Sinomania!

The most important meetings at the G20 summit in London will be done by the end of the day: the first official face-to-face between President Obama and Russian President Medvedev and Chinese President Hu Jintao and the private meeting between Obama and Queen Elizabeth II.

Much discussion centers over whether a new G2 is emerging between the USA and China, the forces behind the world's number 1 and 2 "new deals" of government spending. But just as important is the potential that the USA and Russia may reduce their nuclear stockpiles perhaps someday down to a mere 1,000 armed missiles apiece. While China's nuclear capacity is a deterrant (to invasion and/or attack) only such a development would in effect create a tripolar world between USA, Russia, and China.

The one bit of substance from Obama and Hu meeting is the tweaking of the US-China Strategic Economic Dialogue - the word "and" is now added between Strategic and Economic enlarging the focus to matters of State (Sec. State Clinton) and Treasury (Sec. Geithner).

An aside: the hapless crowd of protesters outside the Bank of England with all their competing slogans, costumes, and aims recalls Chairman Mao's observation before the Paris Riots in the 60's that there will be no capitalist crisis great enough in the future to bring the middle classes into the streets for a 20% rise in wages as the bourgeoisie had co-opted itself to the ruling class. Were this really the "greatest financial crisis since the Great Depression" or the true Crisis of Capitalism predicted by Marx the protesters in London would not leave the streets. Odds are they will all be back in their flats by nightfall...

Labels: g3, hu jintao, obama

With the exception of the fire-breathing wing of the American Republican Party most observors of the current scene agree that the global influence of the USA is finally beginning to wane. Events of the Panic of '08 show that the world really contains 3 superpowers specifically the USA, the EU, and China. An interesting analysis of where we are and where we very soon need to go is provided by one Parag Khanna in Der Spiegel. Two key grafs:

"As stealthy, globalized escalations continue among the great powers undeterred by global governance norms, the potential for conflict grows: resource competition in the Caspian and South China seas, terrorism with nuclear weapons, an attack in the Gulf of Aden or the Straits of Malacca. The uncertain alignments of lesser but still substantial powers such as Russia, Japan, and India could also cause escalation. Furthermore, America's foreign lenders could pull the plug to undermine its grand strategy, sparking economic turmoil, political acrimony, and military tension. War brings profit to the military-industrial complex and is always supported by the large patriotic camps on all sides. Yet the notion of a Sino-US rivalry to lead the world is also premature and simplistic for in the event of their conflict, Europe would be the winner as capital would flee to its sanctuaries. "

"Yet at present the term "international community" is little more than a euphemism for Western dominance. The West can expect no allegiance to a Western order masquerading as representative of global values decreed without global input. America has called on China to be a "responsible stakeholder" in the global system, but because it is implicitly an American order China is naturally resistant to it. China will not exercise its enormous economic weight in the interests of antiquated and unrepresentative clubs like the G-8 that will not even let it in. Similarly, much as the efficacy of the UN Security Council today depends on the United States, the same is becoming true of China, which can also bribe the rotating Security Council members to vote its way. Without a new division of labor, Western institutions will diminish with America's power, leaving only classic geopolitical competition without even the veneer of diplomatic coordination. "

Labels: financial crisis, g3, new world order, panic of 2008