COVID-19 AND THE US-CHINA TRADE WAR: WILL THE US FALL?
By Tim Akano
1 On December 26th 1991 the Soviet Union died and something new was born “something utterly new”- a unipolar world dominated by a single super power unchecked by any rival and with decisive reach in every corner of the globe. This is staggering development in history, not seen since the fall of Rome’’
Charles Krauthammer, the influencer America Neo Conservative, October, 2004.
2 ‘’’Mao Zedong made Chinese people stand up, Deng Xiaoping made Chinese people rich, Xi Jinping will make Chinese people strong’’
Willy Lam, Chinese Expert, Chinese University, Hong Kong, Oct 21st 2014
3 ‘’Artificial intelligence is the future, not only for Russia, but for all humankind*. *The nation that leads in Ai will be the ruler of the world, it would be undesirable if one nation wins a monopolist position’’
Russian President, Vladimir Putin, 4th September 2017
The die is cast, ‘Alea iacta est’. What a perplexing but interesting times to live? Seeing what’s next from where we stand here today, where a third of Planet’s population is on lockdown in their respective countries, watching Television and surfing the internet 24/7 for the latest news on COVID-19 – is no mean a task. As Africans, our continental survival and prosperity, however, depends on our ability to decode the future or quickly become disruption experts with deep Emotional Intelligence to predict change and identify where the global pendulum of a new world Order is swinging. In 1945, immediately after WW11, Japan and the seven Asian Tigers correctly re-positioned their respective countries in light of the new World Order and aligned with the American-brand of market-driven economy. And the advantages are theirs- even up to this day.
Is American Limo about to park, as it runs low on gasoline? Is Chinese Limo pulling up? Is the sun about to rise again in the East and set again in the West? How close are we to the defining moment when the current Assistant Class Captain will supplant the current Class Captain? – is it now, 5 years, 50 years? More importantly, how prepared is China to get in, when its Limo pulls up?
Typically, the universe has always been in a fluid state, rotating- in no particular order, though. No method to the universe’s madness, it seems, otherwise, Africa that was the cradle of human civilisation, should not have remained in this sorry, inconsequential state. Unarguable, power has a shelf life, an expiry date. And like tomatoes, power is a perishable commodity, truly transient- at all levels, without exception. In the last two centuries, the world has witnessed two dominant Super Powers, Britain from 1850-1914 with London as the world Capital and the USA from 1945 to the present with New York serving as the world capital. Back in 1500, Florence was the world’s Centre of Gravity. And in 1000, Kaifeng in China could be described as the world’s focal point- the Middle Kingdom civilisation. Whereas, in 1 A.D., Rome- the almighty Rome, was the most powerful, and the most influential nation on earth. Before then, the first king to rule the world was King Sargon of Akkad who established the world first empire more than 4000 years ago in Mesopotamia.
Peeping into the future, we therefore ask; is the world’s capital about to change its address from New York to Beijing, against the background of the ongoing political and economic undercurrent? What happens to Africans, should that scenario happen? How do Africans maximise its existence on this Planet- regardless of where the pendulum swings? How does Africa become more? Can Africa, too, reinvent itself like China, and what does it take? How do we optimise Africa’s huge potential in human and material resources and project real power, i.e. power to enforce our core interest and stop other Civilisations from doing to us what is detrimental to our existence and the future of our children? How do we put an end to the continuous, merciless gang raping of Africa by different civilisations and imperialists: Portugal. Arabs, France. Britain, Belgium, Netherlands, America, Russia and China?
