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Is the 3rd WORLD WAR between the USA x CHINA inevitable? The balance of power and the direction of geopolitics enters a new phase in our era!

Written by Paulo Nogueira
Published 19/06/2024 às 13:40
Tense geopolitical scene depicting the USA and China on the brink of World War III, with flags, iconic and military elements.
The balance of power between the US and China enters a new phase, with the imminent threat of a global conflict

The planet's two economic and military super powers have never been so close to an armed conflict, mainly due to territorial issues and alliances. They are mistaken if they think that Brazil would be exempt in the event of a possible conflict between the USA and China!

Geopolitics plays a crucial role in formulating strategic decisions that shape international relations and global power dynamics. Although we often think that decisions are predominantly economic, in fact, they are heavily influenced by political factors. In this article, we will explore how political elements influence decisions, the power dynamics between the US and China, and the implications of a possible conflict between these two powers.

Political, economic and social decisions are interconnected in complex ways. The discourse that decisions are purely economic ignores the significant influence of politics. Political factors, such as individual values, beliefs and goals, play a central role in decision-making. For example, a government may prioritize national security over immediate economic gains, reflecting the importance of political over economic considerations.

Power Dynamics between the US and China

The power distance between the US and China is a central point in geopolitical analysis. Historically, transitions of power between great powers rarely occur peacefully unless one of them collapses. In the current scenario, both the US and China are strengthened, which increases the possibility of conflict. China's rise as an economic and military superpower challenges US hegemony, creating an environment of growing rivalry.

The Influence of Politics on the Economy

Politics has a profound impact on the economy and business operations. Political decisions can affect regulation, taxation, trade and investment, shaping the economic environment. For example, economic sanctions imposed for political reasons can destabilize markets and affect companies globally. Therefore, it is essential to understand political influence on the economy to make informed decisions.

No decision process is purely rational; it involves political elements that reflect the values ​​and objectives of decision makers. Decisions in the market, for example, are influenced by political factors, such as government policies and international relations. Investors and companies look for governments that prioritize perceived benefits for the market, showing how political factors influence economic decisions.

Human and Political Interaction

Politics is present in all human interactions, from personal relationships to professional environments. It is not limited to party politics, but encompasses beliefs, values ​​and daily negotiations. For example, in a work environment, decision-making can be influenced by power dynamics, alliances and individual goals, reflecting the presence of politics in various aspects of life.

Geopolitics is a crucial element in analyzing risk and predicting future developments. Incorporating geopolitical analysis into decision-making processes is essential to understanding global challenges and opportunities. For example, conflicts such as Russia and Ukraine illustrate how geopolitical events can affect financial markets and investment decisions.

Economic Logic

Two economic logics prevail: the market perspective, focused on interdependent relationships, and the competitive political perspective, which sees international relations as an anarchic and competitive environment. Economic interdependence is not always mutual and can be measured using market principles. For example, in commercial relations between Brazil and China, Brazil's dependence on exporting products to China China reveals power dynamics at play.

The analysis of economic relations often neglects power dynamics. In a domestic market with established rules, the win-win situation is valid. However, on the international stage, where clear rules are absent, power dynamics prevail. For example, during crises, those who control essential resources hold power, illustrating the importance of understanding these dynamics in international economic relations.

International Economic Competition

The dependence between countries in terms of trade can give one power over the other in times of crisis. Brazil's dependence on soybean exports to China, for example, highlights the need for a deeper analysis to understand who really depends on whom. The strategic importance of certain goods can determine power in a commercial relationship, especially in specific contexts of national survival.

The transformation of the global supply chain highlights the need for diversification and the risks associated with dependence on a single country. Recent global events, such as the pandemic and the war in Ukraine, have revealed the dangers of relying on a single supplier. The lack of diversification in Brazil's trade relations, especially its dependence on China, highlights the country's vulnerability to global changes.

Geopolitical Considerations

Brazil's political and ideological alignment with China contributes to its vulnerability and dependence. Diversifying trade relationships and avoiding excessive dependence on any one country is essential for economic resilience. For example, even if aligned with a democracy, Brazil must avoid excessive dependence to maintain its independence and economic security.

Understanding the logic of power is crucial to understanding the futility of waging war. Losing economically in the logic of power is only acceptable if the enemy loses even more. The power dynamics between the US and China, where the power gap has narrowed in China's favor, highlights this logic. The US failure to transform China's economic strength into political power reflects the complexities of international relations.

Power Transition and Potential Conflict

Historically, transitions of power between great powers do not occur peacefully unless one of them collapses. The current path of US-China relations suggests a possible confrontation unless one of the countries collapses. This potential scenario is not just limited to a US-China conflict, but could lead to a global conflict, involving multiple nations and internal and external factors.

Global stability depends on the continued strength of USA and its allies. If a collapse of any of the major powers occurs, peace may prevail, but the possibility of global conflict remains present. Maintaining a balance of power is essential to avoid conflicts, similar to the game of “War”, where players come together to weaken the strongest.

China's Ambitions and Potential Tension Points

China's ambitions, including the unification of Taiwan, are points of tension that could test the global balance of power. The U.S. response to these ambitions could send a signal to the world about its strength and influence global power dynamics. If the US does not intervene to save Taiwan, countries like Japan may feel isolated and forced to increase their own power or align themselves with China.

