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Why confrontation between United States and China is unprofitable for Ukraine?

Author : Georgiy Kuhaleyshvili

Source : 112 Ukraine

There will be no "thaw" in US-China relations under new President Joe Biden. The other day, White House press secretary Jen Psaki announced the new administration's plans to revise the first phase of the trade agreement with China and develop relations from a position of strength
23:03, 2 February 2021

bbc.com

The growing tension in relations between the United States and China in the foreseeable future creates a cause for concern in Ukraine since we prioritize effective cooperation with both superpowers, which have a significant impact on the world order.

Strength in unity

Biden will move away from the tactics of unilateral frontal attacks in the form of increasing duties on Chinese products and will put pressure on China together with other states, using as a pretext for cases of human rights violations in Hong Kong, Tibet, Xinjiang Uygur Autonomous Region, freedom of international shipping. Biden will continue to persuade leaders in other countries to abandon the use of Chinese telecommunications equipment, which competes with American high-tech products. The White House will initiate collective sanctions against Chinese officials and companies.

The American leader is going to strengthen regional alliances with the participation of the United States to contain the military and technological power of China. In the Far East, he relies on Tokyo and Seoul. In the first days after taking office, Biden held telephone conversations with Japanese Prime Minister Yoshihida Suga. In relations between Japan and China, there is a territorial dispute over the ownership of the Senkaku Islands. Secretary of State Anthony Blinken spoke with his Japanese and South Korean counterparts on security issues. Biden will not withdraw the US military from Japan and South Korea. In 2021, military exercises are planned in East China and South China Seas with the participation of the UK, the USA, France, and Japan.

In the Indian Ocean and the South Pacific Ocean, the Quadrilateral security forum, with the participation of the United States, India, Japan, and Australia, could be a counterbalance to China. Initially, it appeared in 2004 as a platform for coordinating activities to eliminate the consequences of the tsunami, and since 2016 it has been considered as a mechanism for ensuring safe and free navigation in the Indian and Pacific Oceans. In 2020, the participating countries held joint naval exercises.

The United States is reorienting itself towards security cooperation with India in South Asia, ditching Pakistan, its longtime regional partner. Trump accused Pakistani Prime Minister Imran Khan of insufficient effectiveness in the fight against terrorism and threatened to stop providing financial and military assistance. Pakistan is China's longtime ally in South Asia, and their common opponent is India, to which they have territorial claims. From 2014 to 2020, the United States increased the volume of arms supplies to India from $ 1.9 to $ 3.4 billion.

The effectiveness of the Quadriteral forum will depend on the flexibility of the American and Indian leadership. During the election campaign, Biden criticized Indian Prime Minister Narendra Modi for oppressing the Muslim minority in Jammu and Kashmir state. The problematic issue that doomed US-Indian trade negotiations last year to failure is New Delhi's protective duties on imported agricultural products to protect the interests of local farmers.

Perhaps the American president will interact with the political forces of the center-right of Southeast Asia, who do not want to strengthen China in the economies of their countries and do not want to play by its rules. In particular, at the end of January, the Governor of the Philippine province of Cavita, Juanito Remulla of the Nationalist Party, denied permission to the China Communications Construction Co. to modernize Sangli airport in the amount of 10 billion dollars due to complaints about the technical documentation of the project. The firm was involved in the construction of Chinese military facilities in the South China Sea and is on the US blacklist. Such actions are at odds with the policy of the incumbent president of the Philippines, center-left Rodrigo Duterte, who, since coming to power in 2016, has pursued rapprochement with China.

The countries of the Association of Southeast Asian Nations (ASEAN) see China as a potential threat to their security. In 2019-2020 China has conducted naval exercises off the coast of Taiwan, which it considers its breakaway province, not a sovereign country. Recently, the PRC have threatened the authorities of the island with war if they continue to build an independent state. Last year, there was a border clash between Chinese and Indian militaries, and Chinese sailors sank a Vietnamese fishing vessel. There are disputes between China, Vietnam, the Philippines, Malaysia, Brunei, Taiwan over the ownership of the islands in the South China Sea.

The American-Chinese confrontation is not limited to the scale of the Asia-Pacific region, and therefore Biden will involve NATO member countries in curbing the expansionism of the Middle Kingdom. Judging by the November report "NATO 2030: Unity in a New Era," the North Atlantic Treaty Organization is wary of China's growing influence in the economy and information space of European countries. NATO is working on the option of creating a special department to track cooperation between Moscow and Beijing in the military and technological fields, in the field of hybrid and information wars.

Money against democracy

When discussing the importance of strengthening US cooperation with international organizations and democracies, Biden overlooks the fact that ideology no longer exerts such a serious impact on international relations as it did during the Cold War. Building viable anti-Chinese alliances will be hindered by China's economic interdependence with the EU and ASEAN countries, which has reached such a degree that it is simply not profitable for them to spoil relations with Beijing. The paradox is that even those countries that are alarmed by its behavior are tied to trade with China. ASEAN countries are China's main trade and economic partner. In 2019, trade between the EU and the PRC amounted to $662 billion. Europe depends on imports of Chinese goods, while China depends on access to modern technologies.

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Developing and transition countries are eager to work with the Chinese because they have more to offer than the Americans. China provides loans to countries regardless of the effectiveness of the fight against corruption, the presence or absence of democratic institutions, the observance or violation of human rights. The Chinese only care if the investment will pay off or not. Since 2013, China has allocated $ 575 billion in loans and investments to countries in Africa, Latin America, Asia, and Southeastern Europe under the Belt and Road Initiative.

