Russia, China and the New Cold War


7-25-06, 10:45 am

On May 4, 2006 Vice President Dick Cheney gave a speech in Lithuania that raised eyebrows globally. For like former reactionary British Prime Minister Winston Churchill who traveled to Fulton, Missouri in 1946 to make plain what was already evident – the launching of a cold war against the former Soviet Union – Cheney’s inflamed remarks were designed to codify what has not escaped discerning observers: US imperialism is dissatisfied thoroughly with Moscow’s present course and prefers a return to the “good old days” of the sell-out policies of Boris Yeltsin.

This development should be sobering, particularly to those on the left who had believed that the “old” cold war was supposedly about Moscow’s alleged “expansionism” and real and imagined human rights violations. No, as Cheney’s provocative words indicated the cold war new and old is about an attempt by US imperialism to dominate the world. Russia, which is the land-bridge between Asia and Europe and, besides, contains a fabulous storehouse of natural resources – particularly oil and gas – is the key, as Washington sees it, to global domination. In that sense, only a sell-out regime like Yeltsin’s will do, and not even the capital-friendly policies of Vladimir Putin will suffice, though predictably Washington was outraged when the Russian president termed the collapse of the Soviet Union as the greatest political catastrophe of the 20th century.

Thus, the journey some 35 years ago by then-President Richard Nixon to Beijing was a turning point in the decades-long attempt to overthrow the Soviet Union; however, the difference between that conflict and today’s is that US imperialism – its appetite and arrogance whetted by the realization of its dream of destabilizing the USSR – also has China in the bull’s-eye as well. This crusade can only end badly. The only question is to what extent will world imperialism be injured by this latest attempt to dominate the planet. For despite the chest beating and hosannas of self-praise, the fact is that it was the China initiative that was decisive in destabilizing the Soviet Union; so, how can a debt-ridden, militarily overstretched US imperialism take on China and Russia simultaneously?

How serious this present attempt at dual destabilization is has been revealed in a recent issue of Foreign Affairs, organ of the elite Council on Foreign Relations. There was unveiled the lunatic notion that Washington has developed nuclear capacity sufficient to launch a strike guaranteed to wipe out Russia and China without the risk of suffering a return strike. Thus, the purpose of the US’s anti-missile defense system is not as advertised, i.e. a noble attempt to ward off aggression from “rogue” states. No, such a system enables the US to reduce dramatically the risk of a nuclear counterstrike by Russia and/or China after a nuclear attack by the US.

Naturally, this information was received in Moscow and Beijing with grave alarm and accelerated their pre-existing close cooperation in the realm of missile and nuclear technologies.

One of the signal aspects of US imperialism today is how it consistently overestimates its strength. This underscores the fiasco that the illegal and criminal invasion of Iraq has become. Despite spending almost a half-trillion dollars on military spending, more than the sum total of all of its major rivals, the US could only muster 130,000 troops for this occupation and they have been unable to halt a growing insurgency. Similarly, though US imperialism is now making noises about bombing Iran, supposedly because of its development of nuclear technology, rather than seek to entice permanent United Nations Security Council members China and Russia into an alliance with Washington against Tehran, instead this arrogant imperialist threatens Beijing and Moscow.

In turn, China and Russia have welcomed Iran into an organization little-known in this nation but which, inevitably, will come to influence global trends: the Shanghai Cooperation Organization. SCO was initiated in June 2001 by Beijing and Moscow not long after tensions had risen between the US and China after the downing of Washington’s spy-plane on Chinese soil and the clear enunciation by the incoming Bush administration that it intended to ratchet up tensions. Also included in the founding of SCO were Kazakhstan, Kyrgystan, Tajikistan and Uzbekistan, an indication that Beijing and Moscow were concerned about these struggling nations being deployed against them in a policy of encirclement. After all, NATO, the aggressive cold war vehicle that was so instrumental in the destabilization of the Soviet Union, now has thousands of troops imbedded in Afghanistan, not far from Chinese and Russian territory.

Thus, the authoritative People’s Daily in China announced somberly that “the real intention behind the US fueling the Iran issue is to prompt the UN to impose sanctions against Iran, and to pave the way for a regime change in that country. The US’s global strategy and its Iran policy emanate out of its decision to use various means, including military means, to change the Iranian regime.” Agreeing, Gennady Yefstafiyev, a former general in Russia’s Foreign Intelligence Service has written:

The US’s long term goals in Iran are obvious: to engineer the downfall of the current regime; to establish control over Iran’s oil and gas; and to use its territory as the shortest route for the transportation of hydrocarbons under US control from the regions of Central Asia and the Caspian Sea bypassing Russia and China. This is not to mention Iran’s intrinsic military and strategic significance.

