Mar 252017
 

By James Petras99GetSmart

1067306056

Introduction

From their dismal swamps, US academic and financial journal editorialists, the mass media and contemporary ‘Asia experts’, Western progressive and conservative politicians croak in unison about China’s environmental and impending collapse.

They have variably proclaimed (1) China’s economy is in decline; (2) the debt is overwhelming; a Chinese real estate bubble is ready to burst; (3) the country is rife with corruption and poisoned with pollution; and (4) Chinese workers are staging paralyzing strikes and protests amid growing repression – the result of exploitation and sharp class inequality. The financial frogs croak about China as an imminent military threat to the security of the US and its Asian partners. Other frogs leap for that fly in the sky – arguing that the Chinese now threatens the entire universe!

The ‘China doomsters’ with ‘logs in their own eyes’ have systematically distorted reality, fabricated whimsical tales and paint vision, which, in truth, reflect their own societies.

As each false claim is refuted, the frogs alter their tunes: When predictions of imminent collapse fail to materialize, they add a year or even a decade to their crystal ball. When their warnings of negative national social, economic and structural trends instead move in a positive direction, their nimble fingers re-calibrate the scope and depth of the crisis, citing anecdotal ‘revelations’ from some village or town or taxi driver conversation.

As long-predicted failures fail to materialize, the experts re-hash the data by questioning the reliability of China’s official statistics.

Worst of all, Western ‘Asia’ experts and scholars try ‘role reversal’: While US bases and ships increasingly encircle China, the Chinese become the aggressors and the bellicose US imperialists whine about their victim-hood.

Cutting through the swamp of these fabrications, this essay aims to outline an alternative and more objective account of China’s current socio-economic and political realty.

China: Fiction and Fact

We repeatedly read about China’s ‘cheap wage’ economy and the brutal exploitation of its slaving workers by billionaire oligarchs and corrupt political officials. In fact, the average wage in China’s manufacturing sector has tripled during this decade. China’s labor force receives wages which exceed those of Latin America countries, with one dubious exception. Chinese manufacturing wages now approach those of the downwardly mobile countries in the EU. Meanwhile, the neo-liberal regimes, under EU and US pressure, have halved wages in Greece, and significantly reduced incomes in Brazil, Mexico and Portugal. In China, workers wages now surpass Argentina, Colombia and Thailand. While not high by US-EU standards, China’s 2015 wages stood at $3.60 per hour – improving the living standards of 1.4 billion workers. During the time that China tripled its workers ‘wages, the wages of Indian workers stagnate at $0.70 per hour and South African wages fell from $4.30 to $3.60 per hour.

This spectacular increase in Chinese worker’s wages is largely attributed to skyrocketing productivity, resulting from steady improvements in worker health, education and technical training, as well as sustained organized worker pressure and class struggle. President Xi Jinping’s successful campaign for the removal and arrest of hundreds of thousands of corrupt and exploitative officials and factory bosses has boosted worker power. Chinese workers are closing the gap with the US minimum wage. At the current rate of growth, the gap, which had narrowed from one tenth to one half the US wage in ten years, will disappear in the near future.

China is no longer merely a low-wage, unskilled, labor intensive, assembly plant and export-oriented economy. Today twenty thousand technical schools graduate millions of skilled workers. High tech factories are incorporating robotics on a massive scale to replace unskilled workers. The service sector is increasing to meet the domestic consumer market. Faced with growing US political and military hostility, China has diversified its export market, turning from the US to Russia, the EU, Asia, Latin America and Africa.

Despite these impressive objective advances, the chorus of ‘crooked croakers’ continue to churn out annual predictions of China’s economic decline and decay. Their analyses are not altered by China’s 6.7% GNP growth in 2016; they jump on the 2017 forecast of ‘decline’ to 6.6% as proof of its looming collapse! Not be dissuaded by reality, the chorus of ‘Wall Street croakers’ wildly celebrate when the US announces a GNP increase from 1% to 1.5%!

