by Philip Pilkington
Tuesday, 17
January 2023
Analysis
13:35

Cold War 2.0 will not be between China and the West

A Davos panel offers an incorrect assessment
by Philip Pilkington
Niall Ferguson speaking at the event in Davos this morning.

One of the first sessions at the World Economic Forum this year — ‘De-Globalisation or Re-Globalisation’ — raised some very interesting issues.

According to historian Niall Ferguson, the anti-globalisation populist insurgency had failed. Despite all the talk of de-globalisation following the election of Donald Trump and the Brexit referendum, international trade has actually gone from strength to strength.


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Hungarian Minister for Foreign Affairs and Trade Péter Szijjártó agreed. He noted that Hungary is located where west meets east and that the international automotive business of which Hungary is a hub continues to thrive. Indeed, the batteries required for the electric vehicle revolution are made in South Korea and China — US and European companies won’t be turning them away.

Yet everyone on the panel recognised that, with the sanctions placed on Russia — which Ferguson argued had not worked to stifle  trade between the country and the rest of Europe — and the trade wars between the United States and China, something new is afoot. Perhaps not de-globalisation, but a new form of globalisation – one in which global trade may continue apace but with periodic interruptions caused by geopolitical tensions.

It was clear from the panel that the Davos set is not yet sold on major global conflict, especially with China, and would much prefer that tensions calm down. All expressed fears about ‘Cold War 2’ because it would destroy global trade and prosperity. War fever has not yet consumed our leaders, thankfully. 

But one interesting point that stood out was that the moderator, Ian Bremmer of the Eurasian Group, seemed very keen not to take the recent growing friendship between the Russians and the Chinese seriously. When Szijjártó spoke about Hungary’s need for openness to the east, Bremmer was quick to clarify that Szijjártó was not talking about some sort of collective Eurasian bloc. This stood out as a point of anxiety for Bremmer, as it no doubt is for the Americans more generally.

Yet there is growing awareness that the Russians and Chinese seem intent on much closer cooperation. Meanwhile, in Europe, tensions are rising due to the energy costs associated with the sanctions and America’s attempts at protectionism – these tensions could have consequences for a relationship between Europe and America that many seem to assume is ironclad. These two trends seem related, as they suggest a much more fragmented global system moving forward. Yet none of this was on the menu at Davos this week.

Ultimately, what was missing from an otherwise fascinating discussion was the argument that the world is not so much de-globalising as it is re-polarising and that the global conflict — whatever shape it takes — will not be between China and the West, but rather between an emerging BRICS+ bloc and the West. One came away with the sense that this was an unsettling prospect for some of the panellists, but even a cursory glance at Chinese trade growth by trade partner suggests that it is a perspective that needs to be taken seriously. 

If we look at these trade statistics, they suggest that China is pivoting away from the West and focusing on the rest of the world. Certainly, this does not suggest an end of globalisation, but it seems to indicate that alliances and trade deals will be more fluid moving forward, with the potential for new blocs to emerge as their interests coalesce around certain key issues. But all of this was too much for the Davos crowd to consider this year.

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John Riordan
John Riordan
19 days ago

First off, I’ll note surprise at the idea that the WEF crowd actually care about growth and prosperity: from the nonsense about insect-based diets, no plane travel for the 99% and you’ll-own-nothing-and-be-happy schtick you’d be forgiven for thinking that they’re trying to achieve the opposite.

As for the notion that China is reprioritising away from the West, this reminds me of one of the key economic defences of Brexit, namely that the 85% of the world economy outside the EU is where the growth is, not in the EU. If you add the USA and the EU together (plus the UK’s 1%), that’s a shade over 40% of global GDP – and it’s growing slower than the remaining 60%.

Sp really the question must be why would anyone be surprised?

