Researcher Shatha Khalil *
Translated by : mudhaffar al-kusairi
The global economy, by its current nature which is represented in the WTO (World Trade Organization) , is based on the freedom of trade and called (globalization), which is led by the United States of America, and the violation of that system may mean unthinkable American manipulation, and the consequences of its failure have not been counted! that it will contribute to a crisis similar to the crisis of 2008, which the global economy is still experiencing the consequences that were caused by the inability of debtors to pay the mortgage advances at that time – and was considered the worst of its kind since the time of the Great Depression in 1929, which started first in the United States of America and then extended to the countries of the world to include European countries , Asian countries, Gulf countries, and developing countries whose economies are directly related to the American economy.
The question now is: Are we facing the second version of this painful scenario, and in connection with a trade war between two economic powers (America and China) that will not have a winner and its consequences that will be borne by all?
Today, monetary policy advocates and economic analysts assert that the current economic situation portends serious problems for the monetary system, and that the continued slowdown in the growth of the global economy which has reached the global economic recession is a fact that is difficult to avoid, and there are several indications that confirm these concerns are:
– Hidden currency warfare, whether it is currencies such as the US dollar and the Chinese Yuan, or virtual currencies such as “Bitcoin” and “Libera” or virtual currencies, which China and the European Union plan to put on the market.
– Accumulation of corporate debt, and problems expected to confront the British economy, the fifth largest economy in the world “Brexit” exit from the European Union.
– High-tech economies such as the German and British economies are rapidly approaching a recession.
– Although economic stagnation is one of the natural phenomena in the cycle of the capitalist system, the initial manifestations, which have become strongly visible, are due to the spread of what can be described as a case of obsession with monetary policies, so that the criteria for economic success have become linked to stock prices, quarterly profits and investor confidence , more than it is related to increasing jobs, improving wages and growing public investment.
– The United States is currently going through an economic downturn, with the global debt size reaching three times the global gross national product, meaning that the world owes 300% of the value of the gross national product.
– Its annual deficit is estimated at one trillion dollars, and the American system will not allow an economic collapse to occur, and here all American studies confirm that Trump will create a war with China, the goal of which is to sit with China at the negotiating table, to agree on a new world order between the two parties.
China is a trading country :
China, as a successful commercial and economic country, is still a pioneer in pursuing and continuing the growth of its economic and military power and influence, and the evidence for this is evident from the past 40 years , and America’s insistence on agreeing with China on adopting a system of globalization and a free – market economy by China as a policy for commercial dealings between them and between China and the rest of the countries, under the cover of the United States, believe that this policy will inevitably lead to the economic destruction of China because it previously depended on the totalitarian socialist system permanently.
But what happened shocked America when China succeeded and became able to sweep the whole world, through the Silk Road, through which the Chinese economy meets its needs to more markets, as it provides prosperity and progress for all the countries that pass from it from Kashgar city in western China to Europe.
As for North Africa, “Egypt” is an important station on the Maritime Silk Road, and it benefited from it after the June 30 revolution with an agreement with China worth 10 billion dollars in addition of other 46 billion to modernize public roads and transportation. The axis of the Suez Canal development is based on establishing new ports and Logistic regions and marine and commercial services are provided to passing ships, which is the way Egypt takes advantage of the Chinese industrial zone in Suez, and other industrial areas along the course in Ismailia, and East Port Said integrated projects that take advantage of the natural resources of Sinai, achieving the maximum benefit from the Suez Canal area , as a global logistic center, and not only as a shipping lane, it depends on the location’s distinctiveness and its genius , followed by the Emirates, where China invests one billion dollars in Khalifa Port in Abu Dhabi, and the volume of trade exchange increased to 70 billion.
Trade war:
Trade wars between America and China have become more influential on the global economy than conventional wars, as their impact extends not only to the warring states, but to a larger scale, depending on the strength of the economies of the warring countries.
As the year-and-a-half conflict has an increasing impact on the global economy, US exports to China decreased by 30% on annual basis in the first quarter of 2019, while Chinese exports to America decreased by 9% and fell by 2.7% on annual basis in April.
Reports also indicated that the global economy witnessed the weakest growth since the financial crisis in 2008, slowing from the rate of 3.6% last year to 2.9% in the current year, before reaching the expected rate of 3% in 2020.
Why does Trump go for this war? He pressured China under the pretext of reforming some of its important economic policies including: industrial espionage, theft of intellectual property, forced transfer of technology, massive government subsidies to selected industries, and severe restrictions on foreign companies in certain core sectors.
Many American observers, including Trump’s harshest liberal critic, Thomas Friedman, agree that China cheats on its commitments in these areas to the World Trade Organization, which it joined nearly twenty years ago.
As for the currency, as America accuses China of devaluing its currency with less than its real value, and as a result, Chinese goods enter the American markets at competitive prices and lower than their American counterparts, and this leads to consumers receiving Chinese products and their preference to the American, which led to a reversal of the trade balance between China and America, in favor of China, which was rejected by America, and began pressuring China by imposing customs duties on the goods imported from it.
Trump seeks to control Iraqi and Syrian oil to break the thorn of China:
US President Donald Trump stressed that his forces have secured oil in Syria and that forces will remain in the region to protect them, in line with his larger pattern of focusing on oil supplies in the Middle East countries.
America is now trying to control the whereabouts of oil, whether in Iraq or Syria or in the Arab Gulf, and according to my simple expectations, to close the road to the China Sea and prevent oil from reaching China, and this is the beginning of the crisis, and it is expected that oil prices will rise during the crisis that the price of a barrel reaches more than $ 100, and here China can be forced to sit around the negotiating table with America to chart the features of the new world order.
Trump defines the relationship between the United States and various effective actors in the Middle East from the perspective that oil is the price of American military protection.
The Middle East has two options:
The countries of the Middle East will come under greater pressure than ever before to make difficult decisions towards these vital options, which are geopolitical in no less important than their economic nature.
Thus, in general, the US-China trade war is likely to have a limited or indirect impact on the Middle East.
But after this war, there will be a great revival in the world, and its beginning will be in the Arab region, because more demolition and destruction has occurred in the Arab region, and therefore the opportunities for reconstruction and its financing are enormous, through the wealth found in the Arab region. Now America wants to be positioned to impose its role in a process of reconstruction.
Economic Studies Unit
Rawabet Center for Research and Strategic Studies