While China has acknowledged its serious environmental problems, it is a leader in committing billions of dollars (2% of GNP) to reduce greenhouse gases – closing factories and mines. Their efforts far exceed those of the US and EU.

China, like the rest of Asia, as well as the US, needs to vastly increase investments in rebuilding its decaying or non-existent infrastructure. The Chinese government is alone among nations in keeping up with and even exceeding its growing transportation needs – spending $800 billion a year on high speed railroads, rail lines, seaports, airports subways and bridges.

While the US has rejected multi-national trade and investment treaties with eleven Pacific countries, China has promoted and financed global trade and investment treaties with more than fifty Asia-Pacific (minus Japan and the US), as well as African and European states.

China’s leadership under President Xi Jinping has launched an effective large-scale anti-corruption campaign leading to the arrest or ouster of over 200,000 business and public officials, including billionaires, and top politburo and Central Committee members. As a result of this national campaign, purchases of luxury items have significantly declined. The practice of using public funds for elaborate 12 course dinners and the ritual of gift giving and taking are on the wane.

Meanwhile, despite the political campaigns to ‘drain the swamp’ and successful populist referenda, nothing remotely resembling China’s anti-corruption campaign have taken root in the US and the UK despite daily reports of swindles and fraud involving the hundred leading investment banks in the Anglo-American world. China’s anti-corruption campaign may have succeeded in reducing inequalities. It clearly has earned the overwhelming support of the Chinese workers and farmers.

Journalists and academics, who like to parrot the Anglo-American and NATO Generals, warn that China’s military program poses a direct threat to the security of the US, Asia and indeed the rest of world.

Historical amnesia infects these most deep diving frogs. Forgotten is how the post WW2 US invaded and destroyed Korea and Indo-China (Vietnam, Laos and Cambodia) killing over nine million inhabitants, both civilian and defenders. The US invaded, colonized and neo-colonized the Philippines at the turn of the 20th century, killing up to one million inhabitants. It continues to build and expand its network of military bases encircling China, It recently moved powerful, nuclear armed THADD missiles to the North Korean border, capable of attacking Chinese and even Russian cities. The US is the world’s largest arms exporter, surpassing the collective production and sale of the next five leading merchants of death.

In contrast, China has not unilaterally attacked, invaded or occupied anyone in hundreds of years. It does not place nuclear missiles on the US coast or borders. In fact, it does not have a single overseas military base. Its own military bases, in the South China Sea, are established to protect its vital maritime routes from pirates and the increasingly provocative US naval armada. China’s military budget, scheduled to increase by 7% in 2017, is still less than one-fourth of the US budget.

For its part, the US promotes aggressive military alliances, points radar and satellite guided missiles at China, Iran and Russia, and threatens to obliterate North Korea. China’s military program has been and continues to be defensive. Its increase is based on its response to US provocation. China’s foreign imperial thrust is based on a global market strategy while Washington continues to pursue a militarist imperial strategy, designed to impose global domination by force.

Conclusion

The frogs of the Western intelligentsia have crocked loud and long. They strut and pose as the world’s leading fly catchers – but producing nothing credible in terms of objective analyses.

China has serious social, economic and structural problems, but they are systematically confronting them. The Chinese are committed to improving their society, economy and political system on their own terms. They seek to solve immensely challenging problems, while refusing to sacrifice their national sovereignty and the welfare of their people.

In confronting China as a world capitalist competitor, the US official policy is to surround China with military bases and threaten to disrupt its economy. As part of this strategy, Western media and so-called ‘experts’ magnify China’s problems and minimize their own.

Unlike China, the US is wallowing at less than 2% annual growth. Wages stagnate for decades; real wages and living standards decline. The costs of education and health care skyrocket, while the quality of these vital services decline dramatically. Costs are growing, unemployment is growing and worker suicide and mortality is growing. It is absolutely vital that the West acknowledge China’s impressive advances in order to learn, borrow and foster a similar pattern of positive growth and equity. Co-operation between China and the US is essential for promoting peace and justice in Asia.

