China-US War: A Frightening Possibility | The Daily Star
12:00 AM, October 16, 2020 / LAST MODIFIED: 12:49 AM, October 16, 2020

China-US War: A Frightening Possibility

US Secretary of State Mike Pompeo, speaking at an Atlantic Council Front Page event on September 15, called for building an international coalition against China. Meanwhile, Michèle Flournoy, widely expected to be Pentagon chief in a Biden administration, said, "American military and its partners should consider developing capabilities to sink the entire Chinese Navy within 72 hours to deter Beijing."

From what we understand from these hawkish statements by the incumbent and possible future key cabinet members of the US, the country is on an irreversible collision course with China, irrespective of who wins in November. To sustain its war economy that mostly benefits its plutocracy, the US needs to be on a war footing. How and when the two countries collide is a matter of conjectures. But the indicators of a gathering storm are getting alarmingly visible.

After the recent China-India spat, it seems India has finally decided to shed its reluctance and actively engage with the anti-China Indo-Pacific military alliance in the making, known as the "Quad", when it invited Russia to join the initiative. Moreover, India and the US are expected to sign the Basic Exchange and Cooperation Agreement (BECA) for geo-spatial cooperation on October 26-27, according to Hindustan Times. In layman's words, it's the basis of a future military alliance, under which both can draw from each other's military assets and resources if and when needed.

To put the above facts into perspective, these are indications that the US's growing aggression against China will only get worse in near future even without Russia joining the Quad, which seems highly unlikely. The US can turn up the heat on China using two possible strategies: i) diplomatic, financial and economic pressure, and ii) military means. As part of the first strategy, it may try to strangle China in the following ways.

First, it may put immense pressure on Japan, ASEAN and the EU to fall in line behind the US sanctions and economic decoupling from China. Japan will be willing, unlike the other two, but if the US stops its present hostility towards the EU, things may change. And this will definitely create a huge problem for Chinese accessibility to the EU market.

Second, the US may ask banks across the world to not have dollar transactions with China. In case of non-compliance by any bank, the US Federal Reserve may penalise that bank by seizing all its dollar assets or barring it from trading in dollars. It can also preclude Chinese banks from using the SWIFT, the interbank dollar transfer tool. In both cases, China's overseas trade of goods and services against dollar payment can be stopped almost immediately. This will in effect mean that any supply chain anywhere or third country doing business with China, or wanting to make payment in dollars to China, will be barred from doing business with the US. Yes, alternative payment in Chinese yuan is possible, but to establish it as a mode of payment first will take a lot of time, and more importantly, many states may be unwilling to accept it instead of dollars.   

Third, the US can raise the tariffs on Chinese goods further, making it impossible for the latter to remain competitive. This means virtually preventing Chinese market access into the US, which it has already started by forcing Chinese tech giants to cease their business in the US.

Fourth, the US may get tempted to apply the nuclear option, and seize all Chinese dollar assets.

All these measures will, in effect, be akin to a declaration of Cold War 2. Well, some key policy planners are keen to do precisely that considering how the first Cold War had created full employment and a prosperous economy. But a key difference is, back then the US was the world's number 1 creditor nation, whereas today it's the biggest debtor nation. By the end of the year, the US is expected to incur a debt of USD 30 trillion, more than its GDP, meaning it has entered a permanent debt trap. If, in this context, the US decides to adopt the above measures, it will definitely harm China by cutting it off from the global market, but in the process will also wreak havoc on the world economy in general and the US economy in particular. Because, in a globalised world economy where innumerable supply chains are so integrated, disruption anywhere is sure to create havoc everywhere. It means the cost of goods and services will rise in the US as it's the biggest consumer.

Moreover, the US will lose the biggest market of its agro products, and all its major companies based in China will lose the most if they are shut off from the 500-million-middle-class Chinese market. The fourth option will surely be a death blow to the dollar's dominance and status as the reserve currency. If this option is used, it is highly unlikely that any country will want to buy dollars as foreign exchange reserve or even buy US treasury bonds. This in turn will stop bankrolling the chronic US budget deficit. Yes, it still can go on printing its currency, but that will trigger inflation and make the dollar even more valueless.

