Policy Implications

·       We describe and discuss the current development of the global system which we characterise as fuzzy bifurcation, where the patterns of globalisation and new security requirements are in tension, unlike during the Cold War when they were largely complementary.

·       We address the fact that policy domains are now discreet, with allied relations, unlike during the Cold War, only extending within each domain.

·       In this new strategic context, terms like ‘allies’, ‘competitors’ ‘rivals’, and even ‘adversaries’ become contingent on the specific policy issue.

·       Globalisation will not ‘end’. Rather states and the private sector will adapt as its tentacles are rerouted.

·       China and the US will remain the dominant powers. But managing allies will be circumscribed by the enhanced, if still limited, autonomy enjoyed by smaller states. It is a world that policy makers will find challenging, indeed frustrating.

·       Russia may become more dependent on China but will adapt and endure.

·       Europeans may bandwagon on the US for security but will adopt markedly different strategies over other policy issues.

1. INTRODUCTION: CONVERGENCE OR DIVERGENCE IN TWO WORLD ORDERS?

The logics of economics and politics aligned during the Cold War. Together they created two self-contained spheres. The Western economic sphere consisted of North America, Europe, Japan, South Korea, Australia, and a group of post-colonial states who nonetheless remained dependent on foreign direct investment, trade and the monopoly transportation links of the former colonial power. American dominance was predicated on three pillars: multinational corporations, nuclear capacity and the role of the dollar (Gilpin, 1987). America’s imperialist designs found parallels in Russia’s dominance of the Soviet Union and the Warsaw bloc (Anderson, 2015). Non-aligned states – notably the Group of 77 at the UN General Assembly – wistfully advocated the creation of a New International Economic Order (Cox, 1979).

The logic of geopolitics followed the same parameters as the geoeconomic. European states sheltered under the American nuclear umbrella. Soviet dominance was evident in its invasions of Hungary and Czechoslovakia. Although China’s fraying alliance with the Soviet Union fractured after Richard Nixon’s successful Sino–American rapprochement in the early 1970s, the term ‘spheres of influence’ accurately reflected the twin, compatible logics of economics and geopolitics. Those spheres may not have been hermetically sealed. Yet there were few grey zones. But that was then.

Contemporarily, allusions of a return to a Cold War have been plentiful in the aftermath of the pandemic and now the Ukraine war. It has reinforced a perception of history repeating itself. Augmented by the language of decoupling and resilience, states seek a more bounded capitalism (US Senate on Foreign Relations, 2021). The pandemic exposed longstanding vulnerabilities in global supply chains for essential elements like PPE equipment (Reich & Dombrowski, 2021). Vulnerabilities now extend to computer chips and the supply of natural resources and staples (James, 2022). Niall Ferguson and other pundits refer to ‘Cold War 2’, albeit with a focus on China and not Russia as the West’s primary adversary (Goldstein, 2021; Naqvi, 2022). The implication is that we have reached an ‘inflection point’ (Heusgen, 2022).

This vision assumes that the processes of globalisation of the last thirty years – of economic liberalisation and political democratisation – is ending (Posen, 2022). BlackRock CEO Larry Fink, invoking Cold War imagery, suggested the Ukraine war presages globalisation’s retreat (The Financial Times, 24 March 2022). More subtly, Dani Rodrik ponders whether ‘hyperglobalization’ may be over (quoted in Wong, 2022). Others have suggested the world is splitting in two (Schuman, 2022). Many believe global supply chains are unravelling and the sanctions regime initiated against Russia is a prelude to wider constraints on the movement of goods and capital (Sonnenfeld et al., 2022). This gloomy scenario was even captured at the 2022 Davos conference where its traditional discourse of ‘one world globalisation’ was jettisoned in favour of a discourse on the geo-politics of division (Leonard, 2022).

Accompanying this view of a global order composed of spheres is the claim that the strategy of containment should be resurrected (Daalder, 2022; Larson, 2021). This implicitly assumes that declining American power will lead to a multipolar structure. Proponents of this view focus on the emergence of new powers such as India (Borrell, 2021), other BRICS, and the EU’s claims to the viability of strategic autonomy (Borrell & Breton, 2020). Analysts believe that the growth of German defence expenditure and a greater focus on pan-EU military operational integration through vehicles such as the Permanent Structured Cooperation (PESCO) will facilitate that process.1 Russia in this formulation will remain a pole. The war may have exposed its demographic, economic and logistical frailties, but it remains a nuclear power, a major energy producer and source of staples for nonwestern customers. Many states remain willing to side with Russia against the West. China will not want to upset Russia by trying to establish a bilateral condominium with the USA. (Stent, 2022). Multipolarity will therefore prevail.

The weakness of this argument is that multipolar nodes (like India) are still in the process of developing. Others, like Russia and the EU, have their own limitations. In contrast, America’s, and China’s capabilities – from the military to the diplomatic and economic – are unrivaled. China’s position will likely continue to strengthen. Its share of the global economy grew from 6.9 per cent to 16.8 per cent between 2000 and 2018 as the G8’s combined share declined from 47 per cent to 34.7 per cent. Given its population size, even productivity at half that of the US would mean China’s economy will be larger than the US and the EU combined by 2050 (Lin, 2022).