Influential Muscovites have dismissed the idea that Iran’s nuclear plans are a threat to international peace and security. Yevgeniy Velikhov, president of Kurchatov Institute, Russia’s nuclear research center, has said of Teheran’s initiative that “launching experimental equipment of this type is something any university can do.”

Unsurprisingly, when Washington sought observer status at the SCO in June 2005, it was turned down summarily. This outraged US imperialism and led directly to Cheney’s fateful remarks in Vilnius.

Yet, this ire is bipartisan as indicated by the release in March 2006 of a report from the Council on Foreign Relations, devised by a panel chaired by former Vice-Presidential nominees John Edwards and Jack Kemp. Entitled “Russia’s Wrong Direction: What the United States Can and Should Do,” it prefigured Cheney’s inflammatory speech. This report followed on the heels of a State Department analysis which castigated the Putin regime for “corruption” and other forms of malfeasance. Then Bush’s National Security Council spoke in similar harsh tones about Moscow, which led the otherwise sober analyst, Anatol Lieven, to write in the Los Angeles Times of an attempt at “regime change” in Moscow, a new “cold war,” the US forming even more “anti-Moscow military alliances” and providing “overt support” to Putin’s domestic political opponents.

What US imperialism is confronting is that despite the looting of the former Soviet Union, Russia still has foreign currency reserves of $180 billion, gigantic territory, awesome natural resources, nuclear weapons, space technology, immense scientific potential and a defense industry not unwilling to aid regimes in Havana, Caracas and Harare.

The strength of Russia was crystallized when in September 2005, Moscow concluded a $5.7 billion deal with Germany in laying a 1,200 kilometer gas pipeline with an annual capacity of 55 billion cubic meters connecting Russia’s Black Sea coast through international waters with Greifswald on Germany’s coast. This is more than a pipeline, however, as it binds Europe’s economic locomotive – Germany – with Russia in a way that complicates mightily Washington’s so-called North Atlantic alliance. US imperialism would prefer the Yeltsin approach, which envisioned Russia as an energy appendage of Washington.

Strikingly, the xenophobic and right-wing regime that now rules Poland echoed Washington’s criticism of this deal, albeit in hyperbolic and hysterical terms. Moreover, the plans of US imperialism to convert formerly socialist states like Ukraine, Georgia and Hungary into bases of subversion targeting Russia is complicated by the fact that these nations are so heavily dependent on Moscow for energy and trade. Slowly but surely, Warsaw and the other Eastern European regimes that ousted Communists from power are coming to recognize that they may have bet on the wrong horse when they opted to throw in their lot with US imperialism. Instead, a new global architecture is steadily evolving that involves new alliances that do not portend US domination.

Unsurprisingly, the two Texas oilmen who presently occupy the highest positions in the land see energy as the essence of their policies. Yet, their unrealistic dreams increasingly are running aground. Not only did Houston’s Enron go bankrupt but its two leaders are now slated for long prison terms. Led by Venezuela, Bolivia and Ecuador have moved to take control of their huge oil and gas reserves. And now Russia has suggested that it has plans that soar far beyond becoming a neocolonial outpost of US imperialism. After all, Russia contains 20 percent of the world’s natural gas reserves and already supplies 25 percent of the entire Western European market. If Gazprom, the $300 billion Russian behemoth that dominates this industry, were to turn off the tap, the European Union would freeze in the dark.

In addition, the twin giants of the 21st century, China and India, have ambitious plans to buy stakes in Russian oil producers. During the recent visit of Russian Prime Minister Mikhail Fradkov to New Delhi, the Indian side proposed Russia’s involvement in a suggested Iranian gas-pipeline project to Pakistan and then India: this initiative faces continuing US opposition.

Moscow’s energetic diplomacy also has involved open dealings with the Hamas regime in Palestine, which complements its approach to Iran, and its observer status within the Organization of Islamic Conferences. Recently Putin visited Algeria where he concluded a hefty $7.5 billion arms deal which will be financed under a payment scheme woven into deep collaboration between the two nations in the energy sector that provides for Moscow’s participation in Algiers’ upstream and downstream operations in the oil-and-gas sector. Algeria is Europe’s only viable alternative source of gas at present, ranking fourth globally as a gas-exporting nation. It also exports liquified natural gas to the US itself, helping to take the brutal edge off cold winters.

