The US and China: One Side is Losing, the Other is Winning

The US and China: One Side is Losing, the Other is Winning
By James Petras

Global Research, January 3, 2010

http://www.globalresearch.ca/index.php?context=va&aid=16754

Introduction:

Asian capitalism, notably China and South Korea are competing with the US for
global power. Asian global power is driven by dynamic economic growth, while
the US pursues a strategy of military-driven empire building.


One Day's Read of the Financial Times

Even a cursory read of a single issue of the Financial Times (December 28, 2009)
illustrates the divergent strategies toward empire building. On page one, the
lead article on the US is on its expanding military conflicts and its `war on
terror', entitled "Obama Demands Review of Terror List". In contrast, there are
two page-one articles on China, which describe China's launching of the world's
fastest long-distance passenger train service and China's decision to maintain
its currency pegged to the US dollar as a mechanism to promote its robust export
sector. While Obama turns the US focus on a fourth battle front (Yemen) in the
`war on terror' (after Iraq, Afghanistan and Pakistan), the Financial Times
reports on the same page that a South Korean consortium has won a $20.4 billion
dollar contract to develop civilian nuclear power plants for the United Arab
Emirates, beating its US and European competitors.

On page two of the FT there is a longer article elaborating on the new Chinese
rail system, highlighting its superiority over the US rail service: The Chinese
ultra-modern train takes passengers between two major cities, 1,100 kilometers,
in less than 3 hours whereas the US Amtrack `Express' takes 3 ½ hours to cover
300 kilometers between Boston and New York. While the US passenger rail system
deteriorates from lack of investment and maintenance, China has spent $17
billion dollars constructing its express line. China plans to construct 18,000
kilometers of new track for its ultra-modern system by 2012, while the US will
spend an equivalent amount in financing its `military surge' in Afghanistan and
Pakistan, as well as opening a new war front in Yemen.

China builds a transport system linking producers and labor markets from the
interior provinces with the manufacturing centers and ports on the coast, while
on page 4 the Financial Times describes how the US is welded to its policy of
confronting the `Islamist threat' with an endless `war on terror'. The
decades-long wars and occupations of Moslem countries have diverted hundreds of
billions of dollars of public funds to a militarist policy with no benefit to
the US, while China modernizes its civilian economy. While the White House and
Congress subsidize and pander to the militarist-colonial state of Israel with
its insignificant resource base and market, alienating 1.5 billion Moslems
(Financial Times – page 7), China's gross domestic product (GDP) grew 10 fold
over the past 26 years (FT – page 9). While the US allocated over $1.4 trillion
dollars to Wall Street and the military, increasing the fiscal and current
account deficits, doubling unemployment and perpetuating the recession (FT –
page 12), the Chinese government releases a stimulus package directed at its
domestic manufacturing and construction sectors, leading to an 8% growth in GDP,
a significant reduction of unemployment and `re-igniting linked economies' in
Asia, Latin America and Africa (also on page 12).

While the US was spending time, resources and personnel in running `elections'
for its corrupt clients in Afghanistan and Iraq, and participating in pointless
mediations between its intransigent Israeli partner and its impotent Palestinian
client, the South Korean government backed a consortium headed by the Korea
Electric Power Corporation in its successful bid on the $20.4 billion dollar
nuclear power deal, opening the way for other billion-dollar contracts in the
region (FT – page 13).

While the US was spending over $60 billion dollars on internal policing and
multiplying the number and size of its `homeland' security agencies in pursuit
of potential `terrorists', China was investing $25 billion dollars in `cementing
its energy trading relations' with Russia (FT – page 3).

The story told by the articles and headlines in a single day's issue of the
Financial Times reflects a deeper reality, one that illustrates the great divide
in the world today. The Asian countries, led by China, are reaching world power
status on the basis of their massive domestic and foreign investments in
manufacturing, transportation, technology and mining and mineral processing. In
contrast, the US is a declining world power with a deteriorating society
resulting from its military-driven empire building and its financial-speculative
centered economy:

1. Washington pursues minor military clients in Asia; while China expands
its trading and investment agreements with major economic partners – Russia,
Japan, South Korea and elsewhere.

