Dr. Murat Kubilay: Can’t Be Neglected: The US-China Economic Conflict

Dr Murat Kubilay: İhmale gelmez: ABD ile Çin’in iktisadi çatışması

Due to Turkey’s intense domestic agenda, in addition to its foreign agenda that has become an extension of national politics, and the economic crisis that has been going on for more than three years, it is difficult to follow global developments. There are events that will affect Turkey in the short or long term, either for or against. One of them is the shift of global proxy wars from Eastern Europe and the Middle East to the Far East.

China-based developments are formed in Turkey through sympathy or opposition to the US Without proper analysis, the current conflict is compared to the cold war between the US and the USSR. Then, sharp conclusions are quickly reached such as ‘America will definitely win’ or ‘New world leader, China’. Even if one of these two extreme results comes true, it will take many years, and in the meantime there is no thought about how it should be placed.

The positioning of other countries in the region between the US and China is done traditionally; For example, the fact that Turkey and even Great Britain are members of the Beijing-based Asian Infrastructure Investment Bank is omitted. The ruling groups of the United States and China are assumed to have a common mentality; But even in the Chinese Communist Party (CCP), decision-making has separate dimensions, even generation gaps.

Conflicts are often seen at the political and military level; In other words, the focus is on who will defeat the other in an imaginary war.

Finally, economic development is equated with the manufacturing sector and services are ignored; Especially the trump cards in the field of high technology and global finance are neglected.

In short, there is hardly a detailed, multidimensional view. The purpose of this article is to share some recent developments; this time, more discussion about the power struggle in Asia in Turkey.

In 2011, the US began to perceive China’s rise as a threat, leaving behind the ‘friendly and developing country’ status it once granted to share high-tech patents. American companies have a dependence on China, especially in the manufacturing sector, and they waited a long time to enter the Chinese market in the field of services. A limited but clear trade war strategy was followed during Donald Trump’s 2018 presidency. The expected gains and losses for both parties did not materialize. The market for high-tech products, its financing, and the ownership of big data were the other side of the war.

There was no softening with the election of Joe Biden as president of the United States, on the contrary, the position of Western capitalism was clarified at the G-7 summit in June. China’s democratic standards will be on the agenda, the global supply chain will not be damaged by an all-out trade war, but Chinese tech companies’ access to Western capital will be hampered. In the framework of cooperation with India, South Korea and Australia, China’s exit to the Eastern Pacific and the Indian Ocean will be blocked. Priority will be given to renovating aging infrastructure in the EU, Britain, Japan and the United States, putting China at a disadvantage in global competition.

China is one of the countries that benefited the most from neoliberalism, the dominant political economy of the 1980s. For this reason, he tried to act calmly in trade wars directed at his own interests, but after a moment he began to react. It is trying to buy time, as it has not yet reached its goal in the fields of nuclear energy, defense industry and space. On the other hand, it is trying to politicize its economic development with the Belt and Road Initiative and infrastructure projects that extend into Turkey.

It also uses its banking system to access resources in Asia, Africa and Latin America. While he wants to maintain his power in foreign trade compared to the United States, he is staying away from the West’s calls for financial liberalization. It seems to have slowed down the steps that will increase the use of the currency on a global scale to cover the weakness of the domestic financial system and avoid financial shock despite the constant current account surplus. In fact, it partially closes to be less exposed to blackmail by foreign capital; For example, Uber’s biggest competitor, Didi, is sanctioned after its massive public offering in New York. With its 92 million members, the CCP considers its system to be more socialist than those represented by the United States. On the centenary of the founding of the CCP on July 1, the country will remain intransigent, as Xi Jinping said; On the other hand, the objective of trade liberalization, increasing national income and being an alternative power with new technologies will be maintained.

If a solid assessment is made, the failures between the US and China can greatly contribute to Turkey’s access to external financing and technology transfer. It is necessary to act for economic interests without being anti-American or admiring and viewing China with prejudice.

It is an excerpt from the author’s article published on Diken.com.tr. The original is at this link.

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