An imbalance of power can lead to an increased likelihood of conflict and instability. A “security dilemma,” where nations feel compelled to strengthen their defenses due to mistrust, could lead to an arms race. The potential development of nuclear capabilities

indicates that the possibility of a conflict cannot be ruled out. China, with its rapid economic and military growth, has been closing the power gap with the US. This shift favors China in terms of relative gains, although both nations have benefited in absolute terms.

The Influence of Politics on the Economy

Politics exerts a substantial influence on the economy and business operations. Political decisions can significantly affect the daily functioning of the economy and companies. For example, economic sanctions imposed for political reasons can paralyze entire sectors of an economy. Therefore, understanding the political elements in economic decisions is essential for a complete analysis of power relations.

Human and Political Interaction

Politics is not limited to the party sphere; it permeates all aspects of human interaction, from personal relationships to professional environments. Daily decisions are influenced by personal values, beliefs and negotiations, reflecting the ongoing presence of politics in everyday life. This human aspect of politics highlights the complexity and depth of the decisions that shape our societies.

Geopolitics in Decision Making

Geopolitics is a crucial element in analyzing risks and predicting future developments. Incorporating geopolitical analysis into risk assessment and decision-making processes is essential to understanding the possible consequences of global events. Geopolitical forecasting faces challenges, especially in quantifying qualitative variables, but it is a valuable tool for gaining insights into the future.

Impact of Geopolitics on Investments

Geopolitics has a direct impact on investments. Understanding geopolitical dynamics is critical to making informed investment decisions. For example, the Russia-Ukraine conflict significantly affected gold investments, illustrating how geopolitical events can influence financial markets.

Economic Logic and Power Relations

There are two distinct economic logics: the market perspective and the competitive political perspective. The competitive political perspective involves international relations in an anarchic environment, where economic interdependence may not be mutually beneficial. The relationship between Brazil and China is an example of this. Although Brazil depends on exporting soybeans and iron ore to China, if China can obtain these products elsewhere, the relationship is one of dependence, not interdependence.

Economic Power and Dependence

Economic dependence can give one nation power over another in times of crisis. Whoever controls strategic assets holds the power in a commercial relationship. This dynamic is visible in the commercial relationship between Brazil and China. Analyzing these relationships through economic logic reveals the power dynamics at play.

International Economic Competition

Economic relations on the international stage resemble a competition without clear rules, where vulnerable countries can face severe consequences. Recent global events, such as the pandemic and the war in Ukraine, have revealed the risks of relying on a single supplier, highlighting the need for diversification in global supply chains.

Global Supply Chain Transformation

Global supply chain transformation emphasizes the need for diversification and the risks associated with dependence on a single country. The lack of diversification in Brazil's trade relations, especially its dependence on China, is a significant concern. Brazil's ideological and political maturity is an important factor in preparing for global changes.

Geopolitical Considerations

Brazil's political and ideological stance, especially its alignment with China, contributes to its vulnerability and dependence. Diversifying trade relations and avoiding excessive dependence on any one country is crucial for Brazil's economic security.

Economic Argument and Logic of Power

The economic argument, when analyzed through the logic of power, reveals the futility of waging war. Both countries have a lot to lose economically. The US economic transformation in relation to China's economic opening has not led to the expected democratic transformation. Instead, China has become more authoritarian and conservative, reflecting a failure of the assumption that economic strength can transform political power.

Potential Conflict and Transition of Power

Historically, transitions of power between great powers do not occur peacefully. The current trajectory between the US and China points to a possible confrontation unless one of the powers collapses. This potential conflict is not limited to the US and China, but could lead to a global conflict, with multiple nations involved.

Implications for Global Stability

If the US and its allies remain strong, global conflict can be avoided. The stability of power and the inclination to maintain strength are essential to preventing conflict. China's desire to unify Taiwan it is a potential point of tension that could test the global balance of power. The US response to China's ambitions will send a signal to the world about its strength and influence global power dynamics.

Power Dynamics in the World

The shift in power dynamics has significant implications for nations like Japan and the US. If the US does not intervene to save Taiwan from China, Japan may feel isolated and forced to increase its own power or align itself with China. The power imbalance can lead to increased conflict and instability, with nations strengthening their defenses in response to perceived threats.

Global Ramifications

The global repercussions of power shifts, such as the U.S. abandonment of Taiwan, could affect the security assessments of other nations. Preparing for and responding to these changes is crucial to avoiding a global crisis. The transformation of the global supply chain and the diversification of trade relationships are essential for economic stability.

Final Words

The complexity of US-China relations and the influence of geopolitics on economic decisions highlight the importance of in-depth analysis to understand the possible consequences of a global conflict. Understanding power dynamics and political factors is crucial to preparing for and responding to an ever-changing global landscape. Balance of power, preparedness for global change, and economic diversification are essential for future stability and security.

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Paulo Nogueira

With a technical background, I worked in the offshore oil and gas market for a few years. Today, my team and I are dedicated to bringing information from the Brazilian energy sector and the world, always with credible and up-to-date sources.

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