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State of the World: On the verge of fragmentation?
In Tokyo this morning, Eurasia Group and GZERO Media President Ian Bremmer kicked off this year’s GZERO Summit with his annual “State of the World” keynote speech. As usual, he gave his audience plenty to think about and debate.
He opened with a recap of the past year in international politics, focusing on Russia’s war in Ukraine and its international fallout. The big takeaway: Vladimir Putin has accomplished virtually the opposite of everything he intended. He has boosted Ukraine’s national pride and its determination to cut the ties that have long bound it to Russia. Instead of “demilitarizing” Ukraine, he has brought its soldiers the most modern and powerful weapons they’ve ever had. He united Europeans and Americans in opposition to his invasion. He has strengthened and expanded arch-nemesis NATO and inflicted decades-long damage on Russia’s economic strength, military capabilities, and political cohesion.
But it’s Bremmer’s vision of the future that will generate the most discussion. With a global system crippled by US domestic political dysfunction, intensifying US-China animosities, and growing tensions between the wealthy and developing worlds as fallout from COVID and the war widens gaps between global haves and have-nots, the global system itself is on the verge of fragmentation. Perhaps most startling of all, Bremmer argues that this might become a good news story.
The “global security order,” he argues, will remain American-led, and will be bolstered by both Russian aggression and rising anxiety in Asia over the expansion of China’s international influence.
The “global economic order,” Bremmer predicts, will depend mainly on China’s trajectory. If China becomes the world’s largest economy over the next 10 years and then extends its economic lead, Chinese investment abroad and international demand for access to the Chinese market, he says, “will ensure a more multilateral trade order, with America’s push for strategic competition tempered by the hedging of European and Asian allies and a Chinese alignment for most of the developing world.” But, if mounting debt, poor demographics, and other factors force China to turn inward, “dominant regional powers will become the most important players on trade.”
The “global climate order” has already become multipolar and multi-stakeholder in ways that should give us more resilient confidence in our future,” Bremmer argues. Europeans have “set the pace on rulemaking and model-setting for how a post-carbon world of governance and society can function,” he notes, but it’s China, India, and the developing world that will play the largest role in determining the level of carbon emissions in coming decades.
Finally, there is the “global digital order.” The world’s largest and most dynamic technology companies are nearly all headquartered in America and China, but it’s the tech companies themselves that wield “sovereignty and rule-making power in the virtual world … for commerce, for security, and even for civil society.” Perhaps these companies will align with their governments, setting conditions for a lasting tech Cold War. But, he says, “if the digital space itself becomes the most important arena of great power competition, and the power of governments erodes relative to the power of tech companies,” then these technology giants will become “the central players in 21st-century geopolitics.”
The United States, China, Europe, India, or the tech giants? Who do you believe will become tomorrow’s great powerbroker? Or are you placing your bets on chaos?
Tell us what you think.This article comes to you from the Signal newsletter team of GZERO Media. Sign up today.
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Kevin Rudd: COVID has made Xi Jinping zero-risk
Australia's former PM and current CEO of the Asia Society knows China quite well. He's fluent in Mandarin, and — for a foreigner — has a pretty good idea of what's cooking in Chinese politics.
That's why Kevin Rudd believes China's zero-COVID strategy will (probably) remain in place all of next year.
The Chinese, he tells Ian Bremmer, "had the internal shock of their life" during the early stages of the outbreak. And rumblings over Xi Jinping's initial response have created a "deep pathology" in his mind about taking any risks at all with the virus.
Rudd sees no clear COVID exit strategy for China, or Xi. That'll have serious implications for global trade.
Also, China now wants to join the revamped TPP regional trade deal — without changing its terms. That, he explains, is "basically pulling the rug from under the normal levels of opposition" from countries like Australia or Japan.
Finally, Rudd details why Beijing is more worried than it wants to admit about diplomatic pushback against China’s territorial overreach in Asia with things like the Quad.
Watch his full interview and insights from other participants on Day 3 of our parent company Eurasia Group's 2021 GZERO Summit.
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Japan's "third way" capitalism
Capitalism must further evolve, Kishida says during an exclusive address to our parent company Eurasia Group's 2021 GZERO Summit. And Japan can help lead the way along with other advanced democracies like the US and European countries in an increasingly G-Zero world.
But what does Japan's "third way" capitalism actually entail?
A big part is combating rising inequality, one of several market-based distortions that have led to electoral populism and "narrow-minded nationalism."
It's also about investing big in climate, digital transformation, and economic security — including health — for all citizens.
Kishida plans to detail his vision for a new capitalism in the spring.
