How the USA is Energising a New Cold War
The US-led Indo-Pacific and Trans-Atlantic alliances are fuelling a rapid turn towards global militarisation and exercising asymmetric warfare across Eurasia and along its maritime peripheries.
UPDATE: While your intrepid editor slowly regains his feet after a week of confinement for a serious lung infection, the New Cold War narrative seems to have gained strength.
Today’s Long Mekong Daily is republishing two (long-read) articles that explore the New Cold War from geo-strategic diplomacy and energy. First up is an article on the US-led partitioning of global energy supply chains, which has been underway since at least Richard Nixon’s tenure. Second, is an article on the emerging dynamics of the New Cold War in the Asia-Pacific, which builds on Henry Kissinger’s prediction that China-US relations would ease after the November mid-terms and the ASEAN, East Asia, G20 and APEC summits.
The 2022 U.S. National Security Strategy explicitly targets both Russia and China. However, the Biden administration's strategy for the maintenance of US global hegemony through the prosecution of asymmetric warfare at both ends of the Eurasian super-continent is not new. The Trump administration's strategic shift away from globalism towards patriotism was also designed to align US domestic energy and industrial self-sufficiency with foreign policy, diplomacy and military power in an attempt to fulfill a realist vision of control over global power and wealth. In order to circumvent the institutionalization of a multipolar world order, which places limits on the exercise of US global military and economic power, the Trump administration moved to shift the center of gravity of world oil and natural gas production from the Middle East to North America. As of 2018, the U.S. became the world's largest producer and second largest consumer of energy and, stated Trump, "stands ready to export our abundant, affordable supply of oil, clean coal, and natural gas."
Thus, the U.S. set out to create an arc of non-transit states (Ukraine, Poland, Scandinavia, Baltic States) around Russia to limit energy exports to the EU and actively sought to transfer European dependence on Russian energy to dependence on US oil and gas. This explains, in large part, the resumption of NATO activity in Ukraine, which profited from transfer fees on Russian gas, and unprecedented US political pressure on Germany to halt construction of the Nord Stream 2 pipeline and the promotion of an EU-constructed Baltic pipeline.
The Trump administration's efforts to gain global oil primacy, however, received a grievous shock during the onset of the global COVID-19 pandemic in the first half of 2020. A record plunge in global oil prices, ostensibly due to Russian and Saudi disagreement over production cuts that subsequently led to global demand destruction and supply surplus, exposed the high cost of US shale oil and gas. US shale oil and gas production, which employs millions of US citizens in its long supply chains, immediately collapsed exposing how US foreign policy artificially maintained high oil prices via excessive Saudi output and crippling oil sanctions and political subversion activities against Iran, Libya, Russia and Venezuela.
The withdrawal of the U.S. and its NATO allies from Afghanistan at the end of the War on Terror and the outbreak of the Covid-19 pandemic signalled that Sino-Russian entente and China's Belt and Road Initiative (BRI) infrastructure extensions into Central Asia had wrested effective territorial, political and diplomatic control away from the United States. It also ensured the uninterrupted supply of energy through the Central Asian states of Russia, China, Iran, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan and the primacy of the Shanghai Cooperation Organisation (SCO). Thus, the new eastern frontier for US and NATO activities became the line from the Baltic Sea to the Black Sea on Russia's western periphery.
