Pepe Escobar: How China’s Eurasia Maneuvers Beat Obama’s Pivot to Asia

Yves here. We’ve commented occasionally on Obama’s failed pivot to Asia, which is clearly an effort to contain China. The centerpiece, the TransPacific Partnership, appears to be going nowhere. A meeting between Communist party chief Xi and Japan’s Abe trumped America’s presence at the ASEAN conference; our Japanese press-watcher Clive says that Putin garnered as much media coverage as did the US president. But you’d get perilous little sense of how China is outmaneuvering the US in Asia, despite considerable worries among its neighbors about its aggressive territorial claims.

This article by Pepe Escobar gives a fine overview of the measures China is taking to create greater economic integration with its Eurasian and European trade partners, to the detriment of US influence. And Washington appears to have been caught flat-footed.

By Pepe Escobar, the roving correspondent for Asia Times/Hong Kong and an analyst for RT.. His latest book is Empire of Chaos (Nimble Books). Follow him on Facebook.Originally published at TomDispatch

November 18, 2014: it’s a day that should live forever in history. On that day, in the city of Yiwu in China’s Zhejiang province, 300 kilometers south of Shanghai, the first train carrying 82 containers of export goods weighing more than 1,000 tons left a massive warehouse complex heading for Madrid. It arrived on December 9th.

Welcome to the new trans-Eurasia choo-choo train.  At over 13,000 kilometers, it will regularly traverse the longest freight train route in the world, 40% farther than the legendary Trans-Siberian Railway. Its cargo will cross China from East to West, then Kazakhstan, Russia, Belarus, Poland, Germany, France, and finally Spain.

You may not have the faintest idea where Yiwu is, but businessmen plying their trades across Eurasia, especially from the Arab world, are already hooked on the city “where amazing happens!” We’re talking about the largest wholesale center for small-sized consumer goods — from clothes to toys — possibly anywhere on Earth.

The Yiwu-Madrid route across Eurasia represents the beginning of a set of game-changing developments. It will be an efficient logistics channel of incredible length. It will represent geopolitics with a human touch, knitting together small traders and huge markets across a vast landmass. It’s already a graphic example of Eurasian integration on the go. And most of all, it’s the first building block on China’s “New Silk Road,” conceivably the project of the new century and undoubtedly the greatest trade story in the world for the next decade.

Go west, young Han. One day, if everything happens according to plan (and according to the dreams of China’s leaders), all this will be yours — via high-speed rail, no less.  The trip from China to Europe will be a two-day affair, not the 21 days of the present moment. In fact, as that freight train left Yiwu, the D8602 bullet train was leaving Urumqi in Xinjiang Province, heading for Hami in China’s far west. That’s the first high-speed railway built in Xinjiang, and more like it will be coming soon across China at what is likely to prove dizzying speed.

Today, 90% of the global container trade still travels by ocean, and that’s what Beijing plans to change.  Its embryonic, still relatively slow New Silk Road represents its first breakthrough in what is bound to be an overland trans-continental container trade revolution.

And with it will go a basket of future “win-win” deals, including lower transportation costs, the expansion of Chinese construction companies ever further into the Central Asian “stans,” as well as into Europe, an easier and faster way to move uranium and rare metals from Central Asia elsewhere, and the opening of myriad new markets harboring hundreds of millions of people.

So if Washington is intent on “pivoting to Asia,” China has its own plan in mind.  Think of it as a pirouette to Europe across Eurasia.

Defecting to the East?

The speed with which all of this is happening is staggering. Chinese President Xi Jinping launched the New Silk Road Economic Belt in Astana, Kazakhstan, in September 2013. One month later, while in Indonesia’s capital, Jakarta, he announced a twenty-first-century Maritime Silk Road. Beijing defines the overall concept behind its planning as “one road and one belt,” when what it’s actually thinking about is a boggling maze of prospective roads, rail lines, sea lanes, and belts.

We’re talking about a national strategy that aims to draw on the historical aura of the ancient Silk Road, which bridged and connected civilizations, east and west, while creating the basis for a vast set of interlocked pan-Eurasian economic cooperation zones.  Already the Chinese leadership has green-lighted a $40 billion infrastructure fund, overseen by the China Development Bank, to build roads, high-speed rail lines, and energy pipelines in assorted Chinese provinces. The fund will sooner or later expand to cover projects in South Asia, Southeast Asia, the Middle East, and parts of Europe. But Central Asia is the key immediate target.

