Eurasia Group, which was founded by Ian Bremmer in 1998 with a new and subsequently influential concept of “Global Political Risk Index” (GPRI) for the financial market, puts “China loves a vacuum” as the top risk for 2018.
It says that when “China is setting international standards with less resistance than ever before … in three different areas”, namely, ‘Trade and investment’, ‘Technology’ and ‘Values’, the world has to face dangers which “are three-fold”.
“First, the global business environment will have to adapt to a whole new set of rules, standards, and practices pushed by China and diverging regulatory environments that will raise the cost of doing business …”
“Second, there will be pushback against China’s further expansion that polarizes Asia by pitting China on the one hand against the US and its regional allies on the other …… Xi’s agenda as a threat to their democratic-capitalist model …”
“Lastly, Xi’s growing assertiveness risks negative effects at home and creates a long-term threat to the Chinese model …… they could affect the long-term economic trajectory of both China and its imitators.”
In case by this time you still do not get it why China would (or should) be the top risk for 2018, Eurasia Group’s conclusion is more straight forward to point out that “since 2008, we’ve seen a gradual erosion in global perceptions of the attractiveness of Western liberal democracies. There is now a viable alternative. For most of the West, China is not an appealing substitute. But for most everybody else, it is a plausible alternative. And with Xi ready and willing to offer that alternative and extend China’s influence, that’s the world’s biggest risk this year.”
It means that as the West is feeling its own “decadence’ (as suggested by James Traub’s Foreign Policy article), it is unwilling to accept China’s rise as an alternative to reset some of the world order, and such an unwillingness would cause tension, conflict and even clash. Therefore, China’s effort in seeking a leading role in the world arena generates the biggest risk to the world in general and the financial market in particular.
Risk is big, but is there a solution? Yes. Would China halt rising? No. Could the West overcome its own decadence? Yes. Would a revived West be strong enough to maintain its own world order? Yes. Is there a leader who is able to revive the West? President Trump, at least he is trying (and perhaps President Macron of France). Therefore, the 2018 focus is on Trump, not China.
The opinions expressed are those of the author, and not necessarily those of China Daily Mail.