The move for Ukrainian membership of NATO, which dates from the 1990s and US president Bill Clinton's strategy of "Democratic Enlargement," which securitised democracy promotion,' was accelerated by the U.S. supported coup d'état of 2014 and the consequent Russian annexation of Crimea. Moscow's suspicions that the U.S. was determined to cripple Russian power are rooted in the post-Soviet collapse and the decades-long campaign by successive US administrations to limit Russia's maritime access to the Baltic Sea, the Black Sea and the Mediterranean Sea. Moreover, the U.S.-led campaign of economic and technological sanctions following Russia's annexation of Crimea and increased asymmetric operations to destabilise Russia's southern and western peripheries only confirmed Russian fears of US intentions and NATO expansionism. Russia's successful interventions, to frustrate US and NATO efforts in Syria and Libya, and more recently, to stabilise U.S. backed political turmoil in Kazakhstan, Tajikistan and Uzbekistan were seen in Washington as further evidence that Russian military power must be confronted directly. Thus, the decision to create a buffer zone in the majority Russian populated eastern provinces of Ukraine was not only catalysed by the adoption of legislation by the Ukrainian Parliament for membership in NATO in 2017, 2019 and 2020, but by concerted U.S.-led attacks on Russia's territorial peripheries, Sea Lines of Communication (SLOCs), and its economic and technological advancement.
Since Russia's February 2022 special military operation in Ukraine, the U.S.-led NATO alliance has conducted a proxy war of increasingly vast scale designed to militarily and economically exhaust Russia. Most worryingly, the U.S. has begun to sabotage the physical infrastructure connectivity between Russia and Europe including both the Nord Stream 1 and 2 pipelines and the Norwegian undersea communications cable. Thus, the United States has effectively achieved its long-standing ambition of partitioning Russia from Europe territorially, militarily, politically, economically and infrastructurally. However, the US campaign to partition China from Russia, the G7 and the Indo-Pacific remains incomplete.
In the Western Pacific and western Xinjiang province, the United States has followed a similar strategy of territorial, military, political, economic and infrastructure partition of China from both Europe and the so- called Indo-Pacific. The reinvigorated Quadrilateral Security Dialogue ("Quad" - U.S., Japan, India and Australia) and the AUKUS alliance, between Australia, the UK and U.S., are designed to constrain China within the so-called first island chain, from the tip of the Japanese archipelago through South Korea, Taiwan and the Philippines to the South China Sea (SCS), Australia's far north, the Strait of Malacca and into the Indian Ocean. The Biden administration's continuance and escalation of the Trump-era tech and trade war, increased provocations over Taiwan, political socialisation programs in ASEAN nations, the launch of the Indo-Pacific Economic Framework for Prosperity (IPEF), and more recently, restrictions on semiconductors, semiconductor design and semiconductor production equipment, have placed significant downward pressure on China's economic growth. Concurrently, the U.S. has generated global media and diplomatic narratives of slowing growth in China due to "Communist”mismanagement, heightened risks of military confrontation over Taiwan and the SCS, coercive debt-traps from BRI projects, and pernicious accusations about human rights abuses in Xinjiang and Hong Kong.
By 2003, when the term "Malacca Dilemma" was coined to describe China's critical reliance on the Strait of Malacca sea route, China's perception of a worsening strategic environment along its highly developed and economically dynamic southeast coastal region had sharpened considerably. Since then, China has expanded its global influence and built strategic ties across Africa, the Pacific, Asia and other regions. However, China's rising energy dependence highlights the contemporary security problems of safeguarding commodity supply lanes and defending its historical sovereignty in adjacent seas. Thus, the increase of sea traffic from the Indian Ocean, through the Strait of Malacca and the South China Sea (SCS) headed for ports in China, Japan and Korea, depends to a considerable degree on whether China elects to view energy security geostrategically or geoeconomically. For Beijing, securing energy supplies along the BRI is a coherent strategy for enhancing energy security and comprehensive national power and an effective response to energy vulnerability. China's leaders also promote the physical connectivity of suppliers to China through infrastructure assets such as pipelines, refineries, ports, processing facilities and the benefits that accrue to partner countries from "circulation" into the world's largest industrial energy user and consumer market. The US sabotage of energy infrastructure in Europe can only further exacerbate Beijing's fears for its vast BRI global infrastructure network.
