Navigating the Shifting Sands of Global Influence: The U.S., China, India, and Russia
Navigating the Shifting Sands of Global Influence: The U.S., China, India, and Russia
Embracing cooperation and mutual growth in a multipolar world order
A long-time friend recently shared with me his concerns about the shifting dynamics of global influence, particularly the challenges posed by China and India to U.S. dominance. This conversation was sparked by a talk my friend attended by Dr. Thomas P.M. Barnett, a geopolitical strategist, at the 2024 Forum at Newport climate security summit at Salve Regina University, September 5, 2024.
Dr. Thomas P.M. Barnett’s presentation, "America's New Map: Restoring Global Leadership in an Age of Climate Change and Demographic Collapse" reflects a comprehensive worldview centered on the transformation of global order through climate change, demographics, and technological advancement. His key argument is that China will come to dominate Asia, and the EU will dominate Europe, so the United States must embrace hemispheric integration with Latin America where the U.S. holds natural advantages in terms of geography and shared interests.
Among Dr. Barnett’s assumptions are the U.S. cannot expect India to align with the U.S. in "boxing in" China due to India's reliance on Chinese trade and investment. Russia, while weakened, can be expected to lead efforts to challenge U.S. hegemony. China, India, and Russia are the key players opposing the U.S. in the broader geopolitical landscape.
The Rise of China and India: A New Global Order?
Dr. Barnett describes China's "Quantum Grand Strategy," their comprehensive approach to reshaping global power dynamics through data control, technological dominance, and strategic relationships. At its core, China has constructed a massive institutional architecture that forces all companies to integrate into a centralized national data infrastructure controlled by the Communist Party, with customer data from China-controlled companies accessible to security services. Through the Belt and Road Initiative China has invested over $1 trillion across 150 countries, creating technological dependencies in developing nations. The strategy aims to build a coalition of states to counterweight the U.S. global alliance system, particularly in the Global South, Asia, Africa, and South America, where China offers infrastructure and technology in exchange for partnership and trade. This represents a fundamental shift from China's previous approach, moving from passive influence-building to actively challenging U.S. global leadership through the control of data, technology, and international relationships.
Meanwhile, India is emerging as a pivotal player with its unique development model that blends Western democratic principles with approaches suited to developing nations while maintaining strategic autonomy in international relations. India’s model combines democratic governance with extensive social welfare programs, creating a "third way" between Western free-market capitalism and Chinese state autocracy. This approach is exemplified through massive-scale programs like the Aadhaar biometric ID system covering 1.3 billion people, the world's largest food security program reaching 800 million citizens, and universal healthcare coverage for 500 million through Ayushman Bharat. India's welfare state model demonstrates that developing nations can pursue both economic growth and social protection while maintaining democratic institutions, offering a template that could influence how other developing nations approach modernization.
India's economic trajectory is now outpacing China's in a remarkable shift of Asian economic dynamics. While China grapples with deflation, property sector crises, and declining transparency in economic indicators, India's economy is showing robust health with GDP growth projected to exceed 7% in 2023 and unemployment at a 12-year low of 4.1%. The contrast is particularly striking in their growth patterns - India achieved higher per capita GDP growth than China (5.2% vs 4.5%) between 2010 and 2019, marking the first such occurrence since the 1960s. This trend is expected to continue, driven by India's expanding labor force, increasing female education and workforce participation, and strong productivity growth.
Russia's Ambitions: A Reality Check
In this evolving landscape, Russia's role presents an intriguing case study of a nation whose geopolitical ambitions often outstrip its means. The ongoing conflict in Ukraine has brought this disparity into sharp relief.
