[Analytics] Losing trade, tech war means end of US imperialism

A man walks by a Huawei logo at a shopping mall in Shanghai, China, Dec. 6, 2018. REUTERS/Aly Song. Sketched by the Pan Pacific Agency.

China on Tuesday announced intent to move forward on a legislative initiative to ban the export of strategic substances and technology to foreign companies that could pose a “national security threat.” Bhim Bhurtel specially for the Asia Times.

The legislation is expected to be ratified early next year after China’s law-making body, the National People’s Congress, green-lights it.

This legislation may be the first of its kind in China’s commercial history.

The law could ban the export of strategically essential supplies such as rare-earth materials and technology to US companies and their foreign subsidiary entities.

Earlier, in late August, China’s ministries of Commerce and of Science and Technology jointly announced an update on the catalog of “technologies prohibited or restricted from export.” It was the catalog’s first update since 2008.

These decisions look like tit-for-tat to the “Entity List” issued by the US targeting Chinese tech giant Huawei and the Semiconductor Manufacturing International Corporation (SMIC).

Beijing also adopted the “dual circulation” policy in late June. This is aimed at preparing the economy for self-sufficiency if the US decouples economically from China completely.

Similarly, at the 75th United Nations General Assembly in September, Chinese President Xi Jinping surprised observers by pledging that his country’s economy would be made carbon-neutral by 2060 or earlier.

At first glance, it seems that Beijing has retaliated against the US tariffs on Chinese exports and sanctions against its tech companies. However, its latest legal initiative, if it comes into force, will profoundly affect global geopolitics and geo-economics in the future.

History tells that the world order changes at a time of crisis. The World War II crisis brought a wave of de-colonialism in the world. National liberation movements against European colonialism swept across many Asian, African and Latin American countries.

Similarly, the ongoing Covid-19 crisis has set the stage for a new China-influenced world order. China will play a crucial role as a starting point for the end of another phenomenon, imperialism, something the US has been practicing as part of the post-World War II world order.

After the collapse of the Soviet Union, the US believed it enjoyed unchallenged global supremacy. But in the post-pandemic world, the geopolitical map will change drastically. And China will be central to that change.

China wants to send a message to the US that it cannot set international trade rules unilaterally on the strength of its military capability and strategic and military alliances.

It is difficult to predict the exact date of the complete culmination of US imperialism’s decay. Still, that process has now begun. It is similar to the wane of British colonial dominance after World War II. It is widely believed that the complete end of British dominance coincided with the 1956 Suez crisis.

Although imperialism is an old concept in social science, the British political economist A J Hobson systematically discussed it in 1902 for the first time. Later on, in 1916, Russian revolutionary leader Vladimir Lenin wrote a book titled Imperialism, the Highest Stage of Capitalism.

Lenin successfully applied Hobson’s notion to Marxian analysis in Europe’s emerging geopolitical circumstances that led to World War I. Fierce competition among the European capitalist states had provoked a world-scale war over the control of resources and trade.

The Stanford Encyclopedia of Philosophy recognizes the contribution made by Lenin on imperialism. It says, “The lasting impact of the Marxist approach is apparent in contemporary debates about American imperialism, a term which usually means American economic hegemony, regardless of whether such power is exercised directly or indirectly.”

In his US presidential inaugural address on January 20, 1949, Harry S Truman declared, “The old imperialism – exploitation for foreign profit – has no place in our plans. What we envisage is a program of development based on the concepts of democratic fair-dealing.”

But despite Truman’s vow, the US has continuously practiced imperialism all over the postwar world.

In contrast to colonialism, the direct rule and economic exploitation of colonies by great powers, imperialism directly or indirectly imposes international trade rules by way of military power and strategic arms. These rules then ensure that the economic surplus flows toward the imperialist power. The US has maintained its economic and political domination in the world by adopting imperialism.

For example, the Plaza Accord destroyed the Japanese economy in the 1990s. The rate of expansion of the Japanese economy had been much higher than that of the US. Japan’s manufacturing was leading exports internationally, and the country was now the second-largest economy.

To remain an uncontested superpower, the US needed to halt Japan’s economic growth. Washington initiated the Plaza Accord negotiations, and the US, Germany, France, the UK, and Japan signed the accord. Tokyo was cowed into compliance by the US military presence in Japan.

The Plaza Accord was highly influential in the Japanese economy. It led to the Japanese asset price bubble of the late 1980s and ultimately to the lost decade starting from the early 1990s. Many Japanese feel that they have still not recovered from that effect fully.

China has reaped unprecedented benefits from globalization over the past 40 years. Its advancements in manufacturing and technological development are similar to Japan’s in the 1980s. The US now sees itself as the loser from economic globalization. Should the US fail to achieve something like the Plaza Accord in the case of China, it will lose its superpower crown.

That’s why the US has been waging a trade and tech war against China since March 2018.

The US believes it can cow China into accepting its trade conditions with its military forces and strategic alliances. It also believes it can impede China’s economic and technological advancement as it did in Japan’s case by resetting trade rules and banning Chinese tech companies.

By announcing the new legislation to enforce export bans, China wants to send a clear message that the US cannot set international trade rules unilaterally through military power and military and strategic alliances. China will not be intimidated by any such threats, and it will not repeat the mistake Japan committed.

The US has intensified widespread pressure on China during the Covid-19 pandemic. It has also tried to use its allies to mount pressure on China to reset its trade relations.

US strategists reckoned that China would collapse economically because of the pandemic crisis. However, the reality was the reverse. China has successfully contained the coronavirus since the first quarter of 2020, while the US has been badly hit economically and in terms of fatalities from the disease.

China now has started retaliating against US adventurism. Thus the new Chinese export legislation will kick-start the termination of US imperialism.

Social scientists and historians will find the Covid-19 crisis played a crucial role in ending US imperialism, and that the turning point was China’s ban on the export of strategic material and technology to foreign companies that could pose a threat to its “national security.”

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