This evidence prompts critics of multipolarity to identify a return to a bipolar world where Europe, at best, plays a supporting role to the United States. Equally, weakened rather than strengthened by its foolish military adventurism, Russia will be forced to play the same role for China. The EU, Russia, India, and Japan may have major populations, economic weight or military capability. But none have all three. Only the USA and China possess all these attributes (Hass, 2022). By implication, a structural realist logic of bipolarity should prevail (Waltz, 1979).

The temptation to announce a profound, irreversible shift in the world order, be it a return to bipolarity or multipolarity, is therefore tempting. It is the stock-in-trade of the ‘courageous’ or ‘heroic’ observer of international relations. Yet in reality, few single events – world wars being the exception – have effects on the global system that Francis Fukuyama (1992) attributed to the end of the Cold War, let alone a war in Ukraine.

Our aim here is to caution against these grand generalisations. We challenge both the bipolar and multipolar positions. We do not accept that the logic of economics simply follows that of geopolitics, as both positions largely assume. For sure, events occasion change in practices and thinking. But ideas, structures, and processes rarely all become redundant overnight or, indeed, at one and the same time. Humans remain as mobile as they have in recent decades, as does trade and finance. Circumstances may influence the level or direction of these flows without changing the systemic pattern. The tentacles of globalisation will adapt, not retreat. China and the USA may seek to create strongly complementary economic and political spheres. But they will fail, as largely will their efforts to create consistent all-embracing alliance structures. Instead, alliances will largely operate in terms of a particular policy issue. States will hedge between the USA and China when it suits their interests. We therefore use this article to disentangle the two logics of economics and geopolitics, seeing them more as countervailing logics that generate a complex system best described as fuzzy bifurcation.

The essentials of fuzzy bifurcation reflect in part what Amitav Acharya (2017, 2018) has nicely described as the emergence of a multiplex world. In this multiplex world, fuzziness reflects a plethora of indistinct lines that contrast with the relative clarity of the Cold War. It is bifurcated because the global system is indeed offered contrasting choices by two states with a preponderance of material resources aiming to expand their influence. Fuzziness is so titled because it is characterised by three major features. First, a hybridity of actors, strategies and behaviour governed by normative interests such as nativism, populism and identitarianism. This is distinct from the collective universal and cosmopolitan values normally associated with norm construction that have been embedded in the International Liberal Order. It explains the lack of traction of Biden’s appeal to a community of democracies. Second, policy domains are porous because alliance boundaries are not hermetically sealed. States therefore have a greater temptation to hedge between China and the USA, or bandwagon with one of them, demonstrating a consistency in terms of their interests but not in terms of their loyalty to either power. The world is bifurcating, but not bipolar. Finally, and largely consequentially, while the US (and now China) are growing materially stronger in absolute terms, their influence over smaller states is becoming more constrained and conditional. Their immense power does not axiomatically translate into influence over the policy choices of other states. Actors’ autonomy increases as they are released from the shackles of Cold War alliance structures (or US hegemony). Even the closest of allies are generally unreliable across policy domains, often drawn by ambivalent or competing security and economic interests, as Turkey’s membership of NATO but continued dalliance with Vladimir Putin repeatedly demonstrates.

These three characteristics are symptomatic of a post-Cold War tension between the logics of politics and economics. In contrast to the realist assumption of either bipolarity or multipolarity, politics (and security concerns) dominate under certain conditions, but economic concerns do so under others. Which is more important and when is not as easy to determine as the scholars of geo-politics and strategy on the one hand, and geo-economics and finance on the other, would have us believe.2

The consequences of fuzzy bifurcation are the subject of the paper. It is divided into six sections. The following section examines the resilience of the logic of international economics driving globalisation. Section 3 evaluates the logic underpinning the recent resurgence of geopolitics. Section 4 juxtaposes these two logics to show how the symbiosis that infused their relationship during the Cold War no longer exists in the unfolding fuzzy bifurcation process. This, we argue, makes the prospect of a new ‘Cold War 2.0’ unlikely. We show how the rise of geo-politics is indeed changing the strategies of states towards globalisation without ending it. Section 5 explains why this is the case. As a more accurate way of depicting unfolding global processes – rather than a return to Cold War disciplines – we further discuss the features of fuzzy bifurcation. In Section 6 we consider how it will affect the two major players – the USA and China – as well as Europe’s options in the context of these fuzzy great power relations, before concluding with reflections on its future.

2. THE LOGIC OF ECONOMICS AND THE CONTINUITY OF GLOBALISATION

As Adam Tooze (2022a) has suggested, continuity is strongly embedded in the current logic of economics. The Hayekian neoliberal version that dominated much of the post-Cold War era, reinforced after the financial crisis of 2007–09, has not been derailed. Indeed, globalisation’s processes, systems of innovation, sourcing and production have remained globally embedded. Nativism and populist politics in Europe and the United States, fuelled by globalisation’s unequal distribution of benefits, has promoted hostility to its central tenets. But as a market-based system of global exchange, it resiliently adapts when necessary, continually serving the interests of the most powerful economic actors. Despite Donald Trump’s protectionist trade measures, many retained by Joe Biden, American high-tech and financial services remain reliant on the global trading system.

