Thursday February 21, 2019

CHINA CALLS FOR A “DE-AMERICANIZED” WORLD

October 15, 2013

U.S. Capitol Building

As nations around grow increasingly worried over the U.S. budge impasse, a not so subtle commentary, published by China’s official Xinhua News Agency on October 14 offered their own opinion of the situation.  The article declares, “It is perhaps a good time for the befuddled world to start considering building a de-Americanized world.”

Additionally, according to the Xinhua News Agency article the United States, “Instead of honoring its duties as a responsible leading power, a self-serving Washington has abused its superpower status and introduced even more chaos into the world by shifting financial risks overseas.  Yet at the same time, the article added, the United States aroused, “regional tensions amid territorial disputes, and fighting unwarranted wars under the cover of outright lies.”

China does have reason to be upset.  China holds $1.28 trillion in U.S. Treasures, making it the biggest foreign holder of American debt.  Additionally China has poured billions of dollars into private American investments, with an estimated $54 billion in 2012 alone.  If Congress does not come to an agreement regarding a new raised debt ceiling, by the October 17th deadline China’s potential losses could be devastating.

This is not the first time Washington has been the object of such critique from Beijing.  Back in March 2009, China’s central bank governor, Zhou Xiaochuan, also called for the creation of a new reserve currency, though with much milder language.  In a paper he published on the People’s Bank of China website, he stated that the world needs a new, “super-sovereign reserve currency to replaced the reliance on the dollar.”  According to Zhou, the goal should be to create an international reserve currency that is not directly tied to individual nations.  This would ensure its ability to remain stable over a longer period of time.

This proposal in 2009 sounds very familiar to what the Chinese are proposing today.  Their proposal for new world order as stated by the Xinhua News Agency included: the creation of a new international reserve currency to replace the present reliance on U.S. dollars, which the commentary suggests is a necessary step to prevent American bumbling from further afflicting the world.  They argue that the stagnation in Washington for a viable bipartisan solution over the federal budget as well as an approval for raising the debt ceiling as again left many nations significant dollar assets in jeopardy and the international community highly distressed.

Today, however, topping the dollar isn’t enough.  “Several cornerstones should be laid to underpin a de-Americanized world,” contends the Xinhua piece.  Additionally there should be a greater role for developing-market economies in both the World Bank and the International Monetary Fund, as well as the authority of the United Nations in handling global hot spot issues.  This would mean, “no one has the right to wage any form of military action against others without a UN mandate.”  These have all been long held PRC criticism of the U.S. with a particular emphasis on the last statement regarding U.S. intervention in other nations affairs.

The Xinhua news article concludes with a particularly heated and critical statement, “Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place, according to which nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing.”

The crisis in Washington has frustrated the Chinese on many levels.  The root of their frustration, as identified by Professor Zhao Longkai, a dean at the Guanghua School of Management at Beijing University, is disbelief that the United States Congress would let the situation get this far.  He states, “If we are really rational, I cannot imagine why someone would dare to bear this kind of responsibility because any real default will have a huge impact not only on the U.S. and China, but on the global economy.  It is hard for us to imagine anyone can be that crazy to push the limit to that level.”

While the language of the Xinhua article may cause some stir in Washington, China would be smart to remember that as long as China’s domestic growth and stability are boosted by American debt, the deep ties between the two countries will likely endure.

For Further Coverage of China Calling for a “De-Americanized” World, please see the following new sources and commentary

USA Today-“China Media call for ‘de-Americanized world

Bloomberg Business Week“China’s State Press Calls for ‘Building a De-Americanized World”

CNBC- “China State Media Blasts US Shutdown Calls for a ‘De-Americanized’ World”

Xinhua“Commentary: U.S. Fiscal Failure Warrants a De-Americanized World”

The Telegraph“World Should ‘De-Americanize,’ says Chinese Following Default Fears”

Complied and Edited by Madeline Fetterly