The U.S.-led sanctions regime against Russia represents the most comprehensive coordinated economic response in modern history, targeting three critical sectors of the Russian economy. In the financial sector, sanctions have impacted institutions holding combined assets worth $80 billion. The energy sector restrictions have significantly impacted Russia's export revenues, with January 2023 showing a 26.9% drop compared to the previous year, followed by a steeper 41.7% decline in February 2023. These sanctions, combined with technology export controls, have contributed to Russia's GDP contracting by 2.1% in 2022, with forecasts from the OECD predicting a further 2.5% drop in 2023. Foreign direct investment is down 90%. The sanctions have diminished Russian military capabilities and created a prolonged, painful recession like the country's major economic crises of 1998 and 2008.
Russia has long pursued goals of reducing U.S. influence and these Western sanctions have motivated new Russian efforts to form coalitions outside of U.S. influence. A key goal for Russia would be to create a coalition of countries to support a global payment system to challenge SWIFT.
The Global Importance of SWIFT
SWIFT, the Society for Worldwide Interbank Financial Telecommunications, is a global messaging network that facilitates secure and standardized financial transactions between over 11,000 institutions in more than 200 countries. It plays a crucial role in international banking by ensuring that transactions are executed consistently, securely, and reliably, making it indispensable for global trade and finance. The SWIFT system enforces sanctions by blocking transactions subject to sanction. Russia's interest in developing an alternative payment system stems from a desire for digital sovereignty and independence from Western-dominated financial infrastructures.
The development of alternative payment systems poses a potential challenge to U.S. financial dominance but faces significant hurdles. Historically, attempts to create alternatives to SWIFT have struggled due to technical infrastructure challenges and limited international adoption. The European Union's INSTEX, designed to facilitate non-USD transactions with Iran, was liquidated in March 2023 after proving largely ineffective. Russia's early attempts following the 2014 Crimea sanctions struggled due to technical infrastructure challenges and limited international adoption. China's CIPS system still relies on SWIFT for cross-border messaging.
These failures highlight three major obstacles: achieving network effects comparable to SWIFT's vast network of over 11,000 institutions, developing robust technical infrastructure, and establishing institutional trust and reliability. While technological advancements may make alternative systems more feasible in the future, SWIFT's dominance is rooted not just in technology but also in trust and stability.
The BRICS Summit: Diplomatic Maneuvering
BRICS is an acronym for a group of major emerging economies: Brazil, Russia, India, China, and South Africa. Formed to enhance economic cooperation and influence global affairs, BRICS aims to challenge the dominance of Western nations by representing the interests of developing countries in political and economic spheres.
Russia hosted the BRICS summit in Kazan, a city of 1.3 million people and the capital of Tatarstan, Russia. Putin used this meeting as an attempt to showcase continued Russian relevance on the global stage despite sanctions and isolation attempts. The participation of leaders from China, India, Turkey, and Iran underscored a pragmatic diplomacy that prioritizes economic benefits over political commitments.
BRICS offers developing nations a platform for economic collaboration without demanding strict ideological adherence. For major powers like China and India, it provides an avenue to pursue strategic interests while maintaining flexibility in their international relationships. This reflects a business-as-usual approach in international relations rather than a fundamental shift in global power dynamics.
While Russia used the summit to discuss creating alternatives to SWIFT, those efforts were not successful. Both China and India approach their relationship with Russia through a lens of pragmatic self-interest rather than ideological alignment. Neither country has shown genuine interest in supporting Russia's alternative payment system, as evidenced by their measured responses at the BRICS summit. An independent BRICS payment infrastructure was not mentioned in the summit speeches delivered by Chinese President Xi Jinping and Indian Prime Minister Narendra Modi. At the close Thursday of the BRICS summit in Kazan, Putin himself stated they "have not and are not" creating a SWIFT alternative
Strengthening U.S.-India Relations: A Path Forward
As we consider these global dynamics, U.S. interests will benefit from a strengthened relationship with India as part of a broader strategy for maintaining influence. This can be achieved through:
Economic Partnerships: Expanding trade agreements and investment opportunities that benefit both nations.
Promote educational exchanges: Increase scholarships and research collaborations.
Technological Collaboration: Partnering on technological innovations that address mutual challenges such as climate change and cybersecurity.