Given this overall negative impact of pursuing the above measures, can the US afford to start a prolonged Cold War? In all probability, the most tempting course of action might be to look for a quick fix, as Ms. Flournoy has suggested, hoping China will bend to US diktats. More so, because the conventional thinking is, the US's presently far superior military capability holds a good chance of defeating or crippling China for good.  In 5-10 years' time when it is sure to reach parity with the US, this may be impossible. But it's inconceivable to imagine that, despite the US's military advantage, China will give in without a massive retaliation if its survival is threatened. If the US is seriously considering such a disastrous undertaking, there is no way China will submit without a regime change—meaning all-out war, boots on the ground, and in the worst-case scenario, a nuclear exchange. Here is where Bangladesh comes in the picture. 

If we look at the map of Asia, there are several entry points to mainland China both on land and by sea. In any military showdown between China and the US, the South China Sea will obviously be the main theatre because that's the main entry point to mainland China. In all probability, neither Russia nor any Central Asian states will allow the US to encroach China from their land in the north or the west. The ASEAN till now has expressed a desire not to take sides in any hot conflict between China and the US. That only leaves South Asia which looks like the obvious second theatre. Afghanistan has no interest in getting involved unless, of course, the US forces stationed there impose an unwanted war upon it. Pakistan, being a nuclear state and a close defence partner of China, will definitely not side with the Quad to wage war against it.

It is natural for India as a member of the Quad and a military ally of the US to lead the assault on China's border, which will definitely turn the entire region including Nepal and Bhutan into a destructive battlefield of superpower hostility. There will be immense pressure on both Bangladesh and Sri Lanka to join the war effort, but far more on Bangladesh, because of the Bay of Bengal. From its shores, the US naval forces can fire hypersonic missiles that can reach deep inside China in a few minutes with a speed between 4-5 thousand mph—a few more minutes perhaps for supersonic jets with a speed close to 2000 mph. The Bay, and by extension Bangladesh, may turn into a key war zone.      

Although Bangladesh has no interest whatsoever to get involved in this superpower rivalry, it may well be dragged forcibly. Before the Afghan invasion, the US threatened Pakistan to either join it or get bombed "back to the Stone Age". Three levers can be used to squeeze Bangladesh. One, India is sure to apply its utmost persuasive power; if that doesn't work, the US might step in with several lucrative offers; and if that fails too, it will restore to its typical muscle-flexing tactics. Bangladesh holds USD 38 billion reserve with the Fed, which the US may threaten to confiscate like it did to Iran and Venezuela. In addition, it may also threaten high tariffs on garments and render it impossible for Bangladesh to remain competitive.

Yes, all these possibilities may seem far-fetched, but no one had imagined the outbreak of World War I even before one month of it. The whole of Europe was already a powder keg—all that was needed was a spark, which came in the form of a murder in Sarajevo. Today, the sharp and growing polarisation and increasing civil/military alignment of antagonistic powers are indicators of a gathering storm. The US and the EU are extremely perturbed to see China beat them in their own game and not bending to their will unlike the rest of the developing world, over which they held full sway for over three centuries—first by colonial occupation, and then by market and financial control which is slowly ebbing away. The developing world has an alternative now. Moreover, throughout history, all major socioeconomic crises had led to warfare. The frequency of close encounters between the US and Chinese forces in the South China Sea may cause accidents anytime, triggering a flare-up.

Like all rational minds, I hope this frightening possibility never occurs. But for that to happen, America will need to make peace with China. Will rational sense prevail? The history of all declining empires says otherwise. All had tried their best to sustain the status quo with the help of the most advanced weaponry, but all eventually imploded and got sucked into the ravages of time.

 

Ali Ahmed Ziauddin is a researcher and activist.

Email: aliahmedziauddin@gmail.com

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