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Global evolution of international relations

Author: Dr. Rolf Clauberg - last changes: 02.03.2023

To understand the present situation in international relations it is necessary to analyze the changes for its dominating economic and military powers - the USA, China, and Russia. The changes in global trading patterns and economic relations in the last 10 to 20 years reveal a strong growth in the economic market power and global trading relations of China [1][2]. A development which led to the present trade war between the USA and China. In the last 30 years, after the breakdown of the Soviet Union, the USA was the sole political, military, economic, and scientific leader of the world, from the end of World War II it was already the strongest economic power. The developments in China are now challenging this position. The important question is whether this will lead to a bi-polar or multi-polar world order. In the first case, a bi-polar world confronting the USA and China, we can expect serious issues in international relations. The second case, a multi-polar world with several independent powers, may be much more positive for international relations.
There are multiple factors which determine the international influence of states. The influence always depends on their importance for large groups of other countries. This importance is usually determined by multiple factors like economic market power, (i.e. importance as a market to which other countries can sell their products and services or from which they can buy raw materials, components, complete products, and services), geographies in which the country controls important access points to trade routes (e.g., the Suez or Panama Canal, the Bosporus), historical connections between countries (e.g., the British Commonwealth), and military associations like NATO. In this article we will concentrate on the economic and trade aspects. These aspects of course may also depend on geographic facts like access to trade routes.

Picture - GDP
GDP evolution

Links to references:

