Combat message to the West: China's muscle plays exacerbate geopolitical risk situation

Tensions between China and Taiwan in the wake of Taiwanese President Tsai Ing-wen's visit to the US are exacerbating the global risk situation, but are only part of a much larger picture. The FERI Cognitive Finance Institute comes to this assessment. "While Europe is looking with bated breath at the developments in Ukraine, other cornerstones of the geopolitical coordinate system are already changing," says Dr. Heinz-Werner Rapp, founder and head of the FERI Cognitive Finance Institute. Accordingly, the focus is on global commodity markets, political constellations in the Middle East, and targeted attacks on the U.S.-centered global system. The driver and active coordinator of these developments is primarily the 'new China' under Xi Jinping, he said. "For years now, China has been forming strategic coalitions to break the global supremacy of the United States and the dominance of the U.S. dollar. But current muscle-flexing from China now shows a new intensity that should seriously worry business and political leaders in the West," Rapp warns.

Alliance against U.S. dominance

For years, China has been pursuing a clear strategy directed against the global dominance of the United States. With a long-term perspective, China has built up close relations with countries that are also critical of the United States. These include not only Russia and North Korea, but also Iran, South Africa, Saudi Arabia and numerous countries in the "Global South. With the help of the "New Silk Road," China has tied strategic infrastructure such as ports and trade routes closely to its own hemisphere and is constantly looking for new regional bases. At the same time, he said, China is actively offering itself as an alternative - as well as powerful - trade and development partner to countries that are more critical of the West. "The message behind this is unmistakable: China is forging a global alliance against U.S. domination, and any country is welcome to join in from the Chinese perspective," says Dr. Heinz-Werner Rapp. 

The Middle East as a lever against dollar dominance

It is noticeable that China is now acting with increasing toughness and willingness to engage in conflict. This is demonstrated by the current open threatening gestures against the island republic of Taiwan as well as the demonstrative visit of Chinese President Xi Jinping to Russia's warlord Putin. However, China's latest activities in the Middle East are particularly noteworthy. There, China has recently shifted important coordinates massively - quite clearly against the interests of the United States. "With China's mediation, arch-rivals Iran and Saudi Arabia have come closer for the first time in decades. At the same time, China has signed a long-term contract with Saudi Arabia for oil deliveries - for the first time against payment in yuan," Rapp explains. In doing so, China not only fundamentally changed the fragile power structure in the Gulf region, but also deliberately undermined a basic principle of crude oil trade - settlement in U.S. dollars.

Increasing pressure on the West as a strategic risk

All of these, he said, are clear messages to the United States that its global supremacy is no longer secure. "For Europe, this is not good news. If the leading Western power, the U.S. - and the U.S. dollar as the global reserve currency - are put under coordinated pressure by China and other countries, serious geo-economic upheavals loom in the future. Strategic investors and entrepreneurs should take these warning signals very seriously and start thinking about appropriate precautions today," says Dr. Heinz-Werner Rapp, founder and head of the FERI Cognitive Finance Institute.