Chinese-US tensions may lead to a new Cold War




Until very recently, the Chinese economy was growing by leaps and bounds. But it's slowing down, and soon Indonesia and countries in Africa and the Middle East will feel the effects. 
Jonathan Holslag, a research fellow at the Brussels Institute of Contemporary China Studies, warns that they will have to get used to getting lower prices for raw materials. And, he says, he's concerned that Chinese-American tensions could lead to a new Cold War.
In spite of the downturn, the growth of the Chinese economy is still impressive at 8.1 percent over the first quarter of this year. But the consequences of the downturn will be noticed most by its trading partners, especially those in Africa, thinks Mr Holslag.
Falling prices
“China has less to spend on its infrastructure and its domestic demand is dropping. One consequence is a fall in raw material prices. We can already see this happening with a number of minerals. And we see it in the food market. China determines the price. Countries in Africa, Latin-America and also Indonesia are dependent on high prices for raw materials.”

“It’s is going to be difficult for them to adapt. The situation is similar to the 1990s, when we also saw a steep drop in raw material prices. That caused problems for governments in developing countries and led to a lot of instability. But, in the long run, the prices of raw materials will climb again, because the demand will keep rising.”
Cold War
The question is how long the effects of this dip will last. Mr Holslag is mainly concerned about increasing tensions between China and the United States as a result of American influence in East Asia. The US recently decided to station more navy vessels in the region. And as Beijing gains self-confidence, its rhetoric is becoming more hostile.
Geopolitical tensions in East Asia could cause a new Cold War in Africa, thinks the specialist, this time between China and the United States. “I know it is difficult for many Europeans to imagine, but I think it is becoming more likely.”
“There’s no solution to the tensions across the Pacific Ocean. Debates in the US Congress and in the Chinese Communist Party are becoming harsher. This is reducing the amount of room for manoeuvre for the governments to reach a compromise. The number of trade conflicts between Washington and Beijing are increasing. Beijing is not prepared to make concessions to the West, partly because social economic tensions are increasing within China itself.”
African ports
Meanwhile, China is consolidating its trade interests in Africa with closer political ties and ultimately military partnerships, Mr Holslag believes. “You see Chinese naval forces visiting African ports more and more frequently and China is giving more military aid to countries where it has economic interests. If tensions continue to rise they will definitely cross over to the African continent.”
“China and the United States will take different sides in certain conflicts, for instance in the row between the two Sudans.” The future of countries like Egypt and Algeria could also become points of contention. “If there is civil war or instability in a West African country, there is a danger of uncoordinated military intervention from both sides.”
Hugo Chávez
According to the Mr Holslag, a possible Cold War will not cross quickly to Africa or even to South America. It will be a gradual process. Nevertheless, China is already being wooed by the Venezuelan President Hugo Chávez.
“It’s important that the US and the Chinese reach agreement on the extent of their influence in East Asia. The Chinese want to put an end to US military and diplomatic leadership in the region. But the US is refusing to give up their dominance in the region.

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Monday, June 11, 2012

Chinese-US tensions may lead to a new Cold War



Until very recently, the Chinese economy was growing by leaps and bounds. But it's slowing down, and soon Indonesia and countries in Africa and the Middle East will feel the effects. 
Jonathan Holslag, a research fellow at the Brussels Institute of Contemporary China Studies, warns that they will have to get used to getting lower prices for raw materials. And, he says, he's concerned that Chinese-American tensions could lead to a new Cold War.
In spite of the downturn, the growth of the Chinese economy is still impressive at 8.1 percent over the first quarter of this year. But the consequences of the downturn will be noticed most by its trading partners, especially those in Africa, thinks Mr Holslag.
Falling prices
“China has less to spend on its infrastructure and its domestic demand is dropping. One consequence is a fall in raw material prices. We can already see this happening with a number of minerals. And we see it in the food market. China determines the price. Countries in Africa, Latin-America and also Indonesia are dependent on high prices for raw materials.”

“It’s is going to be difficult for them to adapt. The situation is similar to the 1990s, when we also saw a steep drop in raw material prices. That caused problems for governments in developing countries and led to a lot of instability. But, in the long run, the prices of raw materials will climb again, because the demand will keep rising.”
Cold War
The question is how long the effects of this dip will last. Mr Holslag is mainly concerned about increasing tensions between China and the United States as a result of American influence in East Asia. The US recently decided to station more navy vessels in the region. And as Beijing gains self-confidence, its rhetoric is becoming more hostile.
Geopolitical tensions in East Asia could cause a new Cold War in Africa, thinks the specialist, this time between China and the United States. “I know it is difficult for many Europeans to imagine, but I think it is becoming more likely.”
“There’s no solution to the tensions across the Pacific Ocean. Debates in the US Congress and in the Chinese Communist Party are becoming harsher. This is reducing the amount of room for manoeuvre for the governments to reach a compromise. The number of trade conflicts between Washington and Beijing are increasing. Beijing is not prepared to make concessions to the West, partly because social economic tensions are increasing within China itself.”
African ports
Meanwhile, China is consolidating its trade interests in Africa with closer political ties and ultimately military partnerships, Mr Holslag believes. “You see Chinese naval forces visiting African ports more and more frequently and China is giving more military aid to countries where it has economic interests. If tensions continue to rise they will definitely cross over to the African continent.”
“China and the United States will take different sides in certain conflicts, for instance in the row between the two Sudans.” The future of countries like Egypt and Algeria could also become points of contention. “If there is civil war or instability in a West African country, there is a danger of uncoordinated military intervention from both sides.”
Hugo Chávez
According to the Mr Holslag, a possible Cold War will not cross quickly to Africa or even to South America. It will be a gradual process. Nevertheless, China is already being wooed by the Venezuelan President Hugo Chávez.
“It’s important that the US and the Chinese reach agreement on the extent of their influence in East Asia. The Chinese want to put an end to US military and diplomatic leadership in the region. But the US is refusing to give up their dominance in the region.

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