BusinessToday Previous Editions

10 WORLD 13.4.2023 GLOBAL investors are "desperate for signs" that Chinese President Xi Jin- ping and France's President Emma- nuel Macron can improve relations and avoid a hemispheric geopolitical clash as the latter starts a three-day visit to Beijing and Guangzhou on April 5. "China's interest isn't to have a last- ing war," Macron said shortly after arriving in China, adding that should China send any arms to Russia, it "would be complicit in a breach of in- ternational law." But according to Agence France- Presse, the French president said that at a meeting with Chinese President Xi Jinping he was not going to threat- en China with sanctions. He is there to try to mend bridges and avoid a further deterioration in relations be- tween the West and China. On February 18, US Secretary of State Antony Blinken claimed that China was "strongly considering pro- viding lethal assistance to Russia. The Chinese response was perfunctory. China's Foreign Ministry Spokesper- son Mao Ning said that the Chinese government did not accept "coercion or pressure on Chinese-Russian re- lations from the US" in context of China's alleged military assistance to Russia. The world has been thrown into a polycrisis after Russia's invasion of Ukraine just over a year ago, but while a direct confrontation, and possibly a war, between the US and China is widely anticipated, Europe has other plans. Macron is in China to try to find a middle way, and European Commis- sion President Ursula von der Leyen is making the same trip this week, with a similar agenda. Macron is hoping to capitalise on China's 12-point peace plan that it introduced on the anniversary of the start of the Ukraine war on February 24 and put itself at the centre of the crisis in the process. "China, having recently reaffirmed its strong ties with Russia, may play an important role [in bringing peace to Ukraine]," he said at the beginning of his visit to China on Wednesday speaking before the local French com- munity. Macron's conciliatory approach is at odds with Washington's, which has labelled China a competitor. Blinken set the tone in his first major policy speech in March 2021, a year before the war started, aggressively naming Russia as the "number one threat," but graded China a rank lower as a "com- mercial rival." Europe has been decid- edly more dovish on China and would rather promote business ties. To underscore the difference in ap- proach to China, the US has recently introduced the CHIPS legislation that effectively bans exports of high tech- nology to China or Russia and prohib- its US citizens from working there in the industry, in order to preserve its technological lead over China. Ma- cron, on the other hand, brought 60 top French executives with him to Beijing, including the heads of Airbus, electric utility Electricite de France (EdF) and train manufacturer Alstom. This week's diplomacy has been spurred by China's decision to step up its diplomacy to the top tier, but openly side with Russia in the growing geopolitical clash. Western leaders are hoping to drive a wedge in between the two erstwhile partners to prevent a complete fracture. Chinese leader Xi Jinping was in Moscow for a three-day visit between March 20-22 in an os- tentatious display of support for Putin in what was an open challenge to the US' claim to be the "leader of the free world." China has suddenly become much more diplomatically active, having also brokered a reconsolidation be- tween Iran and the Kingdom of Saudi Arabia (KSA) after a seven-year break. What the West fears is that a non- aligned alliance of Global South part- ners is emerging, led by the BRICS (Brazil, Russia, India, China, South Africa) countries, to challenge the 500-year-old dominance of geopol- itics by the industrialised West, ac- cording to historian Neil Ferguson in his book The West and the Rest. China to challenge the Western Hegemony The Western fears are real, as China does seek challenge the Western he- gemony and it intends to do that with the help of Russia and the other lead- ing Emerging Markets. Much has been made of the rivalries between the main players that should prevent them co-operating. Even dur- ing the socialist experiment, mutual mistrust stopped communist China and Soviet Russia uniting to stand against the capitalist West. And up until today, the disputed border be- tween China and India makes an alli- ance there unlikely, say foreign policy experts. But things are changing. Moscow has already been forced into the arms of Beijing by its clash with Washing- ton and Putin said in Moscow with Xi that Sino-Russian relations are at an all-time high. A newly emergent India has also been one of the biggest win- ners from the sanctions regime and has openly defied Western sanctions in support of the Kremlin. BRICS (Brazil, Russia, India, China, South Africa) has gone from a mar- keting term, invented by Goldman Sachs head of research Jim O'Neil, to a political organisation designed to promote the interest of the leading emerging markets in a world dominat- ed by Western institutions. More recently, the Arab world has also gravitated to this new bloc. It first extended the OPEC oil cartel to include Russia and other producers in Africa and South America to become the 23-member OPEC+. Relations between the Middle East and the US have always been difficult, but those between Riyadh and Washington have become decidedly prickly; only last week OPEC+ decided to cut more than 1mn barrels per day (bpd) of pro- duction to push prices higher, ignor- ing the White House's protestations. Both China and Russia have made deep diplomatic inroads in the Mid- dle East, as the relations between KSA and the US continue to deteriorate. The emerging markets are fed up with being second-class citizens in the changing global economy and resent what they see as the West's lingering colonial attitude to them. The EMs now constitute more than half of global GDP (in PPP terms) and two thirds of the world's population. Yet they are still the junior members of most of the global institutions such as the International Monetary Fund (IMF), World Bank and World Trade Organization (WTO). At the same time, the West is militarily united by Nato, but the EM world has no equiv- alent, leaving them at the mercy of US overwhelming military power. The closest they come is the Collective Se- curity Treaty Organization (CSTO), a security organisation for the Com- monwealth of Independent States (CIS) states, and which regularly con- ducts bilateral joint military exercises. The war in Ukraine has brought these lingering resentments to the surface. The protestations of the lead- ers of the emerging markets have be- come audible. Xi's trip to Moscow was a step up for Beijing, which is now going on the offensive. Previously China's foreign policy has been economic in nature, using the vehicle of the Belt and Road Initiative (BRI). Likewise, Brazilian President Luiz Lula has been a vocal critic of sanc- tions, and openly backed Russia, throwing in his lot with the Sino-Rus- sian camp. South Africa, too, is looking to Mos- cow for economic help, and rebuffed Blinken's effort to get Pretoria on board with the sanctions regime dur- ing a recent visit, preferring instead to hold joint 10-day naval exercises with Russia and China's navies that started on the anniversary of the invasion of Ukraine, February 24. The BRICS has gone well beyond a trade club and will hold its fifteenth summit in South Africa in August. But in addition, these countries are active- ly building up their own set of multina- tional institutions to reduce their de- pendence on the Western-dominated organisations: the China-led Shanghai Cooperation Organization (SCO); the China and the West are on a collision

• Cover