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Ukraine – China’s Trap For The US

Written by: John Perkins, Executive Contributor

Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.

 

From China’s perspective, the US walked into a trap when Russia invaded Ukraine. It was similar to the trap in Afghanistan and Iraq.

Chinese flag and business background

By way of explanation, let me first share a bit of history: After 9/11 the US focused on Afghanistan and Iraq while neglecting much of Africa and Latin America — regions that had long been coveted by the US for their oil and other mineral resources. These regions possess lithium, cobalt, copper, and other minerals essential to high-tech businesses and the green economy. Meanwhile, China went on the offensive.

China’s foreign direct investment in Africa increased nearly 100-fold between 2003 and 2020, from $490 million to $43.4 billion, surpassing the US in 2014. By 2021, China had become the largest bilateral trading partner, largest bilateral lender, and arguably the most influential foreign investor on the African continent.


China repeated the strategy in Latin America and the Caribbean (LAC).


Soon after Xi Jinping rose to leadership in 2012, he made it clear that he intended to challenge the US in its own backyard. In 2015, at the inaugural ministerial meeting of the Forum of China and the Community of Latin American and Caribbean States (China-CELAC Forum), he pledged $250 billion in investments, primarily in infrastructure and resource extraction projects that had been the US’s domain for decades prior to 9/11. Between 2000 and 2020, China-LAC trade grew 26-fold, from $12 billion to $310 billion. By 2020, in less than two decades, China had become the largest trading partner of Brazil, Chile, Mexico, Peru, and Uruguay and the second largest in much of the rest of the region. It was among the top sources of foreign direct investment and finance for LAC countries.

In February 2022, after the US had significantly reduced its presence in Afghanistan and Iraq, Russia struck Ukraine. The US responded by diverting huge amounts of money and energy to Ukraine and — once again — away from the rest of the world. Now, Beijing has reached beyond Africa and LAC. As of 2023, it has become the number one investor and trading partner in countries on every continent. Today, its loans to lower-income countries total nearly as much as those of all other governments combined, according to the World Bank.


It’s important that the US and its allies unite against Russian aggression, and it’s also important to understand why China continues to align itself with Russia.

American pundits like to gloat that the Russian invasion has accomplished the opposite of what Xi wants. They point out that it has strengthened NATO, created terrible food shortages in many parts of the world, demonstrated the power of a small nation to rally support from other countries and stand up to a larger nation (thus, serving as a warning against a Chinese invasion of Taiwan), undermined China’s professed policy of honoring the sovereign rights of other countries, interrupted many of the communications and transportation networks that are integral to the development of China’s Belt and Road Initiative (“New Silk Road”), and blocked supply chains that are essential to Chinese commerce.

However, in the overall scheme of things, these outcomes are viewed by Beijing as relatively short-term. And China looks to the long-term.

The invasion helps promote three of China’s long-term goals. Beijing wants to:

1. End US global policy-setting dominance. Russia has become an ally in China’s strategy of terminating US hegemony over the international system. They are united in their determination to dispel the idea that the world is bound by a set of values and international laws molded by Washington and supported by US-controlled institutions such as the World Bank and IMF.

They join the voices of many non-western states that point to how US demands that other countries obey international laws are hypocritical, given Washington’s willingness to violate such laws by illegally invading Iraq in 2003; offering Israel economic and military aid while it colonizes lands it captured in the West Bank, East Jerusalem, and the Gaza Strip; and provides more money and attention to Ukraine than to Africa, LAC, and other places suffering from severe malnutrition and disease. Non-western countries were particularly incensed when the US defended intellectual property rights and hoarded vaccines rather than launching an aggressive campaign against COVID-19 in the Global South.

2. Break the power of the dollar. China recognizes that having the currency of international trade allows the US to impose sanctions, influence global commerce, and impose its neoliberal economic policies on much of the world. The war in Ukraine enhances Beijing’s long-term goal of replacing the dollar with the yuan, also known as the renminbi. Russia is borrowing in yuen, its energy companies are getting paid in yuan for their exports to China, and much of its “sovereign wealth fund” that supports the war is invested in yuen.


Another important example: long-time American ally Saudi Arabia has made a major shift away from the US. Upset over what it views as increasing US attempts to interfere in government policies and American anti-Muslim attitudes and impressed by China’s rapid rise to global prominence, it is negotiating with China to receive yuan for the oil it sells to Beijing.


3. Strengthen China’s position as the voice of global leadership. Despite what Americans want to believe, many countries respect China as the most likely broker of a negotiated settlement to end the war in Ukraine. For them, the contrast between a leader who can talk and negotiate with Russia and one who responds to aggression with aggression is striking.

Following Putin and Xi’s meeting in September 2022, Putin, in a rare gesture of humility, admitted that Xi had questioned the viability of the war. China’s leader emerged from those meetings looking to many like a person intent on brokering peace. This perception was enhanced in early March 2023 when China brokered the re-establishment of diplomatic relations between Saudi Arabia and Iran after seven years of animosity between the two countries.

China’s role as a peacemaker appeals to nations around the world whose economies have been severely damaged by the war in Ukraine and who see climate change, future pandemics, and environmental destruction as the real threats to their people. A war that raises fears of a nuclear disaster gives Beijing the opportunity to play the role of international peace-broker.

Supporting Ukraine in its war against Russia is and should be an essential part of US policy. At the same time, American policymakers need to pull back from the trap they stepped into in Afghanistan and Iraq. Looking to the long-term is challenging in a country where people are elected for two to six years — and much easier in a country where leadership can keep extending itself. The good news is that America has a long history of meeting tough challenges.

US policymakers must address the following three questions:

  1. How do we expect the war to end?

  2. What is the US strategy — the long-term goal as opposed to short-term tactics — in Ukraine and neighboring countries?

  3. What policies and actions will enhance America’s image in nations that increasingly are turning to China as a trading partner, investor, and model — and that possess resources required by high tech businesses and the green economy?


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John Perkins, Executive Contributor Brainz Magazine

John Perkins is a former chief economist who advised the World Bank, the United Nations, Fortune 500 corporations, and governments around the world. Now as a sought-after speaker and author of 11 books that have been on the New York Times bestseller list for more than 70 weeks, sold over 2 million copies, and are translated into more than 35 languages, he exposes the world of international intrigue and corruption and the EHM strategy that creates global empires. His latest book, Confessions of an Economic Hit Man, 3rd Edition – China’s EHM Strategy; Ways to Stop the Global Takeover, continues his revelations, describes China’s highly effective and dangerous modifications to the EHM strategy, and offers a plan for transforming a failing Death Economy into a regenerative, successful Life Economy. Learn more at johnperkins.org/economichitmanbook.

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