Simmering superpower tensions were on display this week, casting doubt on the notion that Washington and Beijing are keen to dial down dangerous rhetoric and generally reduce the temperature amid a tense tug of war for global supremacy.
US lawmakers are again toying with the idea of a technical sovereign default for the purposes of domestic political grandstanding, an absurd (if familiar) state of affairs the Chinese previously lamented as “dangerously irresponsible.” With D.C. brinksmanship back in focus, China’s embassy in Zambia lampooned Janet Yellen (by name) for America’s debt ceiling crisis, which is unequivocally not her fault.
“The best prospect [for dealing with] the debt issues outside the US would be the US Treasury Department solving the US’s own domestic debt problem,” the embassy chided, in a barbed retort to Yellen who, on Monday, called China a “barrier” to solving Zambia’s debt crunch. The country is in default, and the Chinese hold a third of the $17 billion in external debt that needs restructuring.
China’s expansive foray into emerging- and frontier-market lending has caused considerable consternation among Western nations for a laundry list of reasons, some well-founded others less so. Yellen, who this month met with Chinese Vice Premier Liu He in Switzerland, has repeatedly suggested China is obstructing Zambia’s resolution process.
The whole episode is seen as a litmus test for the so-called “Common Framework,” wherein Western creditors get together with the Chinese and argue about the fate of debtor nations. It’s supposed to be expeditious, but so far it’s anything but. That opens the door to finger-pointing.
The Chinese embassy in Lusaka openly mocked Yellen after her “barrier” remark, suggesting she was in a unique position to facilitate the resolution of a serious debt problem “given how well she knows about [the] facts [and] her professional capacities.” (Other interpretations were possible. The Chinese embassy’s English wasn’t perfect, and the statement read like a long run-on sentence. But there was no mistaking the sarcastic derision.)
In addition to being a large creditor to the developing world, China is also a large creditor to the US which, if you’re unfamiliar with the country, was a highly-developed democracy that now flirts shamelessly with authoritarianism and autocracy on good days and backslides into anarchy during bad weeks.
The data on China’s Treasury holdings isn’t complete given the role of custody accounts, but the trend is certainly lower. At $870 billion, the total pile attributed to China by the Treasury department is down by a third over the past decade.
Meanwhile, the Biden administration reportedly pressed Xi Jinping on alleged support provided by Chinese state-owned enterprises to the Kremlin’s war machine.
According to sources who spoke to Bloomberg, the support “consists of non-lethal military and economic assistance” and probably doesn’t violate the letter of any sanctions.
But such assistance, if it exists, would surely violate the spirit of the sanctions, and although no evidence was provided to the press, sources said the US government believes some Chinese SOEs are “knowingly assisting Russia in its war effort.”
Although Xi has been careful to avoid the appearance of openly backing Russia’s “special military operation,” the consensus among geopolitical observers is that Beijing views Ukraine as a kind of lab experiment — a way to determine what kind of sanctions China might face if Xi decides to seize Taiwan, and more importantly, a way to gauge the West’s willingness to provide military support to an ally facing annexation by an authoritarian government.
Late last month, the Kremlin giddily played up a video call between Vladimir Putin and Xi. “We share the same views on the causes, course and logic of the ongoing transformation of the global geopolitical landscape in the face of unprecedented pressure and provocations from the West,” Putin told his ally-turned benefactor.
Obviously, the Biden administration would be compelled to punish China if it were determined that Xi was countenancing SOE assistance deemed material to Putin’s war. The notion that Xi would be in the dark about any such assistance is far-fetched.
To be sure, it’d be surprising if Beijing wasn’t providing backdoor assistance to Russia, which is cut off from global markets and from the Western financial system.
On the other hand, Xi would be a fool to risk a confrontation with the US by, for example, countenancing the provision of sanctions-defying military support or lethal arms to Putin by Chinese firms. Xi is no fool. It’s still too early for Beijing to openly confront the US. China is close to challenging American hegemony on every front that matters. To jeopardize that for the sake of securing the Donbas for Putin would be lunacy.