Last edited 19 days ago by John Riordan
B Emery
B Emery
18 days ago
Reply to  John Riordan

You could argue that the consequences of this shift put at risk our access to cheap food, energy and resources. China has a massive manufacturing base we partly rely on, if these supply chains are broken its very likely the west will have to scale back on what we have while everything is rejigged and has settled down again. Now there’s a lot going on, not saying anything is for certain but this is going to have consequences.

Edward Seymour
Edward Seymour
18 days ago

My own view is that China is a basket case and is an unsustainable construct. The classically fascistic concept of allowing huge private wealth and private property but reserving control of that wealth and property to the dictatorship will show even greater strains. Couple this with the vast number of cultures, nationalities and languages and I reckon the biggest civil war of all time will result. But my main criticism of this article is the assumption that those of us opposed to globalisation are somehow opposed to foreign trade. Remarks like despite Trump and Brexit de-globalisation has not occurred and foreign trade has increased show this error. A proper conservative respect for home and our borders (Scruton’s oikophilia); a concentration on energy and food security can go hand in hand with mutually beneficial foreign trade, the exchange of value for value to the benefit of all.

Dog Eared
Dog Eared
19 days ago

China is merely an opportunist, they aren’t going to turn away cheap energy from Russia or trade from anywhere. In the time being they will smile politely and keep their own agenda.

Phillip Arundel
Phillip Arundel
19 days ago
Reply to  Dog Eared

100% wrong. The word you used ‘merely’ is the most wrong possible. I am amazed people up-vote this.

China takes the Long view. They take that China is not just first, but is all. China has been happy to starve and kill and have killed, hundreds of millions of their own for political reasons. There is no ‘merely’. What ever they do it is to further their plans – and they have Great Plans, and they are easy to see if you search – they make no secret of then.

The West has set out on its own self destruction by making this regional conflict a WWIII – and China will let us, yes… but they do everything to further their goals first. If buying cheap Russian Petrol and gas did not further their long term goal they would not.

Billy Bob
Billy Bob
19 days ago

Just because a regime is cruel to its citizens doesn’t mean it’s good at playing the long game. Chinas ageing demographic, property bubble and slowing economy pose real problems for the CCP, and with the west becoming more protectionist over intellectual property and the yanks shutting off access to semi conductors (as much as they can anyway) I don’t see an easy way out for them

Emre S
Emre S
19 days ago
Reply to  Billy Bob

It’s not the Chinese that worry me, they’re doing what they always done with the usual clumsy results. It’s more that the West and the Yanks going weak and stupid by the decade. It’s a case of one party staying put while the other’s going back. Overall this means the Chinese are advancing, that’s the problem as I see it.

Billy Bob
Billy Bob
18 days ago
Reply to  Emre S

People have been saying that for the last 50 years, it still seems to be ticking soon just fine

Liam O'Mahony
Liam O'Mahony
18 days ago
Reply to  Emre S

Why is “Chinese advancing” a problem? ..if you oppose them as a US lackey then it will be a problem, but otherwise I don’t see a problem. The “Yellow Peril” is kinda passe these days with the BRI looking like a much better deal than (neo)colonialism, carpet bombing and illegal invasion, at least for the victims!

Last edited 18 days ago by Liam O'Mahony
Emre S
Emre S
18 days ago
Reply to  Liam O'Mahony

A world led by the Americans is just about tolerable, do you really want to live in a world led by the Chinese? Do you not see what they do to their own people let alone others?

Liam O'Mahony
Liam O'Mahony
18 days ago
Reply to  Billy Bob

Just about every point you make is inaccurate..
China always takes a long view.
China’s growth forecast, though slowed is Rest-of-world x3 fgs!
China has semiconductors from Taiwan; the Taiwanese are far too smart to refuse to supply them.
Chinese are smarter than most; way smarter than Americans.

Liam O'Mahony
Liam O'Mahony
18 days ago

While you’re not entirely wrong you’re emphasis is badly skewed.
Yes, China takes the long view.. and has, like the US and Britain before it, killed millions that stood in its way.
I’d be interested in your skewed views on the BRI, ie Belt & Road Initiative..

