Daily Times

US-China relations are hitting rock bottom. And it doesn’t look like there is any way forward as both countries are increasingly tying themselves into knots on the issues that separate them. A resolution of their frayed relationship is important not only for their bilateral relationship but also for the world in all sorts of ways. They are the world’s two largest economies, and wield tremendous economic and political power, besides being strong military powers.

Before I go into their present tense relationship, it may be helpful to understand the backdrop to all this. And for this, a broad sketch of the post WW11 global order is an important pre-requisite. It is important to remember that the Cold War, that dominated much of the post WW11 period till the late eighties, was part of a power struggle for global dominance between the Soviet-led communist bloc and the US-led ‘free world’, with each claiming superiority of its competing ideology and system.

Cultural Revolution, basically a power struggle between the party headquarters and Mao-led and mobilized Red Guards seemingly working for perpetual revolution, internally convulsed China

Around this time, in 1949, the Chinese communists won the civil war in China and became the Soviet Union’s ideological ally and hence part of the communist bloc.China’s entry into the Korean War to forestall US advance towards their border highlighted for the US a new danger, with China as an important factor in its own right as well as part of the Soviet-led communist bloc. And despite the US’s overwhelming military superiority in armour and weaponry, China was able to push back US forces, resulting in the 1953 armistice which, to this day, is the arbitrary border line between the two Koreas, without a peace treaty.

Even as armistice was brought about in Korea, Vietnam was becoming new theatre of a colonial struggle against French rule, seen by the US, though, as part of the worldwide push to advance communism. And when the French colonial forces failed to re-establish their rule, the US entered the Vietnam War against the Ho Chi Minh-led communist liberation movement. The communists had China’s support, and the US saw in Vietnam the beginning of the domino theory, and hence determined to prevail lest Asia was lost to the communists. Which, as we know, didn’t happen and in 1975, the communist forces advanced into South Vietnam to unite the country under communist rule. It was, in a way, a humiliating defeat for the US.

The US’ fear of a monolithic communist bloc appeared overdrawn. China and Vietnam drifted apart over sovereignty claims in regard to a group of islands in the South China Sea. And at a more serious level, the two major components of the so-called communist bloc, China and the Soviet Union, descended into an ideological/political struggle in the post-Stalin period, with China unhappy at the turn the Soviet Union was taking. Indeed, the Sino-Soviet schism created an opening for the US and China to start a process of opening up their relationship; with the US President Nixon’s China visit in 1972 eventually leading to the opening of diplomatic relations with communist China, now being recognized as the sovereign international state with a permanent seat in the UN Security Council.

However, for much of the sixties and seventies, Cultural Revolution, basically a power struggle between the party headquarters and Mao-led and mobilized Red Guards seemingly working for perpetual revolution, internally convulsed China. And it was not until the eighties that China managed to extricate itself from the destructive politics of perpetual power/ideological struggle, after the death of Mao in 1976. Which eventually entrenched Deng Xiao-ping, the former Party boss who had been the victim of Cultural Revolution, the new supreme leader but with a more pragmatic and practical approach.

Unlike Mao he was not into perpetual revolution or perpetual power struggle. And he wanted China to develop into a powerful nation state with all the usual attributes of a strong economy, a modern military force and so on. And he was prepared to go for a capitalist economic model but under the control of a communist state. China was opened to foreign capital investment in designated regions and its cheap labour made it an attractive destination, eventually making China the factory of the world.

And in the decades that followed the eighties, China’s economic growth created a sizeable middle class keen to spend on foreign goods. In other words, China was not only attractive as a manufacturing base because of its cheaper manufacturing costs and stable laborconditions; it also was now an attractive and growing market for foreign goods. And for access to that growing market, China was able to insist on advanced technology transfers, which further pushed it up the economic cycle from simply being the factory of the world on the way to high technology.

However, this was a gradual process but, before that, in 1989, China had to deal with a student-led democracy movement, which was crushed with the use of the military. As with the adoption of the capitalist model of economic development, Deng Xiao-ping prevailed to crush the democracy movement. Despite criticism from the Western world of suppression of a growing democracy movement, China pushed on with economic development.

The world was getting used to cheaper goods made in China. And with its entry into the World Trade Organization, it also qualified for preferential (cheaper) tariffs as a developing country. China was thus on the way to becoming a strong world economy, and an assertive power. In a subsequent article, I might analyze how it all developed into the ongoing confrontation between the US and China.

The writer is a senior journalist and academic based in Sydney, Australia