Michael Weidokal is the author of a wide range of publications, including articles covering the latest on international economics, global politics and other future-looking subjects. Below is a sample of some of his recent articles, covering a range of topics.
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The Three Flashpoints That Will Define China's Future
The return of China as one of the world’s leading powers has been the dominant issue of the 21st century so far. Just four decades ago, China was considered a backwater that had little or no influence on the world around it. Today, China has emerged as the world’s second superpower, with influence that is now felt in all corners of the world. Much of the impact of China’s return to superpower status for the first time in centuries has been felt in the economic realm, as China is now the world’s second-largest economy and the world’s dominant manufacturing center. This remarkable increase in economic power has resulted in China finding itself in all sorts of trade disputes with its international rivals, most notably the United States.
While most of China’s disputes in recent decades have involved issues such as trade and investment, it is the growing threat of political disputes with other international powers that have the capacity to shape global geopolitics for the remainder of this century. Some of these disputes have existed for decades, if not centuries, but now have a greater influence on global security thanks to China’s increasing influence around the world. Furthermore, China’s military power has risen dramatically in recent years, to the point where China is now the undisputed number two military power in the world. With this in mind, it is worth taking a closer look at the three most dangerous flashpoints involving China, as any one of these could trigger a conflict that would be larger and potentially more disruptive than any other conflict since the Second World War.
The flashpoint that has the greatest potential to cause a major global conflict involves Taiwan. For China, this is the most important flashpoint of all, as Beijing views Taiwan as rightfully being a part of China, while the United States and other powers have vowed to assist Taiwan in its efforts to avoid being absorbed into China by force. Unquestionably, Taiwan’s economic success and its vibrant democracy are thorns in the side of China, as Taiwan has shown that there are alternatives to Beijing’s style of government and economic management. Meanwhile, Beijing’s crackdown on Hong Kong’s pro-democracy movement has been a warning that any potential reunification with the mainland could jeopardize the way of life developed in Taiwan in recent decades.
The key to this flashpoint remains the response of the United States to any effort by China to take control of Taiwan by force. As long as the US and its allies in the region remain steadfast in their support for Taiwan, China is unlikely to take military action against what it views as a renegade province. However, should the US and its allies fail to reassure Beijing of their commitment to Taiwan’s security, China may be willing to take a chance and launch a military effort to seize control of Taiwan. Of course, there is the big question of whether or not China’s armed forces are capable of seizing control of heavily-armed Taiwan. Regardless, this is the world’s most dangerous flashpoint and is likely to remain so for the foreseeable future.
The South China Sea
Another dangerous flashpoint in the Western Pacific that involves China is the South China Sea. Here, China’s claim to 90% of the waters of that sea have raised tensions not only with the other countries that claim a share of the sea, but also with the United States and other major powers that claim the right to defend their freedom of navigation through these waters.
For the United States, the South China Sea has become the most significant test of its ability to continue policing the world’s most important waterways so that international trade can continue to flow. For countries such as the Philippines and Vietnam, this body of water is crucial to their position as up-and-coming powers in Southeast Asia, as well as their ability to withstand mounting economic and military pressure from China. With nearly a quarter of all global trade passing through the waters of the South China Sea, this waterway is a vital component of the modern global economy. However, thanks to China’s growing assertiveness in defending its claims to the bulk of this body of water, it is also becoming the flashpoint that is most likely to cause an inadvertent clash between the world’s two superpowers.
The third flashpoint involving China that has the potential to provoke a clash between major powers involves the country’s disputed border with India. In fact, as much of the two countries’ border is disputed, there are many potential flashpoints that could ignite a clash between two countries with a combined population of 2.8 billion people. When these two countries fought a vicious border war in 1962, both were economic backwaters, and they combined to account for less than 7% of global GDP at that time. When the two countries were engaged in clashes along their shared border last year, their combined share of global GDP had risen to more than 20%. In fact, these clashes last year left dozens of soldiers dead and were the worst clashes between the two giant neighbors since the 1962 war.
With China’s economic and military power having risen much faster than that of India in recent decades, the balance of power between these two countries has clearly shifted in China’s favor. As a result, India, which was long reluctant to commit to alliances with foreign powers, has moved to strengthen its economic and defense ties with the United States, Japan and other powers that are also concerned about China’s growing assertiveness. Should India’s ties with the US, Japan and others turn into full-blown alliances, relations with China are likely to deteriorate further, potentially leading to more border clashes that could escalate into an all-out war between the two countries that are expected to generate much of the world’s economic growth in the coming years.