The same is true for China, a growth-oriented economy with primary exports markets in Europe and the United States. In addition, many other states (across, for example, East and South Asia) have enjoyed both unprecedented development and growth through greater integration into the global economy. Indeed, critically, the same logic even applies to Russia’s failing oligarchical economy. As has long been the case, it must export its fossil fuels and wheat to pay for its military and suppress or bribe its citizenry (for a discussion see Friedman, 2006). This same economic logic has even led western allies, like Saudi Arabia, to resist geopolitical pressure to no more than nominally increase oil production despite Biden’s pleading, aware that European customers have few alternative options. Oil and gas prices soared – and, with them inflation in the West – as the economic logic of globalisation has continued to play out.

This power of the market is nowhere more apparent than in the US–China economic relationship, the largest bilateral one in the world despite the Trump administration’s tariffs. In 2020, $559.2 billion in total (two-way) goods were traded; trade in services with China (exports and imports) totaled an estimated $56.0 billion; China was America’s third largest goods export market (after Canada and Mexico) and its largest supplier of goods imports. US foreign direct investment in China totaled $124 billion, while China’s in the US was $38 billion (USTR, n.d.). While both the Biden administration and the Chinese government have embarked on accelerating decoupling, this is unlikely to dramatically change the economic relationship (see Bateman, 2022). With a few exceptions, American firms, are reluctant de-couplers (McMorrow, 2021).

In 2020, China also overtook the US as the EU’s largest partner, with trade worth $709bn. This reflected a trend dating back to 2011, with European-China exports and imports growing largely uninterrupted (Eurostat, 2022). By the end of 2019, EU direct investment in China totalled €362 billion and Chinese investment in the EU €255 billion. Again, efforts at de-coupling and sanctions will not significantly alter the dynamic nature of the relationship. In sum, the West and China’s economies are so inextricably integrated that processes of de-coupling would be complex and extremely painful in terms of product shortages, increased inflation and lost revenue.

Russia further illustrates globalisation’s enduring processes. The focus has been on how the sanction regime will affect Russia’s resource-based economy, with aggregate revenues constituting 45 per cent of Russia’s federal budget (IEA, 2022). The early evidence is that it will be severe, at least in the short term (Sonnenfeld et al., 2022). But Russia will nonetheless remain part of the economic global system, as its exports turn to Asia and possibly Africa through those very market structures that globalisation has created. Meanwhile, European diversification away from Russian oil and gas will remain slow and problematic (S&P Global, 2022). Indeed, some of the short-term effects of the war have proved beneficial to Russia as prices and revenues increased through the summer of 2022 and the threat of winter shortages loomed. (Nanji, 2022). Regardless of Europe’s publicly declared intension to ban Russian gas and coal, it continues to pay massive sums to Russia (Tooze, 2022b). Yes, the EU and USA have tightened sanctions, but loopholes abound. Countries who are nonparticipants in the sanction regime have signaled a willingness to buy more Russian fossil fuels, and the rouble quickly recovered the 40 per cent loss in value suffered at the outset of the invasion of Ukraine, reaching a seven-year high by the start of summer 2022 (Hirsch P., 2022 and Karaian, 2022). Technical factors, rather than economic health, may explain the rouble’s rise. But the logic of natural resource dependency is evident. Russian gas exported to Poland in 2021 represented 45 per cent of Poland’s consumption but only 1 per cent of Russia gas production, demonstrating the asymmetric nature of European gas dependence, the embedded character of globalisation and the capacity of Russia to absorb losses in the European market until it finds other customers. This last factor is key. Putin’s public support and the willingness of Russians to sacrifice is finite. But the critical question is whether both will last until Russia reorients to a new customer base. Gas and oil are fungible but not as easy to sell when existing pipelines become redundant.

Beyond these largely bilaterally-specific examples, there are three broader reasons for assuming that the core logic and operational form of globalisation will endure. First, any decline in cross-border goods trade relative to global GDP long pre-dates the current shocks and has largely been adjusted for. This should come as no surprise. The efficiency gains in manufacturing as a result of the technologically-advanced goods now traded internationally have grown significantly. Furthermore, China’s domestic consumption has increased dramatically, as has its trade in services, FDI and especially data flows as a result of the vast expansion of digital networks (see Lamy & Suzuki, 2022). While the globally integrative dynamics of digitalisation are as capable of generating negative consequences as positive ones, their ubiquity – both within and across borders – suggests their unwinding will be even more difficult than dismantling supply chains. (Coyer & Higgott, 2020).

Second, international supply chains – despite pressures for de-coupling – are often becoming more specialised and difficult to unpick. American legislation to enhance domestic production, events in Taiwan and Chinese efforts to cultivate its own indigenous production capacity have drawn attention to these difficulties. High-value, hard-to-produce specialist chips are not easily pulled out of supply chains and their production continues to be concentrated in R&D hubs (Beattie, 2022a). As things stand, supply chains are finding it difficult to meet US and European demand in the current inflationary context. For example, new EU investment in chip production through the European Chips Act, the benefits of which will not materialise until 2030, could be too little in terms of high-quality and too late in terms of supply chain management in a world where the most sophisticated chips cannot simply be replicated and fabricated (European Commission, 2022; Baraniuk, 2022). More generally, the value of goods traded has bounced back strongly since the onset of COVID.