Energy supply and energy demand form a realistic basis for China's efforts to expand energy cooperation with countries along the BRI. With their abundant proven reserves and huge energy outputs, the countries along the BRI and China's evolving energy requirements are highly complementary. The combined proven energy resources of partner countries along the BRI account for 52.27% of the world's reserves. The top ten nations in terms of their proven reserves of energy resources, when ranked in descending order, were: Russia, Iran, India, Saudi Arabia, Kazakhstan, Ukraine, Indonesia, Qatar, Iraq, and the United Arab Emirates, countries which are mainly located in West Asia and the Middle East. China's energy security in relation to the countries along the BRI demonstratesa complex evolutionary trend and remains the main source of overseas energy for China and thus crucial in guaranteeing China's energy security. The benefits from the construction of a petroleum pipeline and good geo-relations between China and Russia led to sharp growth in Russia's energy guarantee toward China's energy security. Saudi Arabia's energy guarantee, however, has fluctuated as its geopolitical situation has changed in the same period.
Tellingly, the U.S. 2022 National Security Strategy does not once mention Saudi Arabia. Foreign reports that had been anticipating China's President Xi Jining visiting Riyadh were immediately followed by reports that Saudi Arabia would no longer restrict oil sales to US dollars. US President Joseph Biden hastily arranged a visit to the "pariah" state, as he had called it in his 2020 presidential campaign, to meet with Saudi Crown Prince Mohammed bin Salman (MBS). However, the reversal of Biden's cold shoulder approach to MBS was far from successful. The Crown Prince has made no concessions to the U.S. since their July 2022 meeting and on September 5, OPEC and its ten allies, led by Russia, ended monthly increases that had reached 690,000 barrels a day in August and announced a collective production cut of 100,000 barrels a day. They also authorised Saudi Arabia to explore further changes to arrest the fall in oil prices, despite US efforts to keep oil prices between $60 and $75 - approximately $10 above the cost of US fracked oil and gas - to undercut Russia's ability to finance its military special operations in Ukraine.
In another snub to the US strategy, in mid-October 2022, OPEC+ cut production by two million barrels per day. The cuts coincided with further inflation spikes in both the U.S. and Europe and, more critically, the Democratic Party's challenge to keep control of both houses of Congress in the November US mid-term elections. Biden's response, that the Saudis would suffer "consequences" came after the Chairman of the Senate Foreign Relations Committee, powerful Democratic Senator Bob Menendez, said the U.S. must immediately freeze all cooperation with Saudi Arabia, including arms sales. Some powerful Democrats argued that the U.S. should halt all military-technological transfers to Saudi Arabia, while others released statements exhorting Biden to compel the Saudis to reconsider the oil cuts and not risk US leverage over the JCPOA (Joint Comprehensive Plan of Action) and in Yemen. However, much more is at stake for the U.S. than the Iran nuclear deal, a significant loss in arms sales - Saudi Arabia is the leading purchaser of US arms exports - and the potential termination of the Saudi-U.S. partnership.
While the prospect of complete US withdrawal and a Saudi military deal with Russia and/or China would be strategically damaging, the dismantling of the petro-dollar arrangement, established by Richard Nixon in 1973, would be catastrophic for US global ambitions. The greatest strength, and greatest weakness, of the United States economy, and therefore its power and wealth, is the continued role of the dollar as the global reserve currency. To stabilize the hyper-inflation that followed the end of the Bretton Woods system, Nixon visited Saudi Arabia in 1973 and convinced the Saudi royal family that the U.S. would guarantee Saudi security in exchange for the Kingdom, the world's largest oil exporter, to price all oil exports in US dollars. Thus, after the oil shock of the 1970s and the "Carter Doctrine,” the U.S. sought to gain control over global energy pricing and markets by subordinating the members of the Organization of the Petroleum Exporting Countries (OPEC). However, the effectiveness of active US sanctions against Russia (not an OPEC member), Iran and Venezuela, respectively the world's second, fifth and eleventh largest oil-producing nations, while undoubtedly restricting the economic health of all three, has been offset by the continued purchase by the world's largest and third largest oil-consuming nations, India and China.
