Rash Report: China rises, including to top of 2018 'risk list'

As bracing as the below-zero temps whisking in 2018 was the geopolitical forecast from the Eurasia Group, a global political risk research and consulting firm.

Belying buoyant equity markets, the world is facing a geopolitical backdrop that is "radically destabilizing," Eurasia Group President Ian Bremmer said during a call to unveil the group's analysis of "Top Risks for 2018."

A decade ago, Bremmer remembered, a somewhat cohesive, coordinated global response kept the Great Recession from becoming a depression. "Now we're in a geopolitical recession that's every bit as important for the world — and the response from the United States is: 'It's basically not my problem.' "

The forecasting firm saw it coming last year when it named an "independent America" as its top 2017 risk. The void left by this disengagement did not go unfilled, and in fact the Eurasia Group deemed this year's top risk as "China loves a vacuum."

"Until last year, China had avoided talk of global leadership," the Eurasia Group said in its analysis. "Its diplomatic rhetoric was seldom ideological, let alone evangelical, but in 2017, Beijing publicly shifted its official strategy. China is no longer biding its time. [Chinese President] Xi has now consolidated enough domestic power to redefine China's external environment and set new rules within it. He benefits from lucky timing: Trump has renounced the U.S. commitment to Washington-led multilateralism and generated much uncertainty about the future U.S. role in Asia, creating a power vacuum that China can now begin to fill."

The uncertain sound from the Trump administration's trumpet could exacerbate several of the Eurasia Group's other threats, including, starkly, "accidents," which could occur against a "less resilient backdrop." And then there's the "global tech cold war," which pits an independent, industry-centric U.S. approach against a statist China chasing key economic and security-related technologies to develop and dominate, such as artificial intelligence. Also, reaction to China could play prominently into "protectionism 2.0," which ranked seventh on this year's risk list.

The Eurasia Group isn't alone in invoking China as a challenge to the established order.

And while the International Crisis Group didn't specifically list China on its "10 Conflicts to Watch" list issued on Tuesday, China does figure prominently in its analysis of the top conflict, North Korea. (Current carnage in Yemen, Afghanistan, Syria and the U.S.-Saudi-Iran rivalry were analyzed, as well as the ethnic cleansing of the minority-Muslim Rohingya in Myanmar; conflicts in the Sahel and the Democratic Republic of Congo; and the enduring destabilization of Venezuela and Ukraine.)

So it's particularly prescient that Global Minnesota chose China as its 2018 focus country and that two of the monthly "Great Decisions" topics are "China: Economic power and geopolitics" and "the waning of Pax Americana."

Several special programs are planned, including a Global Conversation program in April on "China and America: The New Geopolitical Equation," featuring Jonathan Stromseth, a Brookings Institution scholar.

But first up will be the U.S. Foreign Policy Update 2018 talk on Jan. 23 by Tom Hanson, a former foreign service officer who is now the diplomat-in-residence at the University of Minnesota Duluth. In a preview, Hanson said he also sees China's rise as central to 2018's narrative, especially as it pertains to Pyongyang and potential trade troubles.

But beyond 2018 is where Beijing may be making the most profound difference — especially in contrast with Washington.

How those countries react — to a bolstered Beijing and a wary Washington — adds to 2018's risks. Similar in tone to Bremmer's world wariness, Hanson added: "I think the No. 1 threat is just the level of uncertainty that surrounds a lot of issues right now. We had a lot of changes in 2017, and the U.S. as kind of a central player has been sending a lot of mixed messages, mixed signals, on issues, which makes it hard for countries to really know how to react."

But react they will. Which might make 2018 even more geopolitically turbulent than 2017.