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Author: Harsh V. Pant
To say that 2022 was a tumultuous year would be an understatement. Even as the year draws to a close, Russia continues to bombard Ukrainian cities, targeting Ukrainian energy infrastructure with missiles and drones. Russian President Vladimir Putin defended the attacks in response to an explosion on a Russian bridge in annexed Crimea in early October. Moscow hopes to demoralize the Ukrainian population; instead, Ukraine’s resolve appears to be unwavering, refusing to wilt in sub-zero temperatures with disrupted energy supplies.
The US is now supplying Patriot air defense missiles to Ukraine, responding to a growing air threat amid concerns that Iran could supply Russia with longer-range ballistic missiles. Despite some voices in Europe calling for dialogue, it is unlikely to materialize anytime soon.
The world’s second most powerful country, China, faces multiple pressures. Within days, the Chinese Communist Party reversed its zero-Covid policy as it came under pressure from the general public who were tired of Xi Jinping’s strict Covid measures. China suddenly eased strict Covid restrictions after protests erupted in city after city last month, with some even calling for Xi’s resignation.
And now that the Covid restrictions have suddenly disappeared, the health system is struggling to cope as infections rise rapidly.
But internal challenges do not prevent Xi Jinping from taking his place on the front line of aggression. Recent clashes along the Line of Actual Control (LAC) in Arunachal Pradesh’s Tawang sector underscore Beijing’s intent to continue its efforts to unilaterally change the status quo along the border. The fact that the Indian forces resolutely rejected the quantitative and
a qualitatively superior military would further compel the Chinese Communist Party to make an effort to teach India a lesson.
That this is happening at a time of heightened geopolitical and geoeconomic conflict between the US and China makes New Delhi particularly vulnerable to Chinese coercion. This competitive pressure from heightened US-China rivalry is likely to only intensify in the coming years as the US strengthens its Indo-Pacific partnerships and tightens the screws on technology exchanges with China. The Biden administration has announced a series of export controls in recent months to cut China off from US technologies, targeting Beijing’s ability “to acquire advanced computer chips, develop and maintain supercomputers and manufacture advanced semiconductors.”
Geopolitics is once again at the forefront as trust becomes an essential factor in shaping economic decisions. As Washington makes policy moves to deny China access to critical technologies and restructure supply chains away from Chinese overdependence, it recognizes the need for new partnerships with like-minded people. According to US Commerce Secretary Gina Raimondo, “In our competition with China to shape the global economy of the 21st century, we [the US] we cannot do it alone.” She also underlined that other nations “express similar concerns about China’s behavior and a shared desire to cooperate and coordinate our policies around rules, standards and values that advance our collective national security.”
The corporate sector is facing this new phase in the geoeconomy. Morris Chang, founder of Taiwan Semiconductor Manufacturing Co. (TSMC), which is setting up its first $40 billion advanced chip factory in the U.S. in more than two decades, warned that “globalization is almost dead and free trade is almost dead” and while “a lot of people still want to go back, but I don’t think he will come back.”
This may be an exaggeration, but as Washington insists on restructuring the supply chain in critical industries due to foreign policy and national security concerns, this certainly represents the beginning of a new phase in globalization. The forces of unfettered economic globalization, once seen as a panacea for all global problems, are now in retreat. And if new technologies are going to set the course for the next phase of the geopolitical charts, then the polarization of their supply chains is a new reality that policymakers and market forces will have to face.
In this age of great power struggles and the demise of the multilateral order, the geopolitical equations are changing. Political trust is likely to drive economic and technological cooperation despite the costs it would impose on nations. If the US began this process of economic recalibration, it is Europe that is shaping its final contours. What China’s rise and assertion has done for the US, Russian aggression against Ukraine has done for Europe. He finally made Europe realize the limits of its ambition to emerge as an “empire of norms.” Europe has finally woken up to the challenge of global destroyers, whether in Eurasia or the Indo-Pacific.
With the focus of global politics and economics shifting towards the Indo-Pacific, there is a renewed understanding in the West that while Russia may be a short- to medium-term problem, the real challenge is China, which needs to be dealt with. directly because the Moscow-Beijing axis will only strengthen in the coming years. The West will continue to use the various instruments at its disposal to reduce its economic reliance on China for critical products and limit Chinese access to strategic technologies, even as it seeks new strategic partnerships with like-minded countries.
Beijing will, of course, respond in kind, but the old economic order that it could use to its advantage no longer exists today.
India’s role will be crucial in the emerging geopolitical order, and with its presidency of the G20, it will be able to shape the global agenda in 2023. But beyond that, this is a time when Indian policymakers will have to carefully evaluate their policy choices given their long-term implications.
Using the existing balance of power to one’s advantage is key to a nation’s rise in the global hierarchy. This is a turning point in the global order. New Delhi needs to assess this seriously and respond proactively.
This article originally appeared in The Financial Express.
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