Grain World: Geopolitics is back dominating global relations

Jason Shapiro at Grain World. (MarketsFarm photo by Glen Hallick)

Saskatoon | MarketsFarm — Geopolitics is again shaping the international scene, including China, Jason Shapiro explained here Thursday at the Grain World conference.

Geopolitics, he said, resulted in catastrophic global wars and generated very little peace for close to a century.

Shapiro, director of analysis for Geopolitical Futures — an Austin, Tex.-based international risk analysis think tank — said the concept of geopolitics held tremendous sway on world affairs from the turn of the 20th century to the end of the Cold War.

During the following 20 years, he said, the western world had high hopes for liberal democracies to pop up all over the globe, but such were dashed following the 9/11 terrorist attacks.

“The United States, as it does, completely overreacts to 9/11. The United States really has trouble functioning in the world when it doesn’t have an enemy that it can focus on. Jihadism was just the perfect enemy,” Shapiro said during the lead-off forum at Grain World.

A few years later, Russia re-imposed itself on the global stage with its invasion of Georgia, an independent country that had been one of the republics of the former Soviet Union. Shapiro said Russia’s aggression clearly demonstrated the extent of how unwilling the U.S. was to steadfastly defend Georgia. And that played directly into the hands of Russian President Vladimir Putin and his long-term goal of destabilizing relations between the U.S. and its allies.

Then, a few more years down the road, came the rise of Chinese President Xi Jinping.

“China has had really three world historical figures in its last 100 years. The first was Mao Zedong, he reunited China. The second was Deng Xiaoping, he made China rich. Xi Jinping is here to make China strong,” Shapiro said.

When Xi met U.S. President Donald Trump in Florida, Trump spouted to Xi of how trade relations between their countries were now going to operate from now on, Shapiro said.

With the legacy of Mao and Deng deeply engrained in Xi’s psyche, he would have compared Trump’s bluster to how China was destabilized and carved up, first by the United Kingdom and then other imperial powers for the next 100 years. With that ‘century of humiliation’ in mind, Shapiro said, Xi was determined not to permit such a history repeat itself.

“There may be a cosmetic short-term trade deal in the offing, but the United States and China are locked in a long-term strategic competition,” Shapiro said.

“The U.S. isn’t going to give up on it. China isn’t going to give up on it. Their trade war is just the beginning. There’s no end to this really in sight.”

However, despite China’s tremendous economic and political growth over the last 40 years, it has brought severe consequences as well, he said. China was once a country that didn’t need to import oil, being completely self-sufficient. Today, it’s the world’s largest importer of oil.

The case has been the same for food, which has led China to refocus its policy. Rather than striving for food self-sufficiency, China opted to exercise its might toward food security. And that was something which resulted in Canada feeling China’s wrath following the arrest of Huawei executive Meng Wanzhou about a year ago, Shapiro said.

“For China this is geopolitical, this isn’t import/export. China identified you were an unreliable political partner and went forward accordingly.”

With that in mind, Shapiro expressed his professional opinion that, “it would be a colossal mistake” for a country or a business to have China at the centre of its future growth strategy.

“China, and access specifically to the Chinese market, should not be the core of your business,” Shapiro said. “You need to get used to the thinking of what you can sell to China as a bonus, not as the core of what you’re doing.”

Rather, countries and businesses need to turn to India, which he believes will explode on the world scene such as China did during the 1980s. However, he warned not to treat India as an unequal partner, as Trump was said to have done to Indian Prime Minister Narendra Modi during his recent visit to Texas.

The U.S. and India were to have signed a trade agreement, but despite all of the hoopla surrounding Modi’s visit, he allegedly refused to do so. Shapiro said agreements need to be mutually beneficial, not one-sided.

— Glen Hallick reports for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.

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