China Articles - February 20, 2022
Friends,
Of note, this week’s UK edition of The New Statesman published a special issue with six articles (articles 7-12) on the crimes that the Chinese Communist Party is committing against their own Uyghur population.
From The New Statesman
This week’s issue starts with an OpEd by Stephen S. Roach, the former Morgan Stanley chief economist and head of Morgan Stanley Asia. Roach calls on Americans to recognize the existence of a new cold war in which the PRC and Russia are actively triangulating against the United States to bring about an illiberal international order.
At the end of last week, the White House published the U.S. Indo-Pacific Strategy which continues an approach which started at the end of the Obama Administration and accelerated during the Trump Administration to re-focus U.S. foreign, economic and defense policy towards the risks posed by the Chinese Communist Party:
“The PRC is combining its economic, diplomatic, military, and technological might as it pursues a sphere of influence in the Indo-Pacific and seeks to become the world’s most influential power. The PRC’s coercion and aggression spans the globe, but it is most acute in the Indo-Pacific.
…
Our collective efforts over the next decade will determine whether the PRC succeeds in transforming the rules and norms that have benefitted the Indo-Pacific and the world. For our part, the United States is investing in the foundations of our strength at home, aligning our approach with those of our allies and partners abroad, and competing with the PRC to defend the interests and vision for the future that we share with others.
…
Our objective is not to change the PRC but to shape the strategic environment in which it operates, building a balance of influence in the world that is maximally favorable to the United States, our allies and partners, and the interests and values we share.”
Simultaneously, the U.S. Trade Representative released their annual report to Congress on the (non)compliance of the PRC with its commitments to the international trading system. Below are a few lengthy quotes from the Executive Summary:
“After 20 years of WTO membership, China still embraces a state-led, non-market approach to the economy and trade, despite other WTO members’ expectations – and China’s own representations – that China would transform its economy and pursue the open, market-oriented policies endorsed by the WTO. In fact, China’s embrace of a state-led, non-market approach to the economy and trade has increased rather than decreased over time, and the mercantilism that it generates has harmed and disadvantaged U.S. companies and workers, often severely.
China also has a long record of violating, disregarding and evading WTO rules to achieve its industrial policy objectives. In this report, as in our prior reports, we identify and explain numerous unfair, non-market and distortive trade policies and practices used by China in pursuit of its industrial policy objectives. We also describe how China has sought to frustrate WTO oversight mechanisms, such as through its poor record of adhering to its WTO transparency obligations.
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For many years, the United States pursued a dual track approach in an effort to resolve the many concerns that have arisen in our trade relationship with China. One track involved using high-level bilateral dialogues, and the other track focused on enforcement at the WTO.
The United States approached its bilateral dialogues with China in good faith and put a great deal of effort into them. These dialogues were intended to push China toward complying with and internalizing WTO rules and norms and making other market-oriented changes. However, they only achieved isolated, incremental progress. At times, the United States did secure broad commitments from China for fundamental shifts in the direction of Chinese policies and practices, but these commitments were unenforceable and China repeatedly failed to follow through on them. Over time, moreover, commitments from China became more difficult to secure.
Meanwhile, at the WTO, the United States brought 27 cases against China, often in collaboration with like-minded WTO members. We secured victories in every case that was decided. Still, even when China changed the specific practices that we had challenged, it did not typically change the underlying policies, and meaningful reforms by China remained elusive.
…
In Part Three, we explain that, in recent years, it became evident to the United States – and to an increasing number of U.S. trading partners − that new strategies were needed to deal with the many problems posed by China’s state-led, non-market approach to the economy and trade, including solutions independent of the WTO. We also emphasize that these strategies needed to be based on a realistic assessment of China’s economic and trade regime and need to be calibrated not only for the near-term but also for the longer term.
Thanks for reading!
Matt
MUST READ
1. China’s Triangulation Gambit
Stephen S. Roach, Project Syndicate, February 10, 2022
The former Morgan Stanley Chief Economist and head of Morgan Stanley Asia describes the implications for the United States as Beijing and Moscow team up for a New Cold War.
2. America Is Showering China with New Restrictions
Eric Sayers, Foreign Policy, February 15, 2022
Eric Sayers writes about the “flurry of new restrictions—including on exports, imports, direct investment, and financial securities—that are fundamentally reshaping the U.S.-China economic relationship.”
