The nationalist spinal column?
Global geopolitics is undergoing a profound reorganisation and is becoming a factor that will increasingly shape countries’ economic choices. However, although the former game rules (multilateralism, in particular) seem to have been undermined, the new rules are neither clear nor stable, and President Trump’s unpredictability is muddying the waters. Despite this, we can identify a trend in current events, namely a reshaping of the global stage around a strategic triangle(1) (Russia, the United States, and China), since Europe is, for now, paralysed by its electoral cycle. To predict the upcoming geopolitical balance, we need to study what is driving the foreign policy decisions of these three main stakeholders.
First and foremost, it is domestic politics, naturally – the nature of the social contract between the state and its citizens and the legitimacy the contract confers on governments. Donald Trump, for example, has probably been encouraged to look for political legitimacy on the geopolitical stage because he has been confronted with the bitter setback he suffered with his attempted reform of Obamacare. The same phenomenon has occurred in Russia, where Vladimir Putin’s popularity has been more linked, since 2013, to geopolitics than to the economy. In China, the prospect of the 19th Party Congress may play an important role this autumn, because Xi Jinping, who has embarked on a strategy to centralise power, won’t be able to show any weakness in the foreign affairs sphere, as it would weaken him at home.
Secondly, the foreign policy decisions of the three countries in the triangle will be decided by a number of more deeply-rooted factors, which are less visible but often underestimated by economists. These are, simply, the burden of history, which nurtures and structure states’ will to power, and the people’s perception of themselves as regards their place in the world.
In China’s case, it is primarily the role nationalism played in the rise to power of the Communist Party of China (CPC). The CPC, which was created in 1921, originated in demonstrations in 1919, when thousands of students protested against the transfer of Chinese territories to Japan. From then on, they promoted the ideology of nationalism, which still contributes to the party’s legitimacy to this day. This legitimacy is based on the need for “national rejuvenation”, in the words of Xi Jinping, notably regarding the USA and Japan, which have been seen as imperialists since the “century of humiliation(2)” This instrumentalisation of the past for nationalist purposes explains the high level of popular sensitivity towards questions of sovereignty, and influences the CPC’s foreign policy decisions(3).
Chinese nationalism is one of the key foundations of CPC policy(4). It is core to its legitimacy, and can generate unexpected political over-reactions among the Chinese population or their government if faced with a provocation by the American President or a ratcheting up of tensions around the hotspots of regional geopolitics. This will therefore form part the risks to be monitored in 2017. But we should not rule out the possibility of new alliances, which will certainly be forged outside the scope of multilateralism and on the basis of mutual advantage.
By Tania Sollogoub and Elodie Pichon, Economic Research Department, Crédit Agricole S.A.
For more information, see: China – Political Issues: the main geopolitical risks