As Tom Hardy’s Bane put it, “Now’s not the time for fear. That comes later.”
Xi is in a losing position, he knows it. His attack on tech giants was a panic move. His blood letting of moderates in the Party was a panic move. COVID-zero was a panic move. Authoritarians only engage in such illogical/desperate/aggressive maneuvers if they are threatened. These panic moves (to name only a few) indicated to me that he was “doing the math” and didn’t like what it told him. It’s hard to know as a westerner what the most acute problem is, but Xi has been panicking for the past 3 years or so.
My best guess is that Xi has come to understand the CCPs window to achieve global hegemony is closing specifically because its domestic hegemony is waning. The greatest specific threat, as far as I can tell, is the Last Generation movement in China. I recently became aware of the Last Generation movement, but I’d highly recommend those who are interested to google it.
External forces can only slow down a dominant nation’s progress, but won’t stop it. As usual in a modern world, dominant powers usually collapse from within.
Hopium – cracking down on tech duopolies was in line with communist ideology, pure and simple. And … don’t you think the USA should follow his example to some extent?
Fer instance, X’s crackdown on teen online gaming time. Here in the US parents were whining and complaining about how online gaming was ruining their kids lives. What was done about that? Zero, as a matter of fact.
As well, do we all welcome being held beholden to four or five companies who pay little or no taxes and make their money selling your personal information?
Much of Xi’s crackdown looks rational to me.
Covid Zero was something else. The dangerous result of seeking to save face and national pride.
In the west we are so anxious to look at China and see another “Arab Spring” in the making. How did that end up? And why should it be different in China?
Curious to know the opinion of H and other more informed people here on whether China’s reduced treasury holdings played a material role in the treasury sell-off of last year.
So if China and the US are supposedly in a battle for global supremacy how will the winner be chosen? The US hasn’t actually “won” much of anything in open warfare since WWII, maybe kicking Saddam out of Kuwait, but the rest is mostly very expensive stalemates. Our hospitals are shut down by malware terrorists. Our power grid regularly attacked by hacker/vandals. Where I live in KC 1 in 7 children doesn’t have regular access to food. The homeless abound. Mass shootings are now taking place at the rate of nearly two a week or more. Our government is in the process of creating a recession to cure the inflation they helped create trying to solve a pandemic that killed tens of thousands and is still not really under control. Then there are the Chinese. They couldn’t control the pandemic either. Who knows how many are dead? Millions? Across the country different cultural groups disliked by Xi’s government are under constant attack. The government attacks its most successful tech companies regularly. There are thousands of empty housing units in every big city. I ask, is either country worthy of world domination? On top of my list I have Switzerland and Norway but I doubt either country wants the job. Instead of fighting amongst ourselves to decide who should run the world shouldn’t we be working to save it? My grandson is 13 and he could easily live long enough to see the end.
Would we even be having this discussion were not for manifest dispossessing of aborigine followed by mass slave labor all firmed up by exceptional natural resources. Conquerable lands and slave-able people are un-obtainium, and our momentum resources are evaporating at the present moment. We still have American exceptionalism, but we also have seditious traitors walking around loud and proud and an amplified mother nature kicking us in the teeth routinely.
Granted, when Kissinger visited China and crafted an initial agreement with Mao Zedong and Zhou Enlai, they set in motion China’s renewal, benefiting both countries and enabling a radical transformation of Chinese society.
I wonder whether Kissinger imagined the possibility of what we’re seeing today from Beijing. He doesn’t lack vision, so I expect he and the US presidents took the risk because it was worth it. China has been an example for other southeast Asian countries, which are ramping up their capacity to compete with China. These countries present a choice for the US economy to further outsource its supply chain for common goods and bypass China’s autocratic political leadership. I hope that proves in fact to be what we will see.