Sometimes it takes a fresh perspective to open your mind to the obvious. Francis Fukuyama and other speakers at our annual CEO Retreat warn that the world underestimates the chances and impact of armed conflict in East Asia. And the prospect should give us all pause.
China’s rapid expansion and projection of power with its neighbors in the South and East China Seas dramatically raise the chances of accidents—and even wars. Just a few days ago, for example, China sent four oil rigs under the auspices of exploration to the South China Sea in waters occupied by Taiwan. This is on the heels of a similar push into waters claimed by Vietnam.
While conflicts in the Middle East have an immediate impact on oil prices, conflicts with, say, China and Japan would involve the world's second- and third-largest economies. The ramifications would dramatically affect the state of the global economy in ways that crises in the Middle East and Eastern Europe never could.
As we continue to see with a growing stream of incidents, the chances this might occur are dramatically increasing. While our attention is rightly on crises in the Middle East, Africa, and Eastern Europe, our field of vision cannot exclude the potential risk on the horizon in East Asia.