THE US and China may be the central players in a global struggle for influence, but under the umbrella of their rivalry, many middle and small powers are making their own mark on the international order. In partnership with the US on most issues, in alignment with China on some, and independently on others, they are helping to reshape the world economy by reconfiguring technology cooperation, diversifying investment, and rearranging supply chains. In so doing, they are affecting the global balance of power, and raising their own economic weight, military potential, and diplomatic stature.

Pakistan needs to understand these changes. What has caused them? First, the unhappiness with globalisation in the West, especially in America, as factories and jobs were going to China, causing economic anxiety, social discontent and political backlash. Domestic politics began weighing heavily on perceptions of China and globalisation. It led to the rise of Donald Trump, and attempts at de-globalisation.

Then Covid-19 exposed the risks of overreliance on another country, especially a rival, for vital supplies. Russia’s invasion of Ukraine revealed how much the EU had come to depend on Moscow for energy. These events exposed the vulnerability of interdependence and tarnished globalisation further, spurring the search for a new geo-economics.

Along came a new geopolitics. The rise of China rattled not just the US but many other countries too that felt they were dealing with a new China under Xi Jinping. The Indo-Pacific strategy is basically a “leverage against any future aggressiveness by China”, they argue.

Geo-economics and geopolitics have merged.

US allies in the Indo-Pacific are strengthening their defences through military and technological cooperation with Washington. Japan’s fiscal 2023 defence budget registered a 26.3 per cent increase. Australia and India are engaged in more ‘forward-postured’ security policies and defence strategies, tying their regional ambitions with geopolitics. They have recalculated their interests independently of America although their policies are in synch with US strategies.

Geo-economics and geopolitics have merged. The US is taking the lead in redefining globalisation that does not harm national security, technological supremacy and economic leadership. It is doing so by denying high technology to China, to limit Beijing’s capability for AI and military advancement. Most allies are going along. An EU-led consensus seems to be emerging between America and its allies that, given Beijing’s centrality to the global economy, they cannot ‘decouple’ their economies from China’s. Yet they must de-risk.

As for geopolitics, the hawkish rhetoric on Taiwan captures the headlines but away from the glare of politics, traditional diplomacy is at work as seen in the flurry of diplomatic contacts since the Bali G20 summit of 2022 between Europe and China on the one hand and the US and China on the other. Washington now awaits the Chinese foreign minister’s visit.

India is at the crossroads of new geo-economics and geopolitics. Its geostrategic position on the Indian Ocean and border dispute with China make it America’s natural geopolitical partner while its technology and economic potential make it an attractive partner in geo-economics. In the joint statement issued after Prime Minister Narendra Modi’s visit to Washington, the two governments committed themselves to facilitating “greater technology sharing, co-development, and co-production opportunities between US and Indian industry, government and academic institutions”.

India and many other middle powers are benefiting not only by allying themselves with the US but also by forming independent groupings at the global or regional levels. India’s strategic outreach to the Gulf and Asean stand out. While mini forums like I2U2 (India, Israel, the UAE and US) are tied with the American agenda, India has also advanced its bilateral ties with the capital-rich Gulf independently of Washington. On some issues, India and its cohorts are aligned with China, for instance, through BRICS and SCO.

China is engaged in its own high-profile geopolitics and geo-economics via trade and infrastructure projects, with many of its partners having overlapping relations with the US. So what appears to be a great power rivalry on the surface is much more than that. There are several players multi-aligning and multi-networking through mini forums, ad hoc groupings and shifting coalitions with or without getting involved in the US-China rivalry. That makes the international order very fluid in which Pakistan with its current weaknesses is struggling to find a place with little to offer and much to ask for.

The writer, a former ambassador, is adjunct professor Georgetown University and Visiting Senior Research Fellow, National University of Singapore.

Published in Dawn, August 19th, 2023