Trans-Pacific View

Asia’s Geopolitical Challenges: Outlook 2019

Insights from Tiberio Graziani.

Mercy A. Kuo
Asia’s Geopolitical Challenges: Outlook 2019

Trans-Pacific View author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into the U.S. Asia policy.  This conversation with Tiberio Graziani – Chairman of the Vision & Global Trends International Institute for Global Analyses in Italy  – is the 169th in “The Trans-Pacific View Insight Series.”

Identify three transformative trends in 2018 that will have ongoing impact in 2019.

The main transformative trends in 2018 that will affect next year will concern different global sectors.

First, regarding the economic and financial one, it will be necessary to monitor the growing importance of advanced technologies and their applications in the production cycles of the most industrial nations. In the next year, we will face a sort of rationalization of these production processes that will profoundly change the evolution of the current social equilibrium within nations and also the relations between states and large financial organizations. Furthermore, we will witness the explosion of new markets based on the technological needs of the elderly and the disabled people. We will also face the increase of cryptocurrencies. The knowledge and management of new technologies  ̶  ICT, AI , blockchain mainly  ̶  will constitute the challenge of the next decade between the major world powers and the main investment groups. The impact of the advanced technologies on geostrategic decisions will increase. The new technologies will contribute to impressing, in 2019, a decisive turning point in what we can define henceforth as a new global revolution in military affairs. The military-industrial-financial complexes of the major world powers will undergo a complete transformation starting from 2019.

Second, another important trend that will affect the global level concerns the dismantling of the old world order based on the criteria of multilateralism. In 2019, we will witness the weakening of large global organizations such as the UN and the reorganization of multilateral consultations regarding international trade, climate issues and regulations on the use of new technologies. This will happen for two main reasons. The first is due to the growing presence and importance of global players of nations like China, Russia, and India, who obviously try to implement their 360 degree spheres of influence, even outside the old institutions born in the so-called bipolar era, when the destinies of the world were substantially decided in Moscow and Washington. The second reason is due to the putting into practice of the “Trump Doctrine,” which, over the past two years, has placed a particularly bilateral strategy on U.S. foreign policy, upsetting the old equilibria.

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The third transformative trend will concern the European Union. 2018 has been a very critical year for the EU, both on the economic level, but above all on the political and social one. 2019 will be a year in which the fate of the “European Common House” will be decided. As a consequence of the neopopulist waves and the so-called sovereignist ones that marked the social and political life of the Europeans during 2017-2018, most likely, the elections for the renewal of the European Parliament will reward the anti-European parties. 2019 will therefore be a very unstable year for the economy and politics of the European Union.

Looking ahead to 2019, what are key geopolitical challenges in Asia?   

The main geopolitical challenges in Asia will concern relations between the U.S., Japan, and China. Tokyo, although in line with U.S. policies, could be a point of mediation between the different positions of Washington and Beijing.

On the geostrategic level, Washington will have to follow up on the initiatives launched in 2018 with Pyongyang for a complete normalization of relations. It will be a bumpy route, because the conflicting interests of the U.S. and the People’s Republic of China remain in the background of the North Korean issue.

Another very controversial issue concerning relations between the U.S. and China will concern Tibet. In particular, in the first months of 2019 Beijing and Washington will have to find a mediation in reference to the effects of the “Reciprocal Access to Tibet Act” (signed by President Trump at the end of 2018) that promotes the access to Tibet of U.S. diplomats, journalists and citizens and denies U.S. visas to Chinese officials considered responsible for blocking access to Tibet.

Another issue that will have considerable geopolitical impacts at regional and global levels is related to the Chinese project of the New Silk Road. Beijing, in order to achieve its objectives, will consolidate its relations with the Islamic Republic of Iran and the Russian Federation.

How might further escalation in U.S.-China trade tensions impact the global trading system?     

During 2018, the Trump administration has conducted a real trade war against China. In the next year this war will be in a certain way perfected. We have already had warnings of such kind:  the arrest of Meng Wanzhou, chief financial officer and daughter of founder of high-tech giant Huawei, constitutes an example of the escalation of the U.S.-China tensions. The tensions between the U.S. and China are not just commercial, but strategic. The U.S. and China compete for technological supremacy. This strategic confrontation will affect the entire global system, impacting the worldwide financial system and determining choices of field between the various countries of the globe.

How will contentious relations between the U.S. and China as well as with Russia impact the European Union?  

For different and divergent aspects, the U.S., Russia, and China have an interest in weakening the European Union.

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For the U.S., with Europe in the grip of a political, economic, and financial identity crisis, this situation would allow Washington to “manage” the U.S. economic recovery, especially now that the traditional British ally, thanks to Brexit, is released from the obligations that tied it to Brussels. Moreover, at a geostrategic level, the continuing European crisis allows the U.S. to gain time in making costly decisions and responsibilities in financial terms in the theaters of North Africa and the Middle East.

For Russia, the issue is more delicate and problematic. A weak European Union, according to the Kremlin, would be more malleable in relation to the Ukrainian issue and the sanctions regime that has influenced the Russian economy since 2014. But this could be true, for the short term. In fact, a European Union weakened in the medium and long term would be at the mercy of the strategic interests of the U.S., since the EU is the eastern periphery of the U.S. geopolitical system, built at the end of the Second World War. Ultimately, in the absence of a political EU, the true European “glue” would consist only of NATO’s military-diplomatic device: something that Moscow certainly should not wish.

A fragmented Europe, unable to have a coherent and unitary policy of infrastructural development, does not realistically have the useful force to negotiate with China on the great project of the New Silk Road. For this reason, at the moment, a weak Europe is convenient for China. For Beijing it is easier and cheaper to negotiate with individual EU countries and, in some cases, even with regional administrations. Moreover, the absence of a truly European foreign policy allows China to operate in Africa without real competitors, apart from the U.S. and Russia.

In 2019, what driving forces will challenge U.S. global leadership and regional influence in Asia?  

In fact, I do not think we can talk about global hegemony of the U.S. today. This was true in the period of the so-called unipolar moment, that is, from the collapse of the Berlin Wall to the years of the George W. Bush wars in the Middle East. The U.S. has regained control of South America over the last two years, but even there it competes with China and Russia. The U.S. essentially controls Europe, through NATO. The U.S. influences geopolitical and geostrategic dynamics in the Near and Middle East, but also in these regions Washington feels the influence of Moscow and Tehran.

The United States still holds a technological record, but it will have to deal with the growing Chinese and Russian interest in the sector. As for the regional influence in Asia, even there the U.S. will have to deal with the growing and divergent interests not only of China, but also Japan, Vietnam, and South Korea.