Liam O'Mahony
Liam O'Mahony
18 days ago
Reply to  Dog Eared

Sounds like a plan, a good plan if you’re Chinese. If your part of the West but not the US it might be time to “cross the floor”. Happily, we Irish are on good terms with the BRICS+ though being a vassal of the US we have been forced to kowtow.. but we think the BRICS+ will forgive us as we cannot hope to stand up to the might, and wrath of the US alone.
The EU for which we are poster boy, does however, have the clout, but not the cahones it seems, to stand up to the US, yet! ..perhaps when the decline of the US is a bit more established?
We live in interesting times…

Warren Trees
Warren Trees
18 days ago
Reply to  Liam O'Mahony

The EU has the clout to stand up to the U.S.?? It doesn’t even have the clout to stand up to Russia for heaven’s sake, besides enacting silly sanctions that backfire.

Adam Bartlett
Adam Bartlett
19 days ago

not so much de-globalising as it is re-polarising and that the global conflict — whatever shape it takes — will not be between China and the West, but rather between an emerging BRICS+ bloc and the West” Rings very true with my (admitedly v. limited) recent knowledge of global affairs. Thanks for great though somewhat unsettling insights.

Prashant Kotak
Prashant Kotak
19 days ago

BRICS is just a label, pretty much meaningless in itself. In practice, relationships between these nations are completely on a case by case basis, from almost nonexistent (e.g India and Brazil) to big but extremely ambivalent (e.g India and China), to big and ostensibly friendly but in reality in turns predatory, ruthless, backstabbing, and on a few odd occasions friendly (e.g. China and Russia). The idea that the BRICS (together with perhaps some other countries like Turkey, Saudi Arabia, South Africa etc thrown in) will be able to act in cooperative concert to create a counter block to US hegemony is just outright laughable. One simple glance at the religious, cultural and not least racial antecedents of each make this pretty obvious.

What happens next instead, is a shifting kelidoscope of multidimensional pressures, where each of those countries steadily loses it’s best talent to the west and especially to the US (and I’m not seeing huge queues of migrants forming in the countries surrounding for example Russia or China desperately attempting to break into them looking for a better life), while simultaneously competing with each other, while simultaneously trying to make deals with the west because they need wealthy markets to sell to and buy tech from, while they simultaneously trying to stave off the consequences of huge individual internal problems, like demographic collapse (Russia and China), or food security, and what to do about ten million new not very well educated people entering the workforce each year looking for jobs (India), or climate change etc.

Last edited 19 days ago by Prashant Kotak
Liam O'Mahony
Liam O'Mahony
18 days ago
Reply to  Prashant Kotak

While you’re not entirely wrong in your assertions there’s far too much wishful thinking included. You made no mention of the BRI ie Belt+Road Initiative. A major omission.
Btw, the S in BRICS is RSA ie it’s
already in.. confusing because it used to the the BRICs (small s to pluralise)..

Prashant Kotak
Prashant Kotak
18 days ago
Reply to  Liam O'Mahony

BRI was China’s attempt to distribute the ‘Rings of Sauron’ to developing countries – by turning them into zombies beholden to China via tech and debt dependence. Instead, BRI has turned into a millstone around China’s neck, because those countries will simply turn to the west for protection when China threatens them with gunboat diplomacy when they cannot pay back, and China will simply be left with trillions expended which they can never recover.