Such deals are of gigantic political consequence, for Moscow is maneuvering to develop a natural gas equivalent of OPEC, whose ministrations over the years repeatedly have outraged US imperialism. How can US imperialism issue diktats when its rivals can flip a switch and throw the nation into a deep freeze? Such a realization underscores recent hostility directed at such nations as Russia, Iran, Venezuela, Bolivia and Ecuador. Of these, however, it is Moscow that has the most sophisticated industrial infrastructure and even in its present iteration, a far cry from the halcyon days of the Soviet Union, still remains a formidable roadblock to US global domination. The same holds true for China. Like Moscow, Beijing recognizes that energy is critical, and that means diplomacy with Africa. This continent provides more oil to the US market than the more publicized Middle East. Imports of African oil reached 921 million barrels or 18.7 percent of the US total in 2005, compared to 839 million barrels or 17 percent for the Mideast. In part, this is a response to the so-called war on terror and the pre-eminent role played in this conflict by Saudi nationals, e.g. Osama bin Laden.

But this US reliance on Africa brings new complications. For just as Russia provides new wrinkles for the US in Europe, China does the same in Africa. Angola, which is critical to US supplies of oil, has also overtaken Saudi Arabia as China’s premier supplier of crude oil. Angola, once a hunting ground for slaves and the source of a considerable percentage of the US’s African American population, is sub-Saharan Africa’s second largest oil producer after Nigeria, while China is just behind the US in receiving this key export. However, China, which still retains a sizeable state sector, is better positioned to complement the Angolan economy in other realms.

Thus, Chinese entities are constructing a new airport just outside the capital, Luanda, and are rebuilding the Benguela railway (damaged via decades of US sponsored banditry after Angola embarked on a non-capitalist path of development) which stretches from the Democratic Republic of the Congo to the Atlantic coast. This deal alone is worth $300 million. Angola Airlines is considering opening a direct route to Beijing, while Chinese loans have allowed Angola to forego lending from the intrusive and US dominated International Monetary Fund.

This relationship with Angola is of a piece with China’s new thrust into Africa. China-Africa trade has rocketed, reaching approximately $35 billion in 2005 after growth rates of 50 percent in 2003 and 59 percent in 2004. China purchases almost 60 percent of Sudan’s oil exports, which sheds light on why a coalition of US-based Zionists and evangelical Christians have placed this largest nation by territory in Africa into the international spotlight, as a result of real and imagined human rights violations. The China National Offshore Oil Corporation (Cnooc), which is state-owned, is active in Equatorial Guinea, Chad, Gabon and, of course, Angola. In January 2006 it announced that it had taken a 45 percent stake in an offshore oil and gas field in Nigeria in return for $2.27 billion – Cnooc’s biggest overseas acquisition so far. As the world’s largest user of copper, China has invested a reported $170 million in Zambia’s mining sector. China is increasingly active in the Democratic Republic of the Congo, investing in copper and cobalt mines. China is helping Ethiopia build the continent’s biggest dam; it is launching a communications satellite for Nigeria in 2007; and introducing a new anti-malarial drug in Uganda. In Zimbabwe, China has been essential to the regime’s “Look East” policy, a response to US and EU sanctions.

An increasingly powerful China is viewed as a direct affront to US imperialism, which feels that as the heavyweight champion of white supremacy it has a God-given right to dominate the solar system. But how can that be so when Washington, the tax-cutting maniac, has become so dependent on financing from China to keep the government afloat? There has been loose talk about punishing China because of its reluctance to tamper with its powerful currency but this is madness in light of Beijing’s financing of Washington, not to mention the flood of inexpensive products that buoys the ever-shrinking paychecks in this nation. Plus, threats are not a one-way street and of late, Beijing has made some of its own. Cheng Siwei, vice-chair of Beijing’s Parliament suggested recently that China should trim its holdings of US debt instruments and halt its buying of dollar bonds. Actually China has been gradually diversifying away from dollar assets in its foreign exchange reserves, though it presently holds $262.6 billion of US Treasury notes as of January 2006, which is dwarfed by Japan’s holding of $668.3 billion.

This latter staggering figure is a reflection of the fact that US imperialism sees Japan as an Asian version of Britain, i.e. an island monarchy that will serve as a poodle of the Pacific that will be manipulated willingly against both China and Russia. This scheme too is running into stormy seas, not least since Japan has designs all its own. Japan, which made a prescient mid-1990’s bet on hybrid technology, is set to become the world’s number one automaker in terms of vehicles produced, while GM and Ford are losing market share steadily. Meanwhile, Toyota, Honda and Nissan are all enjoying continuing sales growth in the US.