  1. World Bank data on GDP
  2. World Trade data
  3. World Bank list of GDPs
  4. Visual Capitalist presentation on trade evolution
  5. The Global Value Chain Development Report 2019
  6. TOP 500 statistics
  7. China on the moon
  8. R. Clauberg, “Globalization and technology evolution: impact on economy and society of the USA”
  9. World Bank, “Belt and Road Initiative.”
  10. AIIB - Asian Infrastructure Investment Bank
  11. russian military information
  12. Russia’s Battlefield Success in Syria
  13. Joint Russian-Chinese aircraft patrol
  14. Financial Times Interview mit Henry Kissinger
  15. Ray Dalio investment manager
  16. The changing World Order - Why Nations succeed and fall, Ray Dalio, 2021
  17. Video from Ray Dalio about changing world orders in the last 500 years
  18. University of Cambridge - A World divided
  19. University of Cambridge - a shorter report from Cambridge
  20. Press Release by Bennett Institute of the University of Cambridge
  21. ASPI’s Critical Technology Tracker - The global race for future power
The chart from the World Bank comparing the Gross Domestic Products (GDPs) of the USA, China, India and some other countries [1] clearly shows a sharp increase in the value for China starting at about the year 2005 which substantially decreased the gap to the USA. However, all of the other large population countries considered in this chart stay far below the values for the USA and China and they also miss the substantial increase in GDP observed for China. If we look at the list of countries arranged according to the size of their GDP in US Dollars in 2019 we find the sequence USA, China, Japan, Germany, India, … [3] with China at about 67% (in 2021 already 77%) of the value for the USA, Japan at only 24% (in 2021 already only 21.5%), Germany at 18%, and India at 13%. Hence, the USA and China in GDP are far ahead of the other countries. If we look at the trade data (exports and imports) in [2] we see that China is the largest exporter and the USA the second largest, while the USA is the largest importer and China the second largest. In total trade (exports plus imports) China is the largest trader of the world. If we look at the number of trading partners for which the USA or China is the more important partner [2] we see that in 1999 China is quite unimportant and only relevant for its nearest neighbors while for the rest of the world the USA is the far more important trading partner. In 2018 the situation is reversed with China as the more important trading partner for all of Asia and Australia, as well as for South America and Africa, while Europe is split with Germany, Spain, the Netherlands, Poland, Sweden, and the whole Balkan having more trade with China and the UK, Ireland, France, and the Baltic states having more trade with the USA. There is a visual presentation of this evolution from 1980 to 2018 on the internet [4]. Another source which reveals the important evolution of the international role of China is its role in the global supply or value chains. Fig. 1.15 in the “The Global Value Chain Development Report 2019” [5] by the World Bank and the World Trade Organization shows that between 2000 and 2017 China replaced Japan as the global supply hub for all of Asia in direct trade as well as in complex value chains. The figure also shows that China in 2017 is a stronger hub than Japan in 2000. Taking all these observations together, it looks as if the evolution of China towards international importance is unique and that presently no other countries are visible which could challenge the USA and China in their economic importance and trade roles.
Besides the evolution of GDP and trade there are other evolutions in China which were necessary to achieve China's present position. These are the related evolution of China’s role in science and technology. Evidence for such an evolution is visible in China's computer systems. In 2013 China's Tianhe-2 computer was declared the fastest computer in the world [6]. This computer used a Chinese system to connect 260'000 Intel processors into a single entity. As a reaction to this announcement US President Obama banned the sale of these processors to China. In 2016 the Chinese computer Sunway TaihuLight was declared the fastest computer in the world [6]. The new computer was built with new Chinese processors in a completely Chinese system. Another point illustrating the evolution of Chinese technology is the operation of its spacecraft on the far side of the moon for more than 1000 days[7]. Also, a report from February 2023 by the Australian Strategic Policy Institute (ASPI) [21] states that China is the world leader in 37 of the 44 most important technologies.
As a final point we want to analyze whether the economic evolution of China was an automatic result of the size of its internal market or the result of explicit strategic actions by China. The evolution of the Chinese economy seems to have started around the year 2000. Figure 8 of [8] shows that in 2000-2001 the manufacturing value-add of the USA was at a peak of about 27% of the total world value while that of China was at about 7%. In 2009 both met at about 18% of the total world value, and at 2013 China reached 24% of the world value and the USA was down to about 16%. However, Figure 10 of [8] shows that even for the USA the manufacturing value-add was growing in dollar terms. We can therefore conclude that a lot of labor-intensive manufacturing shifted from the USA to China, caused by the lower cost of human labor in China, while automation of manufacturing dominated within the USA. The evolution of China’s role in complex global value chains points to a later shift of labor-intensive exports to neighboring countries and a change to more capital- and technology-intensive exports from within China. Also the start of the “One Belt One Road initiative” [9] proposed by China in 2013 aims to improving the infrastructure of the supply chains which allow the transport of Chinese exports to its buyers as well as of its imports to China. The same goal is supported by the foundation of the Asian Infrastructure Investment Bank which started its operations in 2016 [10]. In total this clearly looks as if at least the evolution after the start of manufacturing in China was based on specific strategic steps by China, but probably already the initial opening of China to direct foreign investment for manufacturing was already actively supported by the Chinese government.
Based on this finding, it looks possible that other countries may follow the Chinese evolution and based on strategic steps fitting their own specific situation may also evolve into global players and finally create a multi-polar world. However, this will still take time. It is not happening now.

Now there are many signs that the changes in international relations and economic importance are not mirrored in the present organizations of the world. The first example is the United Nations (UNO). In June 2022 there were 193 member countries. These include Nauru (10,000 inhabitants), San Marino (30,000 inhabitants), Liechtenstein and Monaco (40,000 inhabitants each). But also China (1.7 billion inhabitants) and India (1.7 billion inhabitants). In the General Assembly, each member country has one vote, regardless of the number of people represented by that country. In 2022, the European Union has 27 member countries, all of which are members of the UN. That means the EU has 27 votes representing 477 million people. However, China and India with a total of 3.4 billion inhabitants have only 2 votes together. The UN Security Council has 15 members, 5 of which are permanent members with veto powers: China, USA, Russia, France and Great Britain. All were winners of World War II (China through the Sino-Japanes war) and founding members of the UNO in 1945. The other 10 members of the security council are each elected for 2 years.
The second example is the so-called G7 group. This informal group is used to discuss many important economic and financial aspects between all the countries of the world and it prepares many economic and political decisions by its members. The table below shows the list of the countries ranked according to their GDP values. 7 of the 9 countries listed are members of the G7 group, but China, ranked as number 2, and India, ranked as number 6, are not. But France, Italy, and Canada, all with lower GDPs as India are G7 members.
The total of all G7 members represent less than 10% of the world population and Japan is the only asian country in the group. There are no countries from Africa or South America. On the other hand, just the 5 largest countries from Asia, Africa, and South America together - China, India, Russia, Brasil and South Africa (the BRICS group) - represent more than 40% of the world population. The BRICS group was officially founded in 2006.