THE CHINA CHALLENGE
After 40 years of meticulous, deliberate activities to reinvent itself, China today is standing tall at the global stage, projecting real power. China is the number one global issue today: it is either you are for China or against China, but ignoring China certainly is not an option. Those countries which are against do so at their peril. At a huge price. Just this week, a Brazilian Federal government Minister insulted China, and within 48 hours the 1000 Ventilators ordered by the Brazilian government from China was cancelled by the Chinese government. Not until the Brazilian government apologised, before the Chinese government agreed to re-book their order. When President Trump needed medical tools to fight COVID19, he had to eat his vomit by withdrawing his earlier geographic labelling of Coronavirus as CHINA or WUHAN Virus. It is now ‘’Global Pandemic’’, without any country of origin, according to President Trump. Hmm… In France and Germany, it was captured succinctly- WAR OF MASKS where China is the referee, with power of life and death in its hands, at least in this season of COVID-19! The French Politician accused US of buying off on the China Tarmac, Masks meant for France at 400% top up price, while a German newspaper also accused US of Mask-diversion, i.e. the 200,000 respiratory Masks meant for delivery from China to Federal Police in Berlin were diverted by the US. That is power- as raw as it can be, in favour of China. China now possess huge leverage and global influence to enforce its self-interest without blinking an eye and at the same time prevent other nations ( including the US) from enforcing their self-interest which China considers offensive to its national interest. China matters, globally, presently. The mythical, twin year 2020, it seems, brought with it a pot of uncommon good luck charms for China.
The same China that the British and the French destroyed its old Summer Palace in Beijing in the aftermath of the second Opium War in 1860. The same China that the Japanese in 1895 war annexed part of its territory Formosa (Present day Taiwan) and Liaotang province in China. The same China that Russia invaded in 1900 and annexed part of Manchuria (which used to be part of China during the Qing dynasty) and incorporated it as Russia territory till this day.
But that history belongs to yesterday. A critical analysis of the most critical THREE LEVERS OF POWER shows that the odds today are in China’s favour. In accordance with its strategy of PAECEFUL RISE, formulated forty years ago, China is riding the momentum almost anonymously. Only a few discerning minds with skill to interpret ‘tea leaves’’ can see through the consolidation of power around China
Lever 1: TECHNOLOGY & INNOVATION: on April 6th 2020, in a first, China knocks US from the top spot in global patents race as announced by the World Intellectual Property Organisation (WIPO). China filled 58, 990 applications as against 57,840 by the US for 2019, the first time in 40 years of the UN Agency. China figure shows a 200 fold increase in 20 years, condemning US, Japan, and Germany to 2nd, 3rd and 4th positions respectively. As the WIPO Executive succinctly puts it “ownership of patents is widely seen as an important sign of a country’s economic strength and industrial know-how’’ And the Chinese Huawei, the biggest makers of Telecoms equipment in the world has consistently be number one Corporate patent filer since 2017. On 5G technology alone, Huawei filed 5,714 patents and it is the company with the most patents in Europe and top ten in the US in 2019. China is building Greater Bay Area, the biggest Technological Hub in the world to outcompete the Silicon Valley. China businesses have filled about 80% of Ai patents, i.e. 473 of the 608 Artificial Intelligence patents with WIPO in 2019, filed 30% of the patents on Block chain Technologies and investing $2Billion on the first *Ai Park* in the world, located in Beijing. Thus China is now the world leader in Artificial Intelligence, if President Putin warning is not heeded and China gets monopoly over Ai the same way it gets over 5G- then its Game over for the US. On space technologies, another special frontier, China has landed a space rover on the far side of the moon in January 2019. The unmanned CHANGE e-4 probe touched down in a larger crater near the moon’s South Pole. The biggest masquerade in China’s arsenal is ‘’*MADE IN CHINA 2025*’’, (*MIC* ). This is a strategic road map where the Chinese desire to move away from being a low end manufacturer to becoming high end producer of goods, tapping into the limitless possibilities of Robotics Technologies and artificial intelligence to leapfrog. MIC 2025 is what caused the Trade war between Washington and Beijing under President Trump. MIC2025 is what keeps Trump and his nervous Team awake daily till the wee hours, for the past 3 years.
America can’t imagine a day would come when China would be able to produce everything in Technology including SEMI-CONDUCTOR- and CHIPS.
