North America 7 August 2019 The imperial rivalry between the US and China means the left must choose the EU it wants Britain must decide whether to strengthen Europe as a multilateral bulwark against polarisation, or see it torn apart by competing great powers. Getty Images Xi Jinping and Donald Trump attend a welcome ceremony at the Great Hall of the People in Beijing. Sign UpGet the New Statesman's Morning Call email. Sign-up The US has declared China a “currency manipulator” — which, on the face of it, is like a bear declaring that another bear defecated in the woods. But the formal act of designation is a big deal. Under a law passed in 1988, when the US first discovered that its global dominance might be under threat from trade competitors, the president is empowered to “initiate negotiations ... on an expedited basis” to force China to raise the value of the renminbi against the dollar. The act includes sanctions such as banning Chinese firms from US contracts, and was described at the time by critics as “the economic equivalent of civilian bombing”. But in truth the economic war between China and the US is already under way, and is wholly framed by Trump’s skewed vision of American geopolitics. America has not just banned the Chinese tech firm Huawei from its 5G infrastructure. In 2018 it launched a trade war against China that has escalated to the point where $250bn worth of Chinese exports are currently affected, with Trump issuing a threat to slap tariffs on the rest — $325bn — last week. Beijing’s initial attempts to compromise have now given way to full-blown retaliation. With $110bn of US goods already subject to tariffs, the Chinese government last week ordered its domestic industries to stop buying US agricultural products, currently worth $9bn a year. On a wider level, the Trump administration has declared its intent to “decouple” China from the world economy, while the mouthpiece newspapers of the Chinese leadership are frantically denouncing the US as untrustworthy. So what’s at stake? In the short term, global economic growth. For a system built during 40 years of neoliberal orthodoxy on “free trade”, this sudden and voluntary clogging of the arteries is already producing thrombosis. The IMF has calculated that the conflict could knock 0.5 per cent off global growth next year, while the OECD says each of the combatants could see a percentage point knocked off their own GDP in 2021. However, with global economic growth already slowing due to the exhaustion of the stimulus measures taken after 2008, the warnings of multilateral institutions become increasingly irrelevant. Neither Trump, nor Xi Jinping, still live in a mental space where there is an imperfectly competitive global marketplace. This is about the shape of global geopolitics in the 21st century. And the problem is, few of the actors really understand what is at stake. One of the huge weaknesses in the discipline of “international relations” — both in academia and among policymakers — is the focus on the dynamics of power to the exclusion of class, exploitation and other social forces. Thus, despite huge doctrinal differences within US thinking on geopolitics, the question “how do we prevent the rise of China to global dominance?” is still considered sensible to ask. Though there were many world empires in the pre-industrial world — from Macedonia to Genoa — in the 200-year history of industrial capitalism there have only been two superpowers: Britain and the US. And as Adam Tooze shows, in his masterful study The Deluge, Britain and the US exercised that dominance in entirely different ways. Britain created a world market system into which all the exploited and subject peoples and states were coerced. While America, after 1916, tore apart the formal relationships of imperial preference, colonies and dominions and opened up the world to money from Wall Street, wheat from the Great Plains and machines from Chicago and Detroit. In the process, Tooze argues, America became “a power unlike any other… a novel kind of ‘super-state’, exercising a veto over the financial and security concerns of the other major states of the world”. What we’re seeing in 21st-century China is certainly the emergence of a global power, certainly the replacement of US hegemony with a bipolar world system, and quite possibly the eclipse of the US — not just as a power but as a system of power. Though Barack Obama, during the infamous 2012 “pivot” to Asia, recognised this epochal fact, only Trump has really responded to it. The problem is, it is the wrong — and quite possibly catastrophic response. Marxists try to understand international conflict in class terms: what are the material interests of the elites of the competing countries; how are these mediated through the party system and the state; what role does the conflict play in co-opting the working class and wider civil society? These questions became unfashionable during the era of globalisation, above all because of the emergence of a tangible “capitalist communism” among the global elite: sharing via the finance system the fruits of a global exploitation process. But that era is over. Trump’s “decoupling” project is a clear signal that a section of the US elite (including parts of the Democratic Party) is prepared to see a bipolar world emerge — America’s project is to dominate its own hemisphere and disrupt the emerging Sinosphere. As I described in Clear Bright Future, Trump’s section of the elite is making a rational (from their own billionaire viewpoint) response to the decline in the long-term sources of growth worldwide. Theirs is now a zero — or declining — sum game and the battle is for resources, markets, intellectual property rights and spheres of influence. China, meanwhile, for the last decade has gravitated towards policies that indicate what a rival superpower would look like. It has remilitarised in a way that challenges US global dominance; it has ripped up the welcome mat for foreign direct investment; it is pursuing an open, state-directed policy of “technological sovereignty” — suppressing or stealing Western-originated technology; and it has centralised the state bureaucracy around a policy of anti-democratic state repression. As a realignment of global power, it is strikingly different to the one engineered by Woodrow Wilson and David Lloyd George. Then, the rising and declining powers shared a language, culture, religions and a democratic ideological tradition. China’s differences can be impenetrable even to westerners who’ve spent their lives there. And the fragile and clandestine nature of its elite makes it always possible that “what you see” is not what you are going to get in 20 years’ time. For the left, navigating these realities is going to require thought and strategy. Much of social democracy since 1945 has mapped itself onto the project of a globalising, liberalising America that no longer exists. Parts of the far left, who never offered an explanation for the collapse of the USSR, have proved depressingly willing to hitch a ride on Vladimir Putin’s soft power machine. But there is almost no pro-China wing of the left. In the first place, that’s because China is not trying to create one. They were happy to offer foreign direct investment and goodwill to Greek political party Syriza in its clash with the International Monetary Fund and the European Central Bank but never crossed lines drawn by Berlin. China’s interest in the politics of Western democracies is currently focused on Australia, where the penetration of Chinese business interests into politics is tangible. But one day it will arrive in Europe. The old left antidote to inter-imperialist rivalry was internationalism and multilateralism. The internationalism that made Keir Hardie face-down red-faced crowds in the Welsh coalfields at the start of the First World War. And the multilateralism that made Leonard Woolf sit down and draft a blueprint for the League of Nations in the backroom offices of this magazine. But since 1915 our multilateralism always cut with the grain of the way the US was trying to reorder the world. Few remember it now but at one point the UN and all its sub-agencies were seen as agencies of US power. In this century, internationalism — whether libertarian or proletarian — will cut against the grain. The essential dilemma for the British left, over the next decade, will be whether to strengthen Europe as a trading bloc, a multilateral bulwark against polarisation — or see it Balkanised and torn apart by competing US and Chinese interests (where the latter is mainly expressed through an alliance with Russia). There is, for the British left, a clear material interest in remaining part of a multilateral world, or if that disintegrates, a multilateral Europe. When you hear self-styled left wingers call for the rupture and disintegration of the current world system, you always have to ask: cui bono? You can be certain it isn’t working people in Britain. › There's something everyone has missed about the Brecon by-election Paul Mason is a New Statesman contributing writer, author and film-maker. As economics editor at Newsnight, then Channel 4 News, he covered the global financial crisis, the Arab Spring, the Occupy movement and the Gaza war. His latest book is Clear Bright Future: A radical defence of the human being. Subscribe For more great writing from our award-winning journalists subscribe for just £1 per month!