China warnings to the US: Pakistan & public debt

Posted on | augustus 8, 2011 | 3 Comments

In the early 21st century, there are clear indications that China as the ascending global power endeavors to engender international stability in every area from strategic to financial, while the US is behaving as a source of global instability, merely because it is a power in decline; although by no means the kind of decline that the UK experienced as a result of the two world wars in the 20th century.

Out of national interest, China will be the power that seeks to maintain balance where the US and its various allies seek to destabilize and play the catalytic role in crucial areas of conflict and/or instability, yet, without seeking to meddle directly in unofficial traditional spheres of influence that the US, Russia, and and Europe claim. Nor is China bout to give any ground on historical spheres of influence, like North Korea. Nevertheless, China is emerging as the ‘world’s balancing power’, again out of necessity to prevent instability and thus erosion of its ascending power at any level. So far, we have two clear cut areas where China has played such a role.

In the past four months, China has warned the US about very serious issues. On 9 May 2011, the warning was to US alleged plans to hit targets in Pakistan, a move that Beijing interpreted as an act of aggression, according to Pakistani, Chinese and Indian news sources. China had not issued any such warnings to the US since the late 1950s. This issue did not receive much coverage in Western media, given the Western obsession with details about the Bin Laden story. In the aftermath of the attack on the Bin Laden compound, the US was contemplating various scenarios of punishing Pakistan, until China stepped in and insisted that any attack on Pakistan would be construed as an attack on China.

At the same time, China warned India that was collaborating with the US and Israel to hit Pakistani military installations. China made it clear to the US that the it wanted de-escalation, while some Pakistani officials argued that China’s offer of 50 JF-17 fighter jets to Pakistan at no cost signaled the solid alliance between China and Pakistan. There are many issues dividing US and its satellite Pakistan that has been victimized by the ‘war on terror for a decade’. One important issue is the strategic balance of power that the US has been trying to upset; another is that the US is the most destabilizing force in Pakistan, which has many internal and regional sources of de-stablization; another is that the US close ties with India and Israel to weaken Pakistan come at the expense of China as the Asian superpower that wishes to have a voice in determining the balance of power.

Almost five months after China issued a ‘soft ultimatum’ to the US regarding Pakistan’s security, Beijing has struck even deeper into the heart of the US by warning about the perpetual borrowing on the part of the government. After Standard and Poor’s downgraded the US sovereign debt, China struck hard at the heart of America’s power, warning that the days of endless borrowing are over. Losing top credit rating does not mean that the US will become the next Greece, or even the next Italy, but China wants to make sure that the US is not planning to pay back its debt with a sharply devalued dollar that would help exports and result in an effective discount of the debt.

Japan immediately came to the defense of the US. Japan is America’s second largest owner of US bonds. However, the markets are more in line with China, considering in the first week of August 2011, markets lost $2.5 trillion, and the slide may not be over yet. As the world’s largest creditor, China has no choice but to warn the US about its reckless financial policies, just as it warned about its reckless foreign policy.

Geopolitics of energy has brought to the forefront an additional low-level conflict between Asian and Eurasian producers of natural gas and the US that has tried in the past two decades to muscle its way into the domain on behalf of its multinational corporations. The issue of China’s rare earth resources – a topic I have addressed in a separate posting – affords it considerable leverage in the global arena and unique in the sense that it has to balance its political support between energy/minerals producing nations, on the one hand, and consuming nations, on the other. The US as a consumer nation finds itself in the difficult position of engaging in confrontational diplomacy, while China negotiates deals to make sure that it reaches and keeps the top economic spot in the world.

China has been increasing largely because of its rapid economic ascendancy, therefore China is more interested in not making waves internationally than the US that has to resort to military adventures, no matter how costly and reckless, in order to retain its glory of the early Cold War. Naturally, as China moves closer to the number one spot in the global economy, other countries will try to check its power. The question is how Beijing manages its economic and military power and the degree to which is is interested in stability more than the US. It is ironic that China under one-party state has become the pro-stability status quo power in the world, while the US is a source of instability. Who would have imagined such a scenario in 1949 when Mao prevailed over the Nationalists?

AUTHOR: Jon Kofas
E-MAIL: jonkofas [at]


3 Responses to “China warnings to the US: Pakistan & public debt”

  1. Adam Ray
    augustus 8th, 2011 @ 14:31

    Refreshing to see an objective, unbiased article on the subject. If America, the champion of democracy, was to hold referendums in Iraq and Afghanistan the vast majority of people would vote to get the USA out. It’s also interesting to compare the number of military interventions of the two countries in recent decades. While China’s interventions can be counted on fingers of one hand, American interventions, invasions, occupations and sponsored regime changes are in the dozens.

  2. Watertree
    augustus 10th, 2011 @ 15:59

    I think USA needs to stop borrowing money to fight wars. Save money and suffering and go home to your loving families. Take your favourites with you.

  3. Nabeel
    augustus 17th, 2011 @ 06:32

    United States is trying its endeavour to protect its future supply of natural resources throughout the world from GULF to JAPAN & for this is can go any any level of instability.

    US & Europe don’t want to lose their wealth or want other nations to be rich. they do unjustice & prejudice about them.

    IF US didn’t abandon its nature world war 3 can arise & its all responsiblity will be on US+UK+FRANCE specifically & nominally on WEST as whole.

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