Unfortunately, the previous US President Obama and the current President Trump have chosen the path of military confrontation and aggression. The two terms of Obama’s administration present a record of failing wars, financial crises, burgeoning prisons and declining domestic living standards. But for all their noise, these frogs, croaking in unison, will not change the real world.

James Petras is author of  The End of the Republic and the Delusion of EmpireExtractive Imperialism in the Americas: Capitalism’s New Frontier (with Henry Veltmeyer), and The Politics of Empire: The US, Israel and the Middle EastRead other articles by James, or visit James’s website.

Oct 192016
 

By James Petras99GetSmart

119023

During most of the past two decades Washington has aggressively launched military and economic wars against at least nine countries, either directly or through its military aid to regional allies and proxies. US air and ground troops have bombed or invaded Afghanistan, Iraq, Pakistan, Libya, Somalia, Syria, Yemen, and Lebanon.

More recently Washington has escalated its global economic war against major economic rivals as well as against weaker countries. The US no longer confines its aggressive impulses to peripheral economic countries in the Middle East, Latin America and Southern Asia: It has declared trade wars against world powers in Asia, Eastern and Central Europe and the Gulf states.

The targets of the US economic aggression include economic powerhouses like Russia, China, Germany, Iran and Saudi Arabia, as well as Syria, Yemen, Venezuela, Cuba, and the Donbas region of Ukraine.

There is an increasingly thinner distinction between military and economic warfare, as the US has frequently moved from one to the other, particularly when economic aggression has not resulted in ‘regime change’ – as in the case of the sanctions campaign against Iraq leading up to the devastating invasion and destruction.

In this essay, we propose to examine the strategies and tactics underlying Washington’s economic warfare, their successes and failures, and the political and economic consequences to target nations and to world stability.

Washington’s Economic Warfare and Global Power

The US has used different tactical weapons as it pursues its economic campaigns against targeted adversaries and even against its long-time allies.

Two supposed allies, Germany and Saudi Arabia, have been attacked by the Obama Administration and US Congress via ‘legal’ manipulations aimed at their financial systems and overseas holdings. This level of aggression against sovereign powers is remarkable and reckless. In 2016 the US Justice Department slapped a $14 billion dollar penalty on Germany’s leading international bank, Deutsche Bank, throwing the German stock market into chaos, driving the bank’s shares down 40% and destabilizing Germany’s financial system. This unprecedented attack on an ally’s major bank was in direct retaliation for Germany’s support of the European Commission’s $13 billion tax levy against the US-tax evading Apple Corporation for its notorious financial shenanigans in Ireland. German political and business leaders immediately dismissed Washington’s legalistic rhetoric for what it was: the Obama Administration’s retaliation in order to protect America’s tax evading and money laundering multinationals.

The chairman of the German parliament’s economic committee stated that the gross US attempt to extort Deutsche Bank had all the elements of an economic war. He noted that Washington had a “long tradition of using every available opportunity to wage what amounted to a trade war if it benefits their own economy” and the “extortionate damages claim” against Deutsche Bank were a punitive example. US economic sanctions against some of Germany’s major trade partners, like Russia, China and Iran, constitute another tactic to undermine Germany’s huge export economy. Ironically, Germany is still considered “a valued ally” when it comes to the US wars against Syria, Afghanistan and Iraq, which have driven millions of refugees to Europe creating havoc with Germany’s political, economic and social system and threatening to overthrow the government of ‘ally’ Angela Merkel.

The US Congress launched an economic-judicial war against its closest ally in the Gulf region when it approved legislation granting US victims of Islamist terrorism, especially related to the attacks on September 11, 2001 the right to sue the government of Saudi Arabia and seize its overseas assets. This included the Kingdom’s immense ‘sovereign funds’ and constitutes an arbitrary and blatant violation of Saudi sovereignty. This opens the Pandora’s Box of economic warfare by allowing victims to sue any government for sponsoring terrorism, including the United States! Saudi leaders immediately reacted by threatening to withdraw billions of dollars of assets in US Treasuries and investments.

