Thursday, January 27, 2011

UK: Economic leaders warn that tensions between the US and China are biggest threat

The Economist

The world's biggest worry

"SO WHAT is the biggest security risk confronting the global economy? Given the turmoil in Tunisia and Egypt, some may say political upheaval in the Arab world. Others, eyeing the $100 a barrel oil price, may fear a petro-disruption. Cold warriors always worry about loose nukes, and the massive suicide bomb that exploded at Domodedovo airport in Moscow on Monday certainly raises worries about Russia.

"The Global Agenda Council on Geopolitical Risk, an expert advisory group to the World Economic Forum, told the WEF's gathering in Davos today that it thinks none of these is in fact the biggest economic worry. It is the rebalancing of global power from established economies to emerging giants. In particular, the group foreshadows "greater political and trade conflict between the United States and China". Whether it is China's quest for energy and resource security via investments in Africa or its increasingly muscular defence of its "near abroad", the potential for proxy wars or even direct conflict looks set to grow."

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