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Expect the increased prospects for greater trade and finance fragmentation will increasingly pressure some of the stronger emerging markets to push back against China’s pitch to offer a new approach to development. Previously the stance of many EM countries was “we don’t want to choose”, but on a closer look it really looks more like “we cannot afford to choose”. Take Indonesia for example. China is their largest trade partner, but only accounts for 1/4-1/3 of trade. Between now and 2045 they are relocating their capital city. Difficult to consider a large-scale project of that nature while also becoming a target for an economic proxy war especially where one party is on the cusp of throwing all regard for WTO rules out the window. US-China competition might just be a massive game of chicken. However, emerging and developing countries are also held hostage in the middle.

Mar 26, 2023
at
12:36 AM