Chinese companies will be investing in, and bidding for contracts in, dozens of countries along those planned silk roads. After three decades of development while sucking up foreign investment at breakneck speed, China’s strategy is now to let its own capital flow to its neighbors. It’s already clinched $30 billion in contracts with Kazakhstan and $15 billion with Uzbekistan. It has provided Turkmenistan with $8 billion in loans and a billion more has gone to Tajikistan.

In 2013, relations with Kyrgyzstan were upgraded to what the Chinese term “strategic level.” China is already the largest trading partner for all of them except Uzbekistan and, though the former Central Asian socialist republics of the Soviet Union are still tied to Russia’s network of energy pipelines, China is at work there, too, creating its own version of Pipelineistan, including a new gas pipeline to Turkmenistan, with more to come.

The competition among Chinese provinces for much of this business and the infrastructure that goes with it will be fierce. Xinjiang is already being reconfigured by Beijing as a key hub in its new Eurasian network. In early November 2014, Guangdong — the “factory of the world” — hosted the first international expo for the country’s Maritime Silk Road and representatives of no less than 42 countries attended the party.

President Xi himself is now enthusiastically selling his home province, Shaanxi, which once harbored the start of the historic Silk Road in Xian, as a twenty-first-century transportation hub. He’s made his New Silk Road pitch for it to, among others, Tajikistan, the Maldives, Sri Lanka, India, and Afghanistan.

Just like the historic Silk Road, the new one has to be thought of in the plural.  Imagine it as a future branching maze of roads, rail lines, and pipelines. A key stretch is going to run through Central Asia, Iran, and Turkey, with Istanbul as a crossroads site. Iran and Central Asia are already actively promoting their own connections to it. Another key stretch will follow the Trans-Siberian Railway with Moscow as a key node. Once that trans-Siberian high-speed rail remix is completed, travel time between Beijing and Moscow will plunge from the current six and a half days to only 33 hours. In the end, Rotterdam, Duisburg, and Berlin could all be nodes on this future “highway” and German business execs are enthusiastic about the prospect.

The Maritime Silk Road will start in Guangdong province en route to the Malacca Strait, the Indian Ocean, the Horn of Africa, the Red Sea and the Mediterranean, ending essentially in Venice, which would be poetic justice indeed.  Think of it as Marco Polo in reverse.

All of this is slated to be completed by 2025, providing China with the kind of future “soft power” that it now sorely lacks. When President Xi hails the push to “break the connectivity bottleneck” across Asia, he’s also promising Chinese credit to a wide range of countries.

Now, mix the Silk Road strategy with heightened cooperation among the BRICS countries (Brazil, Russia, India, China, and South Africa), with accelerated cooperation among the members of the Shanghai Cooperation Organization (SCO), with a more influential Chinese role over the 120-member Non-Aligned Movement (NAM) — no wonder there’s the perception across the Global South that, while the U.S. remains embroiled in its endless wars, the world is defecting to the East.

New Banks and New Dreams

The recent Asia-Pacific Economic Cooperation (APEC) summit in Beijing was certainly a Chinese success story, but the bigger APEC story went virtually unreported in the United States.  Twenty-two Asian countries approved the creation of an Asian Infrastructure Investment Bank (AIIB) only one year after Xi initially proposed it. This is to be yet another bank, like the BRICS Development Bank, that will help finance projects in energy, telecommunications, and transportation.  Its initial capital will be $50 billion and China and India will be its main shareholders.

Consider its establishment a Sino-Indian response to the Asian Development Bank (ADB), founded in 1966 under the aegis of the World Bank and considered by most of the world as a stalking horse for the Washington consensus. When China and India insist that the new bank’s loans will be made on the basis of “justice, equity, and transparency,” they mean that to be in stark contrast to the ADB (which remains a U.S.-Japan affair with those two countries contributing 31% of its capital and holding 25% of its voting power) — and a sign of a coming new order in Asia.  In addition, at a purely practical level, the ADB won’t finance the real needs of the Asian infrastructure push that the Chinese leadership is dreaming about, which is why the AIIB is going to come in so handy.

