China Research

China’s increasing efforts in the emerging world have been clearly visible for quite some time, particularly in Africa and more lately also in South America. It seems possible that the U.S., Russia and China will be going to design a new world order without including the EU and the UK. This could be a very uncomfortable trend for Europe – a scenario which should not be ruled out completely by Western politicians and business people.

A new world order may be created

We currently do not know enough about the global ambitions of the U.S., Russia and China. However, certain strategies are about to crystallize. Particularly the predilection of President Trump for political agreements as kinds of business deals makes his future impact on global political developments most uncertain. Obviously, Trump sees a lot of promising commercial deals with Russia. Thus, the following scenarios or future developments do not look unrealistic:

First, there seems to be the common objective of the three superpowers – three if we include the military superpower of Russia – to weaken the EU as much as possible.

Second, the U.S. may be interested in regaining influence and power in its Central and South American backyard. Ongoing military intervention threats in Venezuela may point at such a strategy.

Third, major parts of Asia may in the future mainly – but not only – belong to China’s political priority. APEC ambitions may be still in place.

Fourth, Africa could become a strategic part of both Chinese and Russian foreign policy even more clearly than today, trying to crowd out the EU from this commodity-rich part of the world.

Fifth, Russia will probably try to maintain or enlarge its influence in what it considers being natural parts of their hemisphere in Europe and Asia.

Future FDI in emerging countries will need more political consideration

The idea of presenting the alternatives above is not about making a forecast. I am talking about scenarios which must not be equalized with forecasts. Instead, I want to take up a kind of possible outlook that the world may be about to change its political shape and distribution of power. A new world order may be created. If this is going to happen, many emerging markets may be highly affected. This would mean that future Western investments in emerging markets will need much deeper analysis than we have become used to in recent decades.

PS: Best seasonal greetings to all the readers and welcome back in January!

Hubert Fromlet
Affiliate Professor at the School of Business and Economics, Linnaeus University