GM posted a jaw-dropping net loss of $4.8 billion for the October-December 2005 quarter, then announced a whopping 30,000 job cuts and nine plant closures in North America. Credit ratings of both GM and Ford have been downgraded to junk status. Though US imperialism is banking on driving Japan and China into a titanic conflict, Toyota began production of the wildly popular Prius hybrid in China in December 2005 (exports of cars by Chinese manufacturers to the US are slated to begin in 2007, which will place even more pressure on GM and Ford). Yet despite the ranting of overpaid auto executives clamoring for tariffs on Toyota, US imperialism is hesitant, reliant as it is on Japan to assist in its new cold war ambitions.

It is beyond obvious that a central problem with the US is that the super-wealthy have too much power and the working class not enough. This leads inexorably to disaggregating companies, offshoring work and thwarting unionization campaigns. It also leads to a concentration of the national income among a few, the impoverishment of the many and, as a consequence, the constant menace of recession, or worse, due to the lag in purchasing power.

Recently, again in the elite Foreign Affairs, former vice chair of the Federal Reserve, Alan Blinder, announced that given the present global correlation of forces, not just manufacturing jobs, but a large number of service jobs will be performed in cheaper climes. As he sees it, only hands-on or face-to-face services look safe. “Janitors and crane operators are probably immune to foreign competition,” he says, “accountants and computer programmers are not.” In the US of the future, divorce lawyers would have a bright future, and not only because of economic stress engineered by monopoly capital, while lawyers who draft contracts would be destined for the slag heap of history.

As this spokesman for capital sees it, “the total number of current US service-sector jobs that will be susceptible to offshoring in the electronic future is two to three times the total number of current manufacturing jobs (which is about 14 million).” Thus, the total number of US jobs bound for Bangalore, Bangladesh and beyond is somewhere between 42 and 56 million. This does not necessarily mean that all of these jobs will be exported; it does mean that those in this nation performing these jobs will be in direct competition with those who will do the same work for a whole lot less. As Blinder sees it, toss out the comforting notion that education is the key since many jobs under the most stress will be those like accountants and computer programmers and certain lawyers that require significant levels of education.

It is evident that US unions need to accelerate ongoing efforts to raise living standards abroad so as to reduce the wage differential that encourages offshoring, just as legislative remedies are needed desperately that would handcuff monopoly capital. More than this, instead of expending so much blood and treasure on hare-brained schemes of global domination that contemplate nuclear strikes against Russia and China, the US State Department needs to focus on trans-national capital’s gross exploitation of labor abroad.

Strikingly, the international community has come to recognize that restraining the more aggressive impulses of US imperialism will require more intense scrutiny of the domestic transgressions of Washington – as the latter serves to fuel the former. Of late a United Nations panel in Geneva urged US authorities to investigate accusations of torture by Chicago police officers over the past two decades. It is estimated that 192 men – overwhelmingly African American – were subjected to suffocation with plastic bags, electric shocks to the genitals with cattle prods, mock executions and beatings with rubber hoses. Many of these men still languish in prison as a result of “confessions” induced by such brutality.

Interestingly, the UN Committee Against Torture, which highlighted these abominations in Chicago, at the same time called on Washington to close the detention center at Guantánamo. If the US can abuse prisoners offshore, they can do the same at home – and vice versa. Even the International Monetary Fund, typically a pliant puppet of US imperialism, has sharply criticized Washington for its budget and trade deficits and its failure to provide universal health insurance, as it predicted a continued decline in the value of the dollar as a partial result. This rare condemnation reflects the growing unease in the international community with the ongoing and plotted aggressions of US imperialism and what this may portend for this small planet.

During the cold war, US imperialism was able to prevail by enlisting Maoist China, Japan and the European Union in an aggressive encirclement of the former Soviet Union. Yet today it seeks to confront both Russia and China despite being debt-ridden and militarily overstretched in Iraq and Afghanistan, while lusting hungrily after the oil and gas fields of Iran. Not surprisingly, the EU and Japan are decidedly unenthusiastic about tailing after a declining though still dangerous power. Such a scheme can only end badly but fortunately, the international community, assisted ably by US progressives, have begun to raise ever more insistent voices against this idiocy.

--Gerald Horne is author of The Final Victim of the Blacklist: John Howard Lawson, Dean of the Hollywood Ten and contributing editor of Political Affairs. Send your letters to the editor to