China’s “Nixon Move” and the US splits

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Two weeks after the United States closed its ballots, the country is still cut asunder between those celebrating Joe Biden as their new president and those claiming election fraud.

Yet the world is already moving in a different direction, possibly uncertain about what America will actually do. This could be extremely important as China may have devised a new kind of “Nixon’s move” in the opposite direction.

At the moment, the ongoing rallies supporting the lawsuits in favor of President Donald Trump and asserting fraud in vote counting could become a long-term fissure in American politics, even after the results are settled.

A never-ending political campaign

Trump, winning about 73 million votes, could become the standard bearer of the Republican Party for years, which could rally around him as noone else could boast such popularity. He is de facto declaring that, despite the loss, he managed to gain an unprecedented number of supporters and might want to distress the Biden presidency with unsubstantiated accusations. This campaign could condition the Republican Party and the American debate for a long time. Trump then may accept defeat and also wish to turn the time until the next elections into a never-ending political campaign.

This could bog down the nation, which would continue to be bitterly split, and Biden’s efforts to reunite the country could founder. Moreover, the cleavage between Republicans and Democrats could deepen the differences within the Democratic Party, separated between moderates and radicals with diverging agendas and lumped together only in their opposition to Trump. Their internal differences may be larger than those between moderates of the Democratic and the Republican parties.

In other words, the USA socially seems cut in three, with a large central moderate grouping tying together the centrists of the two parties and two large wings, right and left, pulling in different directions.

An unprecedented free-trade agreement

Moreover, will the economy fare much better in the next few months? The Federal Reserve has been printing trillions of dollars to keep the country afloat, and massive debts have been accumulating all over the world. Now the prospect of the vaccine is boosting confidence, but the next few months should be still quite difficult.

Against this backdrop, China and 15 Asian-Pacific countries signed on Sunday an unprecedented free-trade agreement, the Regional Comprehensive Economic Partnership (RCEP), which according to a commentary in the Chinese Global Times, «will end the US hegemony in the West Pacific». This is an interesting point of view because it considers Asia from California, and thus as the extreme West.

The RCEP includes 10 Southeast Asian economies along with China, Japan, South Korea, New Zealand, and Australia. It covers 2.1 billion people, with RCEP’s members accounting for around 30% of global GDP – and it is the world’s largest trade pact.

In 1970, Nixon, tied down in Vietnam war, which the US was losing, thought of opening up to China as a counterweight to the USSR. The move boosted American confidence and helped it to move over Vietnam. The RCEP, where China cozies up to many American allies in the region, could boost China’s confidence in a very delicate moment.

In the past years, China had been dragging its feet on the RCEP, for fear thata sudden opening of its markets could damage its economy. Eventually it apparently found a sensible compromise with its neighbors, although this left India out as Delhi feared being swamped by cheap Chinese exports.

One prize in this is that through the RCEP, China, the largest single member of the pact, can contribute to drafting the rules for trade in the region. This is happening years after the US, under Trump, pulled out of a trade pact of its own, the Trans-Pacific Partnership (TPP), which would have de facto isolated China’s trade.

Apparently, many Asian countries signed the RCEP because they are unsure about what the US will actually do with its TPP. Biden may want to revive it and it could have massive political and strategic gains for the United States, but it is also a tough sell in America.

The underlying problem is that the United States is still bitterly divided on the pros and cons of globalization, as it is the European Union. The financial world and the inventors of new technologies have reaped huge profits from the globalization process and would gain even more if China were to open up as they would like. But the middle class and blue-collar workers have been crushed and marginalized by this first phase of globalization. These people now support a simple answer to globalization – nationalistic populism.

An overall program needed

To make up for all of this, America would need an overall program for its relaunch and greater integration of global markets according to shared rules. Maybe Biden could do it, but as of today, there is no such plan. This makes it difficult to think today of a pure and simple relaunch of the old TPP.

Surely the RCEP may turn up to be more talk than reality and it could have little or no impact on actual trade and regional political and military competition could go on festering the atmosphere of the area. Similarly, US rapprochement with China wasn’t decisive in turning the tide of the Cold War, nor changed Chinese politics. Still in a few years, in the late 1970s, China proved useful to America to stem Soviet ambitions in Afghanistan and South East Asia

America needs a comprehensive recovery plan. Its infrastructure is falling apart; kids finish middle school unable to read and write properly and with poor marks in mathematics. They score below average kids in countries like Germany or Japan, countries at the same level of development. Moreover, the middle class is vanishing while the ultra-rich monopolize all the resources. These ultra-rich should be the first to understand that they must contribute to the regeneration of their country.

In addition to financing schools and hospitals in the developing world, various foundations should relaunch education and health care in the American suburbs. If this were to start with a long-term program, then it would also give greater credibility to new ideas of free-trade areas and place the competition with China on different ground as well. Beijing itself could see not only the instance of American military might, but also the example of the US revitalization force that has been the country’s true great resource so far.

A huge uncertainty over the US role

Short of this, with America mired in domestic disputes, there is a huge uncertainty over the US role in the world.

On the other hand, greater uncertainty in the US and burgeoning domestic difficulties wouldn’t just mean a decline of the country. It could also push the US and the international community to come together even more strongly against a common enemy: China. Its rise as an authoritarian nation could be seen as extremely threatening as it is coupled with the US difficulties.

Then the likelihood of a spike in controversies with China is huge. Here the path for China should also be clear. Beijing shouldn’t gloat over Washington’s troubles, neither should it try to make them bigger. This would be a hostile game with unpredictable costs. It should be rather the time to reform internally and offer olive branches. In the next few weeks we shall see the path Beijing will choose and the one the US is taking.

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