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Questions for 2017 / Tensions between China, U.S. a point of concern

Ryuzo Suzuki/The Yomiuri Shimbun

Jacques Attali speaks with The Yomiuri Shimbun.

The Yomiuri ShimbunThis is the third installment of an interview series with leading intellectual figures around the world. The following is excerpted from an interview with French economist Jacques Attali.

The world is in a very oppressive trend. Society is increasingly compartmentalized and closed. And this compartmentalization is increasingly reflected in the results of voting around the world. We see it in Europe — including the British referendum that decided on an exit from the European Union — and we see it in the United States. It will no doubt be seen elsewhere. I predicted Donald Trump would win the U.S. presidential election. It was a predictable result of the trend.

It is true that many citizens are disappointed by Trump’s victory. But Trump was democratically elected. Democracy is going well, for the time being.

I think that a real threat from Trump, who emphasizes the ideal of “America First,” is not to democracy but to openness and to the international conception of things. It is true that there is a real risk of nationalism.

I often compare the world today to that around 1910. There were a lot of new technical advances. Democracy was going well. Globalization was progressing. Around 1910 the world could have gone toward a period of strong growth but the world instead chose two world wars. It’s kind of the same risk today.

To me, the biggest threat in 2017 is a conflict between China and the United States, with Japan involved. That seems very threatening to me because Trump chose to have Russia as its friend and China as an enemy.

If we add China’s construction of artificial islands in the South China Sea and North Korea’s nuclear and missile development and all that, it creates an extremely explosive situation for Asia. So I’m pretty worried about everything going on in the East China Sea and South China Sea. If a war starts between China and the United States, involving Japan, it will lead to a world war. We have to know that there is a risk in order to keep it from happening.

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  • Ryuzo Suzuki/ The Yomiuri Shimbun

    Jacques Attali during an interview at his home in Neuilly-sur-Seine, west of Paris

In addition, there are five other military crises. These are between Russia and parts of the former Soviet sphere such as Ukraine, between India and Pakistan, in the Middle East, in the Sahel region, and with Islamic State of Iraq and the Levant (ISIL). It is possible we are not far from the end of ISIL in Iraq, but it could revive in Libya or elsewhere.

These are all the risks of instability. There will probably be more terrorist attacks and there will be huge migrations.

However, the United States has already withdrawn as the “world’s policeman.” President Barack Obama refused to interfere in Egypt when it was hit with a military coup. He did not go after Syria’s Assad regime, which used chemical weapons against its own people. In 2006, I warned of a world from which the United States withdraws, and it is arriving.

Imagine a boat designed to transport solid products, whose cargo suddenly becomes liquid: This boat will not withstand the slightest roll in the first storm. In the political evolution of democracies, opinions can change at any moment from one side to the other, “liquidating” their leaders. Zygmunt Bauman — a great philosopher from Poland who now lives in Britain — described a world made up of selfish individuals who become pure consumers, using the metaphor of the “liquid society.” And from that comes populism.

The U.S. withdrawal from the world leads to a more fragile world. There will undoubtedly be more violence. But there is no other that can fill the space.

China has only a will to become a regional power, but not a global one. China has no desire to play the referee in Africa, India, Europe or Latin America.

Russia has the will to do so, if only because it needs this role to stabilize itself and to have access to ice-free ports. Perhaps it is dangerous that no world powers believe they have a true planetary vocation.

There are so many threats. Let me point out six threats that may cause a global economic crisis in 2017.

First, financial bubbles could explode in China. Second, Europe or the United States could be tempted to protectionism to an extreme. Third, a financial crisis in Europe might be led by failures of Italian banks. The eurozone is still imperfect and fragile. Significant differences have emerged between France, which wants a weak euro, and Germany, which wants a strong euro. Fourth, the giant bubble of state debts could explode. Japan is no exception to this. The possibility of a financial crisis originating in the United States is the fifth item. And finally, a crisis linked to the price of oil could be triggered.

But one should not always see only the bad side of things.

Middle class to be huge market

The middle class in China and India will increase. The middle class in Africa will increase. As results, this will create enormous markets. There are a lot of new technical advances that are emerging. There will be strong American growth this year.

The United States will likely withdraw from Europe, the Mediterranean region and Middle East. And the fact that the United States is withdrawing is good news for Europe.

For Europe, defense will be absolutely crucial. For its defense to be successful, Europe must unite. The U.S. withdrawal will force the Europeans to act together. Europe’s integration has been slow but will move forward, and Europe is quite capable of reemerging in international politics.

With Brexit, the EU loses a weighty member. But the Brexit comes after two years, so we have time to see. It’s not finished yet.

It’s not true that the European peoples are against increasing defense spending. They are more inclined to defend themselves and to be assured, since the United States will no longer be there. They want to be safe. Japan, too, will spend more and more on defense.

For Europe to reduce the level of threats, it should have fewer enemies. For that, I am very much for a rapprochement with Russia, which I think is necessary.

This interview was conducted by Yomiuri Shimbun Senior Writer Tetsuya Tsuruhara.

■ Profile

Attali, 73, is a multifaceted intellectual. His roles include economist, writer, management consultant and head of a nongovernmental organization supporting developing countries. He played a role in the integration of Europe as a close aide to Francois Mitterrand, the French president from 1981 to 1995. He has written many books, including “A Brief History of the Future.”Speech

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