Asia Times: Xi, Biden show contrasting styles of world leadership. On the one hand, we see peace deals; on the other, exploding pipelines 亞洲時報：習近平和拜登展現出截然不同的世界領導風格。一方面，我們看到和平協議；另一方面，爆炸的管道 By GEORGE KOO APRIL 3, 2023
Early in January, I opined in Asia Times that “2023 bodes poorly for US international relations” under US President Joe Biden. I based my conclusion on China’s impressive success in making new friends versus the Biden administration’s inability to make any.
In less than three months since then, developments around the world have been seismic and spectacular and have made a prophet out of me, if I do say so myself.
In January, I reported that Chinese President Xi Jinping received red-carpet treatment from Saudi Arabia, concluded a US$25 billion deal for oil and met with the six Middle East nations that make up the Gulf Cooperation Council. Hosted by the Saudis, they talked about China buying energy and helping to build their infrastructure.
Two years earlier, China entered a 25-year strategic cooperation agreement with Iran. Thus China has become friends of both major sects of Islam that have been historically bitter rivals. (To be honest, I did not expect anything earthshaking out of all this.)
Then this March, China announced that after four days of meetings and discussion in Beijing, Saudi Arabia and Iran had agreed to resume diplomatic relations.
A peace deal for the ages
This was a big deal and caught the world by surprise. Heretofore, Saudi representing the Sunnis and Iran the Shiites have been bitter sectarian foes for centuries. Yet China was able to play the role of an honest broker and brought the two sides together.
China has the right set of credentials to be a mediator for peace. China is the second-strongest global power, but does not try to bully any lesser countries and seeks to get along with everyone.
China emphasizes three principles in its international relations: It respects the national sovereignty of other, does not interfere with the internal affairs of others, and seeks joint development based on common interests and mutual benefits.
A few days later, Xi called on his “good friend,” Russian President Vladimir Putin in Moscow, and brought with him a 12-point peace plan to resolve the conflict between Ukraine and Russia.
The West promptly labeled the peace plan as vague, ambiguous and failing to include terms that would revert Russian-occupied territories back to Ukraine. But the West missed the point that was clear to everybody else in the world: Namely, a true mediation for peace does not begin by stipulating what the outcome should look like.
Zelensky would like China to step in
But as pointed out in Asia Times, Ukrainian President Volodymyr Zelensky may find China’s peace proposal an acceptable starting point. He is facing Western allies getting weary of supporting the war. Without such support, Zelensky knows his goose is cooked.
While Japanese Prime Minister Fumio Kishida was visiting Kiev acting as Washington’s envoy to encourage keeping the war going, Zelensky publicly welcomed China’s participation to broker a peace deal. He obviously found comfort in China’s role that brought peace to Saudi Arabia and Iran.
While Xi Jinping is enhancing his stature as a world leader that is proactive for peace, what has happened to Joe Biden during the same period?
History will show that blowback from two of Biden’s worst decisions ever made has come to haunt him in the first quarter of 2023.
Biden imposed economic sanctions and confiscated all the Russian dollar holdings held in the US in an attempt to bring Russia to its knees. But it didn’t work. Russia’s economy turned out to be far more resilient than Washington expected.
Weaponizing the dollar
Barred from trade with the European Union and others in the West, Russia turned to trade with China, India, East Asia and the Global South. Trade with China will surpass $200 billion this year, and Russia has agreed to accept China’s renminbi to settle their transactions.
As Russia earns a bounty of yuan from energy sales to China, other countries see the advantage of accepting the yuan from Russia for their trade. They avoid the extra cost of having to convert their own currency into dollars. Since China is likely to be their most important trading partner, yuan from Russia can simply be used when they do business with China.
By weaponizing the dollar, Biden has succeeded in implanting the idea in other central banks that the dollar is no longer a reliable reserve currency.
Recently, members of the Association of Southeast Asian Nations (ASEAN) held a meeting to discuss ways to avoid using the dollar, euro or yen to settle their trade accounts. If not those, what then? Probably China’s yuan and their own currencies.
Indeed, China and even Japan have been reducing their dollar holdings. In recent months, China and Russia have been the major buyers of gold, no doubt with the dollars they owned.
The recent collapse of Silicon Valley Bank is an indicator that the US economy is caught between a rock and a hard place. To tamp down inflation, the Federal Reserve had to raise interest rates. Rising interest rates meant a devaluation of the long-term Treasury bills that the bank bought paying a lower interest rate. Thus the decline in the value of the collateral assets owned by SVB made the bank vulnerable to a bank run.
Most American banks operated in much the same way as SVB but were more fortunate because the Treasury Department quickly stepped in and injected liquidity to reassure depositors that their banks wouldn’t go the way of SVB.
US economy needs China’s help
To use a Chinese expression, US Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo have been acting like ants racing around a hot griddle, wanting and waiting for an invitation to visit Beijing. Why? Because Yellen urgently wants China to continue buying American IOUs and Raimondo would like to raise the level of bilateral trade, which would help keep the US economy going.
Somehow, these Biden cabinet officials do not know how to ask nicely or diplomatically. They seem to assume that an announcement of their wish is good enough for Beijing to express-mail an invitation to their offices. It has not occurred to them that they need to let Beijing know what’s in it for China to agree to meet with them.
The Biden administration has the arrogance to presume that it can pick and choose the economic sectors that it can decouple from China and which to select for collaboration with China. Apparently, Biden does not understand that China does not see itself as a vassal state and has its own priorities.
Obviously there exists a huge deficit of trust between the US and China. Nothing Biden has done is in the direction of healing the rift.
Blowing up Nord Stream
The revelation by Pulitzer Prize–winning journalist Seymour Hersh that Biden ordered the destruction of the Nord Stream pipelines has further emphasized that Biden is an unethical and ruthless national leader who cannot be trusted.
Biden has shown that he has no qualms in committing a war crime by severing the key economic linkage between Russia and the EU. Cutting off cheap energy from Russia has wreaked economic turmoil on Biden’s European allies. That Biden would do this to his own allies will shake the trust and confidence the EU allies hold for the US for a long time to come.
As matters stand now, Xi Jinping represents a proactive world leader who will apply his influence and prestige to work for world peace. Despite all the slander heaped on him and the blackening of China by Washington and the Western media, a long queue of world leaders jostle to meet with him in Beijing to discuss economic cooperation and collaboration on world peace.
At the other end of the world is Joe Biden, a world leader who is dishonest and unethical and has earned the wary distrust of virtually every national leader in the world. He gives lip service to peace while creating conflict and intimidating smaller countries to join the US military alliance and prepare for proxy wars.
Even his closest ally has to watch its back lest it’s abruptly discarded when it no longer figures in the US national interest.
George Koo retired from a global advisory services firm where he advised clients on their China strategies and business operations. Educated at MIT, Stevens Institute and Santa Clara University, he is the founder and former managing director of International Strategic Alliances. He is currently a board member of Freschfield’s, a novel green building platform.