Keep in mind that China is already the top trading partner for India, Pakistan, and Bangladesh.  It’s in second place when it comes to Sri Lanka and Nepal.  It’s number one again when it comes to virtually all the members of the Association of Southeast Asian Nations (ASEAN), despite China’s recent well-publicized conflicts over who controls waters rich in energy deposits in the region. We’re talking here about the compelling dream of a convergence of 600 million people in Southeast Asia, 1.3 billion in China, and 1.5 billion on the Indian subcontinent.

Only three APEC members — apart from the U.S. — did not vote to approve the new bank: Japan, South Korea, and Australia, all under immense pressure from the Obama administration. (Indonesia signed on a few days late.) And Australia is finding it increasingly difficult to resist the lure of what, these days, is being called “yuan diplomacy.”

In fact, whatever the overwhelming majority of Asian nations may think about China’s self-described “peaceful rise,” most are already shying away from or turning their backs on a Washington-and-NATO-dominated trade and commercial world and the set of pacts — from the Transatlantic Trade and Investment Partnership (TTIP) for Europe to the Trans-Pacific Partnership (TPP) for Asia — that would go with it.

When Dragon Embraces Bear

Russian President Vladimir Putin had a fabulous APEC. After his country and China clinched a massive $400 billion natural gas deal in May — around the Power of Siberia pipeline, whose construction began this year — they added a second agreement worth $325 billion around the Altai pipeline originating in western Siberia.

These two mega-energy deals don’t mean that Beijing will become Moscow-dependent when it comes to energy, though it’s estimated that they will provide 17% of China’s natural gas needs by 2020. (Gas, however, makes up only 10% per cent of China’s energy mix at present.)  But these deals signal where the wind is blowing in the heart of Eurasia. Though Chinese banks can’t replace those affected by Washington and EU sanctions against Russia, they are offering a Moscow battered by recent plummeting oil prices some relief in the form of access to Chinese credit.  

On the military front, Russia and China are now committed to large-scale joint military exercises, while Russia’s advanced S-400 air defense missile system will soon enough be heading for Beijing.  In addition, for the first time in the post-Cold War era, Putin recently raised the old Soviet-era doctrine of “collective security” in Asia as a possible pillar for a new Sino-Russian strategic partnership.

Chinese President Xi has taken to calling all this the “evergreen tree of Chinese-Russian friendship” — or you could think of it as Putin’s strategic “pivot” to China.  In either case, Washington is not exactly thrilled to see Russia and China beginning to mesh their strengths: Russian excellence in aerospace, defense technology, and heavy equipment manufacturing matching Chinese excellence in agriculture, light industry, and information technology.

It’s also been clear for years that, across Eurasia, Russian, not Western, pipelines are likely to prevail. The latest spectacular Pipelineistan opera — Gazprom’s cancellation of the prospective South Stream pipeline that was to bring yet more Russian natural gas to Europe — will, in the end, only guarantee an even greater energy integration of both Turkey and Russia into the new Eurasia. 

So Long to the Unipolar Moment 

All these interlocked developments suggest a geopolitical tectonic shift in Eurasia that the American media simply hasn’t begun to grasp. Which doesn’t mean that no one notices anything.  You can smell the incipient panic in the air in the Washington establishment.  The Council on Foreign Relations is already publishing laments about the possibility that the former sole superpower’s exceptionalist moment is “unraveling.” The U.S.-China Economic and Security Review Commission can only blame the Chinese leadership for being “disloyal,” adverse to “reform,” and an enemy of the “liberalization” of their own economy.

The usual suspects carp that upstart China is upsetting the “international order,” will doom “peace and prosperity” in Asia for all eternity, and may be creating a “new kind of Cold War” in the region. From Washington’s perspective, a rising China, of course, remains the major “threat” in Asia, if not the world, even as the Pentagon spends gigantic sums to keep its sprawling global empire of bases intact. Those Washington-based stories about the new China threat in the Pacific and Southeast Asia, however, never mention that China remains encircled by U.S. bases, while lacking a base of its own outside its territory. 

