CANADIAN Prime Minister Mark Carney’s speech at Davos was one of the clearest enunciations of the strategic adjustment countries, especially middle powers, need to make when faced with a bullying superpower in a fractured world. Without naming the US, he stressed the need for middle powers to resist economic coercion by powerful countries by acting together because if they didn’t, they will ‘not be on the table but on the menu’.

While Carney spoke pointedly about the imperative to adapt, countries have already been adjusting to new geostrategic realities and power shifts in a transforming world. Adjustments are of different kinds, from diversifying trade partners to shifts in geopolitical alignments. Some trends have been accelerated by President Donald Trump’s policies, but they were already in evidence in an increasingly multipolar world characterised by structural changes, new power balances and shift in economic power from the West to the rest.

Consider how the EU and others have been boosting trade with China and how Beijing has been diversifying its markets. In 2020, China overtook the US to become the EU’s biggest trading partner. The EU is also China’s largest trading partner, and not as often thought the US. With Washington pursuing a contain-China strategy and tariff war, Beijing has been diversifying its export destinations away from America, a policy it stepped up after Trump’s return to power. This has paid dividends. It accounts for China’s record trade surplus of $1 trillion today with a boom in exports to Southeast Asia and Europe while Chinese exports to the US have declined. The ‘strategic’ trade and energy........

© Dawn