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Monday, July 15, 2024

Geo-economics and geopolitics of US-China competition

The US is employing economic elements to counter China and dilute the importance of the BRI. The Obama Administration’s policy of pivoting Asia was aimed to advance Washington’s geopolitical and geo-economic interest in the region.

The US-China power competition has returned to Cold War politics. It can divide the world into two competing camps where both powers contest to expand their respective sphere of influence in those regions which have strategic salience for their future hegemonic ambitions. The Indo-Pacific region appears to be a theatre of power contest as both powers attempt to increase their geo-economic and geopolitical footprints in the region.
In the 21st Century’s power politics, geo-economics seems to be effective statecraft of powerful countries to advance their geopolitical objectives because now the “logic of conflict” is in the “grammar of commerce”. Therefore, China’s Belt and Road Initiative (BRI) has a strategic dimension: it can increase China’s economic influence, diplomatic leverage, military presence, economic and strategic alliance, regional domination and soft power. China’s quest to be the regional player can be accelerated through this grand initiative by attracting regional countries for financial integration, infrastructural development, unimpeded trade, and sustainable economic development.

Understanding the matter better

Similarly, the world’s largest trade deal, the Regional Comprehensive Economic Partnership (RCEP), was signed in 2020 by Beijing with a view to palliating the possible implications of the US trade war. The RCEP came into effect on 1 January 2022 that will provide alternative destinations for Chinese surplus trade products.
With its growing power, China tends to explore military bases around the world. The Indo-Pacific region is vital for Beijing’s strategic ambitions; therefore, it seeks to get military bases in Island countries. Although China has created a military base in Djibouti to protect its interests in the African region, the US has been critical to China’s increasing military presence in the South China Sea because Washington considers it against “open and free” Indo-Pacific for free trade and navigation.
Even though the Ukraine crisis has significantly diverted the US attention, China still seems to be the primary focus of the US. In his recent Asia trip, President Joe Biden has announced that the US proposed an Indo-Pacific Economic Framework (IPEF) with its partners, Australia, Brunei, India, Indonesia, Japan, New Zealand, Singapore, and South Korea, Thailand, the Philippines and Vietnam. It demonstrates that the US wants to increase its economic influence in the region and assume regional economic leadership.
The US is employing economic elements to counter China and dilute the importance of the BRI. The Obama Administration’s policy of pivoting Asia was aimed to advance Washington’s geopolitical and geo-economic interest in the region. The Trans-Pacific Partnership (TPP) was negotiated for free trade. However, the Trump administration torpedoed this deal owing to its anti-globalization and anti-FTA policy.
In 2019, the Trump Administration also negotiated the Blue Dot Network (BDN) for global infrastructure development in an open and inclusive framework. Nevertheless, this initiative failed to match China’s BRI projects which have a practical manifestation in the world. Moreover, President Joe Biden and G7 leaders launched another economic initiative which is known as Build Back Better World (B3W) in 2021 and termed it a “value-added, high-standard, transparent and environment-friendly” infrastructure development. Nonetheless, it is far behind the BRI.
In the geopolitical context, the US has created military alliances such as QUAD and AUKUS against China in the Indo-pacific region. Creating a ring of the regional alliance is aimed to strategically encircle China and prevent it from advancing its regional ambitions, domination of the Indo-Pacific region, control of the South China Sea and military occupation of Taiwan.

The more the US tries to strategically squeeze China, the greater chances of confrontation

Despite the US having maintained “strategic ambiguity” of its Taiwan policy for a couple of decades, President Joe Biden, on his Asia trip, announced that the US will protect Taiwan in the face of China’s invasion. This US policy can make China furious as it maintains a zero-tolerance Taiwan policy.
Evidently, the fundamentals of US-China relations are changing. The US tries to protect its liberal hegemony in the world by protecting the global liberal order—economic and political institutions, global norms, democratic ideals with human rights and freedom while China strives to get its place in the existing system or replace it with a new global order. Both the US and China want to shape the world in accordance with their interests by protecting or recreating global economic, political, ideological and technological orders.
To prevent both global powers from direct confrontation, it is debated that the bilateral economic interdependence, alliances, big corporates, world media and public opinion work as buffers that may stabilize their fractious relations. But credible deterrence, military discourse power, strategic stability, the balance of power and deft diplomacy are primary factors that may repel war.
The writer is a strategic affair and foreign policy analyst. He tweets at @drsho_aib. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.