The Chinese Yuan is Palestine’s Best Friend

Before one harbours any illusions about China’s policy towards Palestine, one must remember that like Russia, China favours a two-state solution and maintains healthy contacts with both Palestine and “Israel”. In this sense, Beijing’s policy towards Palestine while clearly more balanced and ethical than that of the United States, is neither a panacea nor is it in line with Arab Nationalism let alone Iranian style Islamic Revolution. The fact that China, like Russia is neither an Arab nor Islamic nation should make such things self-evident.

However, China’s indirect weapon in helping Palestine will ultimately be far more potent in the long-term than traditional forms of literal resistance against occupation. To understand why the gradual emergence of the Chinese Yuan as the world’s next major trading and reserve currency is Palestine’s biggest “secret” weapon, one must understand the realities of US dominance in the early 21st century.

While the Trump administration remains filled with neo-con hawks including John Bolton, Michael Pence, Nikki Haley and Michael Pompeo, even they have quietly acknowledged that the era of hard military regime change wars has given way to soft economic warfare with the intention of overthrowing governments that the US would have otherwise sought to undermine through military means.

This week, the most hawkish of the Washington hawks, infamous Iraq War champion John Bolton confessed that the US goal in Iran is not regime change. Bolton later admitted that he hoped that financial/monetary pressure on Tehran would gradually lead to a change in government in the Islamic Republic, but the method which the US is pursuing in the increasingly vain hopes of achieving this is very different than the kinds of things that the US did in the 1990s and early 2000s and even during the Cold War. In this sense, while the US would certainly like to change the governments in places like Iran, the DPRK, Syria and even Pakistan, the truth is that America’s options for achieving these perverse goals are increasingly limited.

During the Cold War, in spite of the superpower status of the USSR, the US worked to either ‘change’ anti-US regimes or prop-up domestically unpopular regimes that had good relations with the US. This included the CIA operation to change Iran’s government in 1953 when Britain and America conspired to remove the progressive nationalist Iranian Premier Mohammad Mosaddegh from power.

In the 1990s and early 2000s, the US and its partners engaged in multiple regime change wars against legitimate governments in Yugoslavia, Iraq, Libya, Egypt and ultimately Syria. Of all of these endeavours it was only Syria where the US partly failed.

While the US occupies parts of north eastern Syria and retains an isolated garrison in the country’s south-east, the combination of Syria’s political unity against foreign aggression and the help of powerful foreign allies including Russia and Iran, helped stem the tide of regime change. Syria is now in a state of geopolitical attrition which while unattractive to Damascus which seeks to liberate “every inch” on Syria, is never the less preferable to what happened in Yugoslavia in 1999, Afghanistan in 2001, Iraq in 2003, Libya in 2011 and Egypt in 2011.

Today, the US strategy, having already pivoted from the total war model exemplified by the Iraq war, is now gradually pivoting from the proxy war model implemented in Syria towards a model focused primarily on economic blackmail through the use of sanctions and tariffs with the added element of proxy conflict when and where possible.

Crucial to this new model is the US willingness to sanction third party nations who conduct trade with the initial target of sanctions. In the case of Iran, the US has explicitly threatened its closest European allies in France, Germany and Britain with sanctions should they seek to preserve the JCPOA and continue to conduct trade with and conduct commerce in Iran. While Russia is already under sanctions and China is already the victim of a US tariff war, the threat to Beijing and Moscow is an implied yet unambiguous threat.

Russia has already had the most experience in respect of being a country that is not only directly sanctioned by the US, but a country that has seen the US bully both new and old Russian trading partners. The US has gone so far as to threaten fellow NATO member Turkey with sanctions because of Ankara’s soon to be completed purchase of Russia’s S-400 missile defence systems. While India already capitulated to pressure from Washington and has frozen orders of new Russian weapons, Turkey held firm and as a result the US has capitulated to Turkey and will now deliver its F-35 fighter jets to Anakra, even as Turkey follows through with its S-400 purchase from Moscow.

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The EU which is making strong statements of resistance against the direct threat of US sanctions in the event that EU companies and sovereign entities continue to trade with Iran, must now learn a valuable lesson from Turkey. It is only by remaining firm with the US, while simultaneously diversifying ones trading partnerships that one can avoid sanctions. This is the case because if enough powerful and prosperous states and global entities refused to be bullied by America’s third party sanctions, the US would perversely be sanctioning itself if more countries refused to back down than capitulated to Washington’s third party sanctions threats.

In the long term however, the US model of sanctions, tariffs and third party sanctions will become vastly less effective when the Chinese Yuan gradually supplants the US Dollar as the world’s number one reserve currency and crucially, when the Petroyuan becomes the world’s de-facto energy trading currency.

The only reason that US sanctions remain a potent force for US global domination is because much of the world is still dependant on access to Dollar based US financial institutions in order to conduct global commerce. If US financial institutions were substituted for Chinese ones and if the Dollar was supplanted by the Yuan as the major trading currency, US sanctions would lose much and in some case all of their potency.

One cannot be so naive as to think that the Arab world has betrayed Palestine for ideological reasons, not least because anti-Zionism remains a may stay of popular Arab sentiment. The reality is that the US has been able to buy Arab loyalty through the Petrodollar and accompanying Dollar based investments. But when the Yuan becomes the necessary currency of trade for wealthy energy producing Arab states, there will be far less to gain on the part of these Arab states in kowtowing to the US because it will instead behove countries like Saudi Arabia to take cues from China. China has already drastically cut its oil purchases from Saudi Arabia even while China is the world’s largest single energy consumer. Beijing has stated that Riyadh is artificially inflating the cost of its oil and as a result, China is exercising its geopolitical purchasing power to find a better deal. Soon it will be China that will be able to make demands on all of the world’s energy producing nations and such a reality necessarily accompanies more geopolitical clout.

Because China is interested in creating global commercial markets among all nations rather than building a closed imperial style bloc of allies which will necessarily antagonise nations outside this bloc, China will not make domestic or regional political demands in exchange for investments and trade deals, unlike the US. Because of this, the entry of the Yuan onto the world’s stage as the de-facto global reserve currency will create an opening up of foreign policies throughout the wider world. The Yuan will allow nations the freedom to pursue independent foreign policies that the Dollar has thus far disallowed.

Because of this, when the Yuan liberates the world from the Dollar and all of the geopolitical threats, blackmail and ultimatums that come with it, Palestine too will stand a chance to be liberated by countries throughout the world that will no longer feel worried that standing up for Palestine could lead to their own financial ruin.

 


 

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