Dr. Muhammad Akram Zaheer

The small, seemingly insignificant actions in geopolitics often reveal much larger truths about the global order. A recent meeting of the U.S.-China financial working group offers a glimpse into the complexities of their relationship. This group, which includes representatives from the central banks and government agencies of both nations, met in China to coordinate changes in their respective banking systems. On the surface, this might seem like a routine event; after all, such meetings occur regularly. However, a closer look reveals a deeper geopolitical undercurrent. The coordination of financial policies between two of the world’s largest economies is more than just a technical exercise. It is a reflection of the broader tensionthat challenges and opportunities of characterize U.S.-China relations.At first glance, the relationship between the U.S. and China appears highly strained. Tensions between the two nations seem ever-present and their military activities suggest the potential for conflict. Both sides have been positioning their weapons systems in ways that provoke anxiety in the other. For instance, in recent months, we have seen joint Russian and Chinese bomber missions probing near U.S. airspace in Alaska, prompting U.S. and Canadian fighter jets to respond. Similarly, China has violated Japanese airspace, raising concerns among U.S. allies in the region.These incidents are not isolated. The U.S. maintains a close relationship with the Philippines, a nation that frequently clashes with China over territorial disputes in the South China Sea. Additionally, U.S. support for Taiwan continues to be a significant source of tension with Beijing. China views Taiwan as a breakaway province, while the U.S. treats it as a key ally in the Asia-Pacific region. The list of geopolitical flashpoints is long and these examples barely scratch the surface.Amid such military and political tensions, one might expect economic and financial relations to be similarly fraught. Geopolitics often dictates that wars can be sparked by political disagreements, economic threats, or military actions. In this light, financial matters, as a key dimension of geopolitical systems, should logically reflect the adversarial nature of U.S.-China relations. Yet, here lies the paradox: at the same time as military tensions are on the rise, the U.S. and China are quietly coordinating on financial and economic issues.This raises a fundamental question: why would two nations that appear to be on the brink of conflict also engage in efforts to streamline their financial systems and make trade more efficient? Is this merely a technical necessity, or does it signify something deeper about their relationship?The answer may lie in the realization that, despite their differences, both nations have a stake in economic cooperation. While geopolitical tensions may drive military and political actions, economic realities often force nations to find common ground. This is especially true for the U.S. and China, whose economies are deeply intertwined. The financial working group meeting, then, is not merely a technical exercise but a reflection of the broader balancing act that defines U.S.-China relations.The U.S. and China are economically interdependent in ways that make outright conflict unlikely. The two nations are each other’s largest trading partners and the flow of goods, services and capital between them sustains millions of jobs and underpins global economic stability. The U.S. relies on China as a manufacturing hub for everything from consumer electronics to medical supplies, while China depends on the U.S. as a major market for its exports.This economic interdependence creates a paradox. On one hand, it increases the stakes of any potential conflict, as both nations have much to lose if relations break down entirely. On the other hand, it forces both sides to engage in pragmatic cooperation, even when political and military tensions are high. The financial working group’s meeting is a clear example of this pragmatism in action. The U.S. and China may disagree on many issues, but when it comes to ensuring the smooth flow of capital and trade, they recognize the need for collaboration.Another important aspect of this dynamic is the changing perception of China in the international arena. For many years, China was viewed as an emerging military superpower, one that could challenge the U.S.’s dominance in the Asia-Pacific region and beyond. This perception was bolstered by China’s rapid economic growth, its ambitious military modernization efforts and its assertive foreign policy.However, recent developments have led to a reassessment of China’s strengths and weaknesses. While China remains a major military and economic power, it faces significant internal challenges that limit its ability to project power on the global stage. These challenges include a slowing economy, demographic pressures and increasing resistance from other nations to its Belt and Road Initiative (BRI).At the same time, the narrative of China as an economic juggernaut has been revived. Despite its slowing growth, China remains a crucial player in global supply chains and there is still money to be made in its vast market. The U.S., recognizing this, has shifted its focus from military confrontation to economic engagement. This shift is reflected in the financial working group’s focus on removing barriers to investment and trade, rather than on geopolitical competition.

