From Asia Times
Way beyond the first midnight shot in what could possibly turn into a vicious trade war, the US-China tariff tussle must be seen in the context of the game-changing geopolitical and economic Big Picture.
The blame game, as well as all sorts of speculative scenarios on how the tariff tussle may evolve, are peripheral issues. The ultimate target of what started today is not allegedly dysfunctional "free trade"; the target is Made in China 2025, or China configured as a high-tech powerhouse on a par, or even surpassing, the US and the EU.
It's always crucial to stress that it was Germany that actually supplied the blueprint for Made in China 2025 via its Industry 4.0 strategy.
Made in China 2025 targets 10 techno-strategic fields: information technology, including 5G networks and cybersecurity; robotics; aerospace; ocean engineering; high-speed railways; new-energy vehicles; power equipment; agricultural machinery; new materials; and biomedicine.
For Made in China 2025 to bear fruit, Beijing has already invested in five national manufacturing innovation centers and 48 provincial centers, aiming at 40 national centers by 2025. And by 2030, via a parallel strategy, China should also be established as a leader in artificial intelligence (AI).
President Xi Jinping's Chinese Dream mantra, also billed as "the great rejuvenation of the Chinese nation," is strictly linked not only to Made in China 2025, internally, but also, externally, to the Belt and Road Initiative (BRI), the organizing concept of Chinese foreign policy for the foreseeable future. And both Made in China 2025 and BRI are absolutely non-negotiable.
In sharp contrast, there's no evidence a Made in USA 2025 is in the cards. The White House would rather frame the whole process as a battle against China's "economic aggression." The National Security Strategy frames China as the top challenger to US power. The Pentagon's National Defense Strategy sees China as "a strategic competitor using predatory economics."
So how did we get here?Innovate or perish
A quick background is in order.
David Harvey, in The New Imperialism, borrows from P. Gowan's The Global Gamble: Washington's Bid for Global Dominance, to stress how they both see "the radical restructuring of international capitalism after 1973 as a series of gambles on the part of the United States to try to maintain it's hegemonic position in world economic affairs against Europe, Japan and later East and Southeast Asia."
Before the end of the millennium, Harvey was already emphasizing how Wall Street and the US Treasury was deployed as "a formidable instrument of economic statecraft to drive forward both the globalization process and the associated neoliberal domestic transformations."
China for its part masterfully played this capitalist reorientation game -- investing no holds barred in what can be described as "neoliberalism with Chinese characteristics," and profiting to the hilt from US economic power projection via open markets and WTO membership.
Now China, at breakneck speed, is finally ready to invest in its own economic power projection. As Harvey had already noted over a decade ago, the next step for East Asia capitalism would be "away from dependency on the US market" towards "cultivation of an internal market."
Harvey described the massive Chinese modernization program as "an internal version of a spatiotemporal fix that is equivalent to what the USA did internally in the 1950s and 1960s through sub-urbanization and the development of the so-called Sun Belt." Sequentially, China would be "gradually siphoning off the surplus capital of Japan, Taiwan and South Korea and thereby diminishing the flows into the United States." That's already happening.
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