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| ▲ President Biden makes his first visit to the State Department after taking office (Washington EPA = Yonhap News) US President Joe Biden is giving a speech on foreign policy at the Washington DC State Department building on the 4th (local time), while Secretary of State Tony Blincoln listens. | |
| Ⓒ Washington EPA = Yonhap News |
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The Biden administration was no less than the Trump administration. In that it is tightening China strongly. The’trade war stance’ of Donald Trump is also maintained.
For example, the Biden administration temporarily postponed the executive order to ban investment in blacklisted Chinese companies, which was due to take effect on January 29, but did not abolish it. On January 28, the day before the enforcement, the Ministry of Finance’s Overseas Asset Control Office announced that the enforcement of the executive order signed by Trump was delayed to March 27.
In the midst of this, the US is raising military tensions in the Western Pacific region. On January 23, three days after Biden’s inauguration, the Roosevelt carrier squadron conducted training in the Nanjin Sea (South China Sea), and on February 5, Vietnam and China simultaneously claimed sovereignty on the Nanjin Sea Paracel Islands (China Myung Sisagundo) approached the Aegis destroyer, John McCain.
In a situation where internal division and overcoming Corona 19 are more urgent, it is unlikely that the US will advance into a war with China through the above pressures. There is very little possibility of fighting alone. The situation will be different if international solidarity besieged China is established, but for now, it is not suitable either. Even India and Japan, who lead the Indo-Pacific strategy together with the United States and pressure China, put the United States in front of them at an important moment and fall behind themselves.
In particular, India is showing a lukewarm reaction to the’Online Quad (US, Australia, India, Japan) Summit’ proposed by President Biden, even though it is struggling with China over border issues. If the quad summit is held, they are concerned that China will rebel.
US pressure continues despite changes in administration
Because of this situation, the only thing the United States can pursue at this stage is economic, not military. There is nothing else to be aimed at other than to prevent the Chinese economy from overtaking the United States by building a global siege.
In 2008, in China, the Beijing Olympics opened at 8 p.m. on August 8, with a lot of number 8, meaning “get rich,” and Lehman Brothers was held at 2 a.m. local time on September 15 in the United States. When filing for bankruptcy protection, the global financial crisis spread. In 2010, China surpassed Japan in terms of gross domestic product (GDP) and rose to the second place in the world.
This situation has led to the Obama administration having to adjust its strategy toward China. In 2011, the Obama administration, whose diplomatic expert Joe Biden was vice-president, introduced a “Asian Rebalancing Policy” that would modify the existing cooperation route with China, scare and appease China, and deter China. The fact that they did this at the time the Chinese economy rose to second place shows that the US pressure on China is due to economic reasons.
If the United States exerts pressure as it is now, Quad and Western Europe respond, and other countries reluctantly follow, the burden on China’s economy will inevitably increase. If the US raises tensions in the Nanjin Sea and the like, but does not give China the justification for the outbreak of war, China’s economy will face difficulties due to the current defense pressure.
The phone call between President Moon Jae-in and President Xi Jinping was on January 26, and the call between President Moon and President Biden was on February 4. At the time when the South Korean president had to talk to the new president of Biden on the phone, a view came out that China was trying to weaken the siege of China over the request of President Xi Jinping to make a phone call to President Moon. To the extent such observations are made, China is on the defensive due to US pressure.
Chinese card
However, another scene that does not match this situation exists between the US and China. In this other scene, China is’Gap’. This scene, which contrasts with the US pressure on China, is China’s holdings of US government bonds.
China has a lot of US Treasury bonds. At the end of October 2016, just before Trump was elected, China’s U.S. Treasury holdings were $1.1 trillion. A large portion of China’s trade surplus, which the US claims to be unfair, has been funded.
China was certainly the world’s largest holder before 2019. About 20% of foreign U.S. government bonds were in China’s hands. The United States has long been concerned about this situation.
August 2017
The US Treasury Secretary paid attention to Russia’s proposal to China to’sell US government bonds’. It is because of the possibility of negatively affecting the dollar. “Conscious of these issues, the United States included a clause in the 2012 amendment to the Defense Authorization Act that mandated the assessment of national security risks on government bonds held by China,” the paper said.
What if US Treasury Bonds were released?
China’s holdings of U.S. Treasury bonds, which the U.S. regards as an issue that could affect its national security, have shown strange signs since 2018. In the phase of the trade dispute caused by Trump, China seems to be fiddling with government bonds. That is why the ranking of China, the world’s largest U.S. government bond holder, was changed in 2019.
Russia as of October 20 last year <스푸트니크 통신> “China continues to sell US Treasury bonds,” a Chinese-language article, “China is relentlessly withdrawing from US Treasury bonds. By selling it, the holdings of government bonds fell to $1.62 trillion,” he reported.
“For many years, China continued to be the US’s largest creditor, but fell to second place a year ago. (omitted) China began to reduce US Treasury yields in response to Washington’s trade war. While discussing dollar sanctions against Beijing, there is a possibility that it will refuse to pay its debts to Beijing.”
Outwardly, the US is pressing China, but there is also a situation where China is fiddling with US government bonds in its pocket. If U.S. government bonds are released to the world market, U.S. sovereignty may be at risk. Still, if this happens in a difficult situation, it becomes difficult for the United States to maintain its current position in a normal way.
This phase contrasts with the situation that China faced during the period of Western capitalism or Western imperialism in the east. When the Korean Empire and the Qing Dynasty were suffering from economic invasion, advanced capitalist countries tried to make the targets of the invasion not only as raw materials supply and commodity markets, but also capital markets. The reason why Koreans launched a government bond compensation movement in 1907 to pay off their debts to Japan was because they understood the imperialist aggression that preceded the advancement of capital such as loans.
China was also a victim of such aggression. It is also related to the massive bankruptcy of privileged enterprises in Guangzhou (Gwangju), which led the foreign trade of the Qing Dynasty. These merchants, who were given privileges from the government, fell in great numbers in the wake of the Opium War in 1840. About 70% of peddlers who had been active in the 80 years before then went bankrupt. Western companies’ high-ranking business had a significant impact on reaching such a point.
China, which had been plagued by Western capital aggression during the Seosei-dong period, now has the potential to threaten the United States itself while responding to the trade war with US government bonds as a weapon. As at the time, the leadership is still in the western world, but unlike then, China is now in the position of creditor. This is a key phenomenon in predicting the future trend of US-China relations entering the phase of the New Cold War.
The US cannot freely burn government bonds held by China. In the future, the United States must face the’creditor China’ at every important moment. The Biden administration is no exception. It is noteworthy what role US government bonds will play in the face of diplomatic and military pressure from the United States.