Can Russia and China de-dollarize the world economy? Would they come to each other’s aid if one was attacked militarily? What will be the role of China in the future? An American expert on China gives us possible answers
Crosspost with The Saker
The Xi Era – and the Putin Era
[box type=”bio”] Jeff J. Brown has authored numerous books on China. He has travelled to over 85 countries, and runs the website 44 Days, where you can view his complete biography. The text below is an excerpt from a longer interview with Jeff J. Brown. [/box] This article originally appeared at The Vineyard of the Saker.
The Saker: You have recently recorded three very interesting radio shows about China and Russia (see here, here and here). Can you please summarize for us what you think the Chinese want from their relationship with Russia in the middle to long term? While the two countries will not fuse to become one, or even form a confederacy, do you think that China would be interested in joining the Eurasian Union or negotiate some kind of open borders agreement with Russia?
Jeff J. Brown: I earlier mentioned the CSTO [Collective Security Treaty Organization], EEU [Eurasian Economic Union], SCO [Shanghai Cooperation Organisation], and B&R [Belts and Roads Initiative]. The first two are Russian inspired, the latter two are Chinese. The first of each pair is security and strategy oriented. The latter pair are trade based. During his May trip to Moscow with Putin, Xi stopped and met with Nazarbaev in Kazakhstan and then with Belarus’ President, Alexander Lukashenko.
The Chinese press said they all talked about synthesizing these organizations into a holistic whole. Obviously, both sides want their influence, but I am confident they will sort it out. They have to. America’s Seventh fleet is parked off China’s and Russia’s Eastern shores, the US is militarizing Japan, threatening them both, not to mention, banks of NATO missiles are all pointed their way from Europe.
For cross border relations, rail and transport bridges are open across the Sino-Russian border. Just this week, China and Russia proposed a high speed rail line between Jilin Province (in Manchuria) and Vladivostok. The largest engineering project in human history, the gas and oil pipeline system between Russia and China is being built.
All of this is going to continue to intensify and diversify. While I don’t think we will see a Maastricht Treaty, with the free movement of nationals moving from one country to another, I do foresee a day when Russia and China have a border like Canada and the US: no visa, register your passport and go through customs, coming and going. I think Mongolia will eventually be included in the deal.
The Saker: Russia and China have engaged in unprecedented joint military exercises and Chinese officials have even been given access to Russian strategic command posts. Russian and Chinese admirals have given joint reports to Xi and Putin during a video conference organized by the Russian military. Russia is now facing a direct US/NATO threat in Europe while China is threatened by the USA from Japan, Taiwan, Korea and over the Spratlys. If it ever came to a real, shooting, war between the USA and Russia or between the USA and China, do you expect that Russia and China would be willing to get involved and actively support their partners even against the USA?
Jeff J. Brown: Great question, Saker. If the US strikes either China or Russia first, it’s probably World War III and humanity ceases to function as we know it. While there is no announced treaty alliance, we have no way of knowing what Russia and China have agreed to secretly. It is also possible that China and Russia have told NATO back channels to the effect, “You mess with one of us, you deal with us both”. I’ve always wondered if that might be the case, given America’s reluctance to push the pedal to the metal in the Ukraine and the South China Sea.
China’s helmsman: General Secretary of the Communist Party of China Xi Jinping. A capable statesman for extremely delicate and transformative times.
The helping China and Russia wouldn’t even need to fire a shot. Just use all their technology and tricks of the trade to neutralize NATO’s satellites, radars, communications, computer systems, etc. Or either one of them could start selling off their mountains of US Treasury debt. In fact, both of them may have told Obama that if he pushes too far, they will start dumping bonds. Napoléon Bonaparte famously said that whoever is the creditor calls the shots.
Uncle Sam is like an overdosed meth freak on PCP…”
What if Russia feels the need to intervene militarily in the Donbass, or if the Americans can get the Japanese or Taiwanese to do something really stupid? Or of course, the tried and true method of manipulating history: a big, fat false flag in either region, to get the desired result? I guess we will find out the hard way. But think of it this way: the B&R/SCO-EEU/CSTO framework and all its tremendous synergies and potential, just dissolve away, if either China or Russia fell to the Western Empire. If you were Putin or Xi, would you just stand there and let the 21st century and humanity go down the drain?
Then again, both getting involved probably means WWIII and we know how the history books will probably be written as a result, if there is anybody left to write them. What is so scary about all these ponderings is that while Putin and Xi are keeping their heads down and taking care of business around the Asian continent and across the planet, America is so wantonly reckless and out of control. Uncle Sam is like an overdosed meth freak on PCP. It makes me shudder.
The Saker: It is rather obvious that both China and Russia need a de-dollarization of the world economy, but that they don’t want to trigger such a brutal collapse as to crash their own economy. This is especially true of China which is heavily invested in the US economy. Russia is trying to slowly and smoothly pull herself out of the dollar-centered markets. What is China doing? Do you believe that there are plans in China to “de-Walmartize” the Chinese economy or is it still way too early for that?