The financial working group’s meeting, then, is about more than just streamlining financial transfers. It is a step toward ensuring that the economic relationship between the U.S. and China remains stable, even as other aspects of their relationship remain fraught with tension. The meeting reflects a recognition that both sides have much to gain from economic cooperation, even if their political and military interests diverge. At the heart of this cooperation is a principle that has long guided U.S.-China economic relations: “implement a deal for payments and leave the rest to the market.” This principle acknowledges the need for a framework that facilitates trade and investment while allowing market forces to shape the broader economic relationship. A pragmatic approach recognizes the importance of maintaining stability in the global economy, even as geopolitical tensions simmer.Despite the frequent flare-ups between the U.S. and China, it is unlikely that the two nations will go to war. From the U.S. perspective, there is little to gain and much to lose from a conflict with China. A war with China, especially a naval war in the Asia-Pacific, would be costly and could disrupt the global economy in ways that would hurt the U.S. and its allies. Furthermore, the U.S. is wary of being entangled in another protracted conflict, particularly at a time when it is still dealing with the aftermath of wars in Iraq and Afghanistan. For China, the decision to go to war is more complex. While China may be open to a limited conflict in Asia, particularly if it involves reclaiming Taiwan, it is cautious about engaging in a full-scale war with the U.S. China’s military, while formidable, lacks the global reach of the U.S. military and a naval war would expose its vulnerabilities. Additionally, China’s economy is heavily dependent on global trade and a war with the U.S. would likely lead to economic isolation and instability.Given these considerations, both nations have strong incentives to avoid military conflict. Instead, they are likely to continue engaging in a mix of competition and cooperation, particularly in the economic realm. The financial working group meeting is an example of this delicate balancing act. Both sides recognize the importance of maintaining economic ties, even as they prepare for the possibility of future confrontations.

The recent meeting of the U.S.-China financial working group may seem like a small event in the grand scheme of global geopolitics, but it reveals much about the current state of U.S.-China relations. While tensions between the two nations are high, particularly in the military and political spheres, economic interdependence forces them to find ways to cooperate. The financial working group’s focus on streamlining financial processes and facilitating trade is a reflection of this reality. The relationship between the U.S. and China is complex, shaped by both competition and cooperation. While the prospect of military conflict looms large, it is unlikely that either side will pursue war, given the high stakes involved. Instead, the two nations will continue to navigate their differences through a combination of diplomacy, economic engagement and, when necessary, military deterrence. The small things like the financial working group meeting offer a window into the larger truths of geopolitics. They remind us that even in times of tension, nations can find common ground, particularly when it comes to economic matters. As the U.S. and China continue to vie for influence in the global order, their ability to manage their complex, interdependent relationship will be crucial in shaping the future of international relations.

Qamar Bashir

During my tenure as Press Minister in France, I witnessed firsthand the chaos of the Yellow Vest movement, which erupted in November 2018. The protests, sparked by rising fuel taxes and economic grievances, quickly evolved into a larger anti-government movement. Every weekend, thousands of protesters wearing yellow vests swarmed Paris, particularly targeting the posh Champs-Élysées, where the Embassy of Pakistan was located. The protests frequently spiraled into violence, with vandals setting vehicles ablaze, smashing windows of luxury boutiques, looting high-end stores, and even targeting banks by pulling out ATMs.

This movement turned into a prolonged cat-and-mouse game between protesters and law enforcement, who often resorted to tear gas, water cannons, and mass arrests to contain the destruction. Over 200,000 people participated at the peak of the protests, causing over €200 million in damages in Paris alone. The movement severely impacted France’s tourism industry, resulting in a 10% drop in bookings and a 30% decrease in tourist revenues during critical holiday seasons. The disruptions also tarnished France’s global image, and its ranking in the Reporters Without Borders Press Freedom Index fell from its usual top 10 position to 33rd, the lowest in Europe at that time. The unrest not only challenged the government but also left lasting scars on the French economy and society.

It appears that the PTI leadership may have drawn inspiration from the strategy employed during the Yellow Vest movement in France. Like the Yellow Vests, PTI seems to rely on frequent, large-scale protests to challenge the government’s authority. PTI’s strategy of organized and frequent protests has proven effective in multiple ways, although it comes at a high cost to the public and the economy.

