Bubbling geopolitical rivalries and a year of all dangers
Numbed by decades of serious wars and daily conflagrations in the Middle East, financial markets seem to be indifferent to dangers of broader military conflicts.
The ticking time bomb in East Asia is an example of that. China and Japan are now engaged in permanent military harassments around the group of islands they both claim in the South China Sea. And Japan is urgently building up its defense capabilities for the day the sparks may fly.
That would involve the U.S., too. In fact, it already did. On December 6 of this year the U.S. and China nearly came to blows in an "incendiary" (Pentagon's word) incident in the South China Sea as the Chinese warship hurtled toward the American guided missile cruiser USS Cowpens, coming within less that 500 yards (about half a kilometer) off its bow. The clash was avoided only because the U.S. vessel took an evasive action. The Chinese say that the USS Cowpens was spying and "harassing" its Liaoning aircraft carrier battle group.
The danger areas have now been widened because on November 23 of this year China introduced an air defense identification zone (ADIZ) that overlaps the South Korean and Japanese ADIZs put in place since the early 1950s, with their most recent extensions (by Japan) in 2010.
Due to competing territorial claims, China and Russia don't recognize the Japanese ADIZ. For the same reason, and probably more, Japan and the U.S., along with some South-East Asian nations are refusing to recognize the Chinese ADIZ.
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All that is part of difficulties posed by China's rapidly growing economic and military clout.
It would be an extraordinary feat of wisdom and diplomacy if this epochal event were to pass off peacefully.
Europe is another security flashpoint, where events around Ukraine and the missile shield look like the Cold War never ended. The jostling between the EU and Russia about keeping Ukraine, Georgia and Moldova in their respective spheres of influence has thrown Europe into an acute phase of the old West vs. East confrontation – at the risk of disintegrating law and order in Ukraine.
While there is no danger of an immediate military conflict, the European missile shield and massive NATO and Russian military maneuvers at each other's borders strongly suggest that both are getting prepared for such an event. By contemplating large, nuclear capable, missile deployments close to its eastern neighbors, and announcing that it would immediately nuke whoever dares to attack the Mother Russia, Moscow very much sounds like a place ready to pounce.
Next year is the year of all dangers. The unwinding of the monetary stimulus in the U.S. will send tremors far and wide, with distinct dangers for EU and East Asian economies. The standoff in the South China Sea has all the markings of something about to become much more serious. And virtually no chance of any U.S.-Russia-China agreement on the global missile shield has already intensified the ongoing arms race.
How, under these conditions, can one expect any solutions to Iran's nuclear problems and the Syrian civil war?
I wish you all a very merry Christmas as I ask Santa to put some of that yellow stuff under my tree.