Jeff J. Brown: Let’s face it, Saker, when the US dollar economy collapses, it could easily trigger WWIII. It is going to be that cataclysmic. And when it does happen, Israel knows they can start counting the days when the gates of Jerusalem change hands for the 45th time, in that city’s heralded 5,000 year history. Israel is at least as out of control as the US, maybe even more so. Their 200-300 undeclared nukes would surely make a mess of Mother Earth and what they started would surely trigger WWIII, with all the depressing outcomes to go with it.
So I think Baba Beijing [Xi Jinping], as well as everybody else in the world, Russia included, are hoping that the Western financial house of smoke, mirrors and cards can keep going on for as long as possible. Why? Because like ants harvesting for the winter, BRICS, CELAC, NAM and all the other anti-Empire coalitions are working feverishly to organize, plan, implement, found and institute as many entities, agreements and systems as possible, to soften the eventual economic Armageddon.
Great examples include the Sino-Russian CRIFT (anti-SWIFT), UCRG (anti-big three credit agencies), BRICS New Development Bank (NDB), Asian Infrastructure Investment Bank (AIIB), Banco del Sur, PetroCaribe and on and on. Just today, China announced that it is setting up the world’s largest gold fund ($16.1 billion), with 60 countries already signed up, to develop gold mining and commerce along, where else – the Asian continent’s Silk Roads, which Admiral Mahan’s ghost can only dream about controlling.
About the Chinese economy de-Walmartizing itself: ironically, to get over the need to drive the economy based on exports and capital investment, Baba Beijing is doing everything in its power to increase internal consumption. Environmentally, with 1.3 billion citizens, that’s kind of a frightening thought, if the Chinese try to imitate the US model of gluttonous, Hampshire hog overconsumption. But the key words in Xi’s Chinese Dream are, “moderately prosperous, socialist society”.
I believe Xi, with all his upbringing about frugality and simplicity, finds American “shop till you drop” consumerism to be a modern day Sodom and Gomorrah. After 35 years of the Deng Era, with its crass, US-style materialism, Xi is setting a new philosophical course for the Chinese nation: the very Buddhist mantra of “less is more”. A jet ski, a Harley and a SUV in the three-car garage are not going to buy you inner peace and happiness, nor is the newest model BMW or Hermes handbag.
“The key words in Xi’s Chinese Dream are, “[a] moderately prosperous, socialist society”…
The Saker: There are regular rumors and speculations about a new joint reserve currency to replace the dollar. Some speak of a Ruble-Yuan currency, others of a “BRICS” currency, possibly back by gold. This rumors are strengthened by the fact that both Russia and China have been and, apparently, still are buying all the gold they can. Is there support in China for such a “gold-backed BRICS currency basket”?
Jeff J. Brown: China and Russia are the two largest gold miners in the world. They are both buying gold at a prodigious rate (although I have not checked Russia’s purchases since the Western oil-ruble gambit was put into play). It is no secret that China wants to have as much gold as the US’s supposed 8,500MT. China’s gold reserves are a state secret, but estimates are Baba Beijing has somewhere around 3,500MT, maybe a little more.
China will be required later this summer to officially declare its gold reserves, in order to have the renminbi considered as a currency in the IMF’s special drawing rights (SDR) basket. I think they will want to be able to say they have more gold reserves than #2 Germany, which officially has 3,400MT (if only the Bundesbank could get it out of American vaults, which seem to be having a hard time coughing it up).
There is a talk of the “Brisco”, a BRICS currency. The new BRICS NDB will help make that vision become a reality. That would pull in Russia and China together for trade and financing, along with India, Brazil and South Africa. Russia has apparently just invited Greece to join BRICS too, and would have not done so, without consulting the other members first.
Yuan-ruble trade will increase exponentially, when the gas and oil pipelines start flowing in 2018, with CRIFT and UCRG humming at full speed. But I don’t think Russia and China are envisioning a “Ruyuan” binational currency. There is just not enough critical mass there. The Brisco seems much more fungible and international.
The Saker: Lastly, what kind of future do you see for China in the next couple of decades? Where is this country headed and what kind of role do you think it sees for itself in the future world?
Jeff J. Brown: For hundreds of years, China had the world’s largest economy. Finally in 1872, in the depths of opium addiction, coolie slavery trade and extractive colonialism, it fell from its longstanding pinnacle, against the rapidly expanding settler/colonial American Empire. So, China is accustomed to greatness. Becoming the world’s biggest Purchasing Power Parity (PPP) economy last year just feels natural around here, and that Century of Humiliation was simply a nadir not to be repeated.
China had the world’s greatest naval fleet 200-300 years before Europe, possessed gunpowder and invented firearms. They sailed all up and down the Asian, African and Middle Eastern coasts and into the Indonesian archipelago, long before Columbus. Unlike the West, it only wanted one thing: win-win trade and cultural exchanges.
BELOW: READ MORE ABOUT CHINA’S POWERFUL 15TH CENTURY’S “TREASURE FLEET”, THE GREATEST PEACEFUL ARMADA THE WORLD HAS EVER SEEN.
