01/02/13 – Conn Hallinan – The Scott Horton Show

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First up is Con Hallinan.
His website is dispatchesfromtheedge.
That's dispatchesfromtheedgeblog.wordpress.com.
Just Google Con Hallinan.
You can find it pretty easy there.
And he writes for Foreign Policy and Focus.
And this one is reprinted at antiwar.com and at Counterpunch and other places.
It's called The Asian Pivot.
Four more years.
Welcome back to the show, Con.
How are you doing?
I'm doing fine, Scott.
How are you?
I'm doing great.
Happy New Year.
Appreciate you joining us today.
Happy New Year to you.
All right.
So you know what?
We have all been paying so much attention to Middle Eastern conflicts for the last little while.
I think probably even people who are used to paying attention to Asian issues have fallen behind.
And this article that you write, you've got some critical opinions and things to say about it.
But first and foremost, you really do a great job of illustrating just what issues are really at near crisis point right now in the Pacific, the American lake, as they call it.
So can you please give us a rundown?
We've got really Japan versus everybody about who owns what islands and a little bit of China versus the Philippines and some others thrown in.
Could you go down the list for us and explain?
There's a long list.
And you're right, Scott.
I think that Asia in some ways has kind of flown under the radar.
You know, people are looking at Syria and the situation in Palestine and Israel, et cetera.
And here you have two nuclear powers, that is both China and the United States, which really have this kind of growing hostile relationship.
And I don't think we've seen this since the end of the Cold War.
And it's not that I think there's going to be a nuclear war between China and the United States.
But what I think is concerning is that there's this real tension now, and as you say, the issues involve Japan and Russia over the Kuril Islands, involve South Korea and, well, North Korea too, but South Korea and Japan over what the South Koreans call the Doku Island and what the Japanese call Takashima.
There's the tension between China and Japan in the East China Sea over these little tiny islands that the Chinese call the Diaoyu and the Japanese call the Senkaku.
And there's also, as you say, a lot of tension in the South China Sea between Brunei and Vietnam and the Philippines and China and Taiwan, et cetera.
And all of this is going on at the time when the United States is really doing the biggest buildup of military forces since the end of the Vietnam War in the Pacific.
We now have 60 percent of our fleet deployed in the Pacific.
We have put 2,500 Marines into northern Australia.
It's the first time since the end of the Second World War.
We've shifted significant air power and manpower into the Pacific, and we've kind of set up this ring of alliances that the Chinese are very nervous about.
And I tend to get nervous when two people who have nuclear weapons get nervous.
That makes me nervous, and it should make people in the region nervous as well.
All right.
Now, I'm so used to the U.S. government being wrong about everything and being really the engine of the worst parts of every conflict around here.
But I guess it's possible that the right-wingers are on to something when they talk about the rise of the Red Dragon and the revenge of the Chinese, this, that, whatever.
Maybe they're still mad about the Boxer Rebellion.
And they are – I mean, their country is run by politicians.
And so maybe they're really a threat, and America really needs to back all our allies to contain them.
Well, the thing about China is that China is – what the Chinese do best of all is they trade, and they make money.
And that's why this is such an odd kind of conflict, because here you have China and Japan that have locked horns over these two islands.
I mean, even to the extent of Chinese sending airplanes into Japanese airspace and Japanese sending warships into the region and everything.
And yet Japan is China's number one trade partner in Asia.
Japan is the largest outside foreign investor in the Chinese economy.
The tension between China and a lot of its neighbors in Southeast Asia belies the fact that Southeast Asia represents the largest trade bloc for China in the world, $365 billion last year.
So really what you have is that you have the rise of a country that has really suffered greatly over the past 200 years from a combination of colonialism and internal upheaval, et cetera.
And the Chinese are feeling their oats.
And sometimes the Chinese are absolutely in the right.
They're completely in the right with the Japanese over this East China Sea situation.
Those are not Japanese islands.
They were taken forcibly from China by Japan in 1895.
Historically and legally, the Chinese really have a perfectly valid claim to those islands.
South China Sea is something very different.