Of course, China does face titanic problems, including the pressures being applied by the globe’s “sole superpower.” Among other things, Beijing fears threats to the security of its sea-borne energy supply from abroad, which helps explain its massive investment in helping create a welcoming Eurasian Pipelineistan from Central Asia to Siberia. Fears for its energy future also explain its urge to “escape from Malacca” by reaching for energy supplies in Africa and South America, and its much-discussed offensive to claim energy-rich areas of the East and South China seas, which Beijing is betting could become a “second Persian Gulf,” ultimately yielding 130 billion barrels of oil.

On the internal front, President Xi has outlined in detail his vision of a “results-oriented” path for his country over the next decade. As road maps go, China’s “must-do” list of reforms is nothing short of impressive. And worrying about keeping China’s economy, already the world’s number one by size, rolling along at a feverish pitch, Xi is also turbo-charging the fight against corruption, graft, and waste, especially within the Communist Party itself.

Economic efficiency is another crucial problem. Chinese state-owned enterprises are now investing a staggering $2.3 trillion a year — 43% of the country’s total investment — in infrastructure. Yet studies at Tsinghua University’s School of Management have shown that an array of investments in facilities ranging from steel mills to cement factories have only added to overcapacity and so actually undercut China’s productivity.

Xiaolu Wang and Yixiao Zhou, authors of the academic paper “Deepening Reform for China’s Long-term Growth and Development,” contend that it will be difficult for China to jump from middle-income to high-income status — a key requirement for a truly global power. For this, an avalanche of extra government funds would have to go into areas like social security/unemployment benefits and healthcare, which take up at present 9.8% and 15.1% of the 2014 budget — high for some Western countries but not high enough for China’s needs.

Still, anyone who has closely followed what China has accomplished over these past three decades knows that, whatever its problems, whatever the threats, it won’t fall apart. As a measure of the country’s ambitions for economically reconfiguring the commercial and power maps of the world, China’s leaders are also thinking about how, in the near future, relations with Europe, too, could be reshaped in ways that would be historic. 

What About That “Harmonious Community”?

At the same moment that China is proposing a new Eurasian integration, Washington has opted for an “empire of chaos,” a dysfunctional global system now breeding mayhem and blowback across the Greater Middle East into Africa and even to the peripheries of Europe.

In this context, a “new Cold War” paranoia is on the rise in the U.S., Europe, and Russia.  Former Soviet leader Mikhail Gorbachev, who knows a thing or two about Cold Wars (having ended one), couldn’t be more alarmed. Washington’s agenda of “isolating” and arguably crippling Russia is ultimately dangerous, even if in the long run it may also be doomed to failure. 

At the moment, whatever its weaknesses, Moscow remains the only power capable of negotiating a global strategic balance with Washington and putting some limits on its empire of chaos.  NATO nations still follow meekly in Washington’s wake and China as yet lacks the strategic clout.

Russia, like China, is betting on Eurasian integration.  No one, of course, knows how all this will end.  Only four years ago, Vladimir Putin was proposing “a harmonious economic community stretching from Lisbon to Vladivostok,” involving a trans-Eurasian free trade agreement. Yet today, with the U.S., NATO, and Russia locked in a Cold War-like battle in the shadows over Ukraine, and with the European Union incapable of disentangling itself from NATO, the most immediate new paradigm seems to be less total integration than war hysteria and fear of future chaos spreading to other parts of Eurasia.

Don’t rule out a change in the dynamics of the situation, however.  In the long run, it seems to be in the cards.  One day, Germany may lead parts of Europe away from NATO’s “logic,” since German business leaders and industrialists have an eye on their potentially lucrative commercial future in a new Eurasia. Strange as it might seem amid today’s war of words over Ukraine, the endgame could still prove to involve a Berlin-Moscow-Beijing alliance.

At present, the choice between the two available models on the planet seems stark indeed: Eurasian integration or a spreading empire of chaos. China and Russia know what they want, and so, it seems, does Washington.  The question is: What will the other moving parts of Eurasia choose to do?