3. Entente Multiplies the Threat from Russia and China
John Bolton, Wall Street Journal, February 15, 2022
Former National Security Advisor John Bolton analyzes the impacts of the new Sino-Russian entente.
4. Indo-Pacific Strategy of the United States
U.S. Executive Office of the President, February 11, 2022
In my opinion, the most critical quote in this strategy is: “Our objective is not to change the PRC but to shape the strategic environment in which it operates, building a balance of influence in the world that is maximally favorable to the United States, our allies and partners, and the interests and values we share.”
This is the second U.S. Administration to abandon the fantasy of persuading the CCP to act responsibly through inducements, public praise and muted criticisms.
5. 2021 USTR Report to Congress on China’s WTO Compliance
Office of the U.S. Trade Representative, February 2022
This is the 20th report by the Office of the U.S. Trade Representative to Congress about the PRC’s (non)compliance with their international commitments to the World Trade Organization. Like nearly every year’s report, this one describes the “unique and very serious challenges that China’s state-led, non-market approach to the economy and trade continue to pose for the multilateral trading system” and the ineffectiveness of various strategies that the United States has pursued for two decades to encourage compliance.
This year’s report calls for “new and more effective strategies – including taking actions outside the WTO where necessary” to address these long-standing harms to the United States and an international, rules-based trading system.
CNN, February 17, 2022
CNN reports on a new report from the Atlantic council titled "Financing and Genocide: Development Finance and the Crisis in the Uyghur Region." The report presents evidence that the World Bank Group, through one of its development banks, the International Finance Corporation (IFC), has, in recent years, “loaned money to four Chinese companies that have been linked to forced labor and land expropriation in the region, along with environmental damage and the destruction of indigenous cultural heritage sites.”
AUTHORITARIANISM
7. The Silencing: a special report on China, the Uyghurs and a culture under attack
Katie Stallard, The New Statesman, February 16, 2022
From Xinjiang’s network of detention centres to the suppression of tradition, writers report on China’s relentless campaign against the Uyghurs – and what will be lost if it succeeds.
8. Behind Xi Jinping’s Great Wall of Iron
John Simpson, The New Statesman, February 16, 2022
How China’s Uyghur population became the target of a merciless campaign of collective punishment.
9. Suspicion and subjugation in Xinjiang
Katie Stallard, The New Statesman, February 16, 2022
The Chinese authorities have long treated the region – and its people – with suspicion. The abuses there can no longer be ignored.
10. Historic Uyghur culture is under existential threat
Rian Thum and Musapir, The New Statesman, February 16, 2022
Shaped over centuries by pilgrimage, trade, art and war, a unique culture has been suppressed and exploited by Beijing. Can Uyghur distinctiveness re-emerge?
11. The Uyghurs’ plight shows the biggest threat to democracy is Western apathy
Elif Shafak, The New Statesman, February 16, 2022
We know that populist dictators are emboldened by each other’s atrocities, so how many more disappearances will it take before China crosses the West’s “red line”?
Anoosh Chakelian, The New Statesman, February 16, 2022
In a series of specially commissioned poems, the writer who left China in 2010 refuses to be “defined by genocide”.
13. Hong Kong: How Beijing Perfected Repression
Michael C. Davis, Journal of Democracy, January 2022
China's move to impose on Hong Kong a new National Security Law (NSL) in 2020 and accompanying "electoral reforms" in 2021 represent a complete hollowing out and abandonment of the city's liberal-democratic constitutional model that Beijing had promised to let stand.
These policies turned Hong Kong's vaunted legal system into the chief instrument of repression, challenging the independence of the city's courts, law enforcement, and legislative process. This article traces the mass arrests made under the NSL and other challenges posed to basic freedoms across all sectors of the city's society.
14. A Succession Drama, Chinese Style, Starring Xi Jinping
Chris Buckley, New York Times, February 14, 2022
As a party congress approaches, it’s increasingly clear that Xi Jinping plans another five-year term. But if he has ideas about a successor, he has hidden them well.
