Are we on the verge of World War Three?

The standoff between the US, North Korea and China intensified over the bank holiday weekend. I was back up north visiting family and seemingly every time someone put the television on we were greeted with images of North Korean troops parading missiles through the streets.

All very intense, and clearly designed to send a message to the world. Though precisely how that message differs from in previous years I’m not sure. I’m also not convinced we’re on the brink of a global war. That said, people are clearly beginning to get concerned. Google searches for “World War Three” have spiked in recent days. They’re now the highest they’ve been for over a decade.

If you’re interested, the last (and indeed only, given the data only goes back to 2004) time searches have been that high was July 2006, during an intensification of conflict in Israel. A world war didn’t start back then. So there’s no real correlation between what people are searching for and real, actual conflict.

But it does tell us that people are scared. Or at least, highly concerned. If we take what people are searching for as a proxy index for people’s emotional state, then fear just broke out to a new decadal high.

The question is whether that fear is justified or if it’s just a natural consequence of a mainstream media that traffics in fear – which sells – over real insight. I think it’s a smattering of both.

If you’re new to the story, the current tension came about after the Donald Trump administration in the US made it clear that it considers the situation in North Korea dangerous and will be willing to act in order to rectify it. Trump sent warships to the region. The North Koreans responded as you’d expect: with threats of retaliation.

It’s easy to read the narrative like that, anyway. The dominant global power threatening the small pariah state (part of George W Bush’s “axis of evil”, if you remember). Big vs small. Rich vs poor. Powerful vs weak.

I think that’s the wrong way of looking at things though. I see the current situation as a major arm-wrestle between the two most powerful nations in the world today: the US and China.

That’s a much more complicated dynamic. This is simply the diplomatic/military dimension of it.

Think about it: North Korea is essentially China’s client state. The two countries share a (nominal) ideology. Economically, North Korea is bound to China – without Chinese aid it’d collapse. Militarily, they share a close history (China backed the North in the Korean War, where the US backed the South).

China supports and shields North Korea in numerous ways. Now the Americans are calling their bluff.

In that context, American rhetoric regarding the situation isn’t really aimed at the North Koreans. It’s aimed at China. Essentially the Trump administration is saying “We don’t like this situation and China won’t do something about it, we will.”

In short, Trump is looking for the point at which it becomes more bother for the Chinese to support the North Koreans than it is to stop propping them up and deal with the situation. No one knows where that point is. But logic would dictate it exists. Is it really in China’s interests to have an unpredictable and aggressive nuclear state operating on its doorstep?

I’d say not. I think the Americans think so too. They’re trying to force the situation so that China reaches that point sooner rather than later.

Just look at what’s actually been said. In a trip to the region last week, American vice president Mike Pence stated that “the era of strategic patience is over” and that “we look for them [China] to do more”.

It’s the end of an era all right. But reading those words as a message to China instead of North Korea is probably more instructive. It’s not US patience with North Korea running thin, but China.

Pence also claimed that, “The message of the people of the United States of America is that we seek peace, but America has always sought peace through strength”.

Which, to take a brief tangent, is complete bull. Modern America may seek peace through strength (whatever that means). But by no means has it “always” done so. In fact, it had a long and proud history before World War I of seeking peace through… peace. Living in “splendid isolation”. Keeping itself to itself and not going “abroad in search of monsters to destroy”, as John Quincy Adams put it in 1821. The fact that the vice president can essentially rewrite history in such a glib manner is, well, at very best it’s a shame.

I wrote earlier in the year that a defining theme of the Trump presidency wouldn’t be controversy with Russia, but rather conflict with China. That means diplomatic, economic and military conflict. Trump virtually said as much on the campaign trail.

It’s been slow to come to the fore so far (aside from early issues over Taiwan). It’s a complex dynamic. I think Trump sees Korea as one area he can exert pressure over China.

We’ll watch that story for more developments in the coming weeks. In the meantime, don’t search for World War Three on Google. It’s probably not healthy. Go have a beer instead!

That’s the diplomatic arena. What about our regular beat – the economics? Well, China’s economy is ticking along rather well, at least according to numbers out at the end of last week it is. The Chinese economy grew by 6.9% in the first quarter of the year. Growth is accelerating, powered by infrastructure spending, housing and exports.

So, China is more or less doing what it is good at: building and exporting stuff.  We’re not seeing the major rebalancing towards a consumption-based economy we were once promised. But who cares! Perhaps choosing the kind of growth you get is a luxury no one can really afford. Growth is growth. And the rest of the world would probably rather China caries on business as usual rather than go through a major rebalancing.

Unless, of course, you’re Trump and you were elected, in some sense, to address the fact that many Americans perceive the Chinese economic model as a threat to their way of life. Which brings us full circle. It’s not yet clear how he’ll do that. Pushing China over North Korea may score points. But it won’t change the situation on the ground in those deindustrialised areas that helped sweep Trump to power. More on that another day!

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