Reshaping the Global Economic System amidst the Escalation of U.S.–China Competition: A Study in International Political Economy

Abstract

The study examined the profound transformations taking place in the global economic system in the context of the escalating geopolitical and technological competition between the United States and China. It proceeded from the hypothesis that the liberal capitalist model, which has dominated the global economic system for several decades, is now facing fundamental challenges as instruments of economic cooperation are increasingly turning into drivers of conflict and mechanisms for building protectionist barriers. Accordingly, the study primarily focused on analyzing the structural impacts of this competition on global value chains, in addition to investigating the dimensions of the trade war on major economic powers such as the European Union, with particular attention to the direct and indirect repercussions on emerging markets and Arab countries. The study adopted a descriptive-analytical approach as a methodological framework to understand the nature of the struggle over technological and financial dominance between the United States of America and China. The findings concluded that the global economy is moving toward a more multipolar structure, the contours of which are being shaped by the reconfiguration of monetary and trade alliances. The Arab region, in particular, is experiencing clear impacts through multiple channels, including fluctuations in energy and oil prices, inflationary pressures, and disruptions in revenues associated with navigation through strategic corridors such as the Suez Canal. In light of these developments, there is an increasing imperative to formulate new, flexible adaptation strategies that can respond to the challenges of currency wars and emerging global monetary transformations, thereby ensuring the preservation of economic interests and the ability to adapt to the evolving structure of the global economic system.