Trends can break at any time. Global history presents many
examples of the end of an extrapolation of trends caused by seemingly
peripheral phenomena. Based on the growth rate and innovative capacity in the
1970s and 1980s, Japan would be one of the undisputed winners in the global
economy today. Technological disruptions and surprising explorations of
occurrences can fundamentally change the value of raw materials.
Also, there is a reason for skepticism that the Chinese
method of a government-controlled, often planned economy will ultimately
prevail. After all, the setting of standards increasingly evades government
control. Microsoft, Google, and Amazon have set globally accepted standards in
areas of technology development that are near impossible for a state
institution to control through regulation. By contrast, the instrumentalization
of the dollar can lead to other nations fleeing from the currency and
developing alternatives.
Geoeconomics is becoming more significant as a component of
international relations for a second reason already obvious: the primacy of
security policy and the supremacy of military power. Although economic capacity
also limits military power, nations willing to engage in a confrontation can,
at least temporarily, punch way above their weight. Besides China and the US,
the country with the most geoeconomic power is usually Germany. Russia's
approach during its 2008 military intervention in Georgia makes this clear.
Russia's President
Putin used its deployment of the military in Georgia, later in Crimea, and then in
Syria to justify the costs and sacrifices of military aggression to its people,
while Western, economically strong countries face similar challenges. Russian
President Vladimir Putin's success in re-establishing Russia as a relevant
player in international politics helped him gain high ratings among the
population. Military power is not the only factor that outweighs economic
power. We can add Iran's actions in the Middle East, North Korea's nuclear
weapons strategy, and Pakistan's military force to this list. If military
strategies - even if only temporary - continue to succeed, this may lead to a
military disaster. Those nations that have primarily resorted to economic
instruments in foreign policy in recent years must rethink their strategy and
attribute much greater importance to geopolitics than geoeconomics.
Three fault lines begin with one of the three initially
named starting conditions for geoeconomics: globalization and the resulting
interconnectedness of economies. These create interdependencies that make the
use of economic means of coercion or provision necessary. The EU would be far
behind China and the US if it developed a shared foreign and security policy,
as well as understanding and using its economic strength as a factor of power.
Globalization has been in decline for years. This has been
aggravated by growing protectionism. The Trump administration openly speaks of
economic nationalism, which has been exhibited so far as a reduction in imports
and back sourcing. In addition, countries that are or have been subjected to
economic sanctions are making significant efforts to reduce their economic
dependency on the US. This severely damages global value chains. Nevertheless,
there is also a movement in China that considers the outward orientation of the
Chinese economy to be undesirable and calls for a return to a national economy
focus - even if it is currently weak.
Overall, there is a development in China - regardless of
whether it is now weakened - that believes the Chinese economy's outer
trajectory to be a troubling turn of events and is seeking a re-visitation of
emphasis on the public economy. This would undoubtedly be accompanied by a
reduction in the importance of geoeconomics.
In any event, while interruptions in the tendency toward geoeconomics
are unavoidable, Germany is strongly encouraged to plan for this trend. This
planning should have three components: maintaining monetary strength, reducing
unequal financial conditions, and developing a system that captures the value
of monetary power.
Germany's financial strength is mostly based on the gravity
with which it is integrating into the European Union. Germany, as opposed to
other traditional modern nations, has a significant proportion of contemporary
worth production. It accounts for over one-fourth of GDP. A recent study
released by the German Economic Institute in Cologne demonstrates the extent to
which this contemporary area has an impact beyond the immediate GDP share
through the receipt of startup advantages and joined wealth development.
Thus, the outputs of German industry constitute the vast
bulk of German commodities. Modern companies constitute the majority of the
unfamiliar assumptions and, as a result, the entry of unfamiliar economic
sectors. The severity of the industry stems from two main sources: first, the
high consumption of new work, and second, the availability of wonderfully
prepared professionals - fair and square of designers, but also and especially
brilliant workers. A financial arrangement that advances exploration and
development from one perspective while also contributing to the preservation of
the quality of skilled workers from the other is critical for Germany's
monetary strength. As of now, Germany is in danger of lagging behind various
rivals in critical sectors of the future, for example, artificial reasoning.
The second source of financial strength, integration into
the Single Market, is also jeopardized. Although the immediate hazards caused
by crises in the Eurozone have subsided in recent months, the Monetary Union's
dependability remains fragile, and the possibility of other states leaving the
EU or investigating the mix level of the Single Market has not yet been
mitigated. As a result, greater solidification of the Monetary Union and
expansion of the Single Market are urgently needed.
Furthermore, troubling questions develop regarding the
positioning of large-scale geoeconomic projects in many countries. Should the
German government encourage and support German companies' participation in the
New Silk Road to achieve a financial advantage, or should the German
government, based on geoeconomic considerations, undertake counter-procedures
against China building up monetary access to Eurasia?
Finally, this raises the problem of the role that
advancement involvement may and should play later on in the execution of
geostrategic concepts. Addressing these queries necessitates a concentrated
exchange between governmental concerns, financial elements, and societal
requirements, as well as the formation of German international policy, which
now exists only to a modest extent.
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