Russia’s invasion of Ukraine has accelerated a series of underlying trends in world politics that are leading us into a dangerous new world order. This new order is not arriving already formed, and there will be interruptions and reverses along the way, but four key features are coming into view:
First, the return of inter-imperialist rivalry as the key factor in world politics and an end to the illusion promoted by some liberals that the expansion of world trade and investment has rendered geopolitical competition a thing of the past.
Second, an intensive push by both the US and China to rally second-tier imperialists and others behind their banners to strengthen and expand their geopolitical blocs. The scope for smaller states to balance between the two big imperialists is dwindling.
Third, the subordination of economics to politics as the rival imperialist powers try to reduce their dependence on each other. When national security and international supply chains conflict, national security comes first. Energy is leading, but other sectors are following.
Fourth, the increased possibility of a new regional or world war involving two or more imperialist powers. Even if such a war may not be imminent, the decisions being taken by governments today are all shaped by their belief that one is likely.
The war in Ukraine has brought war and its miseries back into the heart of Europe. Heavy artillery and missiles are once again being used against major cities. Despite the onslaught on its neighbour, Russia has not prevailed. The Ukrainian resistance has pushed back Russia’s invasion.
The Biden administration has seized on President Putin’s aggression to weaken Russia. It has imposed deep and painful sanctions and directed tens of billions of dollars of military and financial aid to Kyiv. Ukraine’s success, with Western backing, has allowed the US to recover some of the prestige it lost after its disastrous Middle East wars and occupations, which culminated in its panicked withdrawal from Afghanistan in 2021.
The US has attempted to hurt Putin as much as possible without provoking a direct clash between the two powers. The Biden administration rejected Ukrainian calls to impose a no-fly zone in the early days of the war. It has been slow to deliver long-range weapons systems out of fear that Ukraine might use them to push the war across Russia’s borders. The US certainly does not regard Ukraine as worth fighting a war over.
The Ukraine war has illustrated the US’s abiding power as much as it has revealed Russia’s weakness. The US has the most powerful military in the world, and its weapons systems and military intelligence have been used with devastating effects by Ukraine. The US-led sanctions against Russia have also demonstrated American financial firepower in the form of US control over the international flow of money and credit. None of its allies or enemies can mobilise anything like its resources, and the Biden administration has used this edge to draw its partners behind it and to intimidate its enemies.
Russia’s invasion has brought home to every European government that the US security umbrella remains indispensable. The war has undermined any pretensions of the German and French ruling classes that the European Union might be emerging as a uniquely independent imperialist bloc after the lengthy period of US continental domination in the post-WWII and post-Cold War eras. America has mobilised its power to make the European powers dance to its tune. Sanctions on Russian gas have demonstrated the limits of Germany’s economic strategy of trading with Moscow while relying on the US for military security.
Indeed, the war has forced the German government, despite some resistance, to go along with the US’s broader geopolitical priorities, including switching out of Russian energy, even as this comes at a cost, at least in the short term, to German capitalism, which must now pay higher prices for US- and Qatar-supplied gas. The US has also used the war to break widespread opposition in Germany to higher military spending. Germany is set to double military outlays in coming years, and Finland and Sweden have applied to join NATO, significantly strengthening Western military capacity on Russia’s northern borders.
Despite Ukraine dominating the news in 2022, China remains the US’s main enemy. The governments of both countries have been developing their military and industrial strategies on the basis that a clash between the two is likely.
Following the collapse of the Soviet Union in 1991, the US enjoyed an extended period of hegemony in the world system. Most countries found ways to operate within what the US calls the “international rules-based order”—the network of institutions and rules underwritten by US power that shape world politics. The US and China grew and restructured their economies through closer integration in this situation, particularly after China joined the World Trade Organization in 2001.
Those days are now gone. Thanks to the spectacular growth of the Chinese economy and the accretion of state power that has gone with it, China and the US are now contesting for control in the Indo-Pacific: about 60 percent of maritime trade passes through Asia and about one-third through the South China Sea. China cannot tolerate a situation in which it must play second fiddle to the US and be prevented from exercising what it regards as its proper role in the region. Boosting China’s strength in world politics has been one of Xi Jinping’s main priorities since becoming Chinese leader in 2012; this project was confirmed this year by the twentieth Congress of the Chinese Communist Party, which effectively appointed Xi leader-for-life.
China’s ambitions in Asia are a threat to the US. Washington cannot afford to see its Pacific fleet pushed out of East Asia, because this would signal to allies and adversaries alike that it is no longer “the world’s indispensable nation”, as Hillary Clinton once described the US.
Both sides are developing a multipronged strategy to defeat the other. The Biden administration has inherited and intensified the Trump administration’s targeting of China across all domains. The US has worked with its allies to forge an anti-China diplomatic and military bloc in Asia. Chief among these are Japan, South Korea and Australia. All four have concluded that they must push back against China’s growing strategic threat to the US-led alliance, despite the disruption to trade and investment that this might entail.
The US and its allies this year stepped up efforts to integrate their militaries and prepare for war. The US plans to devote the bulk of its navy and air force to the region, and its three regional partners are also significantly increasing their military spending. As a result of the AUKUS pact and associated agreements, Australia is committed to buying a fleet of nuclear-powered submarines and providing the US military with bases for operations against China.
Taiwan will be a flash point. As long as Taiwan is aligned with the US, China regards it as an obstacle to its control over the South China Sea. Xi has watched as the US mobilised NATO against Russia and fears that China might be subjected to the same coercion if it moves on Taiwan. He is doubling down on building China’s military and economic self-reliance to escape this fate.
