Alexander Yakovenko: "Why the U.S. Is Powerless Against China"

Expert magazine op/ed

Writing in the Russian publication Expert on 3 June, Alexander Yakovenko, Head of the Committee on Global Problems and International Security of the Scientific and Expert Council of the Security Council of the Russian Federation, whose words have appeared here before, examines the issue of why the Outlaw US Empire is “powerless against China.” The introductory header provides some background:

Over the 40 years of its "peaceful rise" in the wake of globalization, China has become the world's leading economy. At the same time, the size of the GDP of the leading Western countries, primarily the United States itself, is pumped up at the expense of the financial sector and its products, including derivatives, as part of the so-called financialization of their economy. For example, in the United States, the real sector of the economy accounts for only 20%, and the service sector accounts for 80%, and this is mainly the financial segment.

The implication of the above information I’ve written about often and that’s the artificial reported size of the Empire’s GDP since the “financial segment” doesn’t produce anything productive—the P stands for Product—so the genuine size of the Empire’s GDP is closer to $10 Trillion than the stated $25 Trillion when a proper accounting is done. What that does is to make the Empire the #2 world economy after China. The gravity of this demotion is just dawning on Exceptionalist Americans. Let’s now read how this Russian expert writes about it from a Russian perspective:

Globalization, launched by the Americans, had its own economic goals--to use cheaper labor in China and other countries of the Global South. Entire industries were transferred there, which ensured a relatively low level of prices for consumer goods. As a result, China turned into a world factory, which was the UK at one time, and then the United States and other leading Western countries. The West underwent deindustrialization. The last industrial bastion was Germany, but it is also collapsing as part of the West's sanctions boomerang in connection with the Ukrainian conflict.

On the whole, globalization, and this was a purely neocolonial project, hit Western society hard. The number of lost jobs was not compensated by the creation of new ones in advanced industries. Not only the working class suffered, but also the middle class, the social pillar of the Western political system.

Now the American elites are trying to blame their crisis on China. The economy of this country really grew due to American and Western investments, technologies and markets. But the situation cannot be reversed. Over these 40 years, China has become a leading technological power and has become financially stronger. As President Vladimir Putin noted, the Americans were 15 years late in containing China.

Naturally, in response to U.S. attempts to contain it, Beijing is building up its military capabilities, including nuclear forces and navy. It has also become a leading shipbuilding power, while the United States is not even able to maintain its obsolete navy. It is not surprising that Trump decided to create a special office for shipbuilding at the White House.

In any case, it is necessary to proceed from the fact that China is a new quality as the world's leading economic power. By the way, in the middle of the 19th century, i.e. before the industrial revolution in the West, China and India accounted for more than half of global production. Now the center of global economic growth has naturally returned to the East. Let me remind you that according to IMF calculations, the top four economic powers (in PPP) are China, the United States, India and Russia.

The Americans cannot do anything about this objective reality. So far, the strategy of reindustrialization at the expense of European allies, who have found themselves at a disadvantage in terms of the cost of energy as a result of both the shale revolution and the Ukrainian conflict, is working. In Europe, the cost of energy is 2-3 times higher than in the United States, which has become the world's leading energy power. Therefore, we can talk about a kind of self-criticism of the Western alliance, when America is trying to revive its industrial sector at the expense of its allies, primarily Germany. This is one of the aspects of the destruction of the historical or collective West as a political community and geopolitical phenomenon.

Donald Trump tried to put pressure on China with his tariff revolution but quickly backtracked: tariffs hit consumption in the United States, leading to an increase in prices for goods from China. In addition, China is already rigidly inscribed in the production chains of American corporations.

Thus, America can only somehow manage the huge trade and economic interdependence with China (the volume of mutual trade is about $500 billion, and China's trade with all Western countries, including the EU, Japan and South Korea, is $2 trillion). It will not be possible to turn it into a weapon. At the same time, China is able to make long-term strategic decisions and there power stands above business (and in the United States – vice versa!), and if Washington tries to take any radical steps, any American government will collapse before the object of its pressure—China.