China's Vital Foreign Relationships
As we look at today’s geopolitical landscape, it is clear that China’s relations with other major powers will go a long way towards determining the level of global stability and security in the years ahead. Of these, it is China’s relationship with the United States that will be the dominant bilateral relationship of the 21st century, with the US seeking to prevent China from overtaking it in terms of global economic, military and technological leadership. At the same time, China’s relationship with India will continue to grow in importance as both countries’ share of global economic output continues to rise, and as both countries increase spending on their armed forces. In fact, this relationship, as much as any other, will determine the balance of power in the vital Asia-Pacific region for the foreseeable future. Finally, China’s relationship with Russia bears watching. While the two countries enjoy cordial relations at the moment, due in large part to their shared desire to weaken the United States’ grip on global power, there are many flashpoints and issues that could divide these Beijing and Moscow in the future.
Predictions of China’s demise appear to be wishful thinking. The fact is, China is here to stay as a leading economic and military power for the foreseeable future and it is the only country that has the potential to overtake the United States as the world’s leading power. Economically, China’s scale is likely to overtake that of the US, although it is unlikely to reach US levels of wealth or living standards anytime soon. The same is true in terms of the technological competition between the US and China, although here, China is mounting a very serious challenge to the US in many areas. Only in terms of military power does China continue to trail behind the United States by a very wide margin, but this gap too has been closing in recent decades.
Each of the three flashpoints that were analyzed here have the potential to stunt China’s rise. This is due in large part to the fact that each of these flashpoints is located very close to the base of China’s power, and a conflict triggered by any of these flashpoints could end up causing significant damage to China’s economy or infrastructure, while also damaging China’s connections with the rest of the world. Furthermore, these flashpoints could put China into a conflict not only with the United States, but with other powerful countries in the region, leaving China’s isolated against a coalition of powerful countries. What is certain is that these flashpoints will play a defining role in determining the level of global stability and security in the years ahead.
The United States and the European Union are Going in Different Directions
Today, the United States finds itself often comparing itself to China, as that country has become the most serious threat to the US’ position of global leadership. The European Union, in contrast, often compares itself to the United States, as European states and the EU have found themselves as junior members of a sometimes tense partnership known as the “West”. While the US and the EU have much in common in terms of economic and geopolitical positions, their goals and aspirations can often be quite different from one another. For the United States, maintaining the global leadership that it has held since the Second World War remains a key goal, while the European Union, with a few exceptions, has goals and aspirations that are far more regional in nature. Likewise, where the United States rewards individuality and risk-taking, the European Union is far more focused on stability and social protection.
The United States and the European Union: A Comparison
Economically, the United States and European Union, despite their different goals and aspirations, are not all the dissimilar. For example, the United States is the world’s largest economy, with a total GDP of $20.9 trillion, while the EU, if it were a single economy, would be the world’s second-largest economy with a GDP of $15.2 billion (although the EU has been passed by China this year).
In terms of wealth comparisons, the US has a per capita GDP at purchasing power parity (PPP) of $68,309, while the EU’s stands at $46,888. Likewise, both the US and the EU economies have suffered significant long-term economic slowdowns, although the US’ downturn has been nowhere near as severe as that in the EU over the past ten to fifteen years.
Geopolitically, the differences are more pronounced. In terms of defense spending, the United States’ $778 billion in defense spending is much larger than the combined EU’s defense spending of $289 billion. Furthermore, as much of the EU’s defense spending is repetitive, the actual gap in military power, particularly the ability to project military power at a distance, between the US and the EU is much greater. In fact, France is the only EU member state that has any capacity to project military power outside of Europe, and its military power is dwarfed by that of the United States’ armed forces.
The United States is Pulling Away
The Covid-19 pandemic has exposed further differences between the United States and the European Union, particularly on the economic front. In the United States, the economy has come roaring back from the impact of the Covid-19 pandemic. Among developed economies, the 3.5% decline in economic output in the US last year was among the smallest of any large economy last year.
Furthermore, the US economy is forecast to grow by nearly 7% this year, allowing the US economy to fully recover from the pandemic quicker than nearly all other large economies. Over the longer-term, while the US is expected to record slower growth rates later in the 2020s, this growth will remain significantly higher than that of the European Union and most other developed economy.