LEVER 2: ECONOMY: According to the World Economy Forum (WEF), China has been growing its GDP at an average of 10% in the last 40 years doubling its economy size almost every 7 years, succeeded in creating 6 megacities and pulled up about 850 million to prosperity. According to FORTUNE 500, China now has more companies than the US with 129 of its companies listed as against 121 of the US, another of the Chinese first. Besides, four of the ten biggest banks in the world are Chinese while US biggest bank is condemned to the 6th position globally. Meanwhile just two decades ago, 8 out of 10 world’s biggest banks are Americans. In 1973, the US and the West accounted for over 65% of the world manufacturing, as at today, the table has turned 360 degrees in China’s favour as the Global supply chain centre. With regards to Foreign exchange reserves, China is way ahead of other countries with $3.3 Trillion, more than the next 4 biggest countries combined (Japan- Switzerland, Russia, Saudi Arabia, Taiwan, and Hong Kong). 50% of the world vehicles batteries are produced in China, 99% of the world’s electric bus fleet are in China. Shenzhen was the first city in the world to replace all its buses with electric buses and it’s in the process to replace its taxis as well. Besides, about 1.1 million electric cars were sold in China in 2019, representing 50% of the global sales. meanwhile, China is just one fifth of the world population
Furthermore, China has achieved Gender parity in professional and Technical roles and women tertiary enrolment. China is responsible for the production of over 50% of medical products and equipment. In tourism, more tourists now visit China’s *Great Wall* (9.9 million in 20118 as against 5.3 million tourists to *British Museum*) than most of the tourist attraction centres in the West. According to McKinsey, about 160 million Chinese are projected to go on vacation abroad in 2020. Chinese are projected to spend about a quarter of Trillion dollars this year on vacation abroad (before COVID19 broke out, though) in 2018, China had a total of 186 UNICORNS STRAT-UPS- these are companies worth more than $1Billion in yearly revenue. It gives birth to One Unicorn in every 3.8 days according to South China Morning magazine owned by Alibaba. China is equally a global leader in renewable Energy with 75% of the world’s five largest floating solar plants located in China according to WEF. More importantly, Life expectancy in China has improved significantly with women averaging 78 years while men hit 75years- almost the same with the West’s best.
LEVER 3: MILITARY FIRE POWER: As at 2019 China’s annual military spending was $228 billion (1.9% of its GDP) as against US military budget of N$649 billion. (3.2% of GDP). China has a total of 3.1 million personnel both active and Reserve as against US 2.1 military personnel. China like the US, is a nuclear power.
Paradoxically, however, it is this 3rd Lever of Military Power where America still maintains a very big lead over China that has become the Achilles heel threatening the continuity of America global leadership and the entire Western Civilisation. According to Watson Institute of International and Public Affairs at Brown University, America has spent $6.4 Trillion on wars in the Middle East and Asia since 2001 when the war started. Having invested so much energy in fighting terrorism all over the world, America has removed its eyes from the two most important Levers of Power: Technology, innovation and Economy, concentrating in building Military fire power that may eventually be of little advantage when the chips are down. The British Navy power was still strong when it lost the number one position to the US in 1945. What Britain did not have was the robust economy to back up the Military supremacy.
*GOOD NIGHT, *AMERICA*?
The US global leadership’s decline has been years in the oven, the bread is still in the oven though, but the aroma is all over the kitchen indicating the bread is almost baked.
It’s there, I mean the palpable anxiety on the faces of the American neo-conservatives, and it is so thick that you can cut it with a knife. The American Clock on the wall is tick-tocking. By the way, can US be the world’s Class Captain for life? Most unlikely. No parallel of such in history.
Best case scenario for US right now is what I call *TENURE ELONGATION*. Most analysts including Goldman Sachs put the expiry date of US hegemony as the world’s biggest economy at around 2025/2027. But I believe America could still lead far beyond 2027, provided it reinvents itself like the Eagle.
President Trump on 6th April 2020, signed an Executive Order to ‘’seize other Planets’’, in Russian mischievous narrative.
Trump’s Executive Order outlined US Policy on Commercial mining in Space.’’ Outer space is legally and physically unique domain of human activity, and the US does not view it as a GLOBAL COMMONS’’, says President Trump. Russia fired back immediately : ‘’any kind of attempt to privatise space in one form or another- and I find it difficult to say now whether this can be seen as an attempt to privatise space- would be unacceptable’’, Kremlin Spokesman, Dmitry Peskov.