Over 130 countries are participating in this project. The main source of capital investment is the state treasury of the PRC, not private investors. China is increasing its influence in the world by building new roads and railways to control overland transport arteries through investment and loans, to use the financial dependence of other countries on Chinese financing to influence government decisions.

The number one priority for Biden's team is to bring the American economy out of the crisis, to provide financial assistance to the population to overcome the consequences of the coronavirus pandemic, and for this purpose, he proposes to allocate about $ 2 trillion. Now is not the best time for Americans to help developing countries in order to reduce the influence of China. The Chinese economy has weathered the coronavirus relatively mildly. At the end of 2020, China's GDP grew by 2.1%. The economic crisis did not prevent China from providing loans to the governments of Latin America for the purchase of vaccines.

China is taking over from the United States the role of a conductor of globalization, promoting the development of free trade and interaction at the level of international organizations. Beijing initiated the creation of such international financial institutions like the Asian Infrastructure and Investment Bank, the BRICS New Development Bank as an alternative to the International Monetary Fund, where the United States has the greatest influence, negotiating platforms like the Africa Forum, the 17 + 1 initiative with the countries of Central and Eastern Europe, the Shanghai Cooperation Organization with the Russian Federation and the countries of Central Asia.

The PRC fills the vacuum in the regions that the United States leaves behind. In 2017, the United States withdrew from the Trans-Pacific Cooperation preferential trade agreement, which involves 12 countries. Three years later, China signed an alternative Comprehensive Regional Economic Partnership with 16 countries in the Asia-Pacific region, including Australia, India, South Korea, and Japan, that will create the world's largest free-trade zone. According to unofficial information, China has provided Saudi Arabia with uranium enrichment and ballistic missile production technologies. The United States opposes the emergence of nuclear facilities in another Middle Eastern country. The Celestial Empire is developing strategic cooperation with Iran and continues to buy oil in this country, despite the American sanctions. There is no unequivocal attitude in the world towards China, which manages to buy the trust of the political elite of different countries.

Russian dilemma

There is an opinion that the deterioration of relations between China and the United States will contribute to the formation of an alliance with Russia. Both countries have complicated relations with the United States and have mutual economic interests. Russia views China as a source of technology, investment, and a market for natural gas and oil. Beijing sees Moscow as a resource base and a source of military technology. In 2016-2020 the Russian Federation supplied Su-35 fighters and S-400 anti-missile systems to China.

However, Russian-Chinese relations are overshadowed by competition in foreign markets and the struggle for influence in the energy-rich countries of Central Asia. Until 2005, both countries had border territorial disputes. Moscow had to make concessions to Beijing and hand over the Tarabarov Island, part of the territory on the Bolshoi Ussuriisky Island, and areas on Bolshoi Island on the Argun River. It is unlikely that Russia will agree to the role of a second player in the alliance with China.

Who is not with me is against me

American-Chinese antagonism affects the interests of Ukraine, as our priority is relations with both countries. The United States is Ukraine's key security partner. The Americans are helping to reform the Armed Forces of Ukraine. US Defense Secretary Lloyd Austin is in favor of new supplies of weapons to the Ukrainian army. China is Ukraine's largest trade and economic partner. Over the past 10 years, the trade turnover of our countries has increased from 6 to 15.4 billion dollars. Over the past five years, the PRC has invested 300 million dollars in the Ukrainian economy. Most of all, China purchases in Ukraine the products of metallurgy and agriculture - the industries on which our economy is based. The Chinese market has become an alternative to the Russian Federation for some domestic manufacturers. Ukraine has been participating in China's Belt and Road Initiative since 2019.

If the United States and its partners impose collective sanctions against Chinese companies operating in Ukraine, this may slow down the implementation of investment projects and lead to the disruption of transactions. The Chinese company COFCO Agri put into operation a grain terminal in the port of Mykolayiv, CMEC participated in the construction of the Nikopol solar power plant, China Harbor Engineering Company carried out drainage works in the Yuzhny port, Xinjiang Beiken Energy Engineering extracts natural gas in Ukraine, and Sinohydro reconstructed sections of the Kyiv-Chop highway... China plans to invest $ 600 million in the construction of a new block of the Slovyanska thermal power plant. In 2012, China allocated a loan of $ 1.5 billion to the State Food Grain Corporation of Ukraine. The Ministry of Health of Ukraine plans to purchase almost 2 million doses of vaccine from the Chinese company Sinovac.

Joe Biden may give President Volodymyr Zelensky a choice: support America's efforts to contain China in Eastern Europe, or be included in the conditional "blacklist" of conductors for the expansion of the Far Eastern dragon. Under pressure from Washington, the Ukrainian authorities have already had to block the sale of the Motor Sich enterprise to the Chinese companies Skyrizon and Xinwei Technology, which now want to sue $ 3.5 billion through the courts and dismantle Huawei's equipment in government agencies.

Despite the fact that Zelensky does not consider China a geopolitical threat to Ukraine, he said that he would not allow selling a controlling stake in the enterprise to other countries. Apparently, to relieve our American partners of anxiety. At the same time, Chinese investments and orders could bring Ukrainian industrial enterprises out of the crisis. Chinese gadgets will continue to be popular among Ukrainians due to affordable prices.

It is beneficial for Ukraine to maintain a balance in relations with the United States and China and not participate in the battle of the titans. To adapt to other people's interests to the detriment of yourself is a path to nowhere. If Washington wants solidarity from Kyiv on the Chinese issue, then the Ukrainian authorities should ask for something in return: from compensation for losses due to the failure of Chinese projects and ending with deepening security cooperation through NATO or in other formats.

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