Align on shared challenges: Cooperate on issues like climate change and regional security.
Support India's global aspirations: Back India's bid for a permanent UN Security Council seat
By fostering a strong partnership with India, the U.S. can enhance its influence while supporting India's rise as a global power.
Multipolar World Is Not a Zero-Sum Game
As countries grow economically it is reasonable to expect the global order to evolve. Power will likely become more diffuse and multifaceted, but the rise of China and other countries does not have to represent a decline for the U.S. In the future the U.S. may no longer be the sole superpower, but U.S. political, military, cultural, and economic influence will remain formidable. Latin America, India, and the EU all represent opportunities for growth as U.S. partners.
The most successful nations will be those that can balance competition with cooperation, leveraging their strengths while recognizing the legitimate aspirations of others. In this context, the United States is very well-positioned to thrive, not by clinging to outdated notions of hegemony, but by leading through innovation, diplomacy, and a commitment to shared global prosperity.
Great thought provoking post. Thank you, Ben.
In viewing the future with what has become the New Axis of Evil - China, Russia, North Korea, Iran - it is imperative that we understand why we differ. We differ because of our fundamental values.
Consider the current level of cooperation amongst these evil countries in Ukraine wherein Russia is buying ballistic missiles and drones from Iran (and supplying nuclear weapons tech in return), buying ballistic missiles, heavy howitzer ammunition, and now troops from North Korea (and also supplying nuclear weapons tech in return); and buyuing chips from China amongst a myriad of other military support.
Western democracies are founded upon the belief that governments exist and draw their power from the freely given consent of the governed and that governments exist to serve the interests of the governed.
The New Axis of Evil believes their governments are empowered by the barrels of guns. Mao articulated this clearly: "Political power grows out of the barrel of a gun." These governments demand the subjugation of their people.
When the gulf dividing us is so fundamentally and grossly different, what is the imperative that we cooperate with these despotisms? Why should we? Should we ignore their mutual support in attacking peaceful countries - Ukraine and Taiwan?
We are currently at war - ideologically and now on the Internet and in space - with all of these despotic regimes and have been for years. We have fooled ourselves into believing that if we allow these despotic regimes to join international organizations they will slowly temper their evil views and become more like us. After more than 50 years that experiment is still a resounding failure.
What has served us well is the sentiment contained in George Kenan's Long Telegram from Moscow wherein American policy since Truman was to confront the Soviet Union wherever it may be found. This is what broke the USSR and paid a peace dividend, not trade and not global cooperation.
The collapse of the USSR was a financial failure and it is important to know that because our opposition to the New Axis of Evil has to be founded upon finance, economies, and global trade.
The US market is the greatest plum as to international trade in the world and we must use access to it as a blunt weapon.
We have to constantly assess who our friends are in the world and act accordingly. If you believe climate change is a real problem, a global problem, then you cannot give China - building coal plants at an alarming rate - a seat at the table. They are the problem.
As to the SWIFT system, there is a reality the post failed to address. What is moving through the SWIFT system is US dollars. The entire global energy industry is settled in USD.
The only national currency that has sufficient float - enough currency to absorb the massive amount of currency moving through the system -- is the USD.
There have been several attempts to create a basket of currencies to supplant the USD in the energy business and as the world's reserve currency (the currency in which a country holds its most precious sovereign reserves for safety - China holds US Treasuries).
The second critical element is trust. SWIFT works because it is trusted. The blockchain attempts to replace trust with certainty of documentation and an unassailable record of trustless transactions.
SWIFT, the USD, the world's reserve currency, western democracies, the United States of America are all founded on trust.
What is the greatest failing of the New Axis of Evil - nobody trusts these deadly, bloody, evil bastards.
It is misguided to believe that the western democracies can bridge a gulf in values and trust of the magnitude that exists between us and the New Axis of Evil.
Why should be try? What is the benefit to western democracies?
JLM
www.themusingsofthebigredcar.com
Very interesting and insightful. Perhaps even a little positive. Welcome that!