The US economic sanctions against Russia are designed to strengthen its stranglehold on the economies of Europe which rely on trade with Russia. These have especially weakened German and Polish trade relations with Russia, a major market for German industrial exports and Polish agriculture products. Originally, the US-imposed economic sanctions against Moscow were supposed to harm Russian consumers, provoke political unrest and lead to ‘regime change’. In reality, the unrest it provoked has been mainly among European exporters, whose contracts with Russia were shredded and billions of Euros were lost. Furthermore, the political and diplomatic climate between Europe and Russia has deteriorated while Washington has ‘pivoted’ toward a more militaristic approach.

Results in Asia have been even more questionable: Washington’s economic campaign against China has moved awkwardly in two directions: Prejudicial trade deals with Asian-Pacific countries and a growing US military encirclement of China’s maritime trade routes.

The Obama regime dispatched Treasury Secretary Jack Lew to promote the Trans- Pacific Partnership (TPP) among a dozen regional governments, which would blatantly exclude China, Asia’s largest economic power. In a slap to the outgoing Obama Administration, the US Congress rejected his showpiece economic weapon against China, the TPP.

Meanwhile, Obama ‘encouraged’ his erstwhile ‘allies’ in the Philippines and Vietnam to sue China for maritime violations over the disputed ‘Spratly Islands’ before the Permanent Court of Arbitration. Japan and Australia signed military pacts and base agreements with the Pentagon aimed at disrupting China’s trade routes. Obama’s so-called ‘Pivot to Asia’ is a transparent campaign to block China from its markets and trading partners in Southeast Asia and Pacific countries of Latin American. Washington’s flagrant economic warfare resulted in slapping harsh import tariffs on Chinese industrial exports, especially steel and tires. The US also sent a ‘beefed up’ air and sea armada for ‘joint exercises’ along China’s regional trade routes and its access to critical Persian Gulf oil, setting off a ‘war of tension’.

In response to Washington’s ham-fisted aggression, the Chinese government deftly rolled out the Asian Infrastructure Investment Bank (AIIB) with over fifty countries eagerly signing on for lucrative trade and investment deals with Beijing. The AIIB’s startling success does not bode well for Obama’s ‘Pivot to Pacific Hegemony’.

The so-called US-EU-Iran accord did not end Washington’s trade war against Tehran. Despite Iran’s agreement to dismantle its peaceful uranium enrichment and nuclear research programs, Washington has blocked investors and tried to undermine trade relations, while still holding billions of dollars of Iranian state assets, frozen since the overthrow of the Shah in 1979. Nevertheless, a German trade mission signed on a three billion trade agreement with Iran in early October 2016 and called on the US to fulfill its side of the agreement with Tehran – so far to no avail.

The US stands alone in sending its nuclear naval armada to the Persian Gulf and threatens commercial relations. Even the Kingdom of Saudi Arabia, the longstanding enemy of the Iranian Islamic Republic, has agreed to a cooperative oil production arrangement at a recent OPEC meeting.

Washington’s declaration of economic warfare against two of its most strategic powerful allies, Germany and Saudi Arabia and three rising competitor world powers, has eroded US economic competitiveness, undermined its access to lucrative markets and increased its reliance on aggressive military strategies over diplomacy.

What is striking and perplexing about Washington’s style of economic warfare is how costly this has been for the US economy and for US allies, with so little concrete benefit.

US oil companies have lost billions in joint exploitation deals with Russia because of Obama’s sanctions. US bankers, agro-exporters, high-tech companies are missing out on lucrative sales just to ‘punish’ Russia over the incredibly corrupt and bankrupt US coup regime in Ukraine.

US multi-national corporations, especially those involved in Pacific Coast transport and shipyards, Silicon Valley high tech industry and Washington State’s agro-export producers are threatened by the US trade agreements that exclude China.

