural gas harms allies suffering from Putin’s shut down of Russia’s pipelines.”

It is good to read Stetzer. He summarises the contradictions that are tugging at the coattails of US Imperialism. It brings into sharp focus the conflict highlighted by Professor Kennedy – expanding strategic commitments…increased military expenditure…ratcheting up the pressure on the economic base…long term decline.

Stetzer seeks solace in what he perceives to be insuperable problems for China – high unemployment, a middle class “immiserated” by Xi’s economic mismanagement and attacks on its successful business men by the regime and “a spate of bloggers”.

Western critics of China have often taken comfort in what they perceive to be China’s “insuperable problems”. No question, governing a country of 1.4bn people challenges all administrators and China is pursuing a path untrodden by any other nation. There is no blueprint for China as it is about to achieve the status of being the world’s largest economic power and with the self-confidence that comes from lifting a billion people out of poverty and fuelled by the ambition to turn a “moderately prosperous country” into a “prosperous country” by 2049 – one hundred years on from the creation of the Peoples Republic of China.

It is appropriate to bear in mind the one set of figures that raises questions about the military aspirations of China and the US. Whereas China has one overseas base in Djibouti which serves the needs of China’s large maritime fleet, the US has 800+ military bases. It was the Chair of the US Joint Chiefs of Staff who said in September 2017 that “China probably poses the greatest threat to our nation by about 2025”. When you have a score of US – 800 and China – 1, you may enquire which country poses the threat?

Interestingly Prof Kennedy compares the position of the US today with  the position of the UK in 1914.  The main reason for World War I, Kennedy contends, was London’s fear that a repeat of 1870, when Prussia and the German states smashed France, would mean that Germany, with a powerful army and navy, would control the English Channel and Northwest France. British policy-makers insisted that that would be a catastrophe for British security. The Great Powers refused to admit a resurgent Germany to the top table in 1914. Today the same mistake is being made.

The US does not fear invasion but its 800+ bases has meant that US military expenses have grown at the expense of reduced investment in economic growth which, says Kennedy, “leads to the downward spiral of slower growth, heavier taxes, deepening domestic splits over spending priorities, and weakening capacity to bear the burdens of defense”.

Kennedy asserts that “the task facing American statesmen over the next decades, therefore, is to recognize that broad trends are under way, and that there is a need to “manage” affairs so that the relative erosion of the United States’ position takes place slowly and smoothly, and is not accelerated by policies which bring merely short-term advantage but longer-term disadvantage.”

The new factor in international relations is the emergence of a close alliance between China and Russia which offers countries – developed and developing – an alternative to dependence on the US and the US-controlling financial system eg the IMF and the World Bank. The Ukrainian War has led China and Russia into a de facto working relationship that alters the world balance of power with significant implications for Washington, Brussels, Tokyo and Canberra.

If the relationship is durable – and the signs point in that direction – then Western leaders including Japan, S Korea, Australia and New Zealand – need a long term strategy that takes account of the new balance of power. In particular they will have to review the coercive measures they have applied to China and Russia and begin to see the wisdom of long-term co-operation that goes beyond just climate change and includes the United Nations and international financial and banking institutions. The more durable the China-Russia relationship becomes the more pressure it applies to the US and its supporters to become less confrontational and more co-operative with China and Russia. The balance of power is changing and with it the need for the US to review its status as the dominant international power. Imperialisms do come and Imperialisms do go. The question for the future is whether China will become the new Imperialism – a question to be addressed in following issues of GOOD MORNING FROM LONDON.


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