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Conflicting alliance

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In Russia, the criticism of the economic dogmatism of the ‘financial bloc’ comes from two currents that mostly overlap. The first is Sergey Glazyev, a patriotic who serves on the Eurasian Economic Commission’s Board of Integration and Macroeconomics. Glazyev, whose influence on the Kremlin is constantly speculated (he was one of Putin’s advisers between 2012 and 2019), could take a left-wing stance so much as acted together with the “Left Front” in the 2017 elections. As recently as 20 April 2022, he accused the Central Bank of not knowing the first thing about the credit system and of acting “according to primitive IMF dogmas relying on foreign investment-hungry citizens of the underdeveloped countries.” In many ways, Glazyev is advocating a new New Economic Policy (NEP). A Just Russia’s far-left deputy Mikhail Delyagin and the Communist Party form the second current. They, too, favor nationalizations and a new “Gosplan” in one form or another.

Sergey Glazyev with Putin

But in addition to crossing each other, these two overlapping currents also interact with the “financial bloc.”

The Central Bank and the Ministry of Finance are the two institutions that make up the “financial bloc.” At the very least, it is clear that the Central Bank has made an unmatched effort to overcome the crisis (within capitalism, of course). In actuality, the praise and even admiration given by European, and US financial institutions demonstrated that its efforts had been somewhat successful. But given that the Central Bank, which prior to February 24 was the “regulator” (i.e., policymaker), is now becoming a “technician” (i.e., practitioner), this inflationist praise and achievement should also be seen as an indication of the breakdown of the conventional “financial bloc”. It was no accident that in early June the attack of economists on the Central Bank for failing to depreciate the ruble was prompted by one of most audacious defenders of the “financial bloc”, RBK, a media conglomerate particularly specializing in economic news.

I have often dwelled on the dogmatism of this bloc. However, at least two instances illustrating the extent of dogmatism should be provided. When we look at these examples, we will also see how internal conflicts work and which factors limit them.

Default

First off, the Ministry of Finance, if not the Central Bank, employed every means to prevent saying that Russia had defaulted, including continuing to pay Eurobonds in foreign currency. Moreover, apart from the irresistible temptation of paying off the creditor, the Ministry had a potent ally: PIMCO (Pacific Investment Management Company). According to data from Tinkoff Investment Advisory, as of mid-May, PIMCO had sold CDS as insurance policies to Russia’s $3.1 billion in foreign debt bonds, demonstrating how confident it was that the country would not go into default. Furthermore, PIMCO had invested roughly $1 billion in credit risk premium (CDS) in Russia last year alone (The seller’s promise to pay the buyer the difference between the nominal price and the market price of these bonds in the event that the issuing nation defaults is known as a “bill” or “derivative”). In order to avert a possible loss, PIMCO was forced to advocate “let them pay”. However, neither the voice of money nor PIMCO’s lobbying efforts were able to prevent it from happening. The bond payments had to halt when the US Treasury Department eventually blocked the OFAC license on May 25. The next installments due on June 24 could not be made, which led to what Medvedev called a “political default.”

However, the world did not come to an end because it was seen that the fixation with default was founded, like all obsessions, on an entirely nonsensical justification. As a matter of fact, payments that were unable to be fulfilled were no longer in the news in the days that followed.

Let’s not forget the other performer on the stage, by the way. PIMCO doesn’t appear to lose money. One of the defining characteristics of the neoliberal period, which worships the financial god, is the use of “derivatives” or risk management coupons, etc. These are ways to extract surplus value through speculation, but more crucially, the forces that drive the market are playing in an echo chamber where the house always wins. The CDS committee, established by the huge businesses that market CDS policies, decides if a nation defaults. Naturally, there was no market left after the US Department of Finance blocked the OFAC license. What should poor PIMCO and poor Golden Sachs do when there is no market, no way to ascertain the market price, and to quantify the difference between the nominal price and the nominal price? How would they determine how much to pay? Thus, the CDS committee asked the US Treasury for permission to auction Russian government bonds and was granted it. As a result, the price of the bonds at the auction shot up by 48 to 56 percent. Coincidentally (!), PIMCO and Golden Sachs purchased the majority of them.