[learn_more] In December 1497, when the Portuguese explorer Vasco da Gama sailed into the Indian Ocean, he met little opposition. Instead, he discovered a sea of enormous potential. Fortunately for the Europeans, the great Chinese armada of Admiral Zheng He no longer existed, though it had left a lasting legacy.
That legacy was the sea-routes, markets and ports of a functioning trading system first established by the Arabs and reinforced by the Ming dynasty. If China’s maritime might had still ruled the waves, Vasco da Gama and the European adventurers who followed him would have faced fierce opposition from the massive Chinese fleets and the history of European globalization in the Indian Ocean would have been very different.
Why did the Chinese embark on maritime trade? Drought, floods and famine, combined with the rule of a ruthless Mongol dynasty, saw fourteenth century China wilting under the effect of on-going economic misery. But in 1368 the Ming dynasty emerged ousting the Mongol rule. Having lost some of its overland trade routes, the new Emperor turned his attention to the sea and the trading opportunities it offered and, from 1405 a period of Chinese maritime expansion began. Emperor Zhú Di nominated the eunuch, Zheng He, to command his fleet.
Standing seven feet tall, the admiral was a Chinese Muslim who could speak both Arabic and Chinese. It was a judicious choice ‘to send a Muslim to lead expeditions into sea-lanes dominated by Arab merchant sailors and into countries that were in many cases Muslim’.
But the fleet’s purpose was neither discovery nor warfare because, ‘Ming Confucians preferred persuasion to coercion’. The fleet’s mission was one of diplomacy, to establish foreign relations, exchange gifts and impress other lands with Chinese produce and technology. It achieved this, through enforcing a system of tributes on the countries bordering the Indian Ocean including West Africa. The Treasure Fleet The Chinese fleet numbered over 300 vessels.
Compared to the tiny carracks of the Portuguese explorers, Zheng He’s treasure ships were mammoth ships, the largest measuring 440 feet in length with nine masts and four decks. Each ship was capable of accommodating more than 500 passengers, including navigators, sailors, doctors and soldiers, as well as a massive amount of cargo in its huge hold. It is not surprising that for thirty years the might of the Middle Kingdom dominated the sea-lanes of the Western Sea.
ABOVE: Inside a reconstruction of a treasure ship (Vmenkov)
But besides acts of diplomacy, the fleet was also an armada, transporting a mighty force of soldiers that could be landed at any port. It was written that the fleet was a terrifying sight to behold, striking terror into those who witnessed it and creating such fear that the enemy would capitulate without conflict. Fighting, however, was occasionally inevitable with a Treasure ship carrying up to 24 cast-bronze cannons with a maximum range of 240 to 275m (800–900ft). However, the ships were primarily considered luxury trading vessels rather than warships. But in one battle, Zheng He destroyed the pirate fleet of Chen Zuyi killing 5000 men. He also established a network of military allies. Source: Margaret Muir [/learn_more]
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Other than Vietnam, China has never had imperial ambitions, nor a hegemonic drive to control the world’s resources, while enslaving the natives who owned them. It has always been, “Let’s do business”. Xi’s “win-win” diplomacy is not Potemkin fluff. Baba Beijing means what it says. Xi and Li Keqiang (China’s Premier) are crisscrossing the globe, signing billions upon billions of bilateral and regional trade, energy, aerospace, infrastructure, cultural, educational and scientific deals, all at lightning speed. But historically, this is what the Chinese have always been doing with the outside world, for the last 3,000 years: Maritime Belts and Silk Roads.
Saker, whether the West likes it or not, Napoléon’s oriental sleeping lion is back in historical form. The West has two choices: come to the negotiating table with BRICS or take our Pale Blue Dot down in a fog of nuclear oblivion. The Empire is so evil and corrupt, I’m leaning towards the latter scenario, to be honest. But I am also an eternal optimist.
Here is to hoping that some superhero, an American Vasili Arkhipov or Stanislav Petrov (they both defused potential nuclear war with the US, back in the day) can somehow short circuit the Joint Chiefs of Staff/CIA/Wall Street deep state, which has been ruling the United States since WWII, and bring humanity back from the brink.
Either way world, welcome to the Xi Era – and the Putin Era – and with fingers crossed – the Modi Era too.
ABOUT THE INTERVIEWEE
[box type=”bio”] A polyglot, polymath and peripatetic cultural traveler and social activist, Jeff J Brown is the author of “44 Days Backpacking in China: The Middle Kingdom in the 21st Century, with the United States, Europe and the Fate of the World in Its Looking Glass” (2013), “Reflections in Sinoland – Musings and Anecdotes from the Belly of the New Century Beast” (2015), and “Doctor WriteRead’s Treasure Trove to Great English” (2015). He is currently writing an historical fiction, “Red Letters – The Diaries of Xi Jinping”, due out in 2016. Jeff can be reached at www.44days.net, email@example.com, https://www.facebook.com/44DaysPublishing, https://twitter.com/44_Days and Wechat/Whatsapp: +86-18618144837 [/box]
Remember: All captions and pullquotes are furnished by the editors, NOT the author(s).