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  1. OpenThePodBayDoorsHAL

    Our feckless Basketballer-in-Chief will truly go down in history, marking the moment when a combination of hubris, idiocy, complete lack of strategic vision, incompetence, and imperial overstretch saw America snatch defeat from the jaws of victory. If those hanging chads in Al Gore’s hands had fallen the other way, our post- 9/11 actions might have been more about intensive policing and intel than Humvees and KFCs on the ground across the globe. That he now sees fit to turn Putin into the enemy-du-jour may prove his unravelling, you might be able to isolate Iran but the Bear is tied in across the board, pull on one stick and it’s Jenga. Oh, look, oil junk is crashing hard…I’m sure the Fed will say “it’s contained”.

    1. 6th-generation Texan

      Obama is indeed an incompetent buffoon, as was “Shrub” Bush. Both are mere figureheads for the powerful interest blocs that actually run Amerika, for which the nom de jour is “Deep State.” Absolutely nothing would have changed if Gore had bested Shrub in 2000, just as it doesn’t matter a tinker’s damn whether another Bush or another Clinton is put in place in 2016.

      Your accurate description of a “combination of hubris, idiocy, complete lack of strategic vision, incompetence, and imperial overstretch” is a result of the disastrous policies implemented over the last several decades by the psychopathic elites directing Amerika’s affairs at home and abroad. The imminent result of their greed, arrogance, stupidity, and lust to commit evil deeds will be the destruction of their own petrodollar system — and thus the death of their Amerikan Empire.

      The fateful challenge for all citizens of a dying empire is how to transit the abyss with their lives — and some remnant of property — intact. Sadly, a great many will fail to solve that puzzle. We can only hope that the vast majority of the elite assholes that are bringing this calamity upon us all are included in that number….

      1. different clue

        Neither were incompetent buffoons. Both were sly consters. Incompetently buffooning in public was all part of the act. They tricked their targets into misunderestimating them. And it worked.

    2. NotTimothyGeithner

      Maybe Al Gore circa 2006, but Al Gore circa 2000 was the king of neo-liberal delusion. Admittedly, I blame Tipper as a bad influence (she is particularly repulsive).

      1. Andrew Watts

        If the rumors I heard about were true, Gore was urging Clinton to invade Iraq in ’97. Instead of that foolish plan Clinton launched airstrikes.

        Aren’t we all glad that the US didn’t invade Iraq in…. oh nooooooessss!

        1. NotTimothyGeithner

          Richard Clarke painted Gore as a gun-ho type compared to Bill. No one noticed because Clarke was an driver of Gore and critic of Dubya.

  2. swendr

    Considering the chaos our elites have sewn in the “arc of instability”, I tend to regard this news of Eurasian cooperation with some optimism. If any reasonable amount of the promised “justice, equity, and transparency” of the new development bank were to be realized, it could well demonstrate a viable alternative to the neoliberal consensus.
    Not that I’m holding my breath, mind you, but it’s nice to consider something positive from time to time.

    1. Jim Haygood

      Me too. Pepe Escobar notes China’s $40 billion infrastructure fund to build roads, high-speed rail lines, and energy pipelines. By contrast, our august KongressKlowns just ‘invested’ $64 billion in the Pentagon’s ‘overseas contingency’ budget to fight ISIS and the like. This is the fast lane to imperial decline.

      Ending the sole superpower’s exceptionalist empire of chaos would be the best thing that could ever happen to us. Unfortunately, history shows that the intransigence of dying empires stops them from changing their disastrous course, even as their infrastructure and living standards grow ever more threadbare.

      Russia just went through all that a quarter of a century ago with the USSR’s collapse, and perhaps learned a thing or two. America is incapable of learning. It lost in Vietnam; lost in Iraq; lost in Afghanistan. And the lesson is … pick a fight with Russia in the Ukraine.

      Brilliant. Simply brilliant.

  3. Clive

    There’s plenty wrong with the U.S.’s Asia-Pacific “strategy”. Not least that it seems most of the time to lack anything which looks remotely strategic. I can criticise it quite happily with a list of reasons as long as your arm. But criticising does infer some responsibility on the person dishing out the criticism to come up with alternatives.

