Last week, US Secretary of State Antony Blinken visited Beijing, where he met with his counterpart Qin Gang and – after a long wait – with President Xi Jinping. As we discussed in our review, Blinken failed in his main objective, which was re-opening the direct communication lines between the militaries of the US and China, to make sure that a conflict doesn’t start between the world’s two superpowers by mistake.
This attempt by the US’ top diplomat was made to ease some of the tensions that have developed in the last few years between the two countries. Perhaps irritated by the limited success of his envoy, Biden subsequently had a slip of tongue and called the Chinese President “a dictator,” specifying however that he was ready to meet with him, and is hoping to see Xi in November in San Francisco at the APEC meeting.
After the failed attempt with China, Biden tried to make inroads with India, by inviting PM Narendra Modi to a state visit to DC, where Modi also addressed the US Congress for the second time. This visit was a resounding success. First, the US and India agreed on a series of technological and strategic partnerships, including in the crucial areas of semiconductors and satellite industries. More importantly, India agreed to purchase (and the US agreed to sell) military equipment, in particular armed MQ-9B SeaGuardian drones, which are produced by US defence contractor General Atomics.
This visit was particularly important because it marks a clear attempt by the US to detach India from China in the global rivalry between the world’s two superpowers that we called Cold War 2. In fact, as we have discussed on several occasions, India is trying to maintain a neutral and non-aligned position between the US and China, in the hope of extracting value from both relationships. But both China and the US do not like this neutrality.
The US is trying to keep India geo-strategically engaged via their participation to the Quadrilateral security dialogue. The US and India both also have democratic political systems, at a time in which many Asian countries are switching to autocracy. Finally, the US is aware of the territorial disputes between India and China, along their 3500 km of shared borders, which culminated in a military exchange between the two countries in May 2022 in the Himalayas.
China meanwhile counts on India’s participation in the BRICS club, and on the fact that Modi has shown several signals of his penchant for nationalistic politics, with some authoritarian aspects, especially in regard to India’s religious minorities, such as Muslims and Christians.
All this is happening while, at a finance summit in Paris, which is being attended by BRICS delegations as well as by the US Secretary to the Treasury, other BRICS countries re-asserted their intention to diminish the role of the US dollar as the world’s reserve currency. (This included South Africa and Brazil, via the attendance of presidents Cyril Ramaphosa and Ignacio Lula, respectively). The BRICS would aim to use their own currencies, rather than the dollar – or else a future “common” currency – for their commercial exchanges, as China and Russia have already done, especially after the international community (led by the US) froze USD 300bn of Russian central-bank assets following Russia’s invasion of Ukraine.
As we discussed on previous occasions, these are all examples of the ongoing competition between the G7 bloc and the BRICS bloc to establish their economic and geopolitical hegemony on the world’s stage. This competition, a further derivative of Cold War II, is destined to remain with us for decades to come.