In order to economically sustain the War on Terror, invasions of Afghanistan and Iraq, operations in Syria and Libya, unprecedented tariff and sanctions regimes to restrict global supply chains, deindustrialization efforts, and finance massive quantitative easing both before and after the Covid-19 pandemic, the U.S. has stripped its economy of vigour. Thus, the U.S. has accumulated vast debts, reduced its infrastructure to disrepair, generated domestic insurrection and political polarization and needed to maintain high domestic demand and employment through restrictive immigration. The Biden administration's current Trans-Atlantic and Indo-Pacific "three oceans campaign" - which echoes the Mahan strategy of global hegemony through maritime supremacy - and unlimited financial and material support for its proxy war against Russia has only added to the Bush Jr., Obama and Trump-era economic profligacy and increased energy and food supply problems to produce the highest levels of domestic and global inflation since Richard Nixon ended the Bretton Woods system and unpegged the dollar from the gold standard in 1971. Thus, the potential geopolitical risks for the United States are now reaching crisis levels.
The United States has forgotten the lessons from its own Declaration of Independence when it fought a "revolutionary" war against the British Empire in 1776. Taxation without representation was the fundamental justification, however, heavy taxation had been imposed so Britain could sustain its global contest with France for control of resource-rich territories and populations. In its persistent pursuit of global hegemony since 1945, and its unrealised subjugation of Russia and China, the United States has crippled its economy to such an extent that it is now exporting inflation. The U.S.-produced inflation is equivalent to global taxation, because other economies must accelerate domestic production to pay for dollar price increases in energy, food and debts. In an act of self-inflicted harm, the U.S. has also exported political destabilization and significant inflationary costs into the economies of its allies, while simultaneously reducing its industrial dependence upon their exports. The EU, the UK, Japan and South Korea have seen significant declines in their currencies against the dollar, energy and food import costs have risen substantially, export dependency on the Global South has increased and competition from China, India and other emerging economies has intensified.
For Saudi Arabia, the unrestricted supply of energy, guaranteed by US military support has become an onerousliability. Oil revenue, which was reinvested into the US economy and massive arms sales, was recycled into US treasuries and invested into the markets and sustained US corporate profits. However, the intense volatility in the U.S. and its EU and Japanese partners has given rise to a greater appreciation of the benefits of diversification. China is now the Saudi's largest customer and has a less volatile economy, superior or peer technology and the world's most advanced industrial and manufacturing base with large growth potential including infrastructural connections to the 140 partners of the BRI in Africa, Asia, Europe and Latin America. Moreover, China has managed to maintain both fiscal and monetary stability and contribute to global economic growth despite US efforts to undermine its economic, technological and military potential.
For emerging economies such as Sri Lanka, Thailand, Laos and Turkey, the spectre of a repeat of the 1997 Asian Financial Crisis (AFC) and/or another 2008 Global Financial Crisis (GFC) is a stark reminder of their reliance on the US dollar as a reserve currency and the US fickle support in times of need. The recent collapse of the UK bond market during the transition from Boris Johnson to Liz Truss spurred former US Treasury Secretary Larry Summers to say it was performing like an "emerging economy.” In fact, Japan, UK, and South Korea have been actively reducing their exposure to US treasuries to support their currencies. In turn, the US Fed may need to reverse course and start to buy treasuries to support the bond market or experience a UK-like collapse. Overall, the U.S. is now widely seen, not as the champion of free and open trade and an economic "safe haven," during global crises, but as the major cause of global financial instability, the primary catalyst for the decline of globalisation and multilateralism, the greatest obstacle to achieving multi-polarity and global economic growth, and an outlier for reaching a consensus on planetary challenges and realisation of a shared future for mankind.
Download the original article from Taihe Observer here
The Chinese leadership feels like they’re being led into a trap after it’s become obvious that the US is provoking them into militarily acting on the emerging security dilemma over Taiwan before they’re ready. The “politically inconvenient” truth is that China is more strategically vulnerable right now than it’s been in decades, hence why it’s decided to urgently buy time to recalibrate its multi-year plans by seriously exploring the parameters of a New Détente with the US.
