A devastating pandemic and the geopolitical trust deficit

SHIFTS in the tectonic plates of global politics and economics are a near constant, but the ongoing pandemic is causing seismic tremors. The emerging patterns are evident in moves towards inward-looking nationalistic economic policies as years of subdued growth lie ahead, as well as strategies to increase resiliency to shocks even if that comes with a loss of efficiency. Fatigue has set in regarding gains from economic liberalisation and multilateral approach to setting rules and best practices for trade, technology, conflict resolution, poverty alleviation, and the environment.

The Covid-19 crisis has laid bare a fragile global order, already reeling from trade wars, weakening multilateralism, and deepening China-US rivalry. A toxic combination of lack of trust, election season, and frustration with the pandemic will likely keep the US lashing out at China, with the latter not shying away from retaliation.

Consider where China is coming from: dealing with pushback from the United States on trade, technology, and security, a local outbreak that became the epicentre of a devastating global pandemic, and a myriad of structural challenges, ranging from debt overhang to ageing. Against this backdrop, China held its annual "Two Sessions" last month.