    There are no easy answers on this on subject of course and the different regional players all want different things, but one thing which the U.S. could do right away which would only help its influence and carries very little risk for either it or its allies is to go along with Chinese and the DPRK’s (North Korea) explicit requests — and the tacit concurrence from Russia and Japan — to restart the Six Party Talks on DPRK denuclearisation. In fact, Japan is (in the classic Japanese tradition) trying to tell the U.S. that it wants it to not act like such a jerk in the matter while not actually coming right out and saying it. The U.S. in response is seemingly trying to tell Japan to mind its P’s and Q’s — another crass manoeuvre because Japan has other fish to fry with the DPRK which it must progress for domestic political reasons so the U.S. should realise it is being really thick to pretend that Japan shouldn’t be doing that.

    The U.S. — and South Korea too, but probably only under chiding from the U.S. — are insisting that the DPRK “does something” first to show evidence of unilateral nuclear disarmament. But that is just a plain dumb posture to take, a precondition that neither the U.S. nor the (at the time) USSR insisted on in the Cold War in exactly the same sort of circumstances, so quite why the U.S. thinks it is so essential now makes no sense. It merely gives the impression that U.S. isn’t interested in resuming the Six Party Talks and is coming up with excuses why it can’t participate.

    Which might actually be the reality of the situation. The Six Party Talks were China’s idea. I don’t know U.S. foreign policy well enough to be able to say if it has historically suffered (and continues to maybe suffer from) a bad case of “not invented here syndrome”. If that is the reason for the reluctance to go along with China and give a kick-start to the Six Party Talks, the U.S. really should get over itself on that one.

    So, here’s something that the U.S. could easily do to bolster its influence in the region, has no downside (it is only talks) and at the very least makes it look magnanimous and considered in its approach. What is there not to like ? Only, perhaps, for the U.S. that it threw a hissy fit many years ago when it was in full-on “war on terror” mode and can’t now be seen to swallow its pride and be a bit more pragmatic. That really is a silly thing to do.

    1. NotTimothyGeithner

      I think it was in a links section in these parts about a month ago, but a former Seal/spec. force type going to grad school wrote essentially about his discovery that no one in the Village operates or even holds views outside of a few set assumptions such as the wonders of free trade with little understanding of what “free trade” actually does.

      I’m on a tablet, so forgive me for paraphrasing. Russian foreign minister Larvov said the U.S.b foreign policy establishment only sees the world in vassals or opponents.

      Anyone acting without sufficient ball washing of DC elite must be acting against the U.S. Working with China without dictating the terms means surrender. The U.S. elite think they are a Hollywood version of a new Rome but more moral, but being so shallow, they don’t grasp Augustus made peace with Rome’s long time enemy only sending Agrippa (Octavian’s bff) and Tiberius, his oldest son under Augustus’ new laws, to deal with the Persians.

      1. Clive

        Yes, vassals or opponents indeed. That’s a very good way of putting it if, as seems likely because as a theory it fits the observed facts, that the U.S. policy making classes really do hold such a binary view of the rest of the world. “Friend or foe”, “You’re either for us or you’re against us”, “loyal or treacherous”…

        If you’re trying to run an Empire (and like it or not, that is what the U.S. is in the position of doing and it will take quite a while to unwind that deal even if it wants to) it can’t see things in such black-and-white terms. The British couldn’t have maintened our Empire without knowing when to make a pact, grease a few palms or negotiate a compromise. Empires aren’t for the prissy and the precious.

        1. NotTimothyGeithner

          “Empires aren’t for the prissy and the precious.”

          Dubya and Obozo have largely taken the U.S. from a country which could engage in the maliciousness of the Iraq War to a world where the Shanghai Cooperative is becoming more relevant and Russia, China, and India are chums in a few short years.

          If you criticize Obama or Dubya, you were anti-American, racist, or delusional. It’s the only thi NH get they know.

    2. flora

      This is very interesting. US govt officials are always touting the US as ” the indispensable nation”. Six Party Talks would be a good way to reinforce that statement. Yet the US declines. The more other countries come to their own arrangements without US input, the more dispensable she becomes in the minds of other countries. What folly.

      1. hunkerdown

        de Gaulle had something to say about indispensability. I’m curious whether that’s entered the mind of the marketroids that came up with that bit of laughable self-fluffery.

  4. John Firestone

    The Deutsche Bahn has been running container trains between Germany and China for a few years now. This press release discusses the advantages of the 20–23 day service, and some of the challenges it faces, as of mid-2012.