The Golden Billion vs. The Global South
The New Cold War between the US-led West’s Golden Billion and the jointly BRICS- & SCO-led Global South over the direction of the global systemic transition is actively unfolding in the Asia-Pacific. This region is the most populous in the world and also the epicenter of globalization processes, thus making it the most important battleground in this global competition between those two de facto blocs. Accordingly, its emerging military-strategic dynamics should be of interest to all.
The Post Mortem Of China’s Derailed Superpower Plans
The US prioritized containing Russia via the ongoing NATO-led proxy war that it provoked in Ukraine since it regarded that Eurasian Great Power as comparatively weaker than China, believing that Moscow’s supposedly inevitable strategic capitulation will facilitate Washington’s plans against Beijing. The stalemate that’s setting in along the Line of Control (LOC) there will result in Russia’s strategic victory with time, however, hence why the US pushed forward its anti-Chinese plans in early August.
Pelosi’s provocative trip to Taiwan coincided with Biden’s signing of the CHIPS Act, the first of which signaled the resumption of the US’ military-driven “Pivot to Asia” that was temporarily suspended due to Russia’s special operation while the second represented a major escalation in the “tech race”. Since then, AUKUS began merging with the US’ regional treaty allies like Japan alongside EU-centric NATO while the Indo-Pacific Economic Framework’s new roadmap strengthened the US’ economic standing.
These newfound regional military-economic pressures contributed to the unexpected systemic challenges unleashed by the Ukrainian Conflict to risk derailing China’s speculative superpower trajectory. In response, China’s new leadership that assumed office after last month’s 20th National Congress began exploring the parameters of a New Détente with the US in an attempt to temporarily relieve some of the aforementioned pressure while buying time to recalibrate their multi-year plans.
The Path To An American-Chinese New Détente
This was precisely what globally renowned China expert Henry Kissinger forecast would happen, though it remains unclear whether such a pragmatic balance of interests will ultimately be reached between these two superpowers in order to uphold the fading bi-multipolar system in which they have shared stakes. That intermediate phase of the global systemic transition is quickly evolving towards tripolarity ahead of its final form of complex multipolarity (“multiplexity”) due to India’s masterful balancing act.
This rising Great Power has proven itself capable of pragmatically multi-aligningbetween the Golden Billion and the Global South of which it’s a part to become the kingmaker in the New Cold War, the role of which is nowadays recognized even by the US’ media and state representatives despite prior denials. The resultant interplay between the US, China, Russia, and India – the four most globally significant players in the systemic transition – intriguingly creates the basis for pushing the New Détente forward.
To that end, the Chinese Defense Minister just held talks with his American counterpart in Cambodia despite having previously suspended military-to-military engagement in the aftermath of Pelosi’s provocative trip in August. US Secretary of State Blinken also plans to visit Beijing early next year to build upon the political progress achieved in thawing tensions between these two superpowers following their leaders’ first in-person meeting during last week’s G20 in Indonesia.
Regional Military-Strategic Recalibrations
On the topic of that geostrategically positioned ASEAN leader, its Defense Minister just reaffirmed its principled neutrality in the New Cold War, thus reducing the chances (at least for now) that it would passively facilitate the US’ Australian-based military-driven anti-Chinese containment plans. That’ll help further soothe tensions between the American and Chinese superpowers as they continue exploring the parameters of a New Détente.
Nevertheless, nobody should expect the US to unilaterally concede on what it subjectively regards as being in its national interest. Military pressure will still continue to be exerted on the People’s Republic as evidenced by Vice President Harris’ trip to the Philippines, which was widely interpreted as reaffirming America’s mutual defense commitment to its treaty ally amidst its heated territorial dispute with China over the South China Sea.
