On March 21, 2022, the President of the United States, Joe Biden, speaking of the Ukraine-Russia war, said: "there's going to be a new world order out there, and we have to lead it." The President did not elaborate on what this “new world order” would look like. What is the United States strategic aspiration, what it seeks to achieve, what it seeks to prevent?

As Yogi Berra observed, "If you don't know where you are going, you will end up someplace else." That is exactly what is happening.

Over the last thirty years, the inability to deal with Russia’s security concerns specifically expressed by Gorbachev, Yeltsin, and Putin eventually exploded into a military conflict. 

Incensed by Putin's audacity, America and the allies, in the collective rush to impose punitive economic sanctions, challenged the cohesion of international order by seeking remedies, which negate the functioning of the global economic system.

The current system is based on respect for contracts, sureness in the banking system, inviolability of private property, and economic interdependency. The scope of economic sanctions violated every aspect of the established order. America has weaponized the dollar as a tool for achieving political ends. The combination of constant threats, freezing foreign assets without a search warrant, and arbitrary expropriation of private properties without due process ostensibly for the global public good invokes memories of Bolshevism and raises the issue of power and legitimacy.   

When existing arrangements are fundamentally altered, a new order must emerge as a practical accommodation to reality.

Regardless how the war ended, the new reality is that the sanctions seriously weakened Russia's economy and greatly enhanced China's geopolitical position. Isolated from the world economy, Putin performed a “reverse Nixon” and played the “China card.” Instead of peeling Russia away from China’s orbit, Biden forced Russia to embrace China.

The unity of objectives drives both countries to form an economic, political, and military alliance. As a result of sanctions, China can acquire a vast natural resource base in Russia. Russia would become an energy and raw materials supplier at prices substantially discounted from the world markets. China can also fulfill the opening left by Western companies that abandoned the Russian market, further magnifying her economic influence. 

Having cheap energy and unlimited access to raw materials, China, which has become the world manufacturing plant, would be in a position to control the global economy and impel any foreign party, including the United States, whose actions are of concern to China.

If sustained, the sanctions on Russia will create a powerful Russia-China alliance that affirms the power of China and gives America a rival that sooner or later will diminish her economic power and lay low her influence over world affairs. 

On the other hand, the United States and Western Europe, without cheap and reliable energy, easy access to raw materials, will face profound and insidious economic and political vulnerabilities.

Furthermore, by forming a coalition against Russia, Biden unintentionally, indeed contrary to his intention, is dividing the world and risking to upend American standing among the countries opposing sanctions or clamming neutrality. At the time of this writing, Russia, China, India, the Arab World, most of Latin America, and Brazil are in this camp. 

China is taking advantage of the division and working to replace the United States as the world's dominant economic and political power. One of the avenues is replacing American petrodollars with yuan.

Saudi Arabia and a few other countries are warming up to the idea. Given that the U.S. economic dominance is built on petro-dollars, if the American dollar is dethroned as the world reserve currency, it would devastate the U.S. economy.

At this juncture, America faces a fundamental strategic choice, though there is no evidence that the Administration is even aware of it. It needs to decide whether keep raising the ante, hoping that Putin blinks and leaves Ukraine, or use a pragmatic approach to make compromises to save whatever is left of Ukraine and harmonize its interests with Russia before  she consummates an alliance with China. The penalty for not doing it will result in shifting the balance of power toward China.

Thus far, as a matter of prudence, China has accepted the world order she had no part in making. However, the recklessness with which America has been using its dominance gave credence to the vitriolic Russian message about American hegemony and offered “moral” justification for China to use her economic might and growing political influence to revise the rules of the game.

It is unclear how China intends to reshape the world order generally and toward the United States specifically. One thing is clear – the world order envisioned by the communists cannot possibly be to our liking.

Image: Stuart Rankin