US-China Chip Dispute, Putin's War, Middle-East Tensions And Other Geopolitical Risks For 2023: What Experts Say

US-China Chip Dispute, Putin's War, Middle-East Tensions And Other Geopolitical Risks For 2023: What Experts Say

Even as the acute effects of the COVID-19 pandemic subside in many countries, the world is still in for significant geopolitical risks in 2023, according to experts. 

What Happened: With Vladimir Putin's war in Ukraine, escalating U.S.-China competition and Xi Jinping's aggression against Taiwan, BlackRock Investments said its Geopolitical Risk Indicator has hit a "high." 

Here's a list of the top 10 geopolitical risks for 2023, as per expert analysis, amid increased market attention to global scenarios. 

1) US-China Tech War: Analysts see a big chance of the U.S.-China chip war escalating further after Beijing recently launched a dispute against the U.S. at the World Trade Organization and the Biden administration added three dozen Chinese firms to its export blacklist.

Experts said the "strategic competition between the U.S. and China is driving global fragmentation as both focus on boosting self-reliance, reducing vulnerabilities and decoupling their tech sectors."

2) Major Cyberattacks Amid Russia-Ukraine War: Experts said the critical government and private sector networks, as well as infrastructure, are vulnerable to hacking and spying and there's a likelihood of cyber attacks increasing amid the Russia-Ukraine conflict. 

"Repeated attacks could cause significant damage and disruption that could spill over to financial markets and the economy."

3) Putin-NATO Conflict: The analysts said since Putin "failed" in his initial aim to capture Ukraine, there is an ever-present risk of intentional or accidental escalation between NATO and Russia, adding that a settlement looks "unlikely" for now. 

"We see an extended conflict, alongside a long-term political, economic and military standoff between the West and Russia."

4) Terror Attack(s): Although the U.S. demonstrated its counterterrorism capabilities after killing Al-Qaeda leader Ayman al-Zawahiri, it said there's serious and persistent terrorist threat to the homeland as affiliate networks and ISIS remain active. 

"We see the threat increasing amid a more polarized U.S. political environment."

5) Emerging Markets Political Crisis: Other than the Ukraine war, the emerging markets face severe pressure from high food and energy costs, higher U.S. interest rates, a strong U.S. dollar and slow Chinese growth amid COVID-19. Although some emerging markets, like Indonesia and Brazil, may absorb these shocks, the analysts said an increased risk of sovereign defaults and social unrest is likely. 

6) Escalation Of Taiwan Conflict: The island nation continues to remain the key flashpoint in U.S.-China relations. There is a higher chance that the next U.S. Congress will likely support closer Taiwan relations, which may further elevate the tensions as Xi pushes for reunification. 

"China can take a range of steps short of military action to pressure Taiwan."

7) Gulf Relations: The strained U.S.-Saudi relations, Iran nuclear talks’ collapse, Iran's military support for Russia and Mahasa Amini protests in Tehran are some of the top factors that may drive the Gulf tensions further. 

8) North Korea Conflict: As Kim Jong Un continues to strengthen his country’s arms production, with the recent testing of a high-thrust rocket motor, there's a "medium" risk that the tensions will worsen in 2023, with a possibility of a seventh nuclear test. Experts, however, do not see an imminent threat of regional conflict.

9) Climate Policy Gridlock: As the world moves away from Russian fossil fuels in the near term amid Putin's war, this will boost decarbonization plans in Europe and make clean energy more competitive. 

"In the U.S., there is political polarization around energy and climate change."

10) Europe's Economy: The energy crunch amid Russian sanctions and inflationary pressures led to a populist resurgence and economic volatility around the world and had a severe impact on Europe. The analysts are worried that divisions may emerge as economic costs of the Ukraine war mount. 

"Franco-German relations are at a low, and countries are grappling with how to approach China amid a more competitive geopolitical environment."

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Posted In: NewsPoliticsMarketsGeneralChina-Taiwan crisisCovid-19EurasiaJoe BidenKim Jong UnRussia-Ukraine WarVladimir PutinXi Jinping