‘Russia’s major problem is its elites, not the USA and China’

“China pursued quite a short-sighted policy”

Mr Kagarlitsky, do you think that the relationships between China and the USA have reached the peak?

Indeed, now the crisis in the relationships between China and the USA has reached its peak because the relations between the countries have never been as bad as they are now since Mao Zedong. It is the most acute phase of opposition since the Korean War. It would be early to expect a war or catastrophe because neither side is ready for further escalation.

As we remember, Mao Zedong didn’t opt for the armed seizure of Taiwan despite quite his all bellicose rhetoric after the end of the Korean War he didn’t plot and was undesirable for China, despite numerous “Chinese warnings”. Americans too demonstrated restraint then. And I think that in this case we can see balancing on the edge of an acute conflict but it will unlikely grow into a direct open military or military and political confrontation.

Why has this opposition — political and economic — between Beijing and Washington has intensified in the last years?

The problem has accumulated since the 2008-2009s. In autumn 2008, China significantly rescued the neoliberal system of global capitalism with its mass investments and purchase of bonds in the world market. I was in Beijing in October 2008 and talked with Chinese economists who clearly described what was going on: China was to support the United States, the West to save the existing system that was beneficial for China. It is very important. They didn’t help for the love, leanings or sympathy, this system allowed redistributing resources from Western countries to China. When this system faced an acute crisis, China took measures to save it. But the cost of the salvation was too high politically and economically because there was a shift of decision-making centres, the centres of economic dynamics towards China. And approximately since the 2011-2012s, a big part of the American ruling class has set itself a task to play this process back and return the United States the reining position in the economy, which has shattered.

It isn’t a reason but a consequence and demonstration of how Trump and his voters’ consciousness who believe conspiracy theory and so on works. I don’t know how sincerely Donald Trump believes this, but he is constantly talking about it, it is obvious

China, in turn, pursued quite a short-sighted policy because it kept taking advantage of those pluses and advantages it received from the existing system without doing anything that could at least influence it: at least to rationalise if not humanise. So the new crisis, unlike the previous one, has provoked not the next rapprochement between the USA and China but, on the contrary, an acute fight between them, as each side is trying to shift costs of the crisis to each other. This is why the classic story of this national and imperialistic opposition is quite logical. Such stories have regularly repeated since the 1990s.

Does it mean that Trump’s accusations of the PRC in spreading the coronavirus is a part of this war?

Psychologically, without doubt. It isn’t a reason but a consequence and demonstration of how Trump and his voters’ consciousness who believe conspiracy theory and so on works. I don’t know how sincerely Donald Trump believes this, but he is constantly talking about it, it is obvious. I think it is a form of anti-Chinese propaganda that is now more popular in America.

“Anti-Chinese sanctions were long overdue”

And now the Senate is preparing to impose sanctions against Beijing...

Yes, anti-Chinese sanctions were long overdue. Moreover, as things stand, not anti-Chinese sanctions but the impossibility of recovery of the economy of old industrial development countries of the West (by the way, including Russia) without the return of the industry to those countries where it was founded is on the forefront. Because all these talks that we will have an economy of services that will consist of only scientific research and innovations turned out rubbish. Science can’t develop without a developed modern industry.

The idea of the possibility of the global division of labour, shifting assembly production to Asian countries and leaving developments, research and services turned out absurd and stupid from the beginning. It is necessary to reconcile the population of the West with a loss of jobs and explain to them why transnational corporations are shifting production into countries with cheaper workforce. But, most importantly, it showed its complete inconsistency because if you shift the industry, science goes after the industry. It is hard for science to develop where the industry isn’t developed. Science (I am not speaking about fundamental but applied technological one) doesn’t exist abstractly, it exists as a system of performance of specific tasks that somebody sets somebody. I mean it doesn’t exist separately from the industry. After giving up the industry, leading countries automatically began to lose their scientific leadership potential too.

All more or less successful stories of mass, wide development of industry presuppose radical protectionist measures of this country or region. Against whom are these measures taken? In this case, against China

And the return of the industry is now a condition to recover the economy, creating jobs and so on. It is impossible to recover the industry in the current order without imposing protectionist restrictions and barriers. The recovery period is expensive. It is very expensive to develop the industry, not a separate sector, on a large scale. And at first, your products will anyway be expensive compared to opponents. This is why all more or less successful stories of mass, wide development of industry presuppose radical protectionist measures of this country or region. Against whom are these measures taken? In this case, against China. In the late 19^th century, the whole world began to defend against English products, which meant the beginning of industrialisation and in the end led to the First World War when Germany and the United States, in turn, went up as industrial powers.

