Asian Camaraderie a Detriment to America
To hear the Obama administration discuss the burgeoning Russia-China-India cooperation, you might think it is a long-anticipated, natural phenomenon that poses no real risk to America. But you would be wrong.
Forbes explains: “A Russia-China alliance would, of course, be an absolute disaster for the United States, pretty much the only grouping of countries that would be genuinely interested in and capable of challenging its position of global leadership. Preventing the emergence of a Russia-China alliance ought to be at the very top of the list of U.S. foreign-policy priorities, but … no one seems to be paying any attention” (May 20).
Realistic analysts are paying attention, and they offer views diametrically opposite those presented by Washington policymakers. “We may well be getting a glimpse of the future of geopolitics—two autocracies in common cause against liberal principles,” said Stephen Sestanovich, a former American diplomat now at Columbia University.
Sestanovich also explained a truth that seems to perpetually elude Western leaders: “This may be self-defeating for both of them, but that doesn’t mean it’ll go away,” he said.
Many naive Westerners seem incapable of imagining a scenario in which Russia or China would take the illogical step of causing economic harm to themselves. They therefore believe the economic interdependent relationship between Moscow/Beijing and Washington will survive the present Ukraine turbulence.
But such a view does not factor in human nature. Human nature can be illogical; the nature of conflict and war often defies basic logic. Nations knowingly inflict harm on themselves as a necessary byproduct of injuring their enemies.
These optimistic Western policymakers believe the leaders in Russia, China and India value geopolitical comfort more than they value a chance at undermining America’s global power. But millennia of mankind’s bloody history prove that this is not always so. Nations routinely place their own wellbeing at risk and willingly endure suffering in order to harm enemies.
Evidence of this truth is especially clear in the behavior Moscow and Beijing are displaying toward the U.S. dollar.
Nails in the Coffin of the Dollar
On May 20, Russia’s second-largest financial institution, vtb, and the Bank of China formally agreed to bypass the dollar and instead pay each other in their domestic currencies. The deal was signed in the presence of Xi and Putin, who called it a “new historic landmark” in the $100 billion of annual trade between the two powerhouse countries.
The agreement came alongside separate reports saying Russia is dumping record amounts of U.S. treasury holdings. Between October 2013 and March 2014, Moscow’s holdings of American treasuries fell by $50 billion—almost a third of the total. Over half of that was sold in March, just after Western nations imposed sanctions on Russia.
Then, on May 22, China announced that it has halted dollar transactions with most Afghan commercial banks.
Moscow and Beijing have long desired to break the dominance of the U.S. greenback in international trade. And as weak as Washington’s punitive response to Russia’s aggression in Ukraine was, it was enough to inject new vigor into that desire.
Michael Klare, professor of peace and world security studies at Hampshire College, said, “China sees the dominance of the dollar in international trade transactions as a remnant of American global dominance, which they hope to overthrow in the years ahead. This is a small step in that direction.”
Moscow and Beijing aim to help each other while simultaneously harming their common enemy, the U.S. They also realize that U.S. debt is around $17.5 trillion and leaders in Washington have been unable to stem debt growth.
Last year, when signs of a Russia-China convergence were multiplying, two acclaimed diplomatic scholars said the development was dangerous. They cautioned the West against dismissing the “possibility of a global realignment set in motion by China and Russia, [both of] which feel threatened by … having to function in the world’s Western-made system.”
Dmitry Simes of the Center for the National Interest and Leslie Gelb of the nonpartisan Council on Foreign Relations continued: “Today, Moscow and Beijing have room for maneuver and a foundation for mutual cooperation that could damage American interests.”
What would the outcome be, Simes and Gelb asked, if Russia and China gave Iran “security guarantees or promised to rebuild its nuclear infrastructure after a U.S. or Israeli attack?” What would happen if Beijing provided support to guerrillas in the Philippines, or if Moscow encouraged separatism among Russian-speaking minorities in the Baltic states? “If U.S. relations with Russia and China sour,” they said, “these nightmares can’t be excluded.”
The bitterness Putin and Xi harbor over America’s global hegemony runs deep. They view Washington as morally bankrupt and in rapid decline, and believe U.S. prosperity will soon dry up. Despite substantial short-term damage to their own economies, Russia and China will pull free from the American economy. And that pull may hammer the final nail into the greenback’s coffin.