Here you have the Chinese throwing their weight around for countries like Brunei and Vietnam and the Philippines and Taiwan and things like that.
And in a sense, the Chinese are playing the role that we kind of traditionally think of the U.S. as playing in a region.
That seems to be working itself out at this point.
I don't think you can see China as a threat in the traditional sense that we thought of, say, Russia as a threat in the Cold War.
First of all, China doesn't represent militarily anything close to what Russia represented.
It's really a local power.
It's not even – hardly even a regional power, let alone a worldwide power.
So I think that most of this has to do with the fact that the U.S. is looking down the road 50 years, and who's going to be the big dog on the block in terms of world economy?
We're number one now, but the Chinese are closing on us, and they well may pass us by 2025 or possibly even earlier.
And the U.S. wants to position itself so that it maintains control of at least the most important element here, which is energy supplies.
And that means gas and oil and anything else that sort of fuels industry.
And that's why the Chinese are nervous, because 80 percent of their energy supplies move by sea, and they move through seas which are controlled by the United States, by the U.S.
5th Fleet and the U.S.
7th Fleet.
So, I mean, the language isn't as hawkish, but ultimately the Chinese sort of are – it sounds like what you're saying is they're guilty of the same sin as the Iranians, which is they have a degree of independence from us.
They're big enough power that they can do what they want without just being another satellite of the American empire.
And the American empire considers anybody who can insist on their own independence from Cuba to Iran to China as therefore a threat.
That's what a threat is to them, someone who can resist.
Exactly.
I mean, that's really basically what it's about.
And it's not that all Americans – I'm talking about Americans in government – have exactly the same position on China or are united in exactly what to do around China.
But there certainly is a tendency for – and particularly I think this has been stressed over the last decade – is that there's been an increasing militarization of American diplomacy.
And we're not talking just about Asia here.
We're not talking about this Asia pivot, which is mainly military forces.
I mean, they're also militarizing the relationship to Africa.
For the first time, we have significant numbers of ground troops on the African continent.
We have military agreements with countries all across Africa.
Now, if you're Chinese, see, you get paranoid about that because they get a lot of their oil from Sudan and Angola.
And that means all of that oil and gas from those two sources passes through the Indian Ocean and then through the Malacca Straits in Indonesia.
And all of that's controlled by the United States and its allies.
So if you're Chinese and you're paranoid, I've got to say, if I was China, given the history of the last 150, 200 years, I think I might be a little paranoid.
If I was paranoid, then what I see here is this effort to potentially choke off the Chinese economy by shutting down their oil and gas supplies.
It's one of the reasons why China is making such a big effort to build pipelines that avoid gas and oil going by sea from Pakistan, from Russia, from Central Asia, Kazakhstan, Uzbekistan, etc.
And so you want to think of this really as a giant chess game at this point.
And for the first time, there are some pieces on the board which we can't just push around.
And I think that's very difficult for Americans to kind of conceive of.
They haven't really been able to conceive of the fact that they were able to pretty much get their way except with the Soviet bloc.
And when the Soviet bloc collapsed, we were supposed to be it.
That's it.
We can pretty much do what we want.
And we can't.
And that's disturbing to us.
Well, it's interesting because when you talk about all the countries, Japan and Korea and whatever, their biggest trading partners, including they're our biggest trading partner too, right?
Yes, they are.
And so all of this belies the fact that the rise of their prosperity from basically Mao raised China completely to the ground.
I mean, they're starting over again from 1976 on basically.
And the rise of their prosperity has benefited and is continuing to benefit everyone else.
It's not like we're talking about some risk board where if they get more power, then boo-hoo for everyone else.
Even further than that, I would say that at this point, the world's economy is tied to China in a way in which the world's economy has not been tied to one single country since, say, the 1950s and the United States.
The fact that China did not go through a major meltdown in 2008, which was largely because the Chinese turned around and poured a huge amount of money into their economy in order to get a fiscal stimulation of the economy.
Because of that, there was less of a meltdown than there could have been in 2008.
And right now, if China's economy gets a sneeze, the rest of the world gets pneumonia.
So, I mean, I think your point is very valid.
The world at this point needs China.
