The significance of geoeconomics as an effective and preferred instrument to achieve geopolitical and geostrategic goals is establishing itself in the fast changing world. China today is a prime example of putting geoeconomic tools to effective use for protecting and enhancing geopolitical and geostrategic gains in the region and beyond. While traditional geopolitics has insinuation of historical imperialistic policies, geoeconomics has come to symbolize integration, transport connectivity, and trans-border ties. It focuses on economic space, networks, and economic strength. China’s Belt and Road initiative (BRI) is exactly in line with this new trend.
China’s opening to the world and its application of free market principles under Deng Xiaoping in the late 1970s charted the path for its exponential development over three decades’ long economic boon, registering an average growth rate of almost 10 per cent. This phenomenal rise of China, particularly the speed and strength of its rise, has fundamentally altered the rules of interstate engagement not only for the developing world but also for the developed and politically established powers including the USA and Europe. With its strong and sustained economic power which gives it the requisite strength to pursue its geopolitical and geostrategic agenda, China’s political outreach has increased exponentially.
Today China is leading the world in the incredible application of geoeconomic tools for national interests. The country has spread its influence in the Middle East, Latin America and Africa. China invests more in Africa than the USA. Nations in South America have also received huge Chinese aid. Similarly, China is also challenging Western financial might in other regions including South Asia, East Asia, the Middle East and Europe.
With the rise of geoeconomics, the use of military power to achieve political and strategic gains is not only loosing acceptability among nations but its effectiveness is also diminishing. Wars and military interventionism have repeatedly failed to achieve political and strategic goals in recent times. Iraq, Libya, Afghanistan, and Syria are all examples of failed attempts to alter the geopolitical realities by coercive military might. This failure and the resultant rise of anti-war sentiments around the world is leading to a re-evaluation of the rising human and material costs and declining utility of war.
On the other hand, globalization has increased the interdependence of sovereign states. In this new world of trade and supply chains, scientific and technological advances, demographic shifts and migration issues due to economic reasons; and new alignments among Asian, African and Southern and Central American countries, the emergence of strong trading blocs, stringent financial laws, intellectual property rights etc. are seemingly making use of economic power more effective and relevant.
In today’s economically interdependent world therefore, the use of geoeconomic tools including targeted sanctions by developed countries on a variety of pretexts including human rights and environmental concerns, are becoming more effective. In the recent decades we have seen geoeconomic tools being increasingly put into practice for protecting and enhancing geopolitical and geostrategic interests. USA’s sanctions against Iran, Pakistan, North Korea, Venezuela, China etc. are all examples of economic pressure employed for projected and expected geopolitical gains.
Nowadays, the use of economic ‘soft power’ has gained greater acceptability and strong incentives for economic cooperation can help nations achieve their geopolitical targets more comprehensively. For the EU, for example, free trade and association agreements represent crucial measures for binding other states to the union and enforcing their rule. China’s economic diplomacy in Latin America, Africa, South Asia and East Asia is an example of successful deployment of geoeconomic tools for political gains.
Additionally, as a result of media revolution, economic success and the soft economic power of successful states on one hand and the socioeconomic benefits that accrue for the recipient states on the other hand, have become more visible. Economic diplomacy is therefore, gaining momentum and recognition with the masses. This trend will apparently continue to strengthen and the world will witness the increasing significance of geoeconomics. However, the long-term impact and the fall out of conditionality attached with economic diplomacy is debatable.
The balance of power is apparently shifting from the Atlantic to the Pacific and this trend is expected to stay the course for the foreseeable future. Economic experts are of the view that China is on track to overtake the United States as the largest national economy by 2030. Other economic powers in different regions may also reach their full potential, creating multiple poles of economic strength which could have demonstrable geopolitical influence and effect leading to further crystallization of the important trends of geoeconomics and regionalization processes.