Third, it is not easy to force states or companies to choose between America’s and China’s competing visions of the global economy. Both present pros and cons on issues such as access to capital, market structure and technology. Cold War corporations may have been multinational. But today they are truly global, and economic imperatives tends to trump ideology in corporate decision making. (see Doremus et al., 1999).

The effects of the war on supplies and prices will of course continue to be significant. All countries, not just Russia, will pay considerable adjustment costs. But the immediate effects do not justify the assertion that globalisation will end. The longer-term trends have nothing to do with either COVID or Ukraine. The patterns of economic globalisation will adapt and endure, albeit – like gas pipelines – the routes of trade and investment flows may at times be forced to change.

3. THE LOGIC OF GEOPOLITICS AND EVOLVING ALLIANCE STRUCTURES

The logic of a return to bipolarity has been widely advanced in the last decade and not purely confined to American analysts, even if most vocally propagated by them (quintessentially see Mearsheimer, 2010; Friedberg, 2018). Dating from the Obama administration’s decision to reorient American forces towards Asia, Russia’s revanchism was seen as a secondary threat to that of China. This was further articulated by the Trump administration’s characterisation of China and Russia in its 2017 National Security Strategy (The White House, 2017) and consolidated in the Biden administration’s 2021 Interim National Security Strategy Guidance (The White House, 2021) with the latter’s focus on the Indo-Pacific. But the American obsession with China extends beyond formal documents into the think tanks of the Washington Beltway and academia (Ikenberry et al., 2022), both realms where consensus is rare. The disagreement amongst them is how to address this growing bipolarity, not whether it exists (see Blinken, 2022).

Essentially, what we might call the ‘bipolarists’ are divided into two groups with distinct, but compatible, perspectives. The first is a more liberal Bidenesque position. It depicts a battle between democracy and autocracy, albeit one that conveniently ignores two facts: that some NATO members do not operate democratically (Hungary, Poland and Turkey); and some democratic states (India) are unwilling to unequivocally position themselves as US allies, illustrated by the refusal of many democracies to support transatlantic condemnation of Russia at the United Nations nor participate in the imposition of sanctions (including Brazil and Mexico). Nonetheless, Biden’s rhetoric of democracy has found currency among the EU leadership team of Ursula Von der Leyen (Von der Leyen, 2022).

The second position is populated by those American realists who eschew concerns about human rights, focusing instead on American and Chinese material capabilities and how they relate to emergent strategic threats and opportunities (see Kupchan, 2022). They prioritise the security and military dimensions of the international order engendered by the war in Ukraine (cf. Walt, 2022). Among those relating the Ukraine war to bipolarity includes the ‘Westsplainers’ who blame its cause on the West’s encroachment onto the Russian sphere of influence (for a discussion see Smoleński & Dutkiewicz, 2022) with Mearsheimer (2022) providing the prime example. The consistency with which they focus on traditional realist features – armaments, demographics, geography or the national security aspects of natural resources – is striking. It is a perspective reputedly shared by Putin himself (Cocco & Ivanova, 2022).

Yet this analysis largely ignores key economic factors beyond the commonplace realist geo-political and security metrics of size of the economy, capacity to produce the technologies capable of building military capacity or the domestic ability to foster economic resilience. Bi-polarists invariably understate the integrative economic logic of globalisation (Kotkin, 2022). That might have been a justifiable position during the Cold War, when the political blocs were also largely economically insulated. But it is less so now. Andrew Bacevich, head of the Washington-based Quincy Institute, with no sense of irony or self-reflection about his own lack of understanding of the geo-economic dimension of the war, excoriated Nobel Laureate Paul Krugman for his lack of credentials as a strategist when Krugman (an ignorant economist) had the temerity to extol the virtues of Biden’s Ukraine response. (Bacevich, 2022).

The concept of grand strategy – recognised alternatively as a state’s principles, plans or behaviour (Silove, 2017) – takes on new and intriguing dimensions in a fuzzy world. Realists have consistently asserted that only great powers have the sufficient resources to formulate and implement a grand strategy (Krasner, 2010). Murray (2011, pp. 1–2) asserts that ‘Grand Strategy is a matter involving great states and great states alone’ and ‘no small states … possess the possibility of crafting a grand strategy’. This is in part because realists and liberals debate whether the purpose of American grand strategising is to ‘control’ or ‘shape’ the international system (see inter alia, Brooks et al., 2012/13, Ikenberry, 2011, Jervis et al., 2018; Posen, 2014). Small and medium-sized powers, and other major actors such as the European Union, are by definition, excluded from consideration as possible grand strategisers.

Yet this claim requires further reflection on at least two scores. First, while they may not be able to control or shape the global system (although Saudi Arabians might contest even that claim when it comes to oil) even smaller states can develop grand strategies designed to control or shape their neighbourhoods or even regions. There is little doubt that North Korea shapes the geopolitics of North East Asia, as Iran and Israel do in the Middle East. Second, the purpose of a grand strategy may not even be designed to control or shape at all. Rather, it may be to dynamically adapt to systemic changes, a concept (at least in principle) considered by Ionut Popescu (2018) with his conceptualisation of an ‘emergent strategy’ dynamically reacting to external changes.

