Read Part 1.
In general, it is widely believed that for several decades after the end of the Cold War, the world was dominated by the so-called unipolar Pax Americana. One of the established perceptions of the recent period is that talk of unipolarity now has no basis and is being replaced by a bipolar world order. Obviously, the mentioned concept has both its grounds and specific features, which significantly distinguish it from the bipolar structure well known to the older generations.
Let me begin by saying that two is two, but this time the composition of the two is qualitatively different. Whereas after World War II the global balance was created jointly by the United States and the Soviet Union, the latter has now been replaced by China.
Regardless of the figurants, there is one principal expectation regarding the bipolar order as a whole, that it will be relatively stable, and international relations of the subjects participating in the tandem will be subject to a certain predictability. In this connection, it is probably not accidental that the previous variant (with participation of the USA and the USSR) was called the longest period of “peace” in the bipolar world. Of course, the word “peace” here is still conditional, given the numerous wars, armed conflicts, interventions and externally supported internal insurgencies.
However, the most important thing in this context is that none of the confrontations (proxy wars) in which both poles participated openly or covertly went beyond the limits of what is acceptable and did not turn into a direct conflict between the USA and the USSR or into a nuclear war. This is probably why in today’s debates, many international figures and experts prefer to divide influence in the world into two areas again. And this, along with the redistribution of spheres of influence, also means taking responsibility to an appropriate degree for resolving controversial issues and for systematic relations in the tandem format.
In any event, this limits the theorizing on the various variants of bipolarity, while the specifics are determined again and again by the essence of the bipolar system in the relevant time and circumstances. Much is being written and many important opinions are being heard today about the nature of USA-China bipolarity. The evolution of comparisons and opinions along this line must be constantly observed, as changing circumstances, both objective and determined by the personal qualities of any given leader, are directly linked to this evolution. Obviously, it is impossible to discuss modern bipolarity in the course of a single article, although several characteristic theses deserve to be mentioned.
To begin with, there is the view that a bipolar world of the USA and China would not seem to be as stable as a USA-USSR world.
The bipolarity that emerged from World War II was the joint result of both actors of that time: the two superpowers who had won the war created the rules of the post-war world by reconciling or confronting each other. As a result, there was no such lag between the influences that either pole was willing to express direct aggression against the other. Thus, the “cohabitating” United States and the USSR found common ground (despite the fact that at times they even reached the threshold of acute crisis) and gave the subjects in their spheres of influence the means to “find common ground” as well.
The lack of sustainability of the new bipolar system involving the United States and China is explained by the peculiarities of the relationship “between the two” among which we will try to highlight several fundamental ones.
The Thucydides Trap
Indicates a trend in which a dynamically growing actor in terms of influence is trying to take over primacy and, virtually, hegemony from a longstanding and influential actor. The risk of a confrontation turning into a direct military conflict is associated with the “Thucydides Trap”, when the strengthening of the Chinese factor threatens the United States with the loss of its role as the sole leader in the world. Speaking of the above trend, it should be noted that such an open and large-scale conflict is so far unlikely, because: (a) China’s military potential is not adequately prepared for it, and (b) Chinese “courage” at this stage is driven by the desire to establish itself as a regional hegemon rather than a global one. However, it seems that this view is only partly true. First, in order to strengthen the role on a global scale in today’s environment, along with the military factor, economic and the so-called “soft power” potential are equally necessary. China has advanced quite far in this regard over the past two decades, and the only question is to what extent the military, economic and soft power components complement or balance each other. And second: it is true that Beijing is still busy expanding its “Monroe Doctrine” in the region, but this does not completely exclude the danger of any regional conflict (say, the Taiwan issue) turning into a global one. One of the factors that contribute to avoiding a major conflict in the bipolar system mentioned above is determined by the same regional nature of the conflict: The fact is that the actual “line of contact” between the United States and China runs along a relatively small sea area, not over the global ocean or land. It is likely this is only for now.
