Alfred Dawes | US and China – when elephants fight, the grass suffers

The parting comments by outgoing United States Ambassador Donald Tapia serve as a premonition for what lies ahead for Jamaica in regard to our blossoming relationship with China in the midst of the decline of the 75-year-old ‘American Empire’.

In 1945, 44 allied countries met in Bretton Woods, New Hampshire, to determine the post-World War II financial system of the world. More than half the world was at that time colonies of European nations so they never had a say in the creation of the system that would later serve to subjugate them in the form of economic colonialism to this day. It was decided in the Bretton Woods Agreement that the US dollar, which was linked to gold, would be the world’s reserve currency to which all other currencies would be in turn linked. This paved the way for the dominance of the US dollar and the US in world financial markets and affairs. It was the birth of an empire. At present, more than 60 per cent of all foreign reserves and about 40 per cent of debt across the world are denominated in US dollars. This position is entrenched as long as America has the largest economy, dominates the financial markets, and countries believe in the stability of the US dollar, despite the removal of the gold standard making it a just another fiat currency, a ballooning national debt and wanton printing of money whenever economic stimuli are needed, as in 2008 and 2020.

Any empire needs a solid military to extinguish threats. For much of its history, America has pursued an isolationist approach to foreign affairs. They were late in entering both world wars and was opposed to the creation of new colonies in the West. All this changed after World War II. The Destroyers for Bases agreement between the US and the UK, where US navy destroyers were exchanged for rights to military bases in British colonies. In Jamaica, Vernamfield and Little Goat Island were leased for 99 years under that arrangement. When America left its borders during WWII, she never came home. Military bases in the Persian Gulf, Japan, South Korea and the Pacific Islands projected American firepower across the globe where strategic interests needed defending. The US eclipses every other country’s defence budgets by several factors and is by far the most advanced conventional and nuclear military power in the world.

AWAKENING OF THE CHINESE DRAGON

With control of the world’s money supply and the biggest stick to discourage usurpers, the US enjoys never-before-seen hegemony over world affairs. But as with every empire that spreads its boundaries, cracks begin to appear, and vanquished or emerging rivals salivate at the prospects of supplanting the old empire. The American economy is not as robust as it may appear, and if ever they were to lose their status as printers of the world’s reserve currency, a collapse would be inevitable. Any threat to this hegemony over money is dispatched unceremoniously and with little regard for international laws. Saddam Hussein tried to sell oil in other currencies. Muammar Gaddafi envisioned the creation of a gold- backed African dinar. The rest is history. But the greatest threat the US has faced will not so easily be neutralised. The awakening of the Chinese dragon.

China is the world’s oldest continuously existing civilisation. It is also a near homogeneous population of the Han who are culturally and politically aligned to Chinese tradition and the ruling communist party that celebrates its centennial next year. The centralisation of power ruling over a culturally and ethnically homogeneous population of 1.4 billion people is by itself a threat. Add to this the incredible rise of China as an economic power since it reopened to the world in the 1970s. China is now the world’s factory and the jobs that Trump tried to bring back to America will never return, not only because of the cheap labour, but because of the countless number of experts and specialists that dwarf those in other industrialised nations. It is no wonder that China was poised to be the world’s biggest economy in a few decades. That was before COVID-19. Now China is the only country in the world set to continue its phenomenal growth rate while others are battling a mega recession. That time frame has been considerably shortened.

Not only has China experienced significant growth that has lifted hundreds of millions out of poverty, they are taking aim at the world’s financial markets. With the recent announcement of the opening of its bond market, China is cementing itself as a major disrupter of the Bretton Woods designed, Western-dominated financial world. China has also made a thrust to deal with trading partners in the renminbi (Yuan) rather than the US dollar, a direct assault on that currency’s reserve status. Should more countries abandon the US dollar and trade with China using their currency, the world as we know it will change considerably.

Once the sleeping giant, China is now projecting its military might beyond its great walls into the South China Sea and as far as the horn of Africa. Military spending, though a far cry from the US, is up considerably and their investment in hypersonic weapons has allegedly propelled them ahead of the US in that field. As the current world leaders in 5G technology it is a foregone conclusion that that technology has already been weaponised with potential devastating effects, using unmanned vehicles in future wars.

The US is very aware of their precarious situation as custodians of the world in the presence of China’s economic, technological and military rise. As usual, it will use its dominant position to maintain the economic and military order of a Pax Americanus. China, on the other hand, is looking to culminate thousands of years of continuous civilisation with being the world’s unchallenged superpower. The lines have been drawn and the ambassador is asking us to choose a side. He asks that we choose who is most likely to be benevolent to us, the US or China. But as the African proverb says, “When two elephants fight, it is the grass that suffers”.

- Alfred Dawes is a general, laparoscopic, and weight-loss surgeon; Fellow of the American College of Surgeons; former senior medical officer of the Savanna-la-Mar Public General Hospital; former president of the Jamaica Medical Doctors Association. @dr_aldawes. Email feedback to columns@gleanerjm.com and adawes@ilapmedical.com.