Geopolitical tensions to affect global economy, governance

The ongoing geopolitical tensions continue to cast a shadow over the global economy and governance into 2024, yet China has the potential to play a positive role in global development amid these challenges, experts said.

They made the remarks at a symposium held on March 19 in Beijing for the release of the Chinese Academy of Social Sciences' Report on the International Situation 2024 compiled by the Academic Division of International Studies, Chinese Academy of Social Sciences, or CASS.

The report details the intensity of geopolitical and ideological competition among major powers throughout 2023 and presents the major challenges the world and the global economy will face in 2024. It notes an increasing impact of geopolitical dynamics on global trade and investment.

The report lists out some major countries for attempting to craft international economic rules that favor their interests. It says the United States, as the world's largest economy, has frequently instigated trade wars, hindering the functioning of multilateral trade, and promoting strategies such as "nearshoring" and "friendshoring" with allies, which disrupted normal international economic and trade practices.

According to the "Global Trade Update" released by the United Nations Conference on Trade and Development last December, global trade volume in 2023 is expected to shrink by approximately $1.5 trillion to under $31 trillion, a 4.5 percent decrease from 2022. It also projects a 7.5 percent decline in goods trade, while service trade might see a 7 percent increase, albeit at a slower pace compared with 2022.

Furthermore, the newly released report highlights how the negative influence of geopolitical tensions spills over into global governance, posing risks of politicization and instrumentalization of global governance tools.

It points out that the rise in exclusive alliances and hegemonic countries' confrontational regional arrangements, such as AUKUS, and the Quadrilateral Security Dialogue, or Quad, among the US, Japan, India, and Australia, have not only failed to stabilize the regions concerned but have also escalated tensions and instability.

In this context, China's advocacy for an equal and orderly multipolar world and a universally beneficial and inclusive economic globalization stands strong, said Pang Dapeng, a research fellow at the Institute of Russia, Eastern European & Central Asian Studies, CASS.
"By holding onto our strategic focus and working on our own development, China can continuously contribute positive energy to the development of global economy and other global affairs," Pang stated.

Because the overall direction of human development and progress will not change, the overall dynamics of world history moving forward amid twists and turns will not change, and the overall trend toward a shared future for the international community will not change, he said.

Zhang Jie, a research fellow at the National Institute of International Strategy, CASS, echoed this opinion, saying that within the Asia-Pacific region, the development trajectory led by China and exemplified by initiatives like the Regional Comprehensive Economic Partnership, or RCEP, provides nations in the region with a cooperation path that is pragmatic and economy driven.

According to statistics from China Customs, in 2023, the total import and export volume between China and the other RCEP members reached 12.6 trillion yuan ($1.75 trillion), accounting for 30.2 percent of China's total foreign trade volume, an increase of 5.3 percent from before the agreement's implementation in 2021.

Among these, agricultural trade performed notably well. In the first 11 months of 2023, China imported fresh durian worth 46.61 billion yuan from member countries such as Thailand and Vietnam, which is 1.7 times the amount before the agreement took effect in 2021.