Reference News Website, July 24 report: In recent years, driven by structural issues such as trade imbalances, the world has entered a stage of sharp geopolitical confrontation. Historically, such crises were often resolved through military conflicts, with the aim of weakening rivals and redefining financial and trade flows.

Today, most major powers possess large-scale weapons for deterrence, so confrontation has largely taken on a hybrid form. However, the United States continues to address domestic issues at the expense of other countries' interests, especially in dealing with relations with China, Russia, and the European Union. The types of weapons have expanded to the economic field, including measures such as tariffs or technology restrictions, aimed at curbing the development of high-value-added industries.

The White House may be confident about these weapons, but the tariff and tax-cut policies implemented by President Trump and the pressure on the Federal Reserve coincided with a period of weakening dollar. At the same time, efforts to reduce the trade deficit have weakened America's global influence and reduced investor confidence overall.

The dollar remains an important economic weapon for the United States, but the decline in the dollar's status has weakened its geopolitical influence. A recent study by the International Monetary Fund shows that as global tensions increase, countries will push for diversification of their foreign exchange holdings.

From a multidimensional national power index based on dozens of indicators such as population, technology, economy, military, etc., these trends are even more clear. Our team at the Central Institute of Economics and Mathematics of the Russian Academy of Sciences has developed a method for ranking national power.

Among 190 countries, China ranks first, followed closely by the United States and Russia. A stress test conducted last year on the resilience of major economies under large-scale trade restrictions showed that the systems of these three countries had the strongest resilience.

The dynamic changes in national power must be considered in the context of time. In the 19th century, Britain had far greater influence on world affairs than its size suggested. For most of the 20th century, the United States and the Soviet Union were evenly matched. By the early 2010s of the 21st century, China steadily rose to become a world power.

Our long-term forecasts show that a new global center centered around China and its partners is forming. We are currently in a transitional period: the United States is striving to maintain its dominant position, the European Union will decline, and most countries remain at a geopolitical crossroads.

A key finding is that long-term resilience depends more on demographic structure and economic fundamentals than on natural resources or military strength.

Financial restrictions are not the only tool to suppress opponents' economies. Pressuring key industries is equally important, and protecting these industries is crucial. These industries generate the strongest multiplier effect on economic growth.

Our research shows that there are no real winners in a trade war. Studies indicate that due to deeper deindustrialization, the United States seems more vulnerable than China, while the EU faces particularly prominent risks when trade flows are interrupted due to its highly open economy.

Population potential depends on factors such as population size, urbanization rate, literacy rate, birth rate, and death rate. If American policymakers believe that illegal immigration hinders long-term resilience, they may invest heavily in building border walls, detention facilities, and conducting large-scale deportation operations. This is the internal logic of the "Big and Beautiful Act."

At the same time, as global power shifts from the United States to China, the world is evolving toward a new pattern centered on three macro-regions. The first is the Americas, where the main power, the United States, pursues self-sufficiency in resources, especially rare earths. The second is the Eurasian region, led by China, Russia, and others. The third is the European Union, mainly Western Europe. Meanwhile, as the geopolitical landscape in the Middle East is undergoing changes, India seems yet to decide which macro-region it will finally integrate into.

Although global connectivity continues, these three macro-regions seem to focus on internal development in areas such as resource security, trade, and digital platforms. Boston Consulting Group predicts that by 2032, global trade flows will undergo significant restructuring, leading to economic fragmentation and the rising importance of regional blocs.

If the trend of global fragmentation continues and the power structure continues to tilt towards China, the Eurasian region may become the main macro-region in the world. China may establish itself as a gravitational center through large projects such as the Belt and Road Initiative, while providing sustainable growth models for other countries. (Translated by Tu Qi)

This article was published on the Hong Kong South China Morning Post website on July 20, titled "Why Is the Global Balance of Power Tilting Towards China?" by Albert Bakhitgin, Director of the Central Institute of Economics and Mathematics of the Russian Academy of Sciences.

Original: https://www.toutiao.com/article/7530459950070465063/

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