It is within this latter realm that the relevance of grand strategy to a fuzzy world becomes most evident. The language of geo-politics distinguishes between three strategies that states and an organisation like the EU can employ when dealing with China and the United States. Bandwagoning entails consistently siding with the great power with superior resources in a particular policy domain. Counterbalancing, conversely, entails allying with the rising great power to avoid complete dominance (Walt, 1987). Yet it is the third option, hedging – the cultivation of a middle position to avoid choosing between other actors – that becomes most relevant in a fuzzy world. As Lim & Cooper (2015, p. 698) suggest, hedging involves ‘an alignment choice signaling an ambiguity over the extent of shared security interests with great powers’. And Ciorciari and Haacke (2019, p. 368) note, ‘Rather than taking clear sides to address ascertained threats or ride the coattails of a surging great power, many states’ behavior suggested efforts to mitigate risk in uncertain strategic conditions. Scholars advanced the concept of hedging to fill the gap’.

In each case, the authors consider the context in which actors can avoid being entrapped in a bipolar-style relationship where, effectively, they have to ally across policy domains. So, it is no surprise that empirical studies of hedging often focus on Southeast Asia, where many states share their largest trading relationship with China, even as they try and shelter under the American security umbrella. However, a fuzzy world, as opposed to a bipolar one, affords states and nonstate actors the greater latitude to pursue grand strategies designed to adapt to China’s and the US’ demands, requests and suggestions in a way that was inconceivable during the Cold War. This creates a situation where hedging is more accessible when, for example, the logic of security points in one direction and the logic of economics in another. In effect, the grand strategies of actors like the EU, as well as small and medium-sized states becomes far more consequential, as countries such as Turkey and Hungary, have demonstrated. Neither modern day geopolitics nor geoeconomics resemble the alliance structure of the Cold War.

4. FUZZY BIFURCATION AS AN UNFOLDING PROCESS

Yet the global geopolitical system is dividing, while the global economic system is adapting. The tentacles of the latter are deeply embedded, and many states and corporations lack incentive to simply fall into one of two bipolar spheres. Supply chains are highly interdependent. Americans can ban all Russian fossil fuels because they don’t need them. Europe can sanction Russian coal because it doesn’t need it. Starbucks can withdraw from the Russian market because, with 130 stores and 2000 employees, it is a small market and the cost of transgressing sanctions and incurring public ire will be much greater. Even McDonalds can bear the brunt of losing its Russian market, given that it and Ukraine accounted for just three per cent of operating income before the war (Koenig, 2022). Europe can even plan to ban the supply of Russian oil by the end of 2022, although it won’t happen because Hungary and Slovakia are notably exempt from the ban. But the same is untrue of Russian gas, where spiking prices and European dependency are both short- and medium-term problems. Highlighting European dependency, Russians make excuses in order to cut supplies, toying with the Europeans over whether sanctions will even allow them to accept back the turbine needed to fully operate Nord Stream 1 (Chatterjee, 2022).

As a process of fuzzy bifurcation unfolds, some states will consistently cleave to the USA (like the UK), some to China (like Russia) because of a lack of options. But many will hedge, interacting with both, depending on their specific policy interests – be they trade and investment, digitalisation, climate or energy. In contrast to the supposed new-found unity of ‘the West’ (albeit fraying at the time of writing, even in the USA itself (Telhami & Rouse, 2022)), no country in Latin America, Africa or the Indo-Pacific (apart from Australia, Japan, New Zealand, South Korea and a handful of other countries) imposed sanctions on Russia in the opening months of the war (Oi, 2022). Interestingly, in the UN vote in March 2022 condemning Russia’s invasion of Ukraine, 17 of the 35 countries that abstained were African (Olivier, 2022). Also, many non-aligned countries are unlikely to support such resolutions, given historical memories of treatment by (and a residual antipathy towards) colonialism, and the anger enhanced by the maldistribution of covid vaccines (Dahir & Holder, 2021).

Contrary to his strategic calculation, Vladimir Putin has – in the short-to-medium-term at least – single-handedly revitalised NATO and the concept of the West. But European unity will continue to be tested. Viktor Orban characterised the EU and Ukraine’s leadership as ‘opponents’. The instrumental nature of Turkey’s (currently on hold) opposition to Finland and Sweden’s applications to NATO provides another example of the messier face of multilateralism. Yet NATO – distained by Donald Trump and described as ‘brain-dead’ by Emmanuel Macron – has found new purpose. It is developing an expanded role (feasibly) in the Arctic and (less feasibly) the Indo-Pacific.

It is nonetheless helpful to locate the pandemic and the Ukraine war within the increasingly fuzzy processes of the last three decades, the principal highlights of which are not one-off events but China’s continual rise, the USA’s loss of direction over time and the growth, and subsequent integrative beneficial effects (as opposed to negative externalities) of globalisation and digitalisation. China’s global expansion through greater trade, and activities, such as the Belt and Road Initiative and the creation of the Asian Infrastructure Investment Bank, has been unprecedented, clearly enhancing its global standing. But it has been followed by missteps in the COVID era, such as its overly assertive ‘Wolf Warrior’ diplomacy and what now appears to be its unfortunately timed commitment to a ‘friendship without limits’ with Russia. China cannot now disown Russia, its ally in its contest with the US over the world order’s governing rules. So, there are two possible readings of China’s position regarding the war. Positively, it may benefit from Russia’s greater dependence, as there is no other major power with which Russia can align. Negatively, a dependent Russia, at long-term odds with its European neighbours and the USA, will provide baggage for a China for whom Europe and America will always be more important economic partners. Diplomatic missteps regarding the war could prove costly over the next decade as Europe becomes less forgiving of China’s refusal to criticise Russian behaviour or if China is found abrogating sanctions.