They need what they produce.
They need to sell the raw materials that keep the Chinese economy running.
And, of course, the Chinese economy needs to keep running at this because one thing they cannot deal with is economic downturn because of the possibility of political unrest.
And the Chinese are very concerned about the possibility of political unrest, and they ought to be.
Well, and that brings up another point, which is that their economy is still a basket case because they have so much government, and they are still run by the Communist Party dictatorship there, and there's so much cronyism.
I remember reading – it's been a couple of years ago now – about how we have these ghost suburbs in California.
They have a ghost Houston-sized gigantic city that they built where it was all some central plan to build this giant city, but nobody lives there.
There's no industry there.
There's no business there.
There's no people there.
I mean, these kinds of malinvestments, as the Austrians call it, I mean, that just is one signal.
I mean, hell, they're stuck.
They have to more or less peg their currency to ours, and we have such a terrible monetary policy.
They have to follow suit just like the poor Egyptians and all the revolutions across the Middle East are based on American inflation.
You know what I mean?
So the Chinese, they're pretty much – they can't be counted on over the medium term and the long term.
They've got their own problems internally big time.
Oh, no question, and part of that is the fact that the – I mean, there are two things that are happening.
One is that the boom took place partly because you do have centralization, and so you can make a decision that you're going to build infrastructure, for instance, or you're going to pour money into the local economies or regional economies, et cetera, and stimulate those economies and keep jobs going and things like that.
But largely, their export industry is based on the fact that they have very low wages.
Well, Chinese are putting up – not putting up with very low wages these days, and people are demanding higher wages, and wages are increasing.
Well, as wages increase, then the world export industry is going to start looking at places like India or Vietnam or the Philippines where you have lower wages, and that's what they're moving towards.
So you have this problem of – it's not a problem for the Chinese people.
It's a good thing for the Chinese people, but as wages go up, then it means that China is less competitive.
And then the other side of that is that there's terrible ecological crisis going on in China, enormous environmental degradation, which under conditions of global warming, which for China translates into drought, is a serious problem and has caused a lot of tension with their neighbors because they are concerned about drought.
So they're building dams, and they're damming up rivers, and then a lot of people who are downstream of those rivers, which are not Chinese but are Laotians or Vietnamese or Indians or Pakistanis or whatever, they're not happy about all these dams that are going up because they're getting less money, less water that are coming in.
And so there are all of these contradictions that are going on.
But the fact that China is poised as a threat to the United States, they're not a physical threat.
They're an economic threat.
Well, yeah, because we're in deep trouble, and we're not going to get out of it right away.
Okay, this is a crazy one maybe.
It's not in your article or anything like that, but I wonder what you think of it.
I've read a couple of different times.
I think this is actually the basis of a Tom Clancy book from back in the 1990s, and it was the possibility of a war between Russia and China, where China would try to invade and take Siberia.
There are so few people there, so little resistance, and the population is waning and waning in Russia, while in China they need more and more.
And I've read in different places, investment newsletters here or there, that, hey, this is a flashpoint to watch for the medium term in the decades in the future, that this could really be a problem.
What do you think?
I don't think so, and I'll give you two reasons why I think that's not the case.
One is that China needs Russian energy supplies, and Russia is the largest exporter.
Saudi Arabia and Russia are the largest exporters of oil and gas, and Russia is number one.
And China needs that.
China needs the oil and gas that they get from Russia.
It's cheaper to just buy it from them, in other words.
And they're buying it from them, and they get a break because they buy in bulk.
But Russia is in the process now of building an enormous oil pipeline to go to the Pacific, and China will benefit from that, so will Japan, so will other countries in Asia and Southeast Asia, but mainly Japan and China.
The other side of it is that partly in response to the fact that after the fall of the Soviet Union and you had this sort of vacuum and this was supposed to be the new American century, one of the things that the Russians and Chinese did is they got together and they started an organization called the Shanghai Cooperation Organization.
It consists of China and Russia, and almost all of the countries in Central Asia, what we think of as the steams, you know, Kazakhstan and Uzbekistan, Tajikistan, etc., which are all very, very rich in oil and gas, or most are very rich in oil and gas.
