Last month, Ian Bremmer and the analysts at his international Eurasia Group released their 10th annual list of the 10 biggest risks on a global scale. Two of the 10 involved China — one technological, one political.
The list was issued on Jan. 6, before most of us had heard about the coronavirus, but hold that thought.
This is an Opinion
The Eurasia Group is a proponent of global trade. Its analysts, then, see “the decision by China and the United States to decouple in the technology sphere” as “the single most impactful development for globalization since the collapse of the Soviet Union” nearly 30 years ago, before most of us had ever heard of the internet.
The internet was an American export, and the world’s cyberstructure has been built to American standards. But China’s president-for-life, Xi Jinping, announced last year, in the wake of what the Eurasia Group calls “a series of escalating US policy moves,” that it was time for China to break its dependence on American technology. The Eurasia Group described a “new virtual Berlin Wall,” but this time countries will choose their sides.
You’ve probably heard about the rivalry between the U.S. and China for 5G wireless technology. The British government last month rejected President Trump’s plea to ban parts made by China’s Huawei Technologies Co. from its 5G network. The U.K. seemed unwilling to wall itself off completely from China.
ZDNet, the business technology news site owned by CBS, summed it up this way: “The issue of whether the country allows a Chinese supplier into the core of its 5G Wireless telecommunications network is actually less about information security than about geopolitical alliances.” Now, the Brits could still reconsider their decision, but at this point, it looks like the “special relationship” with the U.S. isn’t as special as it used to be.
As China becomes technologically independent, Eurasia Group predicts tensions that have been left to simmer will be allowed to boil: national security, global influence, fundamental values. “The two sides will continue to use economic tools in this struggle — sanctions, export controls, and boycotts — with shorter fuses and goals that are more explicitly political. Companies and other governments will find it harder to avoid being caught in the crossfire,” they wrote.
The 20th century was undeniably “the American century,” but China is on track to become the world’s largest economy — “assertively a good thing for China,” Ian Bremmer said in a recent interview, but “a really bad thing for the world, in ways that should be obvious to people.”
Talk about newfound wealth in China and pictures of gleaming new cities and high-speed mass transportation masks this basic fact: In the scheme of things, China is still a middle-income economy. The Chinese will still need a lot more coal. With more than four times our population, China still has fewer cars than in the U.S. The Chinese eat little meat, but they want to. And development on that scale will strain the environment.
“We don’t trust their data,” Bremmer added. “Their governance is bad. … They don’t have rule of law.”
All of this explains why the newly identified nCoV coronavirus could emerge as a full-blown epidemic, Bremmer said. “The reason it is exploding in China is they have a bigger economy with people who travel all over China and all over the world. But a lot of their people still engage in practices — lack of health quality, lack of hospitals, lack of data, lack of political responsibility — that befit a country that is not in the First World.”
The coronavirus probably wouldn’t have happened in Japan or the U.S. because of better systems and practices to keep a virus from migrating from animals to humans, Bremmer said. And if it did happen, “we’d have much better capacity to identify it, recognize it and stop it.”
And that kind of backwardness, according to Bremmer, “means that our understanding of global governance is going to become worse.”
China is No. 2 and No. 3 on the Eurasia Group’s list of risks in 2020. For the first time, domestic politics in the United States tops the list. Previously, the analysts wrote, American politics have not been considered so risky “mainly because US institutions are among the world’s strongest and most resilient.”
But this year, “those institutions will be tested in unprecedented ways,” especially by a national election “that many will view as illegitimate, uncertainty in its aftermath, and a foreign policy environment made less stable by the resulting vacuum.”
What happened last week in Iowa didn’t help, although it is good to remember that it took more than two weeks for Republicans to figure out who won their Iowa caucuses in 2012.
Email Gwen Moritz, editor of Arkansas Business, at GMoritz@ABPG.com and follow her on Twitter at @gwenmoritz.