American Sino Mania leads to geoeconomics power struggle

Uncertainty in global trade and investment environment got a shot in the arm when Donald Trump started the sanctions game. Tools of macroeconomics were used by him to intensify business warfare between China & US. This transformed the seemingly innocuous trade dispute into much more potent geoeconomics power struggle.

Nobody can deny that economics is interwoven with politics and military. In fact anyone who has cursory glance would realize that politics, economics and military are the key verticals in any meaningful strategy. Wars are fought for political reasons that are in turn prodded on by economic imperative.  By the same token, war by other means also involves the uses and sometimes abuses of economic power.

While acceding to the fact that economic security of a nation must be sacrosanct and by no means could be compromised at any time, it also behoves on national leaders that a proper balance between and amongst politics, economics and military, the so called PEM, should be maintained. 

Extending this further into international relationship, rules and procedures must be developed and accepted by all the nations in the United Nations Organization. Instituting such rules in trade & investment policy and procedures as a code of conduct by every nation must be sine quo non. Of course, there is a caveat as whatever policies and procedures there are it is the market that is final arbiter and market forces of demand and supply indeed determine price and quantity of goods transacted.

The moment a particular country, for example US turns into zero-sum game stance, by placing sanctions over trade, finance and investment it not only negates the spirit of partnership, but brings forth further strain on partners in the wake of imposing such sanctions. Plainly put, sanctions are counterproductive to the essence as victim nations are emboldened and make every effort to become still stronger as in the case of Iran. For China this was a god-sent opportunity for shedding the legendary Deng Xiaoping counsel of caution and begins to face up with America as an equal challenger in geoeconomics! 

 

Cheers! 

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail:   cosmicgems@gmail.com

Blog:   Business Strategist