Dutch Admiral Rob Bauer, the chair of the military committee of the North Atlantic Treaty Organisation (NATO), said in Brussels recently that militaries win battles but economies win wars. His words were a replay of the ancient adage that an army marches on its stomach, but their contemporary currency derives from the extent to which wars are winnable (or not) in a closely globalised world.

Admiral Bauer's purpose in sounding a warning was to alert businesses to be prepared for a wartime scenario and to adjust their production and distribution lines accordingly, in order to be less vulnerable to blackmail from countries such as Russia and China.

His speech, delivered to the European Policy Centre think tank, is important because it provides an insight into the political economy of war. While the conflict between the United States-led West and the erstwhile Soviet Union during the Cold War was deadly enough because it could spill over into war between the two nuclear-armed sides, that conflict involved two adversaries which did not depend on each other economically. The United States presided over a market-economy system in its sphere of global system, a system overseen ultimately by the Bretton Woods institutions of the International Monetary Fund and the World Bank; while the Soviet Union presided over COMECON, a system of planned and coordinated socialist economies that existed in the Warsaw Pact countries. In a war, each side would draw on its own resources.

Now, the integration of national economies is such that each adversary - the West and Russia/China - would draw on the common resources of globalisation to fight. A war between the West and the Soviet Union would have seen economies fight; a war today would see the globalised economy fight itself so that one military side in the war could prevail over the other.

This is an extremely crucial point. How could a contemporary war be fought in these circumstances?

Admiral Bauer's prescription focuses attention on the need to expand the concept of deterrence. In his speech, he declared that deterrence goes far beyond military capability to include all the instruments of international power - including the economic - that could and would be wielded in war.

Economic deterrence means the West ensuring that "all crucial services and goods can be delivered no matter". By the time war breaks out, supply chains would have been disrupted, affecting, for example, Western dependence on Chinese supplies of rare earth materials, sedatives, antibiotics, anti-inflammatories and low-blood-pressure medication. "Business leaders in Europe and America need to realise that the commercial decisions they make have strategic consequences," Bauer said.

Of course. So do business leaders in China, to whom the same rules of the strategic game apply in obverse. Indeed, having been subjected to the strategic disruption of economic supply chains during the first Trump Administration - a process that was not really reversed during the subsequent Biden Administration - China is more than prepared for the eventuality of another, fiercer bout of confrontation this time with an America and its allies, which are adamant in containing China economically so as to contain it militarily.

Essentially, the West has securitised economics in the same way that China did when it translated its economic heft, gained under Western aegis and cemented by China's entry to the World Trade Organisation, into countervailing military power against the West. What China did was natural in the history of nations; in contemporary times, only post-World War II Japan has resisted the trend because of its strategically-subordinate position to America as a treaty ally.

Hence, what the Dutch Admiral says about the economics of war applies to NATO's rival sides (Russia and China) as well. Much more than Russia in Europe, it is China here in Asia whose economic power, which is sought to be countered by Western economic power, that could cause a strategic rupture in the globalisation process in the lead-up to the next war: cold, hot, or nuclear.

A Sino-American nuclear war would spell the economic end of globalisation. As for Asia, it would cause the downfall of the very term "Asia" as a marker in global strategic geography. Even a hot, conventional war would wreak unimaginable havoc in Asia unless the conflict were to be limited to skirmishes (unlikely) or an outright victory for either side (even more unlikely). The Russo-Ukrainian war, which would enter its third year this coming February unless Trump ends it on taking office in January, shows how long wars of attrition can last. It is a half-proxy war, with NATO using Ukraine as a proxy and Russia ensuring that NATO does not win the proxy war by supplying Kyiv with arms that are sufficient to wear down Moscow militarily. Assuming that an Asian war would similarly see China in a proxy conflict, it is to be expected that Beijing would sink in its heels and prevent Taiwan from seceding from it and retain China's maritime gains in the South China Sea.

What remains is the possibility of a cold war between the United States and China. Its prelude has arrived already. Admiral Bauer speaks very much in a pre-Cold War spirit when he warns Western business to be prepared for a military showdown with rival powers. A Chinese military leader would say the same to his country's economic leaders. The Cold War has not begun because there is sufficient political space on both the American and Chinese sides to make economic adjustments to prevent all-out strategic conflict. This situation might or might not last.

If it does, it would represent the best of a globalised deal gone sour. If the Cold War does arrive, the political economy of globalisation would be reduced to the mercy of the great powers.

Great powers are not merciful. They did not become great by being merciful.

The writer is Principal Research Fellow at the Cosmos Foundation. He may be reached at epaaropaar@gmail.com