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12.01.2022 Author: James ONeill

China and Russia Lead the Way in a New World Order


These days Russia sits down with the United States, and NATO, to discuss Moscow’s demands (they go beyond proposals) for in effect a new world order in Eastern Europe. The Russian plan envisages a greatly reduced role for NATO on and around its borders. The United States has not yet made any specific proposals in advance of the meeting, although a number of voices have been raised against the Russian proposals.

Rather than a direct response, the Americans have allowed the British assets to in effect make their answer for them. In what is manifestly a timed attempt to disrupt the talks and put Russia on the back foot, the British (with the obvious knowledge and consent of the Americans) have attempted a coup against the government of Kazakhstan.

The Russian response, pointing clearly to foreknowledge of the planned assault, has been rapid, dispatching troops to Kazakhstan to act on behalf of its embattled president and restore a measure of order to the country. At the time of writing the Russian intervention (and that of his allies) appears to be successful.

It is not only the forthcoming talks between the Russians and the United States and its allies that the aim of disruption is directed. There are simultaneous talks going on between the Russians and the Chinese president. Both men agreed to create an “independent structure for trade operations that could not be influenced by other countries”, a clear reference to the United States.

Giving impetus to the agreement by the two presidents was yet another thinly veiled attack on Russia’s membership of the SWIFT system of international banking. This is an American controlled system and they have never hesitated to use their control to achieve other geopolitical goals, as with the suspension of Iran’s membership by the Trump administration, part of the United States refusal to lift its sanctions on Iran following the nuclear deal arranged during the Obama administration. Biden was vice president at the time, and hence a party to the deal. He has refused to lift Trumps sanctions despite vague promises to do so.

The importance of the Russia – China agreement to create an independent financial structure cannot be overstated. Russia and China are but two of literally scores of nations that have suffered under United States hegemony of the world financial system and they do not have to be asked twice to abandon that system and join the new Russia – China alternative.

Bypassing the dollar’s role in trade and indeed the entire financial system is a major goal of both Chinese and Russian planners. Removing the dollar as the principal means of exchange is a vital stage in the Russian – Chinese version of a new global order.

China takes over the role of chairing the BRICS system of international trade and the year in charge is expected to see an acceleration of a series of related economic arrangements. These include the closer association between the Belt and Road Initiative and the EAEU whose geopolitical and geo-economic importance is expected to expand through 2022.

The other major change occurring in the region is the coming into force of the RCEP deal, a truly game changing arrangement that links China with 10 ASEAN nations, plus Japan, South Korea, Australia and New Zealand. The inclusion of Japan, South Korea and Australia may be seen in some ways as a game changer. All three countries have close ties to the United States, and it is certain that the United States did not approve of their becoming members of the RCEP.

In Australia’s case, it has recently signed a deal with the United States and the United Kingdom that is manifestly anti-China in its orientation. It involves Australia buying a number of submarines, the clear intention of which is to threaten China’s freedom of navigation. The signing of the RCEP deal may therefore be interpreted as a minor victory by those in Canberra who recognised geographical, trade and Geo-political reality, reflecting Australia’s position as a landmass on the southern end of Asia.

Persuading the politicians of both major parties to recognise that reality and adjust their adherence to the rapidly fading United States remains a major policy challenge. The signing of the RCEP deal recognises that there are at least some people in Canberra who have a clearer view of Australia’s interests in the region than is true of others.

It would be an unwise to expect the Americans to accept these developments unchallenged. As a partial response to the rise of the Asian powers the United States is still demanding that it is the centre point of the Asian region and that it be acknowledged as such.

The United States especially fears the rise of China which it sees as the fundamental challenger to its hegemony. The United States continues to see itself as the major power in the Asian region, but this is no longer true. Beijing certainly does not see the United States as any longer being the dominant power in the region, and Japan and South Korea joining the RCEP may be interpreted as their coming to the same conclusion.

The difference in opinion between China and United States is exemplified by the attitude to trade. The United States has progressively become less of a free trade nation, imposing more and more restrictions upon Chinese imports. China on the other hand is moving in the opposite direction. In recent years China has progressively opened its markets to foreign trade, and the RCEP is a personification of that trend.

The United States response to the Chinese moves is to propose what it calls the Indian Pacific Economic Framework. It is not actually a framework for anything but continued United States dominance of the region. It is a fundamental principle of trading relationships that if one sets out the rules, then one is expected to abide by those rules. The United States does not and has expressed no willingness to ever do so.

By attempting to remotely set rules reveals the hubris with which the United States structures its relationships with its “partners”. The United States fails to recognise what may be called the tyranny of distance. In attempting to set the rules for other countries from 10,000 km away just highlights the degree of imperial overreach that characterises United States foreign policy.

China is the driving force of the Asia Pacific region. As the old saying goes, if you don’t play the game, you don’t make the rules. The United States has long lost the ability to dictate the rules, let alone define how others should play a game. It is a lesson the Americans have been slow to learn. In Asia, and indeed throughout much of the rest of the world, China is showing that it does not accept the United States version of the rules. The quicker the Americans learn that lesson, the safer the world is likely to be.

James O’Neill, an Australian-based former Barrister at Law, exclusively for the online magazine “New Eastern Outlook”.

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