And it also includes observer status from India and Pakistan, Iran, etc.
And it's really a regional kind of counterbalance to the hegemony of the United States.
If you want a similar kind of organization, think of Mercosur in South America, even though the Shanghai Cooperation Organization is not specifically a trade organization like Mercosur is.
But Mercosur is the third largest trade organization on the planet now after the EU and the United States free trade regime.
And what it means is that actually what you've got is a lot closer cooperation.
For instance, China and Russia have been on the same page on the question of Syria, on the question of the Middle East, on the question of Turkey.
And the Russians have supported the Chinese in the East China Sea, less so in the South China Sea because that's a different matter.
And so I think really what you have there is much closer cooperation than you had during the Cold War when there really was, well, at least one incident in which Russians and Chinese shot each other.
I think that's a clancy, a wet dream.
I think it's less a reality than the fact that what you really are seeing is the development of kind of regional blocks that are challenging the traditional powerhouses in the world, the BRIC countries, for instance, which is Brazil and South Africa and China and Russia and India.
These are countries which are now beginning to say, look, we need to watch out for ourselves.
We need to cooperate with one another if we're going to really have a place at the table.
And they're agitating, for instance, to get into the Security Council.
I mean, if you think about it, there's not a single member of the Security Council from Africa, the whole continent.
There's not one single member of the Security Council from Africa.
There's no member of the Security Council from Latin America.
It's just crazy.
No, it's just the allies from World War II.
Exactly.
Exactly.
And so what you get is you get the Russians supporting the Brazilians and the Nigerians and the South Africans to get into the Security Council.
Well, a lot of this is all about American foreign policy, too, which is apparently to make everyone in the world want to join up against us, or at least, you know, in a way to protect themselves from our influence.
So it's all, you know, the more you tighten your grip, the more systems slip through your fingers and all of that.
I believe that's a Star Wars line, wasn't it?
Yeah.
Yeah.
Well, there's great wisdom in that Princess Leia.
There is.
There is.
Yeah.
And particularly economically, because, you know, what's happened is that in the 90s, in the 80s and 90s, the U.S. system, what they call the Washington Consensus, which was free trade and, you know, rigorous austerity to deal with national debt and opening up your markets to, you know, advanced industrial countries and everything, and the absolute shattering of economies that that did all over the world.
Particularly in Latin America, but also Asia as well.
That Washington Consensus has been rejected down the line.
And so you no longer have the kind of economic and political clout in Washington that you used to have.
I mean, look at the vote on Cuba, you know, the United States and Palau.
That's it.
That's all we've got.
Which is that's just a tiny little island that we bought in the Pacific somewhere.
Exactly.
And even on the you take a look at the Palestinian thing, you know, again, if you add up the U.S. allies, with the exception of Canada, which is not exactly heavy in population either, you know, you have the Czech Republic and then you have one little tiny island after another in Israel.
And that's it.
And we only have no time whatsoever, maybe like a minute or something.
What do you think has changed now that North Koreans have reached space?
Well, I do think it's interesting that that the North Koreans are proposing that they want to start talking to the South Koreans.
I think the North Koreans are very want to be recognized as a power, a regional power.
They don't want to be isolated.
And I think that this the New Year's statement by North Korea on improving relations with South Korea, I think, is an important step.
What I hope is that the Americans take advantage of it.
You know, this is not a country which is a threat, except maybe to its own people.
You know, it just keeps the pot boiling in Asia.
And we would do good to take a big, deep breath and ignore the bombast and say, OK, let's start dealing with North Korea as if they're a normal country and see what kind of progress we can make.
And, you know, I think that's the direction we should go in.
All right.
Great.
Hey, thanks so much for your time.
I appreciate talking with you.
Thanks for having me, Scott.
Happy New Year.
Everybody, that is Colin Holliman.
Dispatches from the Edge blog at wordpress.com.
Dispatches from the Edge also find him at Foreign Policy in Focus.
And his most recent one is at Antiwar.com and at Counterpunch.
It's called the Asian Pivot.
Four more years.
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