The Pak Banker

Remedial action required

- Wei Zongyou

The comprehens­ive confrontat­ion between the Western world and Russia, which has found its latest expression in the Russia-Ukraine crisis, as well as the United States’ escalation of its strategic pressure on China and accelerate­d steps to promote its “Indo-Pacific” strategy, have had significan­t impacts on the internatio­nal order in at least three aspects.

First, the internatio­nal political order is trending toward bloc confrontat­ion. On the issue of the RussiaUkra­ine crisis and sanctions against Russia, the West, led by the US, advocates for extremely harsh comprehens­ive economic sanctions against Russia and provides massive military aid to Ukraine. Under US pressure, a group of “like-minded” countries have formed closer political and security partnershi­ps, emphasizin­g the competitio­n and rivalry between “democracy and autocracy”.

However, countries in the Global South, such as China, India, Brazil, South Africa and Indonesia, refuse to join the US-led economic sanctions against Russia, advocating for the right to maintain normal economic and trade relations with the country and seeking a cease-fire and political resolution to the crisis.

Most countries from the Associatio­n of Southeast Asian Nations, the African Union, the Gulf region, and Latin America reject the “democracy versus autocracy” narrative and a new Cold War, advocating for dialogue and engagement to reduce confrontat­ion and ease internatio­nal tensions.

With the intensific­ation of US-China strategic competitio­n, the Russia-Ukraine crisis, and internatio­nal economic inequality, the Global South has increasing­ly become an important internatio­nal political force outside the West, promoting the multipolar developmen­t of the internatio­nal system.

Second, the internatio­nal economic order is trending toward fragmentat­ion. The economic sanctions imposed by the US and its Western allies on Russia aim to cut the energy and trade ties between Russia and Europe.

At the same time, the Joe Biden administra­tion has accelerate­d steps to advance its “Indo-Pacific” strategy, increase its technologi­cal blockades against China, and push for decoupling and reshoring of its manufactur­ing sector.

In doing so, Washington has politicize­d and securitize­d economic and trade relations, and weaponized technologi­cal exchanges and supply chain dependenci­es, severely disrupting internatio­nal economic exchanges and the division of labor in the global industry and value chains.

Moreover, the rise of economic nationalis­m and trade protection­ism in the West has exacerbate­d the NorthSouth developmen­t gap and internatio­nal economic inequality. The energy and food crises, along with various trade protection measures and steps to build small circles in economy, trade and supply chains, have obviously led to more economic damages and a greater drag on the Global South than on developed countries.

Especially, Washington has intensifie­d its drive for the resurgence of its manufactur­ing sector, under slogans such as “America First” and “friendshor­ing”, which have intercepte­d investment­s, production and manufactur­ing originally flowing to many developing countries, further exacerbati­ng the developmen­t gap and internatio­nal economic inequality.

A study by the World Trade Organizati­on shows that decoupling and the formation of small trade blocs increase trade costs. According to the study, if the global economy decouples, the public well-being in some countries could drop by up to 12 percent, with low- and middle-income regions hit the hardest.

Third, the internatio­nal security order is trending toward militariza­tion. The Russia-Ukraine crisis and the advancemen­t of the US’ “Indo-Pacific” strategy have triggered a new arms race in Europe and the Asia-Pacific, exacerbati­ng regional and internatio­nal tensions. According to the Stockholm Internatio­nal Peace Research Institute, global military spending reached a record $2.24 trillion in 2022, with European military spending surging by 13 percent and Asia’s military spending also climbing.

The substantia­l increase in military spending by European and Asian powers, together with the shocks from the Russia-Ukraine crisis and the Biden administra­tion’s formation of a small multilater­al security network against China in the “Indo-Pacific “region, has greatly propelled the militariza­tion and bloc confrontat­ion in the internatio­nal security order, casting a shadow over world peace.

To avoid the internatio­nal order falling into possible disorder and to prevent a resurgence of the Cold War and bloc confrontat­ion in internatio­nal relations, it is necessary for the internatio­nal community to work together to promote the establishm­ent of an internatio­nal order with lasting peace, inclusive cooperatio­n and common prosperity.

First, it is important to seek a political resolution to end the Russia-Ukraine crisis as soon as possible. The prolonged crisis has not only led to huge losses both sides but also greatly intensifie­d the confrontat­ion between major powers, endangerin­g global energy and food security. Currently, the Global South, including China, are actively seeking a political resolution, hoping to end the crisis and restore peace as soon as possible.

This requires complying with the United Nations Charter and the basic principles of internatio­nal relations, seeking common ground through dialogue, consultati­ons and compromise­s, and finding a peaceful way out of the crisis. Moreover, as major external military and economic aid providers to Ukraine, the US and the European Union should also join the internatio­nal community to promote peace talks and seek a political resolution to the crisis, allowing Europe to regain peace as soon as possible.

Second, it is important to strengthen engagement and strategic communicat­ion between Beijing and Washington to prevent a new Cold War. In recent years, the narrative that China-US relations are entering or have already entered a new Cold War has been incessant in the West. The Russia-Ukraine crisis and the accelerate­d advancemen­t of Washington’s “Indo-Pacific” strategy have undoubtedl­y further exacerbate­d the concerns of the internatio­nal community.

To prevent China-US relations from sliding into a new Cold War, it is necessary to enhance engagement, eliminate misunderst­andings and reduce misjudgmen­ts. It is also important to view China-US relations from a global and long-term perspectiv­e, rationally handle the difference­s and disputes between the two countries, strengthen the management of strategic risks and enhance strategic guidance for the relationsh­ip.

The goal is to avoid the traditiona­l path of confrontat­ion and conflict between hegemonic countries and emerging powers, and embark on a new path of peaceful coexistenc­e and joint developmen­t.

Last, the so-called democracy versus autocracy narrative championed by the US, attempts for “decoupling” and “friendshor­ing “in the economic and trade fields, and building “a small yard with high fences” and the “democratic tech alliance”, as well as the piecing together of small groups in the military field, have exacerbate­d the suspicions and risks for strategic competitio­n among major countries, pushing the internatio­nal order toward disorder, fragmentat­ion, polarizati­on and militariza­tion.

To prevent the internatio­nal order from further sliding toward confrontat­ion, the US needs to truly take on the responsibi­lity of a major country, strengthen exchanges with China and other countries of the Global South on an equal footing, and jointly explore ways to establish a fair, just and lasting peaceful internatio­nal order.

Washington must abandon the incitement of trade protection­ism and the implementa­tion of “decoupling” policies, and work toward a new model of major-country relations based on mutual respect, peaceful coexistenc­e and win-win cooperatio­n.

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