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THIS is with reference to the report ‘Nato boosts Asia ties to counter China’ (July 12). The summit and its conclusions suggest that the West remains on a war footing against Russia. Alarming comments came from Keir Starmer, the newly-elected prime minister of the United Kingdom, who said Ukrainian forces could use British weapons to strike Russian territory. Such utterings will only escalate the conflict. Besides, bringing Ukraine into Nato will only inflame tensions with Russia.
Concluding comments presented by Nato Secretary-General Jens Stoltenberg and other leaders branding China a “decisive enabler” of Russia’s war in Ukraine were also worrying signs. Are we witnessing the early stages of a full-blown rift between the United States and China, with the former taking steps to secure its assets before an official ‘cold war’? If this continues, and Pakistan is pressed to choose a side, the consequences may drastically alter Pakistan’s trajectory for decades.
The Creating Helpful Incentives to Produce Semiconductors Act of 2022, called the Chips and Science Act, was a major step that the US took to reduce its reliance on China for semiconductor supply, and to diversify the control of rare earth metals that are crucial for electronics. The global market is currently dominated by China. The act was aimed at ensuring that the US is better prepared for any future conflicts or economic decoupling.
For decades, the West has enjoyed the benefits of cheap Russian energy and Chinese goods, which kept inflation in check. However, the world now appears fragmented, and inflationary pressures in the West will likely persist, forcing central banks to maintain high interest rates.
Additionally, China’s aggressive stance on Taiwan poses a significant risk to global supply chains, especially in the semicon-ductor sector.
Taiwan, a key player in the global semiconductor market, produces over 60 per cent of the world’s semiconductors and over 90pc of the most advanced ones that are essential for sustaining the artificial intelligence (AI) revolution.
The dominance of Taiwan Semiconductor Manufacturing Company (TSMC) is so critical that Seth Moulton in the United States House of Representatives was quoted as having said that the US “should make it very clear to the Chinese (that) if you invade Taiwan, we will blow up TSMC”.
Disruptions in semiconductor supply will affect everyone, as modern economies depend on these components for just about everything; from washing machines, laptops and refrigerators to mobile phones and smart television sets.
Ray Dalio, the founder of Bridgewater Associates, the world’s largest hedge fund, and among the richest and influential individuals in the world, recently titled his published article ‘The Coming Great Conflict’.
In his Time article, he examined 500 years of history to identify patterns in global war cycles, and concluded that the world is nearing a critical point in the internal order-disorder cycle where choices will become stark: “pick a side and fight for it, keep your head down, or flee”. Herein lies the dilemma that Pakistan should expect to face in the near future.
If the West confronts China and forces Pakistan to choose a side, the conse-quences will be chaotic. The stakes are incredibly high, and the implications are profound. It is crucial for Pakistan to navigate these geopolitical tensions with great caution to avoid being drawn into a conflict that could reshape its future. Choosing the right side for its betterment is essential; otherwise, the alternative could be really disastrous.
Adil Hanif Godil
London, UK
Published in Dawn, July 22nd, 2024
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