Trade and geopolitics
The economic balance of power and need for international alliances
Published 08 October 2020
Building international alliances is the only way if the US wants to modify China’s behavior either in the economic or geo-political sphere. This paper examines the appropriateness of multilateral and plurilateral approaches to geo-economic policy aimed at China’s current regime.
Unilateral action by the United States has had a limited impact in modifying China’s behavior either in the economic or geopolitical sphere. In the last essay by Stewart Paterson, titled “US-China decoupling: How far have we come and how far will we go?”, he argued that US strategic aims towards China have shifted from a renegotiation of the pre-existing economic relationship to containment. This new paper from the Hinrich Foundation suggests that while a multilateral approach is more likely to achieve this strategic goal, it would require the US to engage in an alliance building process.
What would that require, who are the potential allies and what are the political and economic realities behind such a process? Moreover, would an alliance of likeminded countries – and absent China – be able to reinvigorate and advance the multilateral trading system?
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Stewart Paterson is a Research Fellow at the Hinrich Foundation who spent 25 years in capital markets as an equity researcher, strategist and fund manager, working for Credit Suisse, CLSA and most recently, as a Partner and Portfolio Manager of Tiburon Partners LLP.
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