After half a century of almost uninterrupted economic growth, we have largely forgotten to factor in the potential impact of sustained economic weakness when analysing geopolitical risk.
Global economic growth has slowed substantially since the heady days before the financial crisis of 2008. The advanced Western economies have barely recovered, and, after decades of average growth of 10% in China, Beijing says the Chinese economy is now expanding at 6.7%— a figure many external analysts believe is optimistic. There’s little sign of a return to pre-financial-crisis growth rates any time soon.
The potential dangers of a prolonged economic trough are global, but in East Asia many governments depend on their ability to deliver economic growth either to fulfil election promises, in the case of the democracies, or to justify their continued monopoly on power, in the case of the autocracies.