Formation of a new global geopolitical and geoeconomic balance

Nikolić, Goran and Zvezdanović Lobanova, Jelena (2022) Formation of a new global geopolitical and geoeconomic balance. Nacionalni interes, 41 (1). pp. 65-81. ISSN 1820-4996

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Abstract

While in the past the power of states was based on the control of land or oceans, today it is defined by controlling the flow of people, goods, money and data, and the connections that these flows create. The new geopolitical map is a consequence of the success of the great powers in controlling the mentioned terrains of power. Key areas of power are: economy, technology, potential for future climate change, population, military, health capabilities, and cultural dominance. Along the military potential and the size of the population, the most important spheres are economics and technology. In this regard, global business is increasingly made up of companies based in China, where, together with the US, as many as 76 of the 100 the world’s most valuable companies are located. If we compare the share of the US and China in world GDP with their share in business activities, America accounts for 24% of global GDP and 48% of global business activity, with China being convincingly second with 18% of world GDP and a fifth of global business activities. Firms from the two countries also dominate new technologies such as fintech and electric cars, with huge domestic markets helping those companies in achieving economies of scale. The new reality seems to define the global economy: the (hostile) takeover of the international economy by geopolitics, although the main battlefield on which the great powers compete is not military, but economic. In the emerging geo-economic era, many countries are putting the economy at the center of their strategy. Market power in some areas - such as 5G, semiconductors, rare earths, quantum computing and payment systems - is critical, as is control of data flows and digital services. While the former global order was in some ways symbolically reflected by the influence of the G7, the new atlas of power can be associated with a world dominated by a different group of great powers, with China moving towards a pedestal. In this “new world”, a great power can build its influence through the ability to define regulations and set standards, via control over financial or energy flows, through the ability to influence political processes, or even its capability to build social media platforms or sets search engine standards. There has been a dramatic change in the very nature of power and the ways in which it changes and moves. Consequently, in the post-Cold War era, we are in a state without a formal war, but certainly not peace.

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