Jun Mai, South China Morning Post, February 16, 2022
President says country should move faster on legislation relating to foreign matters, particularly around sanctions and interference
He also calls for efforts to ensure lawyers ‘voluntarily support the Communist Party and our socialist legal system’
16. China censors lesbian plotline in 'Friends'
Philip Wang, CNN, February 16, 2022
17. ‘We’re going backward’: Chinese viewers upset by censorship of LGBTQ content in ‘Friends’
Jiayun Feng, SupChina, February 14, 2022
China’s media nannies have censored ‘Friends,’ even though the classic American sitcom, much loved in China, used to be available in all its unbowdlerized glory.
18. Eyes everywhere: China's surveillance equipment spreads worldwide
Nikkei Asia, February 16, 2022
The tone of British lawmaker David Alton, a member of the House of Lords and a well-known human rights advocate, was sharper than usual. China's Hangzhou Hikvision Digital Technology is "directly linked to the surveillance state," he declared at a news conference on Dec. 9 last year. The company's surveillance cameras, he said, can be found "on every high street in this country."
19. Hong Kong singer arrested on suspicion of acting with seditious intent and money laundering
Kelly Ho, Hong Kong Free Press, February 16, 2022
Hong Kong police have arrested a singer on suspicion of acting with a seditious intention and money laundering. Citing sources, local media reported that pro-democracy singer-activist Tommy Yuen has been detained.
20. Hong Kong tech giants 'censor' UK rights website amid firewall fears
Jojo Man, Radio Free Asia, February 14, 2022
21. Pernod Ricard asks senior staff in Hong Kong to temporarily relocate
Primrose Riordan, Financial Times, February 15, 2022
22. Grindr is pulled from Apple’s App Store in China.
Paul Mozur, New York Times, February 2, 2022
23. Hong Kong pop star Denise Ho arrested by national security police
Jessie Young, CNN, December 29, 2021
Cantopop star and prominent Hong Kong pro-democracy activist Denise Ho was arrested at her home on Wednesday morning by the city's national security police.
She was one of six people arrested in an early morning operation, all linked to online media organization Stand News. Police later confirmed at a news conference that a seventh person had been arrested. They have been accused by police of "conspiracy to publish seditious material," a colonial-era crime.
24. Journalists warn of chilling impact of Hong Kong's planned 'fake news' law
Radio Free Asia, February 15, 2022
ENVIRONMENTAL HARMS
25. Rocket on collision course with the moon ‘built by China not SpaceX’
The Guardian, February 14, 2022
26. How The U.S. Can Fight China’s Fishy Business
Jill Goldenziel, Forbes, February 8, 2022
Illegal fishermen are more dangerous than pirates. You may have heard it here first, but the U.S. Coast Guard said so in 2020: illegal, unreported, and unregulated fishing (IUU Fishing, or IUUF) is the No. 1 global maritime security threat.
Hungry nations are exploiting others’ fishing stocks as overfishing has drastically depleted the world’s supplies. In the process, they undermine the global economy, threaten traditional livelihoods, deprive populations of their traditional protein source, and facilitate transnational crime.
China is the largest perpetrator of illegal fishing—and uses fishing to mask other illegal activities. China uses its maritime militia and fishing fleets to engage in legal warfare, or lawfare. U.S. efforts to tackle IUU fishing must address this context of lawfare and great power competition with China. Policies that counter only the act of fishing itself will be insufficient to address the security risk.
27. Chinese Fishing Fleet Wreaks Havoc in Latin American Oceans
Julieta Pelcastre, Dialogo, February 9, 2022
28. China Says the Winter Olympics Are Carbon Neutral. They Aren’t
Natasha White and Akshat Rathi, Bloomberg, February 16, 2022
FOREIGN INTERFERENCE AND COERCION
29. How China Captured Hollywood
Erich Schwartzel, The Atlantic, February 8, 2022
Over this next century, China wants to use the movies to rebrand itself, and it has learned how to do so from the best.
30. Taking the low road: China's influence in Australian states and territories
John Fitzgerald, Australian Strategic Policy Institute, February 15, 2022
In November 2020 a Chinese official passed a list of 14 grievances to Australian journalists, highlighting what Beijing regarded as missteps in the Australian government’s relations with China. A striking feature of the list is that many concern Australian Government attempts to limit Chinese engagement with the states and territories, or state-based institutions such as universities.
Why did state and territory relations with China concern Canberra? This study explores the changing nature of China’s engagement with Australian states and territories, local governments, city councils, universities, research organisations and non-government organisations, all nested in Australian civil society.
