Reflections on War and Peace (1) – A Scenario for a Multipolar World Order
The confrontation in Ukraine demonstrates that globalization has already peaked, elevating supply chain management and reshoring policies into key strategic drivers. Our earlier articles had anticipated this (2-4). With military action currently underway (5), the world seems to have passed a geopolitical turning point that businesses have remained slow to acknowledge. This article makes the case for the necessity of a deep 2023-2026 strategy review addressing the incoming “Great Disconnect” between the East (6) and the West (7). Strategic planning should factor in long forgotten risks such as persistent inflation, fragmentation of global markets and regionalization of supply chains. The transition towards a multipolar world order stokes the embers of a potential hot war. Catalytic events include the upcoming 2024 US elections and the National Congress of the Chinese Communist Party in 2027. This scenario has significant implications for companies within the chemical industry. Invest, divest, and reposition while the window of opportunity is still open. The time to act is now.
The Risk of a Sino-American Hot War: 75%
With Russia dominating the news cycle recently, it is easy to forget that China remains the full-spectrum peer competitor of the US (8). Russia remains a global source of commodities and ranks second to the US in terms of military power. However, with a GDP of less than 1/10th of the United States’, she is not a credible threat in and by herself. To compensate for her economic shortcomings, Russia has forged an alliance with China that bears profound negative strategic implications for the West. This is why leading thinkers of American realpolitik see escalation of the war in Ukraine as counterproductive to long-term EU and American interests (9, 10).
Pragmatism leans on some undeniable facts: China’s GDP caught up and started racing neck and neck with the US since 2014. She eventually stood victorious in 2017 as the largest economy in the world at purchasing power parity (11). The changes made under President Trump’s administration proved tardive and ultimately did not deliver. China’s GDP (at PPP) grew unstoppably to (Dollar)27 TRN versus the US’ (Dollar)23 TRN by the end of 2021 ...