Country GDP 2020 (% of world GP) GDP Ranking Population 2018 (% of world) G7 member
USA 24.7 1 4.14 Yes
China 17.4 2 17.78 NO
Japan 6.0 3 1.60 Yes
Germany 4.5 4 1.05 Yes
United Kingdom 3.2 5 0.84 Yes
India 3.1 6 17.14 NO
France 3.1 7 0.85 Yes
Italy 2.2 8 0.77 Yes
Canada 1.9 9 0.77 Yes

After analyzing the background of the trade war between the USA and China, we must look into the relations of both countries to Russia to understand the present global situation.
Economically Russia is no threat to the USA. However it disturbs USA ambitions and political goals in two ways. Firstly, dependance of a large number of European Union countries on energy deliveries from Russia. Secondly, Russia's military development and activities disturb USA activities. Russia is extensively modernizing its military systems, especially its nuclear triad of sea- land- and air-based missiles[11]. One goal of the military development of Russia is to guaranty that the Russian system still can completely destroy any attacking enemy, even if a large part of its military systems would be eliminated in a surprise attack. To achieve this its triad of sea-, land-, and air-based missiles is heavily automatized. The non-nuclear parts of Russia’s modernized military were already used successfully to prohibit success of USA military plans in the middle east[12]. In addition, already in 2019 there were joint military maneuvers with China[13]. However, the USA still follows its worldwide expansion strategy as described and developed by Zbigniew Brzezinski (1966-1968 counselor to US President Lyndon B. Johnson and 1977-1981 security advisor to US President Jimmy Carter) in his book "The grand chessboard: American Primacy and its geostrategic imperatives". But, the US leadership claim in Brzezinski's strategy is based on the requirement of a clear and visible global leadership role in the military, economy, trade and technology. However, such a clear leadership role no longer exists. So, of course, this strategy is anathema to China and Russia, and may be unacceptable to many other countries as well. Therefore, the current escalation is not a war by Russia against everyone, but a struggle for US supremacy in the world. This is also clear from a recent interview with Henry Kissinger (former Secretary of State and former US National Security Advisor)[14]. In it he makes three important points. Firstly, the aspects and problems of the "divide and conquer" strategy of the USA, against the current cooperation between China and Russia, secondly, that the interests and supremacy of the USA are clearly at stake here, and thirdly, the danger of the new weapons that surpasses anything previously imagined.
In this context, the study by the New York investment manager Ray Dalio becomes interesting[15]. He examined the reasons for unexpected stock market crashes and found that these unexpected events happened before but were unexpected because they repeated on a time scale larger than that of a human life. Only by studying longer time scales in history he could understand them. He found multiple cycles with different time scales. The cycle with the largest time scale describes the rise and fall of empires, which of course leads to changes in the world order. I do not want to go into the details of his findings, you can look them up yourself [16][17]. There are only two points I want to mention - he predicts, that we are now at the change from the American empire to the Chinese one, and he finds that such changes are often associated with times of great international conflicts.
A new report from the "Bennett Institute for Public Policy" at the University of Cambridge (UK) [18-20] shows a division in the world that has clearly deepened. The version in [19] clearly points out that the group with a strong inclination towards the USA comprises around 1.2 billion people (16% of total), while the opposite group comprises around 6.3 billion people (84% of total). The pro-USA group corresponds to the so-called economically developed, rich countries, the opposite group to the poorer developing countries.
If we look at all these aspects together, the current situation can easily escalate into a third world war.

© Clauberg R., 2022-2023 Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.