In this scenario it appears that focus will continue to be on the implements from which a country derives its soft power including economic power. The coming times may see traditional oil and mineral rich economies stagger and struggle compared to innovative, smart and technologically advanced countries. This could change the outreach of many countries. China’s strides in 5G technology and Artificial Intelligence are an example of this emerging reality and has become one of the most contentious point of conflict between China and the USA.
Many scholars are of the view that emerging trend of geoeconomics, particularly its actual practice by China, is questioning the political and governance models in vogue in the West. They believe that President Xi’s model is not only propagating a geoeconomic order as an alternative to neoliberalism but also offers a political alternative to liberal democracy. China advocates a diverse and multipolar world — a balance of power among large regional blocs that would prevent any single one of them from dominating the emerging world order.
China has made geoeconomics the central anchor of its geopolitical approach: It is binding other countries through raw material agreements, energy and major infrastructure projects thereby creating economic interdependence, which also opens up avenues for political alignment. With the Belt and Road Initiative (BRI), China is raising its efforts to a new level. The BRI envisions creation of six Eurasian land corridors and a maritime Silk Road. It comprises over sixty-five nations in Asia, Europe, and Africa. The plans for transportation and infrastructure corridors through Pakistan, Southeast Asia, and Central Asia all the way to Duisburg and Rotterdam are particularly ambitious. To ensure the participation of Eastern and Central Eastern Europe, China additionally set up the ‘16+1 format’, in which it exchanges ideas on economic cooperation plans with the nations in this region. The New Silk Road initiative is generally described as China’s attempt to tap into new markets, generate economic interdependence, and expand Chinese technology and business standards in the then accessible region. Ultimately, these economic measures also help establish political alliances, cooperation and collaboration.
Within the South Asian regional context, China-Pakistan Economic Corridor (CPEC), a $60 billion project, is seen by many in the West as an obvious manifestation of Chinese way of playing geopolitics through geoeconomics. Under its Belt and Road Initiative, China is investing more than 1 trillion U.S. dollars for five other economic corridors in at least sixty-five countries across South and South West Asia, Central Asia, Africa, Europe and the Middle East. However, China has displayed mutual respect for other countries’ sovereignty and avoided meddling in their domestic affairs. In our case, CPEC is a manifestation of time-tested friendship, trust and multi-faceted cooperation.
COVID-19 pandemic has added another dimension and has further challenged the standard tools of geopolitics. There is no example of a pandemic that has put the political and governance systems of states, their administrative capabilities, and their economic fundamentals, the strength of their health infrastructure, the resilience and discipline of the people to test as COVID-19. Here again we saw how the economic strength, among other factors, helped China not only survive the pandemic but scuttle the brutal attempts to alienate, stigmatize and malign it. 2020 has clearly brought to the fore the inequalities in response to the pandemic by countries, particularly the economic inequalities.
China successfully used its economic and production strength to emerge as the world leader in the provision of COVID related PPEs (personal protective equipment) and ventilators amassing goodwill from around the world, particularly the developing world that is struggling to cope with the pandemic. Whereas U.S. is still struggling to limit its military-might driven policies, China put its geoeconomics ‘COVID diplomacy’ to superb use to protect its geopolitical interests.
It now appears that 2021 will continue to be dominated by pandemic politics – this time on the development and distribution of the vaccine. China is expected to translate its effective control of the pandemic and development of vaccine into the strength of its economic system. Economic engagement of the world with China is expected to become significant and nations that handle the post vaccine phase will come out of the economic slump successfully. It seems that economic balance between the world’s nations may see a considerable shift in the coming decade and economic experts predict that China’s New Silk Road could well define the new world trade order.
Shifting the gear or focus from geopolitics to geoeconomics for attaining national interests only means changing the tactics through applying geoeconomic tools. It, however, remains to be seen whether the new system being spearheaded by China will be successful and stay or the world would revert to its age-old tried military prowess. Only time will tell.
The writer has served as an Ambassador to China, the European Union, Belgium, Luxembourd and Ireland. She has also authored and edited several books including Magnificent Pakistan, Pakistan-China All Weather Friendship, and Lost Cities of Indus.
E-mail: [email protected]
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