A meeting of Putin, Xi and Modi shows how global power is shifting eastward

Russian President Vladimir Putin, left, and Indian Prime Minister Narendra Modi speak during a meeting at the Shanghai Co-operation Organisation summit in Tianjin, China. Reuters

The world has a history of realigning its power, from Britain's rise and fall about 300 years ago to today's shifting balance as China, India and other emerging players are reshaping the geopolitical and economic order while the US has stirred economic conflicts with Russia and others globally with its sweeping tariffs.

In the War of the Spanish Succession and the Seven Years War, in the first half of the 18th century, Great Britain brilliantly managed shifting coalitions of allies to win and build its empire. By 1775, with the rebellion of the American colonials, it had alienated European partners. Against a coalition of France, Spain and the Netherlands, it lost the war and saw the creation of a future superpower, the US.

Yet the UK came back. Its mastery of diplomacy and finance sustained the alliances that eventually beat Napoleon. It hardly had to fight a serious war for a century thereafter. Britain’s development of machinery powered by running water, and then coal, made it the world’s first industrial state. Its rebuilt empire, along with its steamships and railways, its trade, currency, language and law, came to span the globe.

China hosts show of economic force with fellow Brics nations India and Russia

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China and India

Last week, India’s Prime Minister Narendra Modi visited China for the first time in seven years for a gathering of the Shanghai Co-operation Organisation. Russian president Vladimir Putin, the presidents of Iran and Turkey, and several Central Asian and other leaders also attended in Tianjin. This came just days after US president Donald Trump had doubled tariffs on India to 50 per cent over its purchase of Russian oil.

On Tuesday, China and Russia agreed after many years of discussion to progress the Power of Siberia II pipeline, which would decisively reorient Russia’s gas exports from west to east.

China still needs gas, but it has leapt to become by far the world’s largest manufacturer and developer of solar panels, wind turbines, batteries, electric cars and nuclear reactors.

The US has also imposed heavy tariffs not just on China but on European and east Asian former allies. Its trade “deals” require Europe, Japan and South Korea to buy huge quantities of American oil and gas, far more than the country will actually have available to sell. It has alienated its major continental neighbours, Canada, Mexico and Brazil, with trade barriers, political interference and threats to invade. It has meddled in Greenland in an attempt to acquire the island, coveting potential mineral deposits.

The White House has pressured Ukraine to give in to Russia’s invasion, and it emerged on Friday that it will cut security assistance to European nations near the Russian border. It appears that a review of the US’s strategic posture will recommend concentrating on the defence of the “homeland” and the Western Hemisphere, abandoning the “pivot to Asia” intended to contain China.

Winners and losers of US pullout

In January – for the second time – the US withdrew from the Paris Agreement on climate change, joining Iran, Yemen and Libya as the only non-members. It looks set to proceed with seabed mining, despite the strictures of the International Seabed Authority and the UN Convention on the Law of the Sea. The chairman of the president’s council of economic advisers has cast doubt on the sanctity of US government debt.

The second Trump administration has launched a campaign against renewable energy, most recently nixing the Revolution Wind farm off Rhode Island, on which Danish developer Orsted and partner Skyborn had already spent $5 billion, and which was almost complete. The White House has slashed spending on science and technology, not just in green energy but in other core areas of the future economy such as space and biotech.

These are elements of a geopolitical, geoeconomic and climatic realignment. Of the great powers, there are two big losers, one big winner, and two that have a lot to do to salvage their positions.

The first loser, self-inflicted, is of course the US. In this scenario, it plays the part of Great Britain after the Revolutionary War. But, unless it can capitalise on AI, it does not have a new economic engine.

Instead, it is stuck with selling fossil fuels, for which long-term demand and prices are at best going to rise tepidly. Already far behind China in new energy technologies, it now has no chance of catching up. A long-shot bet, fusion power, might reset the table entirely, but that breakthrough might equally come in China.

The second loser is Russia. Mr Putin’s chummy appearance with Chinese leader Xi Jinping in Tianjin gave a positive impression. But Russia’s economy is the furthest behind on new energy technology of any major power. Even its traditional strength in hydrocarbons is being battered by Ukrainian drones, sanctions, and the diversion of finance and effort to the war front.

The pipeline agreement is, so far, no more than an agreement to talk. Beijing gets a free option to bargain down Qatar and other suppliers of gas. Its official reporting on the summit did not even mention the pipeline deal. Moscow, in contrast, gets the chance to spend scarce money and steel on a very long pipeline through inhospitable terrain to sell half the gas it used to send to Europe, at a lower price, to a powerful continental neighbour.

Rarely have Beijing and Moscow been friends – from 1949 to 1965, and from about 2001 onwards. More usually, they have been rivals, or outright enemies. But only recently has China been clearly the dominant one in the relationship.

It is, of course, the big winner from this realignment. A structurally slowing economy, an ageing and shrinking working population, and a deflating real estate bubble are, at least for now, papered over by a tremendous surge in renewable energy at home, a cleaning of the local environment, and the creation of new economic motors.

Its growing share of renewables and electric vehicles, and the Russian pipeline option, diminish American leverage over its oil and gas supplies. Contrariwise, it has pressure points against the US in trade, such as controls over rare earth minerals crucial for defence and energy applications. Its strongest neighbours – not just India, but Japan, South Korea, Taiwan and Vietnam – now have to rethink their own economic and security plans.

Rising and falling economies

India still has the fastest-growing major economy and the best demographic outlook. Mr Modi knows he has to stand strong against Washington’s bullying. It is tempting to try to play all sides. But for the sake of a few billion dollars of cheaper Russian oil, India’s own hopes of becoming a green manufacturing superpower have been dented.

Its own domestic renewable sector is doing well. India is next door to the Gulf’s hydrocarbons, as shown by last month’s deal for liquefied natural gas from the UAE. But, blocked by Beijing-backed adversary Pakistan to the north-west, it will never enjoy the same energy security from overland pipelines as Beijing.

Europe, too, has to work hard to reinvent itself. Its high energy costs and its need for imported hydrocarbons, will drop over time. But it is hard to create a new economic and security system in the face of internal disunity, complacent and ageing populations, and a strange lack of self-confidence in relation to both Washington and Moscow. The counter-intuitive but most logical partner is China, to forge a green partnership and stand up for world trade and financial stability.

That requires pairing, not just democracies with an authoritarian state, but two distinct geopolitical traditions. Maritime powers, which describes the US as well as imperial Britain, benefit from open trade, alliances, multilateral institutions, and principled adherence to the international norms that they define. Land-based leaders, by contrast, prefer hard power and tangible infrastructure, Bismarck’s “blood and iron”, and Xi Jinping’s “Belt and Road”. The SCO meeting was a parade of the second paradigm.

Two centuries ago, Britain managed to overcome its blunder and play to its strategic strengths. The task for the US and its former friends will be much harder.