Geopolitics and Markets Review – 11th April 2023

Apologies I didn’t post like usual on Mondays, I was travelling back from a camping trip, and I spent most of the journey back sleeping. I don’t usually do my most productive work while in and out of sleep so thought I’d hold it until today.

Sections

1. Macron’s Trip to China

2. Yemen War Peace Talks

3. An Improvement of Turkey and Syria Relations

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The Pivot Zone Fragments

A few weeks ago, I described in this new multipolar world order, we have two clear sides. The US-led world system and the Chinese/BRICS-led world system. The other large bloc in the world currently is the EU.

Macron’s visit to China this week has highlighted the fragmentation of the EU. Some members want to distance themselves from China. Others want ties to be closer.

France doesn’t want to put all their eggs in one basket.

Photo by Peter Werkman on Unsplash

Which tactic will be optimal will be seen by who becomes the more powerful in the US and China tensions. The US has characteristics of a falling empire such as high debts and internal political tension. China is growing economically but isn’t without its share of problems. Problems include demographics and supplying enough food and energy for its large population.

France is strong on maintaining communication and diplomacy. Macron seems to currently believe disagreements and key geopolitical issues can be solved by talking. But can things be sorted by talking if one side doesn’t want to speak at all? If they benefit from the current state of the geopolitical world?

History would argue no it can’t be solved. But communication could greater help understanding.

One key point in Macron’s requests to China was that they would influence Russia to end the Ukraine war. China didn’t include this commitment in its joint statement.

As the U.S. pours further military aid into Ukraine, the U.S. continues to outspend and attempt to outthink the Chinese. One key principle of any rivalry, as mentioned by Napoleon, is to not interfere with your enemy when they are destroying themselves.

This doesn’t happen tomorrow and might not happen at all. But we must be aware of it. The cycle of the decline or rise of a superpower is one that is difficult to reverse or alter. Long-term thinking is a must and the Chinese with their 5-years often set where they want to be in the future. This decade-long thinking puts them at an advantage for not sweating about the smaller details, which are important. But the long-term trend continues to see China rising is one they hope to continue.

I’m currently reading The Digital Silk Road by Johnathon Hillman. It discusses the rise of China as it joined the WTO and became more integrated with global trade. This started the period of globalisation that saw China continue to show high economic growth. The inclusion of China so heavily in world trade contributed to their rise to potential global superpower status. Did the U.S. notice this too late? They enjoyed cheap Chinese labour and products as did the rest of the world for many years. Will any countries remain close to China in an attempt to also rise in geopolitical influence and power? Or will it reach a point where not being a part of China’s Belt and Road Initiative is too disadvantageous? Will nations pivot to China or suffer by not having access to this trading system?

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Saudi in Yemen Peace Talks

After the Chinese brokered peace between Saudi Arabia and Iran, we could see further peace in the Middle East.

Saudi Arabia is working to end the war in Yemen. The war has been fought between a Saudi-led coalition against an Iranian-backed Houthi rebel group. The Houthis took the capital, Sanaa, in 2014 along with other areas. In March 2015, the Saudi-led coalition launched a military campaign backing the recognised government.