HONG KONG ¨C At the latest annual meeting of the World Economic Forum in Davos, United Nations Secretary-General offered an unusually frank of the international order¡¯s current predicament. With the world ¡°plagued by a perfect storm on a number of fronts,¡± he said, ¡°we need cooperation, yet we face fragmentation.¡±
In fact, the perfect storm is better likened to a tsunami. Its components ¡ª including supply-chain disruptions, an energy crunch, a cost-of-living crisis, slowing global growth and a lurch toward climate disaster ¡ª are all at least partly consequences of the tectonic rift between China and the United States.
If what Guterres calls the ¡°Great Fracture¡± plays out, the world will have ¡°two different sets of trade rules, two dominant currencies, two internets and two conflicting strategies on artificial intelligence.¡± The costs would be tremendous. World gross domestic product would by 1.5%, or more than $1.4 trillion in annual terms; prices would rise virtually across the board; and the delivery of global public goods would be severely diminished.
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