Global power seems to be shifting towards the
East. It seems to be that the future power will fall in the hands of eastern
nations, namely, those involved in APEC (Asia-Pacific Economic Cooperation) and
BRICS (Brazil Russia India China South Africa). Earlier this year, China warned
India that an economic partnership with the US would be a “zero sum trap”,
because the Chinese seem to believe that the US is singling out, even
pressuring, India to become an ally in order to slow China’s rise. Since this,
China and India have reached a common ground in the East. In return for India’s
support, China endorsed India’s push to join APEC. Now India is officially a
member. APEC has contributed to the progressive reduction of tariffs and other
barriers to trade in the Asian Pacific region over time, leading to the
expansion of economic growth and international trade in the region. This seems
to be a foreteller of an expansion of overall power in the region, which means
a decrease in the US’ relative power internationally.
Is this
true? If trends continue to follow a pattern, it could be determined that the
US could be subject to losing some power. Moreover, the US is quite disturbed
by the formation of BRICS and the 2014 trade deal made between Putin and India,
and they don’t want India to be pulled into the Chinese-Russian alliance. India
is already a part of the BRICS alliance. How significant is BRICS in terms of a
threat to the US place on the world scene? Indeed, BRICS is very significant.
The populations and the land mass of BRIC areas is enormous, and certainly
China has taken over the lead of economic development. India has also had a
development in skills, so this does have a potential in abandoning the use of
the dollar, of leaving the western financial mechanisms, and this is a direct
threat to the exchange of the US dollar. So, the threat becomes that there will
be a trade relationship formed that undermines the ability of the US to control
all the outcomes. Currently the US has a large amount of control, so it sees
BRICS as a hindrance to control outcome. Therefore, the US will likely do what
it can to break BRICS up, and reasonably so, from a Realist’s perspective,
because the BRICS countries make up over a quarter of the world’s GDP, so they
pose a threat to the US in terms of rising hegemony.
BRICS creates its own system of trade and
finance for helping developing nations in which it doesn’t have to be reliant
on the US. Likewise, the Chinese have been working deals with other countries
in exchange for oil to cut the dollar out, strongly in South America and
Africa. The basis of American power is the dollar as world reserve currency,
because it means the US can pay its bills by printing money, so it therefore
eliminates any financial constraint on the US. China is purposely and
consciously trying to create a trade system in which the role of the dollar
disappears, because that means the demand for the dollar falls, and as the
demand of the dollar falls, the value of the currency falls, and that helps
accelerate the loss of role of world reserve currency. The Chinese are doing this
as a response to a threat they deem to arise from the US hegemony, and in doing so, they might be on their way to
replace the US as the main great power.
https://ustr.gov/issue-areas/trade-organizations/asia-pacific-economic-cooperation-apec
http://www.russia-direct.org/debates/brics-and-west-partners-or-rivals
http://www.russia-direct.org/debates/brics-and-west-partners-or-rivals