Moving toward new blocs

1 August, 2020 · News> Global situation> Weekly Report

US fleet in South China Sea.

Those who follow our daily international news summary have been following the steps of the almost daily increase of aggressiveness between the USA and China throughout the week. The explicit goal of U.S. capital is to contain China’s development, that is, to bring it to a standstill and to confine its capitals in a belt of armed conflicts from the South China Sea to the Indian Ocean. By now, the trickle of imperialist cross-aggressions has become an open faucet in which one milestone follows another almost daily and in which it is easy to end up losing the really significant elements.

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This has long since stopped being about Trump. The language of the Biden environment vis-à-vis China is more and more openly similar to that of the worst of the Cold War vis-à-vis Russia. Accusations, loaded words, and in response… military calculation. It’s worth reading some of the articles published this week in such media as the New York Times about the reciprocal closing of consulates or the delusional arguments that try to equate the development of new, more sophisticated Chinese ships and planes to a massive nuclear rearmament that would require strong responses.

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Although in Asia it mainly plays at stirring up water and border delimitation conflicts from India to Vietnam via Malaysia to draw them out against China, the main global stake of the United States is to turn the alliance of the five eyes into the core of an Anglo-Saxon bloc. In the end, key countries such Korea or Japan have every reason to be reticent about an exacerbation of tension with China.

The alliance is originally a system of coordination of intelligence and espionage services formed by the United States, Australia, Canada, New Zealand and Great Britain. But, very significantly, it is proposed as the basis of a free trade zone that begins by suggesting the search for alternatives to Chinese rare earths. It actually goes far beyond that. Today it is a synchronized legislative effort and often, as in the case of Australia, dangerous for the national capital itself to join the economic war against China in similar terms and with complementary measures to those of the USA. Its short term strategic objective is to clearly show that Japan is tempted by the possibility of extending the recently signed free trade agreement with Great Britain to the rest of the Anglo-Saxon powers. An interesting fact: in spite of counting on the rivalry between Indian and Chinese capital as part of their strategy and the constant requests of the Indian bourgeoisie, they have no interest in enlarging the bloc. And no, even if it has all the trappings of Churchill’s imperial and racist dream, the rationale is not ideological. The Anglo-Saxon bloc is actually the expression of a high degree of integration of the national capitals of the five countries around US capital. An integration that Brexit promises to complete.

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And the driver must be sought precisely in this fusion of capitals and their global problems. The US GDP has fallen by 32.9% in the second quarter, the requests for unemployment aid increased by another week and the Congress was unable to agree on a new stimulus plan. As Der Spiegel summarized today:

The economic collapse is historic. The crisis of the labor market is gigantic. And the Covid aid for Americans in need will probably cease by the end of the week.

However, the big five technological companies have multiplied their profits. And that’s relevant. The cold war between China and the USA before becoming a hot war between both, will probably divide the world in two big technological blocs with development lines that are industrially incompatible thanks to regulations and commercial blockades. This is the goal, for example, of the controls that the United States has tightened this week on its own exports. Making a rival’s technology incompatible with one’s own is a way of closing off markets where the US is still economically and politically dominant.

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Trying to move ahead is a central part of the Chinese strategy. To begin with, promoting its own international payments system, avoiding dependence on the dollar and the sanctions that use the global centrality of the Anglo-American financial system. Especially when USA is already accusing China of starting a new currency war.

On the other hand, trying not to lose the link with the EU and to avoid its drift towards the Anglo-Saxon block of a Germany whose capitals and exports are suffering severely from the crisis. Here we can also see the fragility of Chinese capital as soon as it leaves its main areas of influence: the diplomats of the Xi government promise not to work towards dividing the EU and only ask Merkel to keep her distance vis-à-vis the US.

China until now, when it came out of Asia, put supply and sales ahead of strategic considerations. This allowed Brazil and especially Argentina, to keep a position of certain balance between Washington and Beijing, feeding illusions of autonomy in the development of their national capital. But the growing prominence of capital investments is changing that as well as it could not be otherwise. China is increasingly playing a stronger role in the Middle East: the negotiation of the strategic agreement with Iran -which followed the old patterns of direct profits- is followed by increasingly explicit -and not very profitable in direct terms- rapprochements to Syria and Turkey.

Where is the world headed?

The imperialist conflict between the U.S. and China is accelerating with each blow of the crisis. Both powers are pushing towards the formation of close blocs that are strategically and economically very much aligned with those national capitals with which they are most integrated, leading to a wider fracture by reorganizing trade out of them and with it the international division of labor and the technological standards of the industries most capable of placing capital today. We are in the first steps of a deep fracture in the world market, which can only strengthen the tendencies towards crisis… and war.

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