global business. Through 2025, internal conflicts will cause the highest casualties to the world; on the other hand, interstate wars, though less frequent, will grow in lethality due to the spread of destructive technologies.

The international community also has to deal with the uncertainties being brought about by the continued rising of China and India and the decline of Russia and Japan. Furthermore, terrorism is becoming a dominant threat to the Western world.

Many internal conflicts, particularly those arising from religious, ethical and resources disputes, will continue to be long lasting and extremely difficult to terminate-leaving bitter legacies in their wake. If left to develop, internal conflicts will evolve into interstate conflicts when neighboring countries exploit opportunities to gain their national interests from such internal conflicts. Internal conflicts arising from state repression, religious and ethnic clashes, or increasing migration pressures will occur most frequently in Sub-Saharan Africa, the Caucasus and Central Asia, and parts of south and Southeast Asia, Central America and the Andean region.

China's prospect beyond the next 25 years is full of unknowns. Most experts today claim that China's new leaders, in an effort to keep its nearly 8 percent annual GDP growth and to ensure internal stability, will continue to avoid conflict in the region. A powerful China, others assert, would seek to adjust regional power arrangements to its advantage, even risking conflict with neighbors and the U.S.

It seems that economic development is on the top of the Chinese government's priority list; however, China's drastically increased military budget and military capabilities to refrain Taiwan from referendum alert us. Is China trying to play a regional super power role or attempting to go even further?

By 2025, Russia will have to face the further expansion of NATO into its traditional power territory. The quality of Russian governance will continue to impede its road to regain Russia's previous powerful status in the world. Internally, the current will of those Caucasus and Central Asia republics to be more independent and internationalized will further conflict with Russia's ambition to return to this area. The resourceful oil reserves in that area have also already attracted the attention of China, the United States and Japan. All those imply that those current internal affairs will become more complicated to handle.

In the midst of a nearly 10-year recession, Japan will have difficulty keeping its hold as the world's third largest economy by 2025. Tokyo has so far not shown that the country has a plan to carry through the painful economic reforms necessary to maintain its leadership role in Asia. In the absence of an external stimulus, Japan seems unlikely to accelerate changes in security policy. Although claimed to abandon the right to "war," Japan possess the most advanced fleets and well-equipped air forces in East Asia. Its territory disputes are not resolved with China and South Korea.

With the goal of being a regional super power, India will continue to strengthen its military power, but many uncertainties about the effects of global trends on its society throw doubt on how far India can go. India faces a growing gap between wealth and poverty, a mixed picture on natural resources, and problems with internal governance. More seriously, India's territory dispute with Pakistan shows no signs of abating and may turn more destructive in the future.

Meanwhile, the confluence of domestic economic pressures and regional confrontation is likely to further the proliferation of weapons of mass destruction and the means to deliver them. By contrast, spending on conventional arms probably will remain stable or decline in most countries. Rather than conventional warfare, the region is likely to experience more terrorism, insurgencies, and humanitarian emergencies arising from internal disparities or disputes over ethnic or religious identity.

At the same time, the more diverse, medium scaled, transnational networks, enabled by cyber technology, will continue. Some of the states that actively sponsor terrorism or terrorist groups today may decrease or even cease their support by 2025 because of regime changes, rapprochement with neighbors, or the conclusion that terrorism has become counterproductive. Weak states, however, could drift toward cooperation with terrorists, creating new state supporters.

Between now and 2025, terrorist tactics will become increasingly sophisticated and designed to achieve mass casualties by using chemical and biological technologies. We expect the trend toward greater lethality in terrorist attacks to continue; and terrorists will target the United States, NATO and their overseas interests. Such attacks are likely to expand to include Western companies. Middle East and Southwest Asian-based terrorists are the most likely to threaten.

In essence, the internal conflict, interstate conflict and transnational terrorism will greatly influence our global business environment, especially making our global investment and international trading much more unpredictable.