Eurasia Press & News
US President Joe Biden has been very firm with countries that have politico-economic relations with Russia. Equally, Vladimir Putin has been very firm in his warning to the US and the Western bloc not to cross his undefined “red line”. Russian President Vladimir Putin has warned the West not to cross a “red line” with Russia, saying such a move would trigger an “asymmetrical, rapid and harsh” response.
The warning came in his annual State of the Nation address, amid heightened tension with the West over Ukraine and jailed Putin critic Alexei Navalny. The tension increased when President Joe Biden in an interview with the American Broadcasting Corporation described Vladimir Putin as a “ killer”. Russians commented Joe Biden’s statement was unprecedented coming as it did from a sitting US President. Russia does not feel that it can be blamed for its attitude towards the Western bloc as Vladimir Putin has been repeatedly asking the West to respect her security perimeters, particularly on the issue of Ukraine.
As reported by BBC President Putin said that some Western countries were like jackals trying to please the US, just as a jackal behaves with the tiger Shere Khan in Kipling’s tale The Jungle Book. “We don’t want to burn bridges, but if somebody interprets our good intentions as weakness, our reaction will be asymmetrical, rapid, and harsh,” he said. “We’ll decide for ourselves in each case where the red line is.” Such an undefined red line might have encouraged some countries to test American determination to punish those who have dared to deal with Russia.
In an article (August 23, 2330- Jonathan Fenton-Harvey- The New Yorker) gave the example of the UAE and commented that the war in Ukraine has continued to test nations’ global allegiances, and the countries of the Gulf Cooperation Council significantly embody this trend. In particular, the United Arab Emirates has worked proactively to embrace Russian business while hoping to evade pressure from the United States and its Western partners.
Yet amid growing scrutiny over Russian ties, Abu Dhabi may have to adapt. Despite narratives of the UAE and Saudi Arabia drifting from the U.S. orbit, the Gulf states continue to recognize their dependency on U.S. security ties. In May this year the UAE announced it would withdraw from the U.S.-led maritime coalition, a 34-nation force aimed at counterterrorism and anti-piracy in the Red Sea and Persian Gulf. However, just days later, it confirmed its desire to continue working together with Washington on regional security. Indeed, Washington’s recently renewed naval activities in the Middle East may serve as a reminder to Abu Dhabi of the benefits of security cooperation with the United States. Similarly, the US is unlikely to lose its dependable arms-buying market in Saudi Arabia despite the murder of a now universally known Saudi news reporter allegedly on the orders of the Saudi Crown Prince.
Other analysts include Samuel Charap a senior political scientist at the RAND Corporation with research interests including the foreign policies of Russia and the former Soviet states; European and Eurasian regional security; and U.S.-Russia deterrence, strategic stability, and arms control. Charap’s book on the Ukraine crisis, Everyone Loses: The Ukraine Crisis and the Ruinous Contest for Post-Soviet Eurasia (coauthored with Timothy Colton), published in January 2017 has been widely acclaimed. In Samuel Charap’s words “The idea of sticks in international relations is not just for beating other countries. It’s for achieving a better outcome.” He used the example of the long-standing Iran sanctions, which had finally compelled Iran to come to the negotiating table and vastly limit its nuclear program. The sanctions on Russia, he went on, were not like that. “Sanctions are only effective at changing another country’s behavior if they can be rolled back,” he said. He found Russian demands as prohibitive and remarked that Putin was asking the world’s most powerful military alliance to strip naked and run laps while holding a gun to Ukraine’s head.
One must, however, not lose sight of the back channel talks being held between Russia and the US so that either one or both do not fall into the Thucydides Trap. To explain the Thucydides Trap one has to refer to Professor Graham Allison of the Harvard Kennedy School who popularized the phrase “Thucydides’ trap,” to explain the likelihood of conflict between a rising power and a currently dominant one. This is based on the famous quote from Thucydides: “It was the rise of Athens and the fear that this inspired in Sparta that made war inevitable.” This usage has even spread to Chinese President Xi Jinping who said, “We all need to work together to avoid the Thucydides trap – destructive tensions between an emerging power and established powers … Our aim is to foster a new model of major country relations”.