Speaking of treaty allies, they’re all expected to become the core of a US-led NATO-like regional military alliance centered on AUKUS, even if such isn’t ever officially declared nor all members end up with equal mutual defense commitments to one another. The purpose of this platform will be to keep China’s superpower rise in check irrespective of whether progress is achieved on reaching a New Détente. In practice, this will see Australia, Japan, the Philippines, South Korea, and Thailand playing leading roles.
The “New Normal”
The original NATO’s gradual expansion to the Asia-Pacific will complement its emerging counterpart’s military capabilities and overall potential, thus serving to maximize America’s containment of China. While it remains unclear what role Taiwan will play in this US-led framework, it’s possible that Washington might keep it somewhat comparatively at arm’s length if a New Détente is reached in order to avoid provoking Beijing, though nobody should expect their comprehensive cooperation to end.
The grand strategic challenges that China is facing in its home region (including the systemic ones unleashed by the Ukrainian Conflict that were previously explained in the relevant hyperlink) are therefore expected to worsen and become institutionalized to the point of turning into the “new normal”. The US’ newfound Asia-Pacific AUKUS+ military platform will become the basis upon which its envisaged economic network will be expanded, which will holistically pressure China like never before.
So long as its self-declared “number one red line” of Taiwan isn’t crossed, the People’s Republic is unlikely to commence its own Russian-like special operation in response to this undeniable security dilemma between it and its systemic opponents among the Golden Billion. The reason for this prediction is that China’s grand strategy was completely derailed by the combination of the systemic challenges unleashed by the Ukrainian Conflict and the US’ opportunistic military-economic moves after August.
China’s Pragmatic Response To The US’ Trap
Its leadership, both the prior one before October’s 20th National Congress and those new members that entered into office as a result of that event, feels like they’re being led into a trap after it’s become obvious that the US is provoking them into militarily acting on this security dilemma before they’re ready. The “politically inconvenient” truth is that China is more strategically vulnerable right now than it’s been in decades, hence why it’s decided to urgently buy time to recalibrate its multi-year plans.
This explains why it resumed military-to-military engagement with the US at the Defense Minister level despite suspending such in response to Pelosi’s provocative trip in August even though the US has yet to do anything in return. The same can be said for President Xi’s outreaches to Australia’s new leader even though the latter’s country hasn’t backtracked on any of its unprovoked aggressions against China that were responsible for worsening their relations over the past half-decade.
Where’d All The “Wolf Warriors” Go?
To be clear, these seemingly unilateral concessions on China’s side are superficial for now and are being carried out for goodwill purposes in order to take discussions on the New Détente to their next level, but they also inadvertently confirm just how strategically vulnerable it is right now that it’s even doing this in the first place. The optics of these moves contrast with the perceptions of Chinese policy that were previously pushed by its so-called “wolf warriors”, who curiously seem to have gone quiet.
Their voices reached a crescendo in early August ahead of Pelosi’s provocative trip but then were quickly silenced after China’s calm and strategically responsible response (or lack thereof). In hindsight, that soft power development suggested that its leadership’s grand strategic calculations had tacitly begun to change for the previously mentioned reasons, hence the need to “tame the wolves” (at least for the time being) while exploring the parameters of a New Détente in order to retain goodwill amidst talks.
This insight suggests that observers can monitor Chinese media for hints about the progress that’s being made behind the scenes on reaching a pragmatic balance of influence between the two superpowers. The continued trend of only mildly critiquing the US, both in general and especially regarding relations with China, and even occasionally praising it would suggest that everything remains on track for the time being as is expected to be the case at least until Blinken’s trip to Beijing in early 2023.
Concluding Thoughts
In the interim, the US will seek to further entrench its military-economic achievements in the Asia-Pacific in order to make them the “new normal”, which would keep China in check irrespective of whether a New Détente is ultimately reached while also functioning as a way of “saving face” if it freezes its already high level of comprehensive cooperation with Taiwan as a “concession” to Beijing. As long as China’s “number one red line” isn’t crossed, this piece’s military-strategic dynamics will remain on track.
Find the original article here.