The ‘Petrocurrency’ Determinants in Growing Sino-US Confrontation: Implication for South Asia

Abstract

The purpose of this article is to identify the areas where China’s internationally rising monetary and petrocurrency influence is likely to conflict with the US’s monetary as well as strategic interests. It is assumed that China’s creation of mutually financially supportive networks of economic, monetary, petrocurrency as well as highly innovative and expanding defence industrial structures are sources of generation and reinvestment of revenues and surpluses which are directly coming in conflict with the US’s international interests and especially in the South Asian region. In this perspective, this article poses the questions: what are the innovative developments in China’s refinement of its petrocurrency and its internationally extended arms industry? How are these leading to confrontation with the US? And lastly what are the impacts of this monetary and petrocurrency policies on the South Asian region? In the theoretical domain, this article addresses the role of the combination of monetary and strategic factors in growing confrontation between the two great powers and the possibilities of conflicts leading to changes in international polarity and order. It is argued that China appears to suggest that its new version of international order encourages economic competition among great powers; however, this newly emerging Chinese global monetary and geostrategic network has equal risks of leading to strategic confrontations and armed conflict between China and the US as well as South Asian states.