In the meantime, the prime minister has already committed Japan to spending $4.4 billion on COVID vaccines and treatment, and to cut greenhouse gas emissions by a whopping 46 percent by the end of the decade in order to achieve net zero emissions by 2050.
Watch Kishida's speech and insights from other participants on Day 2 of the event on the GZERO Summit website.
Who's winning the global battle for tech primacy?
How is China able to control their tech giants without suppressing innovation?
For Ian Bremmer, one important reason is that there's a big difference between Jack Ma questioning Chinese regulators and Elon Musk doing the same to the SEC.
"In the United States you've got fanboys if you do that; in China, they cut you down," Bremmer told CNN anchor Julia Chatterley in an interview following his annual State of the World Speech.
Still, he says China knows it cannot kill its private sector because it needs to keep growing and competing with American tech firms.
So, who's winning the global battle for tech primacy?
Right now, Bremmer believes the US and China are at tech parity — thanks to their tech giants.
"When we're talking about tech supremacy, we can't just talk about governments anymore."
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Watch Ian Bremmer's State of the World 2021 speech live
WATCH LIVE: Join us Dec 6 at 8 pm ET to hear Ian Bremmer's unique perspective on the most pressing geopolitical events shaping politics, business, and society in our "GZERO" world.
Ian's State of the World speech will examine:
- Are the US and China engaged in a cold war?
- How powerful have tech companies become on the global stage?
- Is there hope for the world to unite to fight climate change and other shared challenges?
Watch live at https://www.gzeromedia.com/stateoftheworld
Ian Bremmer: State of the World 2021
December 6, 2021 8 pm ET
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Click here to watch Ian Bremmer's State of the World 2020 speech.
Also happening that week:
- GZERO Japan Summit 2021, Dec 7-8th
- GZERO LatAm Summit 2021, Dec 7-8th
GZERO Summit on sustainability: COVID-19’s promise on ESG
The forced slowdown of global economic activity due to the coronavirus pandemic has slashed carbon emissions around the world, opening a unique opportunity to make real progress in the fight against climate change. But there is fear that it won't be enough, and the world will go back to its old ways when we get rid of COVID-19. However, even before the public health crisis, some major emitters had already taken ambitious steps to rethink how to make their own policies more sustainable.
In Canada, the prominence of oil in the economy doesn't mean that it should hide from the existential challenge of climate change. Fossil fuel profits make Canada not only more responsible but gives the nation the resources to commit to a bold climate policy, Canadian Minister of Natural Resources Seamus O'Regan said during a panel discussion on sustainability at the 2020 GZERO Summit in Japan.
Dawn Farrell, president and CEO of Transalta, Canada's largest clean electrical company, noted that we can apply many of the lessons learned from battling COVID-19 to the global struggle against climate change. The same way governments and the public sector have worked together successful vaccines, there must be equal collaboration on carbon prices, which must be set by governments and not the market alone.
Indeed, the pandemic is an opportunity to entirely transform the economy of countries like Japan, which recently committed to producing net zero carbon emissions by 2050 under new Prime Minister Yoshihide Suga.
Other nations with less muscle, though, may struggle to phase out highly polluting fossil fuels such as coal, which still powers dozens of countries across Asia. That's why rich countries should engage and help them, said Tadashi Maeda, governor of the Japan Bank for International Cooperation.
Meanwhile, countries with both the energy and financial resources to aspire to net zero in the near term should deliver on their Paris Accord climate commitments — and support businesses that are doing the right thing for their bottom line and the planet at the same time. For instance, O'Regan argued that Canada understands where the environmental, societal, and corporate governance (ESG) market is moving, for instance on liquefied natural gas.
ESG lately has become code for simply curbing emissions, but Farrell said that ESG investors want to know you can put your money where your mouth is, and show progress… without big disruption like calls for divestment. Indeed, for Maeda pulling back from all fossil fuels is only one aspect of ESG, and not even the most important right now in most emerging economies.
Beyond ESG investing, companies are also learning how to operate in more responsible way. One of them is Sony, a Japanese conglomerate which the Wall Street Journal recently ranked as the world's most sustainable managed corporation.
So, what's the key to Sony's success on sustainability? Dialogue with investors is crucial, explained Kenichiro Yoshida, the company's chairman and CEO.
With elected governments it's a bit different, but even then the way forward is changing our mindset. Farrell said that they are thinking less about who will be in power to set regulations, and more about the values of the people that put the politicians in power to come up with sustainability policies. If you know the people, you can predict how the governments they elect will act in the future.
