I refer to previous postings, namely “Wanted – a Political Oculist” and “US, NATO, Europe and the China-India Axis”
In both those posts, now republished I pointed out that the US has ignored events in Asia and elsewhere as a result of its disastrous and myopic focus on Iraq.
This week’s news of the historic meetings and agreements between India and China support my long held view that the centre of global gravity is shifting inexorably away from both America and Europe to an Asian Heartland.
Once the long festering border dispute between the two countries is put to rest this week , close ties can be forged. Wen Jiabao, the Chinese Premier, made a proposition that the two giants collaborate not only in a regional free trade agreement, but build what could be a Hi-Tech colossus and economic powerhouse. See the following link:
Just as important, if not more so, is the potential that the combined economies of India and China have to replace America as the engine that drives world commerce and/or add a new dimension to world trade. The two countries, representing 2.4 billion people or 40% of the world population could provide a consumer base far in excess of the 250 million Americans.
In addition, the creation of this commercial axis would liberate the world from being hostage to America’s mounting debt stemming from its financial profligacy. As matters now stand, countries such as China, Japan, South Korea, the UK and many others are forced to buy US Treasury bonds of increasingly doubtful value in order to prop up the US financial house of cards.. Should these creditors cease to buy the bonds or reduce the purchases, the dollar and with it the global economy, would go into free-fall. It would result in what one pundit describes as “mutual self-assured destruction” – if the US economy goes under, so do all the others. Without those purchases needed to finance America’s insatiable consumer appetite, US domestic consumption would decrease and the global economy would go into precipitous decline. The rest of the world is held hostage by one country’s economy, an economy that is being irresponsibly mismanaged by the Bush administration..
At present there is not alternative to the US economic engine, and that is precisely why India and China should be encouraged and supported to build a new global commercial and geopolitical heartland. The US is too short-sighted and self serving to recognise the advantage, and with the exception of France, Europe is simply too reliant on the United States politically, militarily and commercially.
Fortunately, unlike Europe, Asia, led by China and India, is not content to lean on America, and the sooner the Asian Heartland takes global leadership, the safer, saner and economically healthier the world will be.
A move away from a US dollar driven global economy and shift in commercial gravity will undoubtedly create turmoil in world markets and economies. A period of painful readjustment will take place, but readjust the world will.