The same day, President Trump put a major hurdle on the way of Huawei’s access to global chip supplies. Trump new measure will require foreign chip makers that use US equipment to apply for a license before they could supply Chips to Huawei. Huawei depends on Taiwan Semi-conductor Manufacturing Corporation, KLA Corporation, Lam Research Corporation and Applied Materials Inc for its Chip. Depending on how fast Huawei $2 billion yearly research can produce an alternative, the company may enter a winter season.
These are some of the aggressive steps Washington is taking to consolidate its global leadership role.
What are the SEVEN MUST WIN BATTLES for the US tenure elongation to materialise? One, re-industrialise America, by bringing back the lost industries and establish new ones through robust economic incentives. Two, replace China with Africa by sponsoring INDUSTRIAL PARKS across Nigeria. Kenya, South Africa and Egypt, creating a 1945- Type-of- Marshall- Aid- Program to develop Africa infrastructure and skills.
Three, President Trump needs to revisit the Obama Trans-Atlantic Trade Agreement. It was a mistake on his part to have trashed the CLUB Obama put together that represents 65% of the world trade. That’s the club that can face and defeat the new China, not USA, not AMERICA FIRST music, sweet only to Trump’s ears. Similarly, Trump needs to mend fences with its traditional partners- Europe, Canada, Japan, South Korea- he should be less brash while dealing with them. Three, Trump should exit America from all wars on terrorism and commit America to *DO GOOD*, always. Agreed, there will always be evil in the world, but if America abstain from EVIL, the curve of terrorism will take an ‘’L’’ shape rather than a ‘’V’’ shape, ultimately. Four, Trump should read what Putin said on the race for supremacy in Ai, Internet of Things, Robotics, Block Chain and Cloud Technologies- all of which are components of the 4th industrial revolution. China seems to be leading in these new technologies, including 5G. Trump should call a C-Level meeting of *MAGA-IFO* (Microsoft, Apple, Google, Amazons, IBM, Facebook, and Oracle) to come up with a new road map that will make US capture the lost grounds in those technologies. US companies are competing with Chinese Companies plus China, therefore, America needs to give stronger backing to its own. Sixth, US should rejig its education system with a view to making it more competitive. America’s fish started to rot from the head. Compared with China, its education system is somewhat obsolete. Seventh, THE WALL STREET ECONOMIC MODEL is fraught with a welter of vulnerabilities, there is an urgent need for a RETHINK- it encourages pleasure without perspiration, greed and manipulation. When the ‘’WALL’’ cracks, the ‘STREET’ caved in under the pressure of the thick wall. There is too much emphasis on stocks, junk bonds and such financial derivatives in the US unlike China that targets building new economic development centres every month at the same time upgrading its infrastructure.
*GOOD MORNING*, ’*OGA*’ *CHINA*?
Unfortunately, not yet ‘’EUREKA’’ for China. It is still a long walk to global leadership acceptability.
What are the 3 Must Win Battles for China?
One, the Chinese concept of’’ *CIVILISATION-STATE*’’ is at variance with the globally acceptable concept of *NATION-STATE*, as means of international relations. The world is watching the way China relates with its neighbours: Taiwan, Hong Kong, Indonesia, and it wonders what happens to smaller nation-states when China rules.
Two, Freedom of speech, Rule of Law, Transparency and accountability. China is regarded as an ‘’F9’’ Student in those four subjects. There is a minimum standard behaviour the world expects from a would-be- world –Class-Captain. Unfortunately, China has not lived up to expectations in its handling of COVID-19 that broke out in Wuhan for not been generous with information. Citizens Censorship on the internet, silencing opposition and government’s critics are some of bad behaviours China must do away with, for it to be taken serious as a contender for the position of World’s Class Captain.
Thirdly, the Chinese ZERO- RELIGIOUS FEELING is considered toxic to the billions of religious people globally If Chinese government will not allow freedom of worship to its Christians and Muslims population inside China, then it calls to question it’s moral readiness to lead a diverse world.
China should have noticed that the TRUST LEVEL between China and Africa is low. Immediately it was announced that Chinese doctors are coming to Nigeria to help fight COVID 19, the population rose against it in the social media . The people don’t trust China, for now. This is one big gap China needs to work on.
*GOOD MORNING AFRICA*?
What’s core to Africa in all this?