PTI’s protests have effectively kept the ruling coalition on the defensive, especially on political and electoral fronts. The protests continue to cast doubts over the legitimacy of the ruling coalition, accusing them of coming to power through rigged elections, particularly citing the manipulation of Form 45 and Form 47. PTI claims that the National Assembly members, who passed critical legislation, including constitutional amendments, do not represent the will of the people. These claims have not only disrupted parliamentary proceedings but also forced the government to allocate resources to counter PTI’s legal challenges and public demonstrations.

The alleged manipulation of Form 47, where election results were reportedly altered in favor of the ruling coalition, remains a critical point of contention. Form 47 discrepancies highlight how PTI’s protests have successfully raised doubts about the electoral process. Furthermore, PTI’s strategy of street agitation and pressure tactics has forced the government to delay or reconsider sweeping constitutional changes that they intended to push through the National Assembly.

PTI’s consistent pressure on judicial matters has also played a role in reshaping Pakistan’s political landscape. Their protests against what they deem politically motivated cases have often rallied public support, placing the judiciary under intense public scrutiny. Legal challenges initiated by PTI have frequently led to delays or the invalidation of government actions, such as their intervention to challenge the amendments in the Supreme Court’s powers and electoral laws.

In this context, PTI’s protests have indirectly shaped the judicial narrative, even pushing the Supreme Court to review certain actions taken by the government. As a result, the judicial process has become an additional arena where the PTI has sought to counter what it sees as unconstitutional or undemocratic practices by the ruling coalition.

PTI’s protest strategy, however, comes at a steep economic cost to the country. Disruptions caused by their protests—whether in major cities or on critical national routes—result in financial losses on a large scale. Businesses in cities like Islamabad, Lahore, and Karachi report up to a 30% drop in revenue on days when PTI’s demonstrations are active. These losses, compounded over time, have taken a toll on businesses and employment.

Transport disruptions during protest days also create logistical nightmares, with goods stuck in transit and supply chains slowing down. This leads to price hikes for consumers and supply shortages in the market, further hurting the economy.

The government’s response to PTI’s protests has added additional pressure on national resources. The frequent deployment of anti-riot forces, tear gas, and other crowd-control measures not only strains law enforcement but also the national budget. The costs of policing PTI’s protests are substantial, with tear gas, fuel, and logistical expenses running into millions of rupees per protest day. According to estimates, the government allocates a significant amount from its law-and-order budget to deal with PTI’s frequent protests, leading to a drain on public resources that could be used elsewhere.

The law-and-order situation further deteriorates during protests as public property is often damaged, exacerbating the financial burden. PTI’s protests have raised concerns about the government’s ability to maintain control, tarnishing Pakistan’s image abroad. This, in turn, leads to lower tourism rates and diminished foreign direct investment (FDI). Investors and tourists are deterred by the political instability, adding further pressure to an already struggling economy. Tourism in Pakistan, which had been gradually increasing, saw a decline due to these political uncertainties and unrest.

Ultimately, PTI’s strategy, while effective in challenging the government on multiple fronts, leaves the average citizen grappling with the negative consequences. Business losses, reduced foreign investment, and diminished employment opportunities are felt across the country. The wider economy suffers from these disruptions, and the trickle-down effects are evident in the loss of jobs and business closures.

The French government ended the Yellow Vest movement by key policy reversals, such as canceling the fuel tax hike and increasing the minimum wage, addressing immediate grievances, while Macron’s “Grand National Debate” gave citizens a platform to voice concerns. Additional reforms, including tax cuts and support for rural areas, targeted underlying economic issues. Over time, the movement lost momentum due to internal divisions, public opinion shifts, and protest fatigue, allowing the government to de-escalate the crisis.

To defuse the PTI movement, the Pakistani government, judiciary, and parliament can learn from France’s handling of the Yellow Vest protests by adopting a balanced approach. This includes initiating public dialogue to address grievances, such as electoral concerns, through transparent reforms and restoring election tribunals. While making reasonable concessions, such as ensuring fair electoral processes, the government must maintain strict law enforcement against violence, distinguishing between peaceful protesters and agitators. Additionally, fostering protest fatigue and addressing economic concerns through targeted reforms can shift public opinion and weaken the movement, helping to restore political stability.

Qamar Bashir

Former Press Secretary to the President

Former Press Minister to the Embassy of Pakistan to France

Former MD, SRBC, CEO, ATV