Watch the above video to learn more insights from our panelists on COVID-19's impact on global sustainability efforts.
GZERO Summit on geotech: US-China tech Cold War or “stable tension”?
Just a decade ago, China's rise — accomplished on the back of globalization — was welcomed by most of the world. That has changed over the past five years, especially in the realm of technology.
Now, China and the US, the world's two largest economies, are fighting what many are calling a "new Cold War" on tech, Eurasia Group President Ian Bremmer said during the panel discussion on geotech at the 2020 GZERO Summit in Japan.
Bremmer believes that this conflict won't end globalization but it is a confrontation that could dramatically change the trajectory of globalization as many countries are forced to pick sides on issues like artificial intelligence, data, or 5G.
One of these countries, for instance, is Japan, China's neighbor and a staunch US ally that is immensely worried about the growing tech confrontation between Beijing and Washington. For Japan, the coming "digital protectionism" is a huge threat, noted Hiroshi Kajiyama, the Japanese minister of economy, trade, and industry.
Former Google CEO Eric Schmidt prefers to call the US-China competition to lead global tech a "stable tension" in which both sides are racing to create global platforms. It's not a war because there still is some cooperation, but without trust because China plays by different rules.
Western players, including America, are used to playing by the rules set by institutions, but those matter much less than they used to in the era of cyber-awakening, when people have become empowered do do anything by the internet, suggested Jane Holl Lute, president and CEO of SIPCA North America.
For Bob Moritz, global chairman of the PwC Network, what Schmidt refers to as a "stable tension" is becoming increasingly volatile and often feels like it's approximating a Cold War, but at the end of the day companies around the world, and especially in China and the US, simply need to find ways to achieve digital transformation as Americans and Chinese battle it out in tech.
To do so, he said, firms must leverage the power of tech, innovation, and skills.
In the US-China tech rivalry, one major difference is strategy, or the lack of one. Bremmer said that China knows exactly what it wants to do on tech, while in the US everyone is angry about some aspect of Big Tech (size, profits, news on social media) but there's no single national strategy, which makes it harder for the US to compete with China.
As the "stable tension" continues over the next decade or two, Schmidt predicts that the power of new tech will favor a small number of players in the US and China, hollowing out the middle class of nations in favor of large, highly organized initiatives supported by big countries and economies. That geopolitical order will soon become unstable because the current system was set up to reflect a post-war liberal international order that doesn't call the shots anymore, Bremmer noted.
G-zero, he warned, cannot exist much longer before something breaks.
Watch the above video to learn more insights from our panelists on our vulnerability to cyber attacks, the promise of cyber deterrence, the US-China decoupling, how to fix US Big Tech, and why Europe can't create global tech platforms.
GZERO Summit: Fighting COVID-19
Almost one year since the coronavirus upended the world, what's the current state of play on ending the pandemic, and what challenges we face towards vaccinating everyone in 2021.
Fortunately, as the virus has grown exponentially, so has science, Dr. Larry Brilliant, CEO of Pandefense and one of the world's most highly regarded epidemiologists, said during the panel discussion on fighting COVID-19 at the 2020 GZERO Summit in Japan.
Science, he explained, has accomplished the audacity of developing successful vaccines in record time. That's why he's optimistic about ending the pandemic next year in many parts of the world, even if the next 2-3 months will be very bad mainly in Western countries.
Part of the reason for his optimism is the great news about the efficacy of vaccines like the one developed by US pharmaceutical giant Pfizer and German company BioNTech, which the UK started administering to its citizens on Tuesday.
For Angela Hwang, president of Pfizer's biopharmaceuticals group, developing the vaccine is just the start. Now enough people need to get vaccinated to achieve the herd immunity necessary to stop the virus in its tracks.
To build sufficient trust in the drug to achieve that goal, she said, everyone needs to be on board. It'll take not only the private and public sectors working together but all of society committed to making everyone understand that vaccines work, and that you must get inoculated at a moment of extreme resistance in some countries.
Also, mass vaccination means it must happen across the developing world at the same level as in developing countries. The world is just too interconnected to leave anyone behind, noted Gargee Ghosh, president for global advocacy and programs at the Bill and Melinda Gates Foundation.
Even where many people are suspicious of vaccines, she added, ultimately the clear benefits of restarting economies will hopefully convince those who fear rolling up their arms.
Vaccinations likely won't be a problem in Japan, where Yasutoshi Nishimura, minister, in charge of economic revitalization, underscored how the majority of the population has heeded their advice to practice social distance, wear masks, stay at home and shut down businesses despite no mandatory orders to do so.
Watch the above video to learn more insights from our panelists.