Things are changing dramatically on the global economic front, and it’s not just Brexit. The past week has seen yet another easing of monetary policy by the ECB in response to economic weakness in the eurozone.
But the core change in the world economy is the rise of China, which is probably the most significant development since the end of the Cold War.
It represents a challenge to the ‘old order’, defined by US/Western dominance in global trade, financial markets and ability to influence other countries.
And this shift in power away from the US to China is likely to have a significant impact on the Irish economy in the coming years, even more so than Brexit.
Since 1978, China has undergone a massive transformation from being predominantly rural and agriculturally-oriented to being an increasingly urbanised country.
Napoleon Bonaparte once stated: “China is a sleeping giant. Let her sleep, for when she wakes she will move the world.”
Although Napoleon is long gone, China in the early 21st Century has woken and is moving the world. The Chinese way is built around an autocratic leader, backed by a single political party, grounded in nationalism and heavily geared to state capitalism. It’s not the democratic Western model Ireland has been used to.
Although China still has tremendous challenges at home, it is doing what the US did in the aftermath of the Second World War, creating an institutional framework.
This includes the Belt & Road Initiative; the Asian Infrastructure Investment Bank and the Silk Road Fund. These give Beijing the ability to project power and dominate Eurasia and, through that landmass, the world.
China is also active in creating a broad range of partners, many of which are authoritarian in their political make-up and regard US power as a threat.
Chief among these is Russia, which has interfered in US politics and backed governments that have clear-cut differences with Washington.
As Sino-American relations have soured, Sino-Russian relations have improved. In 2018, trade turnover between Russia and China rose by close to 30%, reaching a record figure of $107.06bn (€96bn).
The US trade war with China and Western sanctions against Russia for its annexation of Crimea have helped drive the two countries closer together.
For the rest of the world, the state of play between Beijing and Washington is not a positive development, as it will increasingly force governments to choose.
It will also put the brakes on global trade, though not kill it. Although the G7 and G20 will remain important, the world is already a G2 affair.
Like it or not, China and the US are the dominant players. If others, like Europe and Japan, want a bigger say they will have to make changes.
For Europe, that entails pulling its own weight in a military sense, while rethinking its dependence on Russia for its energy.
Two other important factors need to be considered in the changing global political economy –the existence of actors that are not going to fall easily into either the US or Chinese blocs; and climate change.
Countries like Brazil, Iran, India, Saudi Arabia and Turkey are large enough and have strong enough cultural and historical identities to forge their own paths in a world dominated by China and the US.
The other issue is climate change and the consequences from it are likely to be more radical. Food and water are increasingly seen as national security issues, especially for countries with large populations.
And countries, like Nigeria, Pakistan and the Democratic Republic of the Congo (DRC) have rapidly growing populations that are outstripping institutional abilities to accommodate them.
More extreme weather is becoming a norm, in particular, drought and flooding, which has led to a loss of agricultural land, sea-level rise and the spread of disease.
Climate change is likely to drive hard-pressed young populations in places like West Africa and the Middle East to head toward safe havens, such as Europe.
So, when looking at the overall global picture, the reality is that Brexit is only the start of Ireland and Europe’s problems.