Russia is currently destroying itself with its Ukraine war, and China is facing massive economic and political problems. As a result, the United States is almost automatically reverting to its old role as a global superpower. But other countries are also benefiting from the current crises: one in Europe, another in the Far East.
The United States has just declared that it would defend Taiwan in the event of a Chinese invasion. Even more interesting is that Japan – a country that has not taken military action since 1945 – is now taking a similar stance. Militarily, this does not change much; the Americans could hit back with their missiles in an amphibious assault before Chinese troops reached Taiwan’s coast. Which is why Beijing speculates a lot about a possible invasion without actually invading. But the political environment will be changed dramatically by the US announcement – not least because of the economic impact.
America and Japan are not only the largest and third largest economies in the world, respectively, but they are also important customers of China. The military warning is implicitly coupled with an economic one. Added to this is the declaration of what Washington has dubbed the “Indo-Pacific Economic Framework”, which will reportedly include Japan, Australia, New Zealand, South Korea, India, Singapore, Malaysia, Indonesia, Vietnam, the Philippines, Thailand and Brunei. It is not clear what exactly this group intends to do and when it intends to implement it. What is clear, however, is that many Asian countries are willing to participate in a coalition of common economic interests, essentially sponsored by the United States and of which Japan is the first member.
This is no small thing. China is in economic trouble, and President Xi Jinping is in trouble as a result. The Chinese economic miracle depended on exports to generate domestic capital. However, for various reasons, the demand for export goods has been declining, which, along with other problems, has led to the destabilization of China’s financial system.
George Friedman, 73, is one of the United States’ best-known geopolitical analysts. He directs the think tank Geopolitical Futures he founded and is the author of numerous books. Most recently, “The storm before the calm: America’s division, the looming crisis and the triumph that followed” was published by Plassen-Verlag.
India is keen to take China’s place as the world’s largest exporter, and Malaysia, Indonesia, Vietnam, the Philippines and Thailand would also like to take part. So if any of them get free (or at least better) access to the American and Japanese markets, China will lose competitiveness.
However, the starting point of China’s problem was political. The US was (and still is) China’s biggest customer, albeit not on the scale it used to be, and this has hurt many societal groups in the United States. Ex-President Donald Trump imposed tariffs on goods sold to the US, signaling a shift in American policy.
For the Chinese side, this meant abandoning the notion of unlimited exports and turning to how to deal with potentially falling exports. In the long run, this led to a crisis of confidence that undermined China’s financial system, because it was property-based — and which now needs to be stabilized amid the pains of economic restructuring. This in turn leads to a political crisis that either creates new rulers or leads to more repression.
There are currently two guns aimed at China. One is military in nature, which includes the four-way security dialogue between Japan, India, Australia and the United States. The other is economic and poses a serious challenge to China’s export strategy long before the country is ready to switch to domestic consumption. Wars can solve economic problems, as World War II did for the United States. However, it is extremely unlikely that the anti-China military coalition will start a war. Conversely, Beijing also knows that it would have to deal with a powerful coalition if it were to start a war itself.
All of this is taking place at a time when the Russo-Ukrainian war is raging. Russia decided to invade, believing that Ukraine would collapse quickly. That didn’t happen, mainly because of the massive arms shipments to Ukraine and economic sanctions against Russia. China is also facing an ever stronger military counter-power, and the country is also becoming increasingly isolated. It had formed some sort of alliance with Russia a few months ago, but it was never clear what benefit that alliance would bring to either nation.
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Now we’ll never know anyway, thanks to Russia’s unsuccessful invasion of Ukraine. China simply can no longer afford to support Russia politically or economically. And Russia cannot afford to support China militarily.
The sum of all of this is that the US has re-emerged as a global hegemon (although it never really disappeared as such). The growth of Russia and China has caused the United States to recede into the position it held between 1945 and 1991. The US is now engaged in Russia and China and, for that matter, in Europe.
I predicted back in 2009 that Russia would attack Ukraine – although I was wrong about the timing of the invasion and how well Russia would fare. I also predicted that the war would lead to a crisis within Russia and that meanwhile an economic crisis in China would trigger a political crisis there. With the result that the USA effectively regained its role as the dominant power in the world.
So now that a number of my predictions have come true, I want to go back to how my predictions for the next 10 to 20 years looked to other regions. I thought it very plausible that Poland would emerge as one of the leading powers in Europe and that Japan would come back as the dominant Asian power.
Likewise, that we would see a rise in Turkey. Indeed, the current Ukraine war puts Poland in the position of a major military power and a decision-maker in Europe. Japan will be a key power factor on the Asian continent because of its resurgent military and economic power – especially as China weakens.
Admittedly, there is currently little evidence for my prediction regarding Turkey. But I still stick with it.
This article was first published by Cicero.