Taiwan matters to the US in a way that Ukraine does not. After decades of diplomatic evasiveness on the question, President Biden this year repeatedly stated that the US will back Taipei in the event of a Chinese invasion. So the US is pushing NATO to spread its reach into Asia. At the June NATO summit in Madrid, Australia, New Zealand, South Korea and Japan all attended for the first time. The statement issued after the meeting was the first to cite China as a threat, a “challenge to our interests, security and values”. Britain, France, Germany, the Netherlands and Canada all dispatched warships to the South China Sea in 2021-22, an indication that the US is getting its ducks in a row for a forthcoming war.
Growing imperialist tensions have also made apparent the perils for US imperialism of too much economic interdependence. While the country exercised global hegemony, effectively suppressing inter-imperialist military conflict for a period, big corporations could freely choose how and where to invest and trade, with a few marginal exceptions (Cuba and North Korea, for example). This allowed for a partial disarticulation of commerce and statecraft. Even in sensitive sectors such as armaments, where the Pentagon is the main customer, US companies outsourced the production of steel and key electronic components to China. Now, the increased tension forces commerce to align with state priorities as trade and investment barriers go up and more solid geopolitical blocs form. In the recent past, control over global oil reserves was at the forefront of strategic thinking and military deployments, but the front lines today are advanced computational system manufacture and the inputs, such as rare earths and other minerals, required to manufacture them.
For China, there is nothing new about this. Beijing has long regarded business as a handmaiden to national power. China has for years been trying to foster greater self-reliance in core sectors, particularly in computing, semiconductors and satellite technology. This is what underpins the “China 2025” program, which aims to stimulate local production in a range of high-tech sectors.
The US state is now playing catch-up. War in Europe, a potential clash in Asia and the disruption to trade caused by the COVID pandemic have all driven home to policymakers the risks inherent in supply chains involving China. There is bipartisan agreement that the business of imperialism is too important to be left to business people, and that business must bend to the will of the State Department and the Pentagon. As the Biden administration puts it: “Economic security is national security”. “Made in America” is now replacing globalisation as the guiding principle.
The US is attempting to reconfigure its industrial base to bring industry “home”—or at least to its close allies and away from China. Those industries most connected to the military are the priority. In the latter half of 2022, the White House signed off on billions of dollars in subsidies for local production of semiconductors, artificial intelligence, robotics and quantum computing. More tens of billions of dollars in grants will encourage the US production of solar panels, electric batteries and electric cars.
The other side of what one Financial Times commentator described as the US’s “total economic war” against China is its attempt to crush that country’s ability to upgrade its industrial base. In October, the US Commerce Department introduced export controls to limit Beijing’s access to cutting-edge technologies, whether for civilian or military applications. This is a trade war with teeth, propelled by imperialist rivalry. History has shown that trade wars are often just the precursors to shooting wars.
Energy security has been a big driver of imperialist policy, both East and West. This has been a US priority for years: if the Pentagon were forced to rely on imported oil, it could not be confident that its tanks and jet fighters would be able to operate in wartime. The US has now achieved self-reliance in energy and is a major oil exporter and supplier of LNG after billions of dollars in investment in fracking. This gives the US leverage against Europe. European governments have discovered the cost of relying on Russian energy and are now reopening coal mines and extending the life of nuclear power plants that were scheduled to close. The EU now depends on Russia for only 9 percent of its gas, down from 40 percent before the invasion of Ukraine.
China lacks sufficient coal and gas supplies to power industry and must secure a supply from friendly nations. Connections with Russia and Iran have grown this year, but also with Saudi Arabia and the Gulf states, which have bridled at US attempts to regulate Gulf oil exports.
There has been some pushback by US allies against a new world order dominated by US and Chinese blocs. The EU has imperialist interests of its own that do not coincide with those of the US, particularly in relation to China. Washington is trying to reduce trade and investment links with China and to encourage its allies to do the same—from the perspective of the US ruling class, nothing is gained, and much is lost, if US companies withdraw from China only for European capitalists to fill the gap.
So in Biden’s first year in office, the US pressured the EU to scrap the Comprehensive Agreement on Investment with China that it was on the verge of finalising. But the German government and many German capitalists are keen to keep commercial relations open. In 2022, the German government approved Chinese company Cosco’s acquisition of a 25 percent share in a Hamburg container terminal despite an intensive US lobbying effort to block it. German companies BASF, Aldi, Hella and Siemens are all expanding their footprint in China, investing a record €10 billion in the first half of 2022, to the dismay of the US government.
Measures taken by the US to target China are also hurting the EU. The Biden administration’s massive subsidies for local production of high-tech goods are putting European exporters such as Dutch semiconductor company ASML at a disadvantage in the US market, weakening European efforts to build the industry at home, a key tenet of the EU’s “New Industrial Strategy”. With gas prices five times higher than in the US, in part the product of US-led sanctions on Russia, European producers have been dealt a double blow by the US. The European Commission is investigating tit-for-tat measures to protect European capitalists from predatory American actions.
So while the US has used the Ukraine war to impose its prerogatives on Germany and France, it isn’t yet so clear that the European powers will submit all along the line when it comes to China—where the stakes for European capitalists and EU imperial strategists are higher.
One era in world politics is ending and a new era is unfolding. Imperialist rivalry is becoming more dangerous. Military budgets are on the rise. Nationalism is ascendant. We are not imminently facing a situation akin to August 1914, but the logic of developments is pushing in the direction of that ghastly moment when all-out imperialist war took the world into the abyss. The terrible weapons the imperialists have at their disposal, and the consequences for each should it fail to win, warn us of the catastrophe that lies in store for the world’s population if a new regional or world war breaks out.
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