China-US: between microstates and superpowers

Small states paly a big role in global geo-politics. This is due to several reasons: geography, economics, representation in diplomacy, number of exchanges, liberalisation and modernity of their systems. Large powers such as Washington and Beijing base their relations in multilateral bodies through a focus on small nations and micro-states. The division between the small and large powers was defined by the Treaty of Chaumont in 1814 and it is in multilateralism that small countries influence the larger states; In the United Nations General Assembly in New York, each of the 193 member countries has one vote, with a proportionally greater role for microstates, which are small in territory and population.


In 2020-2021, St. Vincent and the Grenadines takes its place on the UN security council representing its 110,000 inhabitants, while participating in global strategic decisions along with the five permanent members and among the 10 non-permanent members who sit on the Council. In relation to wealth per capita, it is the smallest nations which are often the richest, this is due to the high exposure to trade, liberalization and modernity of their systems. Among the 10 countries with the highest GDP per capita according to IMF 2019 data are Qatar, Brunei and San Marino. In the European Union, the nation with the highest economic growth in the months leading up to the health emergency was Malta, which is the smallest EU member.


Even in terms of security and military role, small states are important: Djibuti, in the horn of Africa represents the place with the largest number of military bases in the world, near the Suez Canal and hosts the only Chinese foreign military base, along with those of the USA, Italy, France, Germany and many other military powers. Iceland, a NATO member, has long been an American military outpost for the purpose of controlling the Atlantic and Arctic during the Cold War.

The smallest states in the world are represented on every continent; in Europe they represent the history of state cities, republics and ancient monarchies: Vatican, San Marino, Andorra, Liechtenstein. In the Pacific they are located between the date-line and Australia: Tuvalu, Nauru (which is the least visited country in the world), Marshall Islands and Palau; In Africa the Comoros, Cape Verde, Eswatini, and the Seychelles are counted among the micro-nations, and in the Caribbean St Kitts and Nevis, Genada, Barbados, Antigua and Barbuda represent the third border of the United States.

Globalisation has rewarded small countries, which are often a symbol of modernisation: Estonia has introduced legislation with a focus on blockchain, while San Marino has similarly developed a system dedicated to innovation, with 5G testing and facilitation for every investment in technology. Luxembourg has developed a financial and tax system which puts it at the heart of many investment strategies.


In global relations and governance, small nations are of great importance: Xi Jinping recently made a state visit to Monaco, which is a member of Belt Road project. Mike Pompeo has visited several Pacific nations, to renew the association agreements with Micronesia and the Marshall Islands to keep secure relations with these countries in an increasingly interesting geographical area for Beijing. Luxembourg hosted the annual meeting of the Asian Investment Bank for Infrastructure (AIIB) in 2019, the first meeting held outside the Asian region. The focus on democratic values and the environment is greater in the smaller territories: Bhutan has introduced a concept of the Gross National Happiness Index, an indicator of happiness, alternative to that of GDP. San Marino, has a political system with two Heads of State, the Captains Regents, chosen in rotation between the members of the Great and General Council, exercise their office collectively for periods of six months promoting values of impartiality and direct democracy, guaranteed by the meeting at their inauguration with citizens who can submit petitions of public interest. The development of the global economy goes through the history, finance and policy of multilateral trade between small and large powers.

Recent articles

© 2020 by RsA Asia Tax Advisors