Enter the Dragon: The new global economic order and what it means for Europe

Trade wars, sanctions, hostile company takeovers, currency manipulations — a new economic order is emerging. To paraphrase Clausewitz: the economy is the continuation of war by other means. The world economy has become the key battleground for geopolitical hegemony between the US and China. And Europe is stuck in the middle. It better find a strategic orientation in this new economic landscape, before it turns from being an economic player into an economic playground for great powers.

The international economic order is in the midst of a tectonic shift. Having built and dominated the global economic landscape for centuries, the West is steadily losing influence. The economic centre of gravity is moving to the East. China is the main force behind this development. In three core economic areas, China is making a run for economic hegemony.

First up: trade. Back in the 1980s China’s share of world trade amounted to a meagre one percent. Fast forward to today that one percent has grown into double-digits (12%). China has become the world’s eminent trade power and is displacing the United States. For more than 130 countries in the world it is the most important trading partner. By next year, it is expected that China will even supersede the United States as the European Union’s most important…