China tops Eurasia Group’s list of 2018 geopolitical risks

China tops Eurasia Group’s list of 2018 geopolitical risks

China’s global leadership, missteps in relations with countries including North Korea, and a technology Cold War are some of the top geopolitical risks we face in 2018, according to Eurasia Group, a leading political risk consulting firm.

“In the 20 years since we started Eurasia Group, the global environment has had its ups and downs,” writes Eurasia Group president and CBS News senior global affairs contributor Ian Bremmer. “But if we had to pick one year for a big unexpected crisis—the geopolitical equivalent of the 2008 financial meltdown—it feels like 2018.”  

“China loves a vacuum” topped the list of 10 risks, pointing to a “power vacuum” the United States is creating with its “America First” stance in the global arena. It’s a vacuum that China is now filling.

“They have the strongest leader in Xi Jinping they’ve had at least since Mao [Zedong]. And because the United States is America first, it’s transactional. It’s unilateral. It’s undermining a lot of alliances. You put those things together and suddenly you actually have a China that is willing to engage in what is increasingly a geopolitical vacuum,” Bremmer told “CBS This Morning” on Tuesday. “In other words, this is the first time we’ve ever seen as U.S. leadership erodes, no one else has been standing up. Now the leader of China is saying we’re prepared to stand up whether it’s on climate or the global economy, you know, regional security, you name it, that’s a big change for the world.”

Bremmer said “Americans are in many ways abdicating” and China is attracting countries that want alternatives to U.S. partnerships “because the Chinese are writing really big checks.”

“You just saw [President] Trump yesterday tweeting and saying Pakistan, we’re not going to give them money anymore, they’re not doing anything on terrorism. You know what? Trump has a point. We need more from the Pakistanis, but the Chinese are already by far the most important economic contributor to Pakistan,” Bremmer said. “They didn’t have those sorts of options five, 10 years ago. This is a different environment and we’re just not used to having someone else out there that says, ‘Oh, the Americans aren’t the only game in town anymore.'”

As for the global technology Cold War, the Eurasia Group report says the race for breakthroughs is on between the U.S. and China, whether it’s in artificial intelligence or market dominance.

“The different thing is in the United States, it’s not Washington. Our government isn’t investing in AI. Our companies are. In China, it’s the Chinese, and increasingly with a trade conflict between the United States and China that’s looming, that tech play is going to be a fragmentation. And other countries around the world, other companies are going to be looking and saying, who do we need to play with? That confrontation is going to play out this year,” Bremmer said.

Another geopolitical risk for 2018 is Mexico, which Bremmer said will become a “really big topic.” It’s election year and anti-American sentiments are rising.  

“No, they’re not going to pay for the wall but they’re worried about NAFTA, that’s 40 percent of their trade,” Bremmer said. “We’re saying we want to renegotiate and it’s going to get politicized. We all know when topics that really matter to you happen to line up with elections, that’s when you can make a lot of big promises that can go badly. Mexico looks to come out of this year in a much more dangerous position than the entry.”

Meanwhile, Iran is also entering a new year with violent protests against the Islamic Republic’s leadership. It started with a single demonstration over economic hardship in the eastern city of Mashhad, but the uprisings quickly spread to at least 50 cities in five days, according to CBS News correspondent Elizabeth Palmer. Bremmer says the protests will have geopolitical implications.

“The bigger danger for Iran right now is this is happening in an environment where the Saudis have very strong U.S. support and where the Americans aren’t trying to do a nuclear deal. In fact, we’re threatening to rip one up. So it’s going to be much more polarized,” Bremmer said. “The hard liners will feel like they need to take more control, crack more heads, even though this isn’t nearly as much of a threat domestically. I think it’s more of a geopolitical challenge accordingly in the region than it is a danger that the Iranian regime is about to crumble.”

One country that didn’t make the list may surprise some: Russia. Bremmer said the country wasn’t included in the rankings “for the same reason that Trump’s tweets aren’t on this list.”

“We talk about them a lot, but the actual impact on the global economy, the global environment is less than you think,” Bremmer said. “The Russian economy is smaller than Canada’s. It’s smaller than Italy’s. And you know, Ukraine – [Russian President Vladimir Putin] took Ukraine? No. Most of Ukraine he lost. And it’s oriented toward the west. It’s not oriented towards the Russia. He’s largely out of Syria. Putin is going to make some headlines, he’s got an election, he’s going to win – surprise, surprise – but it’s actually not that big of a deal.”

Here’s Eurasia Group’s Top Risks for 2018: 

1. China loves a vacuum
2. Accidents
3. Global tech Cold War
4. Mexico
5. U.S.-Iran relations
6. The erosions of institutions
7. Protectionism 2.0
8. United Kingdom
9. Identity politics in southern Asia
10. Africa’s security 

Read Eurasia Group’s full report here.   

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