The USA has its own difficulties arising from a succession of poor policy choices: four-trillion dollars spent on war and retrenchment in Afghanistan and Iraq; the Trumpian disdain for global institutions and traditional alliances; and domestic political polarisation and gridlock. All have shaken American credibility and emboldened Vladimir Putin and Jinping Xi to believe that they had sufficient leverage to pursue more aggressive strategies towards America’s European allies. But rather than reinventing American foreign policy, as William Burns (2020) advocated before becoming the CIA’s director, Joe Biden (2022) has focused on restoring US leadership of the West. He has returned to the familiar theme of democracy promotion and, like his predecessor Donald Trump, the restoration of an American manufacturing capacity to offset the global supply chain problems exposed by the pandemic and the war. Following House Speaker Nancy Pelosi’s visit to Taiwan, both have been amplified by the prospect of a Chinese blockade or invasion of Taiwan from where, crucially for the US, so many computer chips originate (The White House, 2021).

An inherent weakness in Biden’s approach rests on his simplistic views of ‘democracy’ and ‘autocracy’. The American version of democracy has often simply been a euphemism for exporting an unregulated neo-liberal version of capitalism. While countries across Africa, Asia and Latin America have generally eschewed the American version of democracy, they have nonetheless come to embrace globalisation as a vehicle for dramatic aggregate, albeit unequal, growth. Globalisation per se may be highly contested. But what is uncontested is that global poverty rates have consistently improved under conditions of globalisation, at least prior to the coronavirus pandemic (World Bank, 2020). Few states are willing to cede those benefits in the name of a conflict over values. Simply stated, Biden’s democracy agenda is not working. Even countries that are democracies are underwhelmed by the rhetoric coming from a USA that they think should heal itself rather than proselytise to others (see Hirsch M., 2022).

While the logic of Biden’s approach implies the formation of two blocs, the two sides of the global binary nonetheless remain indefatigably tied to each other by decades of globalisation that are not likely reversible. The US wants to restore, or ‘re-shore’, its supply chains. Yet the nativist Trump administration’s efforts to cajole, bribe or threaten America’s global corporations to do so failed (Scott, 2020). There is little evidence that the Biden administration’s new term for this form of protectionism – ‘friend-shoring’, in which the US favours allies in supply chains – will fare any better. As a strategy, it fails to factor in the problems of refashioning supply chains (often expensive and requiring technical regulatory and fiscal action), the complexity of determining who are really friends and how to choose (between) them. The fragility of relationships and what ensures they persist is a perennial foreign policy challenge. It also too easily assumed that the other major supply chain actors, notably China and Europe, will acquiesce in this process (Beattie, 2022b).

Cold War-style bipolarity is unattainable unless Americans propose to rid themselves of most of the clothes they wear and the Apple phones they use. Comparably, Europe would need to escape its dependence on Russian gas. It is difficult to imagine Europeans being willing to freeze pending their governments finding alternatives. American exports of liquified natural gas are clearly insufficient to offset the EU’s dependence on Russia, as are new sources from the Middle East and North Africa. As noted, sometimes states will cleave towards the US, sometimes towards China, depending on the issue. But the overall effect is that even the more devout allies will at times adopt ambivalent positions, interacting with both but choosing a strategic posture dependent on their specific policy priorities. In the technical parlance, a mix of band-wagoning, balancing, hedging, autonomy and nonalignment will become increasingly commonplace among non-partisan states and traditional allies. In effect, porous holes exist between policy domains in a fuzzy bifurcated order that were absent in a bipolar one.

5. FUZZY BIFURCATION AND THE DISTINGUISHING FEATURES OF HYBRIDITY

So, beyond these clashing logics, what technically distinguishes fuzzy bifurcation from bipolarity? The answer, as noted, rests on the concept of hybridity in three dimensions: actors, strategy and behaviour. First, reminiscent of Acharya’s ‘multiplex world’, is a growing hybridity of actors in the international system. Hybridity – rather than a simple focus on states and their material capabilities relating to national security – involves a diffuse set of actors operating in multiple global policy contexts: from states to corporations, NGOs and foundations through to transnational criminal actors, paramilitary organisations and modern-day mercenaries. The presence, relevance and capabilities of actors vary by context. The state may be most pertinent in the prosecution of a European war. But a foundation (the Gates Foundation) may have greater significance when it comes to fighting malaria in Africa or promoting democracy (the Open Society Foundation). The role of actors become contingent, diverse and complex in navigating the processes of fuzzy bifurcation.