  5. JustThink'n

    So China is investing in real infrastructure projects while the US spends their money on wars all over the place and maintaining many hundreds of military bases that, in reality, cannot be defended if attacked in multiple places. Still the dollar looks good now BUT what will happen when we have another economic crisis brought on by the banks who have done the same thing that got them in trouble in 2008? Will the US try to print its way out with massive bailouts? Basic economics say that if you print enough money without increases in basic real products inflation will ensue. The US has been printing a lot to finance bank bailouts and war everywhere. Suppose when the next financial crisis comes China and Russia and the other BRICS say they won’t use dollars any more or drastically discount the dollars value? Poof! Big trouble for the US economy.

  6. Tony Wikrent

    Yeah, so China is engaging in the “American System” policies of the early 1800s: building extended transportation infrastructure, which we in USA called “internal improvements” back in that earlier time. But never fear: here in 21st century ‘merrka, we have the “free market.” Yeah, we got eBay, so that the grandsons and granddaughters of steel makers and automakers who used to make $20 to $30 an hour two generations ago, can sell each other hand-crafted trinkets and clothes that don’t fit anymore. Who needs strategic nation building and infrastructure when you’ve got the electronic flea free market?!? So long as the ideological purity of our anti-statism commitment to fleadom remains, you know, pure.

  7. Andrew Watts

    A great piece by Pepe Escobar!

    The Council on Foreign Relations doesn’t know the half of it. By “unraveling” Haass really means collapse. By the time the political class acknowledges the fact the United States is in decline it’s all going to be over.

  8. Otter

    All of the above.

    Plus, nothing the US government does sees the light of day before it is buried in leaches rentiers.

  9. MyLessThanPrimeBeef

    Will this railway another antibiotics resistant vector, as life forms hop on and off along the way?

    And will it be more energy efficient than ocean going ships?

    Lastly, let us remind ourselves that we live one of those rare, relative lucky and relative peaceful times in history, another one being when Genghis Khan and his warriors conquered most of that vast area, and any disruption along one point en-route, and that particular avenue of commerce stops.

    One more beyond lastly, when all the west bound containers have been emptied, will there be employed consumers left to buy those fabulous goods from Yiwu?

    Today’s zen-nomics koan – this one about People’s Inflation: when there are no wage-earning workers around in the forest, does it make a sound the price of milk drops?

    1. susan the other

      Yes, very good question. I’ve been thinkin’ about my life span. Born 1946, almost 70; lived through the most horrific century humans ever concocted, imo. They called it the American Century. Kinda like being Miss Universe for a year. Now it’s over, clearly. I liked Escobar’s description of reality. Thank you Pepe. The major worry I have is that the planet needs us – all of us including the juggernaut of China – big time. So if the Chinese and the Indians aren’t in on environmental solutions, we don’t have much of a future. Trade? That’s easy. Homo Habilis could always make whatever he needed. Conserving the planet? Not so easy. But I’m not sayin’ China and India aren’t creative. They clearly are.

  10. Chauncey Gardiner

    Heh, don’t have quick and snappy answers to any of your questions here, Prime. But I will say that IMO the “Soft Power” infrastructure transport and pipeline projects such as are being proposed and developed by China’s leadership in cooperation with others is a preferable policy alternative to the policy choices and courses of action we have witnessed as citizens up to this very day.

    What was the title of that book again?… “All I Really Needed To Know I Learned in Kindergarten”?

  11. Larry

    Xi is also turbo-charging the fight against corruption, graft, and waste, especially within the Communist Party itself.

    I’m sorry, I just don’t buy it. I don’t buy that an enlightened individual is rooting out untold amounts of corruption and looting that occurs at the level of Communist part politics. China is still a poor country, but they have minted a great deal of rich people who will do their damndest to remain that way and ensure that their children’s children will as well.

    I just don’t agree with this author’s take on the Asian pivot failure and China’s clear ascendancy. This is probably because I’m reading Gindin and Panitch’s The Making of Global Capitalism. The United States may have stumbled, and indeed may have archetypal signs of swooning from time to time, but we still remain in the pole postion of most important country in the world. We survived a civil war. We survied the Great Depression. We have launched countless boneheaded plots to undermine regime X in country Y to prop up leader Z, and none of it has really cost us dollar one. What would people writing about the United States after Vietnam be saying about our declining (and then nascent) “empire”. Or Nixon’s impeachment? Or really anything that in the short term looks like an American failure, but in hindsight was merely a needle prick and not a fatal blow?