The question is whether the United States is capable of a long-term strategy of reindustrialization without upheavals and major wars. So far, the answer to this question is no. This is also the main factor in the current geopolitical uncertainty, including the risks of global shocks. This requires some kind of elementary cohesion in American society, which is lacking in conditions of polarization bordering on civil war. Something in the spirit of Roosevelt's New Deal with its elements of state planning, large-scale public works and other measures of state intervention in the economy. The latter is inevitable, but it requires internal upheavals, like the Great Depression of the 1930s. What these shocks will be is still unclear. But we can recall what we ourselves have gone through over the past 40 years, starting with stagnation and perestroika.

On the positive side, the West's global dominance is shrinking dramatically. Not everything in the world now depends on European and Western politics. There are the SCO and BRICS, which are gradually creating alternative schemes and mechanisms of trade, economic, transport and logistics, and monetary settlement. And China plays an important role in them. The multiplicity of centers of the non-Western world is a guarantee of justice and democracy in the formation of a new world order. It will be created in addition to and in spite of the West, it is possible that Washington's attempts to pursue a great-power policy will cause a transition period consisting of the formation of regionalization (the establishment of economic life in regions and macro-regions). Western countries will have to accept this new reality before new institutions and mechanisms of global governance are universally formed on a new, inter-civilizational basis.

The Americans suspect Beijing of seeking to replace them in the mechanisms of their own global domination–-the IMF-WB, the OECD and the WTO. They are indeed being created within the framework of BRICS, but on a consensus basis. Therefore, the United States would rather destroy these mechanisms controlled by it than allow non-Western countries to be included in them on the basis of their real economic and technological power. A striking example is provided by the WTO, where Washington has blocked the functioning of the trade dispute settlement body, which prevents any attempts by China to appeal to it.

Therefore, it can be assumed that the main shocks for the West are yet to come. And the unity of non-Western countries is necessary in order to ensure collective resilience to these shocks. And this constitutes a positive alternative to Western policy. [My Emphasis]

There were several important views the first and most important is a clear, realistic assessment of the domestic economic situation within the Empire and recognition that its own actions have caused the current situation; yet, of course, America blames China . The second is a very subtle appraisal of the Empire’s military power—”obsolete” was the term employed. There was also the admission that Russia as the USSR had also gone through a very steep decline which brought out the notion that the USA could also eventually recover IF a drastic change in governance occurred and what would amount to a regime change/revolution that recentered power over Capital. The change in the global situation is positive without any mention of escalating armed conflict, although there’s the allusion to the Outlaw US Empire acting out—“attempts to pursue a great-power policy”—but that’s in conjunction with further development and presumed resistance by regional networks who will be forming structures and institutions that bypass those constructed by the West. And then there’s a psychological personality observation that the Empire would rather destroy what it created rather than allow any other nation(s) to have power over it. IMO, that’s a very dangerous observation for the UN was very much a US creation. IMO, the UN building is a monument to the Jeckyl/Hyde nature of the US Empire which went from somewhat beneficent to outright hegemony—two very different outcomes for the many millions of its victims. Musk just said the US ought to defund the UN, but Musk’s in revolt to Trump and is no longer part of his team. The last point is the lack of any words that might indicate Russia wanting closer relations with the Empire.

The conclusion is unmistakably Russian Conservative: The “main shocks” to the West are “still to come” and the world needs to be together to weather the storm in the transition to the New Era, a term both Russia and China employ about the future. Lots of lines to read between as the topic remains focused and doesn’t wander off. IMO, there’re underlying assumptions about the SMO and its relation to the topic: Russian victory is assumed; and China’s high rate of development will continue. We shall see what happens as we traverse Trump 2.0, Xi’s Chairmanship and Putin’s final term.

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