2. Washington drains the domestic economy to finance overseas wars. China
extracts minerals and energy resources to create its domestic job market in
manufacturing.

3. The US invests in military technology to target local insurgents
challenging US client regimes; China invests in civilian technology to create
competitive exports.

4. China begins to restructure its economy toward developing the country's
interior and allocates greater social spending to redress its gross imbalances
and inequalities while the US rescues and reinforces the parasitical financial
sector, which plundered industries (strips assets via mergers and acquisitions)
and speculates on financial objectives with no impact on employment,
productivity or competitiveness.

5. The US multiplies wars and troop build-ups in the Middle East, South
Asia, the Horn of Africa and Caribbean; China provides investments and loans of
over $25 billion dollars in building infrastructure, mineral extraction, energy
production and assembly plants in Africa.

6. China signs multi-billion dollar trade and investment agreements with
Iran, Venezuela, Brazil, Argentina, Chile, Peru and Bolivia, securing access to
strategic energy, mineral and agricultural resources; Washington provides $6
billion in military aid to Colombia, secures seven military bases from President
Uribe (to threaten Venezuela), backs a military coup in tiny Honduras and
denounces Brazil and Bolivia for diversifying its economic ties with Iran.

7. China increases economic relations with dynamic Latin American economies,
incorporating over 80% of the continent's population; the US partners with the
failed state of Mexico, which has the worst economic performance in the
hemisphere and where powerful drug cartels control wide regions and penetrate
deep into the state apparatus.


Conclusion

China is not an exceptional capitalist country. Under Chinese capitalism, labor
is exploited; inequalities in wealth and access to services are rampant;
peasant-farmers are displaced by mega-dam projects and Chinese companies
recklessly extract minerals and other natural resources in the Third World.
However, China has created scores of millions of manufacturing jobs, reduced
poverty faster and for more people in the shortest time span in history. Its
banks mostly finance production. China doesn't bomb, invade or ravage other
countries. In contrast, US capitalism has been harnessed to a monstrous global
military machine that drains the domestic economy and lowers the domestic
standard of living in order to fund its never-ending foreign wars. Finance,
real estate and commercial capital undermine the manufacturing sector, drawing
profits from speculation and cheap imports.

China invests in petroleum-rich countries; the US attacks them. China sells
plates and bowls for Afghan wedding feasts; US drone aircraft bomb the
celebrations. China invests in extractive industries, but, unlike European
colonialists, it builds railroads, ports, airfields and provides easy credit.
China does not finance and arm ethnic wars and `color rebellions' like the US
CIA. China self-finances its own growth, trade and transportation system; the
US sinks under a multi trillion dollar debt to finance its endless wars, bail
out its Wall Street banks and prop up other non-productive sectors while many
millions remain without jobs.

China will grow and exercise power through the market; the US will engage in
endless wars on its road to bankruptcy and internal decay. China's diversified
growth is linked to dynamic economic partners; US militarism has tied itself to
narco-states, warlord regimes, the overseers of banana republics and the last
and worst bona fide racist colonial regime, Israel.

China entices the world's consumers. US global wars provoke terrorists here and
abroad.

China may encounter crises and even workers rebellions, but it has the economic
resources to accommodate them. The US is in crisis and may face domestic
rebellion, but it has depleted its credit and its factories are all abroad and
its overseas bases and military installations are liabilities, not assets.
There are fewer factories in the US to re-employ its desperate workers: A social
upheaval could see the American workers occupying the empty shells of its former
factories.

To become a `normal state' we have to start all over: Close all investment banks
and military bases abroad and return to America. We have to begin the long
march toward rebuilding industry to serve our domestic needs, to living within
our own natural environment and forsake empire building in favor of constructing
a democratic socialist republic.

When will we pick up the Financial Times or any other daily and read about our
own high-speed rail line carrying American passengers from New York to Boston in
less than one hour? When will our own factories supply our hardware stores?
When will we build wind, solar and ocean-based energy generators? When will we
abandon our military bases and let the world's warlords, drug traffickers and
terrorists face the justice of their own people?

Will we ever read about these in the Financial Times?

In China, it all started with a revolution...