This is due to a number of factors, One of these is the leading presence of US-based companies in so many high-tech and high-growth sectors of the economy. Another is the flexible nature of the US economy, which not only allows it to react to crises quicker than most other large economies, but also to reallocate resources away from slower-growing sectors of the economy to those that have a greater potential for growth. Finally, despite all of the political and social turmoil of the past few years, consumers, businesses and investors in the United States generally remain more optimistic than their peers in other parts of the world, something that has helped to fuel economic growth in the US for much of its history.
The European Union and the Threat of Long-Term Stagnation
For the European Union, the pace of its economic recovery from the Covid-19 pandemic has been frustratingly slow. Not only did the EU’s economy shrink by nearly twice as much as the US’ economy last year, its forecast growth rate of around 4% this year is far below that of the United States. For some economies in Europe, there is hope that a combination of export growth and an influx of stimulus funding will significantly boost economic growth prospects in the months ahead. However, for others, this latest crisis has reinforced the notion that it is becoming increasingly more difficult to generate economic growth in the European Union.
Since 2009, the European Union’s economy has expanded by a measly 0.5% per year, while the Eurozone’s economy has expanding by an even worse 0.2% per year. In comparison, the United States economy has expanded by 1.4% per year since 2009. What growth that has been generated in the European Union since the Global Financial Crisis has largely come from the poorer countries of Central Europe and a handful of smaller EU member states such as Ireland and Sweden.
There are a number of reasons for this poor performance. For example, most EU member states lack a sizeable presence in many of the key high-tech and high-tech sectors of the economy that have been the catalyst for much of the economic growth in Asia and North America in recent years. Likewise, most EU economies lack the flexibility to quickly react to crises such as the Financial Crisis, the Euro Crisis and the Covid-19 pandemic. As a result, not only has the European Union struggled to generate growth in recent years, but its prospects for generating higher rates of economic growth in the future are quite dim.
What is Driving Them Apart?
There are a number of key differences between the United States and the European Union that help to explain their divergent economic performances in recent years. The US continues to have a very strong performance in many of the fastest-growing sectors of the global economy, whereas many of Europe’s largest economies continued to be dominated by slower-growing industrial and service sectors. At the same time, the fact that the world has been hit by so many economic crises in recent years gives an advantage to more flexible economies such as the United States. In contrast, too many EU member states have continued to focus on preserving stagnant or declining sectors of their economies, or on protecting jobs in the public sector at the expense of jobs and businesses in the private sector.
Another key difference between the United States and the European Union is that the EU is saddled with southern Europe, a region with a population of more than 130 million people that is severely lacking in terms of economic competitiveness. While the US also is home to regions that are less competitive than others, none of these have struggled as much as countries such as Italy or Greece in recent years.
One area where the US and the EU have a lot in common is the scale of the political divisions that have plagued them in recent years. In the US, the growing polarization between the political right and the political left has intensified dramatically, but this has not stood in the way of the US economy continuing to generate economic growth, as witnessed by the strong economic response to the Covid-19 pandemic by both the Trump and the Biden administrations. In contrast, the increasingly dysfunctional relationship between the European Union and its member states has proven to be a major hindrance to the ability of EU member states to react to economic crises such as those that have befallen Europe this century.
Strategic Allies, For Now
Despite their differences, the European Union remains one of the United States’ leading allies in its growing rivalry for global leadership with China. However, there are growing concerns in the US that not only will many EU member states choose to go their own way with regards to their relationship with China, but that the US is finding itself saddled with a partner whose economic and geopolitical clout is waning at a dangerous pace. This could be compared to Imperial Germany’s relationship with its leading ally in the First World War, the Habsburg Empire, a state that shares many of the same characteristics as today’s European Union. This helps to explain why the past four governments in the United States have actively been moving to shore up their ties with powers apart from the EU.
As we look ahead to the remainder of the 2020s, we can see that the gap in terms of economic and geopolitical power between the United States and the European Union is expected to widen further. Sure, there will be pockets of success and growth within individual EU member states (just as there was during the Habsburg Empire in the final decades), but these will be overshadowed by growing weaknesses in the EU. Already, there are major concerns about the lack of military power in the European Union, something that has severely damaged the EU’s ability to play a role in many global conflicts and flashpoints in recent years.
Now, with the European Union’s main source of power, its economic clout, threatened by long-term stagnation, the EU faces a very uncertain future. To measure the impact that long-term economic stagnation can have on a country’s global influence, one need only look at modern-day Japan, which has suffered from three decades of economic stagnation. For the United States, the long-term weakening of one of its leading global partners must also be a concern, as it jeopardizes the very notion of the West as a collective force for the advancement of economic development and security for the world at large.