What emerges is the astonishing breadth and depth of China’s engagement, much of it the welcome outcome of Australia’s economic and people-to-people engagement with China over many decades. But it’s equally apparent that China has made covert attempts to influence some politicians and overt attempts to engage states, territories and key institutions in ways that challenge federal government prerogatives and have brought the two levels of government into sharp public dispute.
Here we provide a detailed analysis of how China has worked to build its political influence and build dependence through trade and economic ties with each Australian state and territory.
In addition, unique cross-cutting chapters review the impact of Chinese engagement with Australian universities and show how Beijing’s ‘United front’ organisation is designed to build influence. We assess the impact on Australian businesses and the constitutional challenges presented by Chinese engagement with the states and territories.
31. India bans 54 more China-linked apps, including Sea Limited's Free Fire
Rebbeca Ren, Ping West, February 15, 2022
32. India cautions students against enrolling in Chinese universities
Sutirtho Patranobis, Hindustan Times, February 10, 2022
Two years on, Indian students awaiting their return to China still in limbo
Ananth Krishnan, The Hindu, January 29, 2022
33. AUDIO – Talks on China: Martin Thorley on CCP interference activities in the UK
Chris Cash and Martin Thorley, China Research Group, February 14, 2022
The case of Christine Lee shot to national attention when news broke that the Speaker of the House of Commons had warned MPs that there was a Chinese agent operating in parliament. But why is Lee perhaps just the tip of the iceberg when it comes to Chinese interference in the UK political system and how can the UK better defend itself against such threats?
Chris Cash is joined by Martin Thorley, a Postdoctoral Research Fellow at the University of Exeter whose research has uncovered Chinese party-state activity in the UK and evidence of compromised actors within the British establishment. They discuss the activities of the United Front and the groups it has targeted, the UK's approach to foreign interference, and how East Asian diaspora communities can be protected amid wider geopolitical struggles.
You can read Martin's now famous Twitter explainer thread on the Christine Lee case here.
Martin also penned an article for The Guardian in which he described how the UK and China find their relationship in a current state of 'phoney peace'. You can read that article here.
HUMAN RIGHTS AND RELIGIOUS PERSECUTION
34. Financing & genocide: Development finance and the crisis in the Uyghur Region
Laura T. Murphy, Kendyl Salcito and Nyrola Elima, Atlantic Council, February 16, 2022
A joint investigation by the Helena Kennedy Centre for International Justice at Sheffield Hallam University and NomoGaia, published in coordination with the Atlantic Council’s DFRLab, reveals how the World Bank’s private lending arm, the International Finance Corporation (IFC), has several significant investments in China’s Xinjiang Uyghur Autonomous Region, where indigenous peoples have been subjected to what international legislators, legal scholars, and advocates have determined to be a genocide.
Significant evidence suggests that several of IFC’s clients are active participants in the implementation of China’s campaign of repression against the Uyghurs, including through forced labor, forced displacement, cultural erasure, and environmental destruction. IFC’s failure to adequately safeguard communities and the environment affected by its financing in the Uyghur Region makes the institution complicit in the repression of Uyghur, Kazakh, and other minoritized citizens.
Using Chinese state media and propaganda, satellite imagery of IFC’s client operations, IFC project documentation, public reports, and corporate disclosures, this report presents credible evidence that IFC financing is contributing to companies committing gross human rights abuses against Uyghur peoples in the region and makes evidence-based recommendations to IFC and other parties.
35. “China Is Slaughtering Uyghurs Since 1949”
Ruth Ingram, Bitter Winter, February 14, 2022
36. Decoding State Security Trials, Part II: “Other” Trials & Other Provinces
Dui Hua Human Rights Journal, February 15, 2022
In China, trials for crimes of endangering state security (ESS) are capable of generating intense, international media scrutiny while also being woefully opaque. In the face of severe degradations in judicial transparency, increasingly scant data—the latest from 2020—suggests that ESS trials have surged in recent years.
37. Massive Arrests of Tibetan Buddhists in Sichuan After Statue Protests
He Yuyan, Bitter Winter, February 15, 2022
In December 2021, a megastatue of Buddha was destroyed in Luhuo (Drakgo). As protests continued, hundreds are being taken to re-education camps.