First, if the on-going lockdown with its concomitant economic meltdown do not SHOCK African Leaders from their slumber- I’m afraid- nothing else will.
I have spent quality time this week studying China and America policy documents. I did not find where Africa interest is considered by both the Chinese and Americans in their strategic plans.
It’s all about their citizens and the future of their countries.
China will soon replace fossil-driven vehicles with made-in-china electric vehicles. China’s electric vehicles will be sold far cheaper than the cars we use today. Made-in-China 2025 is all about China producing everything, and harvesting all its fruits (low hanging and high hanging ones) for the Chinese nourishments. All Chinese investments in infrastructure across the world under the BELT & SILK ROAD INITIATIVE is an enabler designed for the Chinese export-driven economy via sea, air or land. In another 5 years, if we do not wake up, Chinese will control the OXYGEN we need to breathe in Africa. Why do we need Chinese Engineers to construct our roads, Airports and install street Solar light?
What happened to those ABU, UNN, OAU graduates engineers?
Our oil will soon become sachet water as China embraces electric vehicles and US looks inward to its Shale oil, then what do we survive on?
Africa must insist in producing the batteries that will power the future electric vehicles here in Africa and export it to China as a finished product , since the bulk of the mineral resources required for battery production are minned from Africa-Congo, Mali, etc, mostly illegally by foreigners.
What are the Seven Must-Win-Battles for Africa?
One, we must strengthen and activate the ACFTA- Africa Continental Free Trade Agreement and use it as basis of negotiating with China. 52 countries cannot relate with China on an individual basis and hope to get a fair, equitable deal.
Two, we need a single currency in Africa (AFRO) – not the West Africa’s ECO which the French has just contaminated. The world currency battle will begin after the lockdown as China and Russia are bent on overthrowing the dollar hegemony. What will strengthen Africa economy is to have its own currency through which we can trade in One African market.
Three, the race for 4th Industrial Revolution is open to all races – including Africans. No country has hegemony yet. African youths are hungry and competent enough to compete with their Chinese and Americans provided we make the right investment in infrastructure. I am recommending we set up *five Ai PARKS* across Africa immediately and fund it adequately.
Four. Africa must insist on FAIR and EQUITABLE TRADE DEAL (50:50) with China, going forward.China’s monopoly of the global supply chain has caused a huge dis-equilibrium. This does not augur well for peaceful coexistence.
If China is permitted to produce everything we need, then African leaders should scarp all our Tertiary intuitions without further delay. Where will those universities graduates get jobs if all products and services come from China? The leaders can negotiate a different deal with China under that circumstance and direct China to pay all African jobless youths LIVING WAGES from the profit they make from us.Otherwise, we.must have a regime of 50:50 business relationship in place.
Five, Africa Union (AU) must insist on China writing-off the $145 billion Africa debt this year after the COVID-19. This is the only way Africa can breathe! Where will Africa get the $8billion annual interest rate to pay after the lockdown caused by China?. Thereafter, Africa should seize borrowing.
China never borrowed to develop, never begged for aid from the West either. Then why should we depend on debt and aid to grow? African leaders should desist from going cap-in-hand- looking for aid from Russia, China, America, Japan, India and Brazil. Africa has enough resources to build a modern civilisation for itself without borrowing and beg for aid.
Sixth, from MCKinsey research, Chinese now loves to go on vacation abroad and they were projected to spend about $250 billion in 2020. Africa countries should target taking 50% of the Tourism money from China by building modern amusement Parks across the continent and modernise other enabling infrastructures accordingly.
Finally, Africa’s greatest strength lies in the economic power and Technical Know-how of the Blacks in the diaspora. Africa should plan to build six modern cities to accommodate its citizens in the diaspora and incentivise them to return home. The Jewish in the diaspora developed Israel. The Indians in the diaspora, especially the ones in the US, spearheaded the Technological revolution in India. The Chinese in the diaspora contributed immensely to the development of the modern China through the ‘’BAMBOO NETWORK’’.
To stop another round of colonialism in the new world order, we’ve got to put on our thinking cap and use our 6th sense.
LET’S STOP PLAYING OR LET’S GET SERIOUS.