In response, emerging economies have been making efforts to avoid financial risks by reducing dependence on the U.S. dollar. For example, BRICS countries agreed on the establishment of the New Development Bank and the Contingent Reserve Arrangement at Fortaleza summit in Brazil on July 15, 2014, marking a significant step forward in the group's role in global financial governance.

'Colder war'

The Ukraine crisis and civil war triggered a series of political and economic impacts on geopolitics and international order in 2014.

The expansion of NATO and the EU toward Ukraine has provoked a sharp conflict between Russia and the West. At the moment, the Ukraine crisis has escalated to a proxy war between army of the pro-West Ukrainian Government and Russia-backed militants in east Ukraine.

Since the outbreak of the Ukraine crisis, the United States and the EU have imposed a series of restrictive measures on Russia's finance, defense and energy sectors. Canada and Japan have also joined the sanctions against Russia.

The relationship between Russia and the West has deteriorated to its lowest point since the end of the Cold War in the early 1990s. Meanwhile, the European continent faces unprecedented conventional security risks that could spark a new cold war.

In response to the heavy pressure from the West, Russia has refused to compromise and adopted a tough posture to protect its strategic interests. To ease economic hardships from West imposed sanctions and isolation, it has enhanced ties with China through major deals on energy and finance. In the meantime, Russia has attempted to make use of its status as a major energy supplier to EU countries as well as gaps between the United States and the EU on the Ukraine crisis to divide its rivalry coalition.

New challenges

Terrorism rebounded strongly in the Middle East as Islamic State (IS) militants swept north Iraq and Syria through continuous offensives last year. The IS has become the biggest terrorist threat to the region. In a spillover effect, a large number of terrorists from across the world have resonated strongly with the IS's call for a brutal jihad. Moreover, these international jihadists produce new threats based on their experience in the IS when they return to their countries of origin. Other terrorist groups, like the Pakistani Taliban and the Nigerian Boko Haram, have also launched frequent attacks and caused heavy civilian casualties.

The rise of the IS has had an impact on the United States' Middle East strategy. The Iraqi Government has lost control of considerably large territories in the country, dealing a major blow to the U.S.-led democratic experiment in Iraq. The United States has organized a coalition to fight against the IS in retaliation.

The Ebola epidemic has claimed the lives of more than 7,000 people since its outbreak in Guinea in West Africa in December 2013. The virus was even brought to the United States and European nations when some affected medical service volunteers returned to their homelands from the epidemic area. In view of the outbreak's severity, the World Health Organization declared the Ebola outbreak an international public health emergency on August 8, 2014.

The poor public health system and the lack of necessary knowledge in underdeveloped West African countries are the major reasons why this Ebola outbreak has been much more serious than before in terms of infections and fatalities. The international community should learn a lesson from the unprecedented regional epidemic, as the world did not react quickly enough to contain the virus in the less-concerned West Africa at the beginning. Helping underdeveloped countries build a basic health system remains a major challenge for the international community.

Unstable Asia-Pacific

In the Asia-Pacific region, the United States has enhanced military, political and economic links with its allies and partners as it pushes forward the pivot-to-Asia strategy. Throughout 2014, its engagements with regional countries were focused on leading the establishment of Asia- Pacific security and trade mechanisms. With the permission of the United States, Japanese Prime Minister Shinzo Abe's cabinet has sought to lift a constitutional ban on Japan's right to collective self-defense, which may lead to the country's remilitarization. During a visit to Japan in April 2014, U.S. President Barack Obama said that the U.S.-Japan mutual security treaty applies to China's Diaoyu Islands in the East China Sea, which is currently under Japanese administrative control, in defiance of China's opposition.

 In addition to Japan, some countries that have territorial disputes with China in the South China Sea have received U.S. support. For example, the United States has enhanced defense cooperation with the Philippines by providing warships and carrying out joint military drills. The United States has also partially lifted restrictions on arms exports to Viet Nam.

The U.S. intervention has raised tensions in the South China Sea, though it has assured China that it would not take sides on territorial disputes in the region. For the foreseeable future, situations in the South China Sea will remain complicated.

Chen Xulong is director of the Department for International and Strategic Studies at the China Institute of International Studies, and Su Xiaohui

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