Billy Bob
Billy Bob
19 days ago

What’s this growing partnership between Russia and China? Apart from China (rightly) being opportunistic and snapping up cheap oil and gas that the Europeans won’t buy I’ve seen little to suggest China will look to Russia rather than the west for its exports.
As for the BRICS, Russias economy is in pieces that’s to Ukraine, China has a demographic time bomb and property bubble likely to cause massive problems and South Africa is a basket case. There’s potential in India but despite being pragmatic and looking after their interests with Ukraine their economy and outlook still looks to the west rather than the Russians and Chinese, and actually has constant border skirmishes with the latter.
This author constantly talks up these countries and predicts the wests downfall but glosses over the many problems the BRICS face

Liam O'Mahony
Liam O'Mahony
18 days ago
Reply to  Billy Bob

Of course the BRICS+ countries have problems. Everywhere has problems! Look at GB fgs!
The BRICS+ countries look to the BRICS+ organisation to solve their problems now, eg via the BRI; instead of hoping for a fair deal from their neocolonialists; thats the difference.. If you’re screwing someone into the floor it’s hard to compete for popularity with the guy who does deal fairly!

B Emery
B Emery
18 days ago
Reply to  Liam O'Mahony

I think that’s a fair point, the US has pushed them together tbh, perhaps not a wise move on their behalf really. I don’t suppose we should expect anything else. Tactical isn’t Americas strong point.

Phillip Arundel
Phillip Arundel
19 days ago

Watching the Davos WEF to see anything of where the world is headed is about as useful as watching CCP Conferences to see what they have to say. The Davos conference is just the same as:

”BEIJING, Oct 22 (Reuters) – China’s ruling Communist Party wrapped up its twice-a-decade congress on Saturday, cementing Xi Jinping’s iron grip on power”

All you will get is the agenda they wish to be put out. The action takes place behind closed doors, and is never going to be what is said in the public talks.

Liam O'Mahony
Liam O'Mahony
18 days ago

Not so different from governments but a good investigative journalist will winkle out a lot of that from leaks.

Chris Keating
Chris Keating
18 days ago

I would think that there will be a shift away from the West by China. They have played their hand well and have lifted millions out of poverty but are now resented for this.
They have seen what happens to countries that don’t fall into line with the Washington consensus and are preparing themselves for just this possibility, as are Saudi Arabia, India and a lot of Eurasian countries that are lining up to join the BRICS+. They have also noted the seemingly endless provocations from the US and its allies over Taiwan. They have also seen how the US navy can throttle their trade routes and are adapting to this with the BRI with it’s railway lines heading westward.
The West has shot itself in the foot with its belligerence and a large part of the rest of the world is trying to escape their grip. The Europeans are in the same boat but are unable to comprehend that they are being royally screwed by the Americans. If they realise it, they are in massive denial and can’t bring themselves to do anything about it.
Pepe Escobar at The Cradle has done some good research on just this and the general movement by the BRICS+ to de-dollarize their economies.

Liam O'Mahony
Liam O'Mahony
18 days ago
Reply to  Chris Keating

You are 100% on the money there Chris.. the downticks on this site are due to a combination or…
Anti-Russian sentiment
Anti-Chinese rhetoric
Pro Western wishful thinking
A yearning for a colonial past
Shock at the threat to US led hegemony and neocolonialism.
The likely demise of the US dollar.
It’s just too much for them to take on board all at once. You have to feel some sympathy for them, right?

Chris Keating
Chris Keating
17 days ago
Reply to  Liam O'Mahony

Some Liam, but not much. You have to face reality no matter how unpalatable. I used to be a believer in the goodness of the West but events over the last few decades have removed the scales.
I thought that we were helping the rest of the world but the reality is that the West is just helping themselves to the resources of others through the financial institutions they have created. Any talk of peace is just a subterfuge to mask what is really happening.

Ian Stewart
Ian Stewart
18 days ago

And totally contradicting this article – now China announces at Davos that they intend to start ‘playing nice’ on global trade and it’s the end of ‘Wolf diplomacy’; and at the same time they dish out their Covid stats yesterday to say the number of Covid deaths has increased from 67 to 60,000!!

Whats going on? Suddenly friendly and transparent, but no change in leadership – so just a mask I feel.

Last edited 18 days ago by Ian Stewart