A second contemporary contrast with the bipolar Cold War order concerns hybrid strategies. During the Cold War alliance structures, and the strategies of America’s and the Soviet Union’s proxies, were (more or less) coherent and consistent. The world now looks more like a network than a chessboard (Slaughter, 2017) – without the US being the spoke in a hub-and-spoke system of reliable allies. For China and the USA, universalist assumptions about the rule of law or interests of states are replaced by a need for strategic empathy in an environment that is strategically ambiguous. In this context, selective hedging becomes a strategic norm (Ciorciari & Haacke, 2019). Alternatively, actors may adopt wedging strategies aimed at splitting, blocking or weakening hostile alliances and securing a realignment, or dis-alignment, as Putin anticipated would happen among Europeans before the outbreak of the war. Either way, competitive geo-political practices operate in a diffuse and porous bifurcating order, fluctuating across policy domains. In this new strategic context, terms like ‘allies’, ‘frenemies’, ‘competitors’, ‘rivals’ and even ‘adversaries’ become contingent on the specific policy issue.

Third, these elements are clearly reflected in hybrid behaviour over issues like trade and security, especially in regional contexts such as East and Southeast Asia (see Hwang & Ryou-Ellison, 2021; Jones & Jenne, 2021). The same is true of global issues, as with climate change, where the EU sided with the US normative agenda at COP 21 in Paris, only to cleave towards China’s agenda at COP 26 in Glasgow. But hedging is not the only option. One consequence of this new context is that it also enhances the possibility of a greater strategic autonomy to which the EU aspires (Balfour, 2021), allowing it to pursue a distinct path, for example, in the field of digitalisation, where many of its views and practices oppose those of both the US and China.

Both India and Israel represent examples of such ambivalence in the context of the Ukraine war. Both favour conciliation, given that their own economic and security interests are in tension. Israel remains America’s closest ally in the Middle East. But it treads a fine line because of the cooperation it requires when it comes to Russia’s role on its border with Syria or economic relations with its new nonaligned Gulf Cooperation Council partners. India provides a similar example of behavioural ambiguity. It shares many interests with the USA but has long been seen as a relatively unreliable partner (Tellis, 2022) often focused more on wedging than hedging (Nanda, 2022). India is therefore comfortable participating in the Quad while simultaneously eschewing the western sanction regime and, in fact increasing fossil fuel purchase from Russia (Schmall & Reed, 2022). As India’s Minister of External Affairs commented when asked about his country’s rejection of the sanction regime, ‘Europe’s problems are not India’s problems’ (Jaishankar, 2022). Other states, like Saudi Arabia (on selling oil) or Hungary (on buying it), have and will likewise pursue strategies that serve their immediate interests. Behaviourally, Alliance membership in one domain is therefore no predictor of a state’s allegiance in another.

6. THE IMPLICATIONS OF FUZZY BIFURCATION

Managing allies in a bifurcating world thus presents challenges for the USA and China different to those that existed for the USA and the Soviet Union in the bipolar Cold War. Prospects for uniformity across the diplomatic, economic, military and cultural domains are now slight. The characteristics of fuzzy bifurcation, as opposed to bipolarity or multipolarity, determine a strategically messy world in which the notion of an ‘international order’ – certainly a liberal order built on a series of shared norms – are but a distant memory. States are more likely to hedge in their relationships with the two great powers than to bandwagon with either in a disciplined manner. They will look to exploit the ambiguities that bifurcation affords. Notably, unlike in bipolarity, the ‘weak’ can afford to be opportunistic. Greece will not necessarily be forced to choose between a security alliance with the USA and economic linkages with China. Adept smaller states may find their way through this process because the porous nature of bifurcation mitigates against having to choose a side.

The question of which of the big two – China and the United States – will fare better in a given context is open to debate. Both the unintended consequences of its stringent domestic pandemic lockdowns of 2020–22 and the Ukraine war undoubtedly represent a setback for China. Its longer-term push for an alternative vision of international order (Higgott, 2021), captured in its Global Security Initiative (GSI) to counter American ‘hegemonism’ and ‘block-building’, will clearly be tested by its ‘friendship without limits’ with Russia. Hence, while its rhetorical support – saying little other than blaming the West – has been strong, its non-provision of military aid and its non-transgression of the sanction regime are telling of its desire not to alienate key elements of international opinion beyond a largely non-aligned Global South.

Beijing surely calculates the implications of strategic hedging for its economic relationship with Europe, given its trade with the EU dwarfs that with Russia. If the EU was willing to abandon the EU–China Comprehensive Agreement on Investment (CAI) over human rights, then the predicament presented for China by its association with Russia looms all the greater. More positively for China, Russia’s greater dependency on it presages easier fossil fuel access in the future. China’s leadership will also have learnt lessons about military strategy and how to build a greater degree of domestic resilience through improved technological and material self-sufficiency, should the West react with sanctions to any further coercive measures it might take against Taiwan (Corbett et al., 2022).

The international standing of the USA on the other hand, however temporarily, has been enhanced by its response to the Russian invasion. Its principal European and Asian allies have band-wagoned rather than hedged. The prospect of closer China–Russia relations has had the effect of moving major Asian players, notably South Korea and Japan, into closer alignment with the US than at any time in the last decade. While American support of Ukraine has not eradicated the negative views of the Afghanistan withdrawal or the AUKUS agreement, it has certainly gone some way towards mitigating them. Certainly, Russia’s behaviour in Ukraine has reminded non-great powers, particularly Europeans, of the ruthlessness of major authoritarian states. Expediently, at the very least, if third-party states have to make choices between the great powers on various policy issues, then in a familiar fashion, the USA, at least temporarily, may still look like the least-intrusive, least-bad option.