Iran’s billion dollar market is looking for everything from commercial airplanes to mining machinery. Huge trade deals have has been lost to US companies because Obama continues to impose de facto sanctions. Meanwhile, European and Asian competitors are signing contracts.

Despite Washington’s dependence on German technical knowhow and Saudi petro-dollar investments as key to its global ambitions, Obama’s irrational policies continue to undermine US trade.

Washington has engaged in economic warfare against ‘lesser economic powers’ that nevertheless play significant political roles in their regions. The US retains the economic boycott of Cuba; it wages economic aggression against Venezuela and imposes economic sanctions against Syria, Yemen and the Donbas region in eastern Ukraine. While these countries are not costly in terms of economic loss to US business interests, they exercise significant political and ideological influence in their regions, which undermine US ambitions.

Conclusion

Washington’s resort to economic warfare complements its military fueled empire building.

But economic and military warfare are losing propositions. While the US may extract a few billion dollars from Deutsch Bank, it will have lost much more in long-term, large-scale relations with German industrialists, politicians and financiers. This is critical because Germany plays the key role in shaping economic policy in the European Union. The practice of US multi-national corporations seeking off-shore tax havens in the EU may come to a grinding halt when the European Commission finishes its current investigations. The Germans may not be too sympathetic to their American competitors.

Obama’s Trans-Pacific Partnership (TPP) has not only collapsed, it has compelled China to open new avenues for trade and cooperation with Asian-Pacific nations – exactly the opposite of its original goal of isolating Beijing. China’s Asia Infrastructure and Investment Bank (AIIB) has attracted 4 time more participants than Washington’s TPP and massive infrastructure projects are being financed to further bind ASEAN countries to China. China’s economic growth at 6.7% more than three times that of the US at 2%. Worse, for the Obama Administration, Washington has alienated its historically most reliable allies, as China, deepens economic ties and cooperation agreements with Thailand, Philippines, Pakistan, Cambodia and Laos.

Iran, despite US sanctions, is gaining markets and trade with Germany, Russia, China and the EU.

The Saudi-US conflict has yet to play-out, but any escalation of law suits against the kingdom will result in the flight of hundreds of billions of investment dollars from the US.

In effect, Obama’s campaign of economic warfare may lead to the infinitely more costly military warfare and the massive loss of jobs and profits for the US economy. Washington is increasingly isolated. The only allies supporting its campaign of economic sanctions are second and third rate powers, like Poland and current corrupt parasites in Ukraine. As long as the Poles and Ukrainians can ‘mooch’ off of the IMF and grab EU and US ‘loans’, they will cheerlead Obama’s charge against Russia. Israel, as long as it can gobble up an additional $38 billion dollars in ‘aid’ from Washington, remains the biggest advocate for war against Iran.

Washington spends billions of US tax-payer dollars on its military bases in Japan, Philippines and Australia to maintain its hegemony in the Asia-Pacific region. Its allies, though, are salivating at the prospect for greater trade and infrastructure investment deals with China.

Economic warfare doesn’t work for the Washington because the US economy cannot compete, especially when it attacks its own allies and traditional partners. Its regional allies are keen to join the ‘forbidden’ markets and share in major investment projects funded by China. Asian leaders increasingly view Washington, with its ‘pivot to militarism’ as politically unreliable, unstable and dangerous. After the Philippine government economic mission to China, expect more to ‘jump ship’.

Economic warfare against declared adversaries can only succeed if the US is committed to free trade with its allies, ends punitive sanctions and stops pushing for exclusive trade treaties that undermine its allies’ economies. Furthermore, Washington should stop catering to the whims of special domestic interests. Absent these changes, its losing campaign of economic warfare can only turn into military warfare – a prospect devastating to the US economy and to world peace.

James Petras is author of  The End of the Republic and the Delusion of EmpireExtractive Imperialism in the Americas: Capitalism’s New Frontier (with Henry Veltmeyer), and The Politics of Empire: The US, Israel and the Middle EastRead other articles by James, or visit James’s website.