Today the main industrial production is located in China. Consequently, everybody will protect from China. As China is the main exporter of ready-to-use industrial commodities, this is why countries of the third world, which will try to actively develop their economy, will also close from China. In this respect a conflict between China and India is unavoidable. China and Vietnam are traditional enemies in general.

In fact, this is an unpleasant story because the layout “China against everybody” is maturing under the guise of the American-Chinese conflict. The only solution for Chins is to follow its domestic policy — social, economic, political, that’s to say, to look at the domestic market as one of the ways to continue development. But this will require not just a turn in policy, this will require changing the structure of society. It is always said that China has a potentially huge domestic market. But to make this potential market real, China has to become a completely different country, with another political, social regime, with another population that behaves differently. In other words, China has to dramatically change from the inside to be able to realise its huge potential. There must be global transformations comparable with those of Mao Zedong in the 1949-1950s.

I wonder what is in the foundation: not concern about the Uyghurs or Tibetans but the fact that Chinese commodities became a problem for the world economy, impede the development of global production

American senators became concerned about the fate of the Xinjiang Uyghur Autonomous Region, Tibet, Hong Kong. Why?

This always happens. China has vulnerable points, first of all, it is the Uyghur, Tiber problem. Though to be honest, as much as we talk about the right of nations to self-determination, Chinese authorities for these regions are an undoubted good because it brought these territories to serious development, improvement of the material and cultural level. This is why the constant topic of self-determination of nations and oppressed people very often ignores this social and economic reality these peoples live in. We know this because of the history of dissolution of the Soviet Union. With the dissolution of the USSR, a lot of territories that joyfully marched towards independence began to rapidly degrade then. And now many people consider the Soviet Union as a lost good. However, Russia degraded too, but it is a separate topic. But as for Central Asia (except Kazakhstan), these regions degraded even worse than Russia.

This is why they will press China, pay attention and kindle this separatist topic by all means — it is a weak link of the People’s Republic of China. But in general this topic is quite speculative. But I wonder what is in the foundation: not concern about the Uyghurs or Tibetans but the fact that Chinese commodities became a problem for the world economy, impede the development of global production.

“China benefited from the dissolution of the USSR very much”

Whose stance will Russia protect in this opposition?

Russia should defend its interests objectively, not China or the USA’s interests. Russia is interested in protectionism. But the problem is that Russia needs to protect its markets from both China and the West. And there is another moment: protectionism and the protection of markets are incompatible nowadays because of economic self-isolation. It is necessary to protect our markets simultaneously in the global market and create a new place. While Russian elites decided to build in the existing economy by selling feedstock. Russia’s main problem is its elites that created such an economy that can do nothing, not the USA and China. It is impossible to change it. And they (Editor’s Note: the elites) fulfil this system, they are interested in it and are an obstacle to any changes.

Can we say that Russia (the USSR in the past) isn’t as scary enemy for America as Beijing?

The dissolution of the Soviet Union considerably brought to geopolitical and economic reconfiguration in which China significantly went up. China benefited from the dissolution of the USSR very much, of course, though not directly unlike the West but indirectly. Nowadays China is the main problem for the United States.

China’s problem isn’t that it has a conflict with America but that it happened to be objectively engaged in a conflict with the rest of the world

What measures will the Celestial Kingdom take in reply to such complaints of the Americans about China, “attacks” on Beijing?

No measures yet. If you read Chinese newspapers, you will an aggressive campaign against the USA — no less harsh than the USA has towards China.

Unfortunately, I can read only Global Times in English and Xinhua news.

Chinese newspapers for the domestic audience write about America very aggressively. But I see nothing serious yet. China’s problem isn’t that it has a conflict with America but that it happened to be objectively engaged in a conflict with the rest of the world. But the Chinese are lucky because Trump is a very bad character to create a single anti-Chinese front. Trump himself is unpopular, neither are America’s hegemonic ambitions amazing. This is why there won’t be a single anti-Chinese front, but China has already had parallel economic conflicts with other countries because everybody has stopped imports from China on the pretext of the fight against the coronavirus.