7. CONCLUSION: THE FUTURE OF FUZZY BIFURCATION

How long will the era of fuzzy bifurcation last? The processes we have identified, short of a war between China and the United States that neither want, will take a long time to work their way through the global economic and security systems. Meanwhile, traditional categories such as partner, rival, competitor, ally and adversary will continue to be contingent and contextual. America’s major European security allies in the Ukraine war will vary in the extent to which they cleave to the United States across other policy domains. While the EU’s expressed preference for strategic autonomy remains aspirational in the realm of security, it will elsewhere try to exercise autonomy where it can, the current battle against climate change being a notable example (Borrell, 2021; Borrell & Hoyer, 2021). Its desire for autonomy will only increase if Donald Trump, or a similarly inclined nationalist politician, wrestles back the American Presidency in 2024. Until then, the likelihood is that Biden will be frustrated by what he will surely regard as the EU’s inconstancy.

China’s shift towards a more confrontational diplomatic posture may be unabated when it comes to regional issues, such as the South China Sea, or Taiwan (which it regards as a domestic issue). But it remains more comfortable than the USA with the strategic ambiguity that fuzzy bifurcation engenders. It fits better with China’s deliberately ambiguous approach to multilateralism and world order (Caffarena, 2022). But in a messier world, China still has to manage its problematic relationship with Russia. The two may share a desire to contain the USA and collaborate in venues such as the Shanghai Cooperation Organisation. But this nevertheless will not stop either from competing for influence elsewhere, such as in Central Asia and Africa.

Fuzzy bifurcation gives many other states a markedly greater latitude than they enjoyed during the Cold War, and thus a chance to implement their own strategies. This explains why some also see a new era for India as an independent and influential ‘swing’ power (Merchant, 2022). Turkey’s leaders make much the same claim about their country’s future (Aktaş, 2022). Even smaller states have found that they have a greater latitude as they navigate new terrain. Resources and material capability still count. But so too does skill and will. A capacity for strategic empathy and strategic ambiguity – an understanding of the thinking of others and a nuanced conception of the likely positioning that they might adopt – will prove critical if states are to achieve identified policy objectives. These assertions are not particularly novel. The more thoughtful traditional ‘middle powers’ – Australia and Canada and the Nordic countries (Cooper et al., 1993) – have long understood this modus operandi. Newer middle powers, especially in Asia, are also learning these lessons (Howe, 2021). Policy makers are therefore revisiting long held assumptions about the interests of other states and their bilateral relationships with them. Hedging is becoming endemic.

If many authors cited in this article are correct, then some de-coupling from global supply chains, and a more nationalist form of economy and nativist form of politics, will continue apace. But many factors may intercede. Putin may not survive the war, a nativist may not return to the American presidency, President Xi may not launch an attack on Taiwan. A decade ago, few would have bet on the UK’s exit from the EU, the election of Donald Trump, a global pandemic or a war in Europe, let alone all of them. We are not minimising the significance of a pandemic and a war on European soil in contending that their systemic effects may be overstated. But they do not represent the end of globalisation nor the re-emergence of a familiar Cold War structure.

Rather we see a continuing period of ambiguity that will present new strategic threats as well as opportunities. In the battle of ideas and for influence, neither the United States nor China will record a knockout blow. The age of fuzzy bifurcation has been in train for quite some time. The pandemic and the war have just made it more transparent. How states deal with this represents the major policy challenge for the big and the small alike. The US and China will have to learn to tolerate and interact with each other not only as states but also as ‘civilisations’ (see Coker, 2019; Higgott, 2022). Other players, notably the EU, as we have tried to suggest, will develop a new kind of policy thinking and practice that reflects both the constraints and opportunities presented by fuzziness.

ACKNOWLEDGEMENTS

The authors thank Richard Ned Lebow, Kim Nossal and Martin Rhodes for their comments on a prior draft, as well as the invaluable suggestions of two reviewers. Simon Reich also wishes to acknowledge the support of the Central European University where he spent time as a visiting George Soros Chair during the research and writing of this article.

Endnotes

1 On the EU’s intent to build its independent weapons production capacity see European Commission (Borrell, 2022). 2 This dichotomous mode of thinking, with but a few exceptions, is more prevalent amongst economists than scholars of international relations. Of exceptions see: Pisani-Ferry, 2021 and Skidelsky, 2019.

Biographies

Richard Higgott is Distinguished Professor of Diplomacy, Brussels School of Governance at the Vrije Universiteit, Visiting Professor of Political Science, University of Siena and Emeritus Professor of International Political Economy at the University of Warwick. His latest book, States, civilisations and the reset of world order was published by Routledge in 2021. He can be reached at richardhiggott0@gmail.com.

Simon Reich is a Professor in the Division of Global Affairs and Department of Political Science at Rutgers University, Newark, and a Research Associate at CERI (Sciences Po.) in Paris. He is author, co-author, or editor of 13 books and currently co-edits ‘The Oxford Studies in Grand Strategy’ book series (Oxford University Press). He can be reached at reichs@rutgers.edu.