It is also a fact that in order to achieve possible stability between the US and China a major role is assigned to the potential of Chinese nuclear weapons, i.e. to bring them to a level that would make these weapons, just as in the confrontation between the USSR and the US, a real deterrent. Here we should also say that in the era of great power competition the nuclear factor has a number of other determining “errors” (including misinterpreting the adversary’s intentions and basing countermeasures on an incorrect consideration).
The use of new forms and methods to spread influence, especially in cyberspace and other spaces, is also considered under the same theme. Their effective use is a kind of introduction or even a prerequisite for enhancing the military or political outcome, since it is the combination of conventional and non-conventional measures that creates the essence of modern conflict and determines the effectiveness of preventive or countermeasures. All of this is a subject of discussion on the basis of expertise beyond the scope of the article presented.
Interdependence
That is, the close relationship between the economic interests of the United States and China, which undoubtedly gives a certain uniqueness to the so-called Cold War of the second version – in comparison with the analogue of the last century. Despite repeated statements and partial steps taken in this regard, it has proven very difficult to actually achieve “decoupling” and end the existing economic interdependence. While not providing extensive statistical analysis, we will only point out a few circumstances.
From agricultural products to various raw materials and components needed for manufacturing, China continues to be the largest U.S. export market. As to the trade turnover, although it is true that it has declined somewhat between the U.S. and China, but this deficit is due to the penetration of Chinese exports into the U.S. market from third countries (Vietnam, Malaysia, Taiwan, Indonesia) rather than directly from China. The volume of e-commerce is also important.
In order to meet the goals set by the protectionist policy of the US, the current administration has applied a series of legislative initiatives, which should have led to the possibility of greater political maneuverability towards China and increased economic space. For instance, we would like to specifically mention the Inflation Reduction Act passed to support domestic production in the US, or the adoption of a legislative embargo package aimed at limiting future microchip production by China.
This was supplemented by some political measures taken by Washington to weaken EU trade ties with China or to diminish the role of the World Trade Organization in US-China relations. The palette of such examples can be enriched by mentioning the measures implemented as part of Beijing’s obviously protectionist policy. It is a fact that in the context of the unfolded first world economic war the US-China relations have a significant impact on the formation of not only the bipolar, but also the whole new global (dis)order.
Here we should also note the circumstances that are manifested in the form of systemic challenges to the Chinese economy in the context of bipolar confrontation with the United States. Contrary to the widespread opinion about the “boundlessness,” “enormity” and “guaranteed” resource of China’s economic potential, in fact, this is not the case. The main reason for these challenges is to be found in the macroeconomic structure, which is unbalanced. This inequality is largely manifested in the prevalence of the real estate sector, and the investment resources needed to reduce the existing imbalance, including investments by local companies in their own production, are considered insufficient at this stage. Thus, long-term high-interest economic growth, which is so important for the stability of China’s political and social background, is problematic and poses a challenge that amounts to a national threat to official Beijing. Moreover, a significant challenge to the country’s development may become (if it has not already become) a phenomenon in the economy known as the “average income trap”: that is, a situation in which a slowdown in the required pace of development of productive capacity and lagging behind high-income countries directly affects the average income of the population. In sum, this negative process manifests itself in a weakening of global influence.
It is a fact that complete and effective “separation” is almost impossible, and both sides are aware of this. This is what makes the bipolar world of the United States and China different from the bipolar world of the United States and the Soviet Union, where the modern version, unlike its predecessor, is much less ideologized. The explanation should be sought in several key aspects. We have already briefly described the export destination of the other country for each of these countries.
It is also necessary to mention the geopolitical and geoeconomic role of the U.S. dollar as a world currency, which is difficult for Beijing to ignore. In addition, for maintaining the dollar’s role in the U.S. Treasury securities portfolio the Chinese ownership share is leading – immediate or significant sales of debt securities would critically affect U.S. bonds and the interbank interest rate. Similarly, with regard to U.S. foreign exchange reserves, the “pegging” of the Chinese yuan to the U.S. dollar is a determinant for the value of the dollar. Therefore, Washington and Beijing should bear the burden of this very critical segment of the bipolar system “forcefully and with dignity,” with due prudence and consideration of reciprocal obligations.
Read Part 3.
By Victor Kipiani, Chairperson of Geocase