    Who will honestly rise to challenge us? While the U.S. is corrupt, Chinese elites remain corrupt at a level unparralled here. Their population is largley poor and uneducated. A long railway line does not impress me one bit.

    And where does that railway line end? Spain. What can we say about the European elites leading their citizens into poverty and suffering with foolhardy imaginary economic policies? The U.S. has been bad recently, but we have not mactched Eurpoe for sheer stupidity in all matters economic. With unemployment at unprecendented levels in Spain and not decling, what are the Chinese even going to sell in Madrid and Barcelona?

    For better or for worse, the post-WWII policies that placed the USD at the center of all econonomic life and the US at the center of all political life has left us quite powerful, far more powerful than any supposed upstart throne contender. Obama’s China pivot may have failed, but more pivots will be forthcoming. If the Chinese had an open society I might feel differently.

    1. Demeter

      I think the US can match China on the Poor and Uneducated Scale, Percentage-wise.
      The “revolution” in education is gutting this nation, as is the vacuuming out of the Middle Class’s pockets, wallets, bank accounts, pensions and jobs.

      If a rigorous analysis were attempted, China is probably in a much better position regarding its population, despite the slave labor, pollution and corruption, all of which are growing and thriving in the US to an extent that we haven’t seen since…well, pollution got a major block in the ’60’s, slavery in the 20’s, corruption in the 40’s, and in just 40 years, all that good work has been undone, and then some.

      It’s more than a Greater Depression. It’s Despair as a national policy as the robber barons make up for lost time, with interest and amazing cruelty and greed.

  12. different clue

    China’s goal is to exterminate every trace of industry in Europe and replace it with maquiladoras all along the New Silk Road and mother factories in China. The New Silk Road is meant to be One Big NAFTA for Europe.
    Europeans who chafe under the AmericaNato Hegemony might well prefer the New Chinese Hegemony to come.

    China will profit from the de-industrialization of Europe by arbitraging the difference all the way down.

    1. Larry

      This is an interesting thesis and one I had not thought of in regards to the building of the new “silk road”.

      1. different clue

        Yes . . . Europe as one Great Big Ukraine . . . . or “Chinakraine” if one prefers.

        The Europeans should be pleased. By fifty or eighty years from now . . . they won’t have America to kick around anymore.

  13. different clue

    About what “Washington” wants, who in “Washington” really wants it? There is/was a VERY tinfoily political analyst named David Emory who did radio shows which showed up on some Pacifica and Free Speech Radio connected stations. Those shows were called “For The Record” and “Spitfire List”. His thesis, often explained and advanced in detail, is that the various “fascists” considered WWII to be not a “war” but only a “battle”. They saved themselves from defeat by moving money and personell out of Europe when it first seemed Germany might lose the war. They were helped by fascism supporters in the US and elsewhere, the same fascism supporters who had sought a coup against Roosevelt and had helped Hitler to power in Germany to begin with as an experiment in Fascist governance . . . an experimental test-bed if you will.

    Anyway, the various fascist groups and people and money constitute a Fascist International working to Fascise the wordl once and for all. Emory refers to the based-in-America members of this movement as the Underground Fourth Reich. His theory is that the Underground Fourth Reich, operating through sympathetic parties like the Republican Party and sympathetic Presidents like President Bush; seeks to destroy the US from within in order to get revenge on the US for winning the phase of the battle known as World War II. He mentions this theme in the program entitled ” The Engineer Intends To Wreck The Train”, for example. A deathless quote from that program goes like this: ” President George W. Bush represents the visible nexus of the Underground Fourth Reich in America today.”

    Pretty far out there, I suppose. Still, even the stranger theories deserve a passing look to see how fact-based they are and to see how much sense they make of the facts they work from.

  14. knowbuddhau

    Way late to the party, just want to say, Pepe Escobar in the house! Woot woot! Thanks for having my favorite journalist at my favorite web site.

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