38. This time, Tibet stands silent as Olympics return to China
Dake Kang and Sam McNeil, Associated Press, February 16, 2022
INDUSTRIAL POLICIES AND ECONOMIC ESPIONAGE
39. China's Export Controls White Paper
Xiaoli Shi and Daniel Merlo, Field Fisher, January 20, 2022
On 29 December 2021 China issued its first ever White Paper setting out its legal framework and policies on export controls. This clarity will benefit businesses and institutions with links to China, whether through supply chains, or scientific or academic collaboration, and this note provides an overview of the key elements to help businesses and institutions to plan accordingly.
40. How China spies on the West
Ian Williams, The Spectator, January 23, 2022
41. Walmart’s China Dilemma is Every Western Company’s, Too
Nathaniel Taplin, Wall Street Journal, December 28, 2021
42. Move to check import of non-essentials from China
Times of India, February 10, 2022
CYBER AND INFORMATION TECHNOLOGY
43. TikTok Can Circumvent Apple and Google Privacy Protections and Access Full User Data, 2 Studies Say
Antoinette Siu, The Wrap, February 14, 2022
The popular Beijing-based app has ”carte blanche“ in gathering users’ data, cypersecurity experts say
TikTok can circumvent security protections on Apple and Google app stores and uses device tracking that gives TikTok’s Beijing-based parent company ByteDance full access to user data, according to the summaries of two major studies obtained by TheWrap that appear to confirm longstanding concerns raised by privacy experts about the popular video-sharing app.
The studies, conducted by “white hat” cybersecurity experts that hack for the public good, were completed in November 2020 and January 2021. TheWrap verified the studies and confirmed their conclusions with five independent experts.
44. US sanctioned China’s top facial recognition firm over Uyghur concerns. It still raised millions
Johana Bhuiyan, The Guardian, January 7, 2022
45. How to avoid falling into China’s ‘data trap’
Samantha Hoffman, TechCrunch, December 26, 2021
46. Chinese MI6 informant gave information to MPs about Huawei threat
Duncan Campbell and Richard Norton-Taylor, The Guardian, February 16, 2022
MILITARY AND SECURITY THREATS
47. Taiwan says Chinese plane flew close to remote island
Yimou Lee, Reuters, February 15, 2022
48. U.S. Aims to Thwart China’s Plan for Atlantic Base in Africa
Michael M. Phillips, Wall Street Journal, February 11, 2022
49. Indian Army to deploy K-9 howitzers in central, eastern sectors of LAC with China
Manjeet Negi, India Today, February 4, 2022
50. New U.S. sanction rules hit dozens of Chinese firms linked to military
Bill Gertz, Washington Times, February 15, 2022
51. China Now Understands What a Nuclear Rivalry Looks Like
Michael Schuman, The Atlantic, February 16, 2022
ONE BELT, ONE ROAD STRATEGY
52. Alberto Fernández’s Magical Odyssey to Russia and China
Evan Ellis, Global Americas, February 15, 2022
President Alberto Fernández’s state visit to Russia and the People’s Republic of China (PRC) this month was tragic for Argentina—its national interests, its reputation as a democratic voice in the region, and moderates within Peronism who sincerely believe in the government as a tool for social justice and progress.
The choice by Argentine voters in October 2019 to return the Peronists to office largely reflected frustration with former President Mauricio Macri’s inability to adequately address the country’s accumulated challenges through his market-oriented policies and re-engagement with Western governments and financial institutions.
53. Uganda Finds China’s Leverage Is in the Fine Print of Its Lending
James T. Areddy and Nicholas Bariyo, Wall Street Journal, December 27, 2021
54. EU tempts Africa away from Chinese influence
Stuart Lau and Barbara Moens, Politico, February 15, 2022
OPINION PIECES
55. Ukraine Proves ‘Asia vs. Europe’ Is a False US Foreign Policy Choice
Andrew A. Michta, 1945, February 15, 2022
56. Chinese Support for a Russian Attack on Ukraine Cannot Be Cost-Free
Bonnie Glaser and Andrew Small, Foreign Policy, February 14, 2022
Beijing backing Moscow should trigger a rethink of China-European relations.