Any discussion on Russia and the Western bloc inevitably draws the discussionsits into modern China which today claims its place at the table framing the rules the rest of the world is expected to follow. Such expectations given the complexity of the global politico-economic situation prevailing today would be highly unrealistic. Famous British magazine The Economist has described the acute economic distress that China’s economy is presently going through. In the words of US President Joe Biden
The Economist has reported that China’s economy is a “ticking time bomb” because of its aging workers and unemployed young. The magazine also reported that others think it is suffering from “long COVID” because of the private sector’s “immune response” to Xi Jinping’s meddlesome rule. Many worry that China faces “Japanification”—a combination of debt, deflation, and demographic decline—in the long term and a “Lehman moment” in the more immediate future, as defaults cascade through the shadow-banking system. Even level-headed observers are shaken. The mood is the worst it has been for years if not decades. The magazine adds that foreign direct investment all but vanished in the second quarter, falling by 87% year-on-year to $4.9bn, as multinationals repatriated their earnings rather than reinvesting them. The Shanghai Composite, a benchmark stock index, is down by about 5% compared with a year ago when the memory of Shanghai’s torturous lockdown was still fresh.
Prices for existing properties in China’s 100 biggest cities have dropped by 14% compared with their 2021 peaks. In the smaller cities, where price information remains patchy, things are probably worse. An old trick many economists now expect growth to meet the government’s target of “around 5%” only because the word “around” gives it some wriggle room. Slowing growth has also been accompanied by declining prices and a weaker currency. The combined effect could wipe trillions off the dollar value of China’s GDP. In the past four months, for example, Goldman Sachs, a bank, has slashed its forecast for this year and next by a combined $3trn . For some observers, there is little hope of improvement.
Adam Posen of the Peterson Institute for International Economics, a think-tank, has suggested that China’s economy is suffering from something akin to “long covid”. Draconian and arbitrary lockdowns in 2020-22 ruptured people’s faith in Xi-Jinping’s meddlesome party. Households and entrepreneurs can no longer assume that the party will not bother them if they do not bother it. Therefore private investment is tentative, purchases of consumer durables are weak and bank deposits are unusually high, as people self-insure against an uncertain future. Confidence has also suffered as a result of the “regulatory storm” that struck after 2020, humbling China’s online platform companies, such as Alibaba and Meituan, and all but killing the ed-tech industry. Households may be despondent because employment is insecure, wages are stagnant and assets, especially houses, are losing value. If so, morale should pick up if the job and housing markets improve. The animal spirits of private entrepreneurs should also revive if their sales regain momentum.
It may, in fact, be property that is at the heart of the problem. In manufacturing, by contrast, private investment has been respectable, growing by 8% in June compared with a year earlier. Weak spending on consumer durables may also reflect property-market woes, which have depressed furniture and white-goods sales. Purchases of other consumer durables have shown more signs of life. Sales of cars surged in the first half of this year, helped by the exemption of electric vehicles from a 10% sales tax. China’s households are not so worried by their government that they will miss out on a bargain.
The renewed weakness in China’s property market has certainly contributed to fears of deflation and default. The price of building materials fell by 5.6% in July compared with a year earlier, and the price of household appliances fell by 1.8%. The “deterioration in sales” was one reason Country Garden gave for failing to pay its bondholders on its deadline of August 6th this year.
The Economist concludes that China will still have to contend with demographic decline and diplomatic dangers. Its workforce will begin to shrink more rapidly in the 2030s. And America’s restrictions on semiconductor exports will bite more keenly as technology advances. The second concerns the political dynamics at play. If China’s government acts with urgency, it has the tools it requires in order to engineer a recovery in the latter part of this year. But will it use them? Xi-Jinping lacks the credibility or focus of previous leaders. He now prizes greatness over growth, security over efficiency, and resilience over comfort. He wants to fortify the economy, not gratify consumers. These competing priorities may prevent China’s rulers from doing whatever it takes to revive demand. Xi-Jinping no longer wants growth at all costs. And so the country has not had it. At a growing cost.