57. Lazy parallels between Ukraine and Taiwan’s plight only help Putin and Xi
Chris Cash, City AM, February 17, 2022
58. Modern warfare is catching companies in its crossfire
Elisabeth Braw, Financial Times, February 14, 2022
States are increasingly using IP theft, business acquisitions and cyber-attacks to harm adversaries
59. China’s Economic Downturn Gives Rise to a Winter of Discontent
Kevin Rudd, wall Street Journal, January 21, 2022
60. China's Olympics have been a catastrophic failure
Luke De Pulford, The Telegraph, February 15, 2022
61. Minxin Pei on the Biggest Misperception about China’s Surveillance State
David Barbosa and Minxin Pei, The Wire China, February 13, 2022
The political scientist Minxin Pei talks about China’s appetite for political reform, why no one saw Xi Jinping coming, U.S. responsiveness, and why China’s low tech surveillance scares him.
62. A new cold war? Britain’s relationship with China is much more complex than that
Martin Thorley, The Guardian, January 23, 2022
63. Digital currencies carry threats as well as promises
Eswar Prasad, Financial Times, February 14, 2022
The proliferation of new financial technologies calls for better cross-border regulation and supervision.
The emergence of digital currencies, both private and official, is shaking up domestic and international finance. This will yield many benefits but some things will remain much the same. There are risks, too, with developing economies potentially finding themselves on the wrong side of a widening global financial divide.
Consider international payments, which are inherently complicated. They involve multiple currencies, payment systems operating on diverse protocols and institutions governed by varying regulations. So, cross-border payments tend to be slow, expensive and difficult to track in real time.
New technologies spawned by the cryptocurrency revolution are making cheaper and practically instantaneous payment and settlement of transactions feasible. This will alleviate payment-related frictions in international trade. Economic migrants sending remittances back home will also benefit.
Changes are afoot in foreign exchange markets, too. For instance, transactions between pairs of emerging market currencies are becoming easier. China and India will no longer need to exchange their respective currencies for dollars to conduct trade. Rather, exchanging renminbi for rupees directly will become cheaper. Consequently, the reliance on “vehicle currencies”, particularly the dollar, will decline.
The prospect of a digital renminbi being available worldwide has heightened concerns (or excitement) about the dollar finally receiving its comeuppance. The digital renminbi by itself will not, however, shift the balance of power among major currencies. After all, international payments are already digital. Rather, it is China’s Cross-Border Interbank Payment System, which can communicate directly with other countries’ payment systems, that will enhance the renminbi’s role as an international payment currency. The CIPS even has messaging capabilities that could sideline Swift, which currently monopolises messaging for all transactions between banks in different countries.
These changes have geopolitical implications. The dollar-dominated global financial system and American influence over Swift have long given US financial sanctions real bite. This has rankled rivals such as Russia and even allies exposed to secondary sanctions. The efficacy of such sanctions will erode.
Still, digitisation by itself will hardly elevate the renminbi’s status as a reserve currency, an international store of value. China has made progress on removing restrictions on cross-border capital flows, in addition to broadening foreign investors’ access to its bond markets. But the government has resisted the institutional changes — including the establishment of an independent central bank and the rule of law — that are essential to garnering the trust of foreign investors.
The dollar’s role as the dominant reserve currency is likely to persist, even if its status as a payment currency erodes. A likelier prospect, though, is a reshuffling of the relative importance of other currencies, while the dollar retains its primacy. Indeed, private stablecoins backed by US dollars might well gain more acceptance worldwide than those backed by other currencies, thereby bolstering the dollar’s prominence.
Developing countries will benefit from new financial technologies that improve their access to global financial markets. However, the proliferation of channels for cross-border capital flows will exacerbate their vulnerability to the vagaries of major central banks’ policies and the whims of international investors.
Moreover, small countries and those with central banks or currencies that lack credibility could be overrun by non-native digital currencies. The easy availability of digital versions of the major currencies, or even stablecoins issued by multinational corporations or global banks, would pose an existential threat to many national currencies. As Turkey’s recent experience highlights, even a volatile cryptocurrency might be preferred to the local currency at times of economic turmoil.
The proliferation of digital currencies and new technologies calls for greater cross-border co-ordination of regulation and supervision. International institutions such as the IMF will have a crucial role in helping limit collateral damage inflicted on vulnerable economies.
These technologies are binding the world’s economies and financial markets closer together. But left to itself, this brave new world could exacerbate global economic divides rather than bridge them.