As a result, both the asset owners and the asset insurers are now the same. This implies that as long as Russia continues to declare, “I owe my obligation,” modern alchemists will continue to triumph. They will prevail thanks to 340 billion dollars in reserves, even if Russia writes off their debt. In this situation, individuals who own the bond and furthermore sell its derivative may even find the default to be a seductive opportunity. That is nothing meaningful, even if they lose. When compared to PIMCO’s $2.2 trillion trading volume, which is based on data from late 2021, who cares about a few billion dollars?

Leasing

Another example is the leasing problem; this time, the Ministry of Finance had some success in its struggle to keep making payments at the expense of the Treasury. The issue was whether to keep making the leasing payments to foreign firms that have left the Russian market and, thus, failed to fulfill their contractual obligations (at a cost of 350–400 billion rubles annually) by stopping manufacturing, importing, maintaining, and supplying spare parts and, or to declare moratorium. At the end of October, Prime Minister Mishustin authorized Deputy Prime Minister Manturov and Transport Minister Savelyev to make a decision on this matter. Based on the “expert report,” the Ministry of Transport gave an unfavorable judgment, and the Ministry of Finance seconded it. However, the “expert” committee’s members, who wrote the report, were representatives of foreign firms withdrew from the Russian market. It was such out in the open that Mishustin was forced to step in and partially fix the “issue”. Accordingly, payments are to be reduced. But there is still a problem with the availability of maintenance and supply of spare parts for leased vehicles. For this, robust routes with parallel exports through Turkey and -mostly- Iran are needed. As for leasing payments, the final word has not been said yet. It will be had by the representative of the “import substitutionist bloc,” Deputy Prime Minister D. Manturov.

Denis Manturov

This is a crucial example in terms of demonstrating how determined the ministries are to remain in the global capitalist system. The conflict began when Soviet industry, or economic independence, collapsed in the face of low-cost Western goods. Now they have to rebuild all over again. Either they must find other cheap suppliers, like China (but shifting the supply chain is a difficult task and China, which is equally dependent on the global capitalist system, is not very willing to do this). Or, they have to preserve their dependency in a way that keeps the wolf from the door with the hope of that that the crisis will be resolved soon.

Three options

The three options don’t differ significantly from one another, though. The phases of putting these options into action overlap. If we consider those who advocate for rebuilding to be the most radical, they are partnering with the “import substitutionist bloc” to make the gradual transition since they cannot do it again in a short time and must find a cheap supplier. And import substitutionists who wish to move their supply chain to the east cannot do so in a short time; instead, they must rely on the pro-imperialist system’s supporters who barely hold their end up until the issue is fully resolved.

This contradictory transitivity between the parties and this conflicted unity continues in all aspects of economic life. Consider dividends received by large corporations.

The first group, whether from the political “right” (pro-military) or left (popular), wants to fully halt these payments and keep using the profits of large state corporations to finance the budget. Furthermore, they believe that this situation is unavoidable because oil and natural gas revenues will certainly be threatened by sanctions, at which point they will either appeal to the bourgeoisie or the people for funding.

The second group is also aware of this, but they cannot afford to alter the capital structures of these businesses since their political objective is the ascent of the middle bourgeoisie through the exploitation of other classes, particularly the big bourgeoisie. However, this can only be accomplished within the capitalist system, whereas the first group’s radical solution entails closing one of the channels through which the middle bourgeoisie can rise.

This is where the third group enters the picture. In order for the capitalist system to survive, the stock market must continue to run. This can happen only if the giant state corporations that serve as the driving force behind the Russian economy continues to pay dividends, that is, they should keep feeding their local or international big bourgeois. As a result, a solution is found that keeps the conflict peacefully. Dividend payments are somewhat restricted but not entirely stopped. Due to “overlapping interests,” the second group gains the most from this, but also the other two.

Balance

The balance has been established so that under the terms of the sanctions, those who advocate paving the way for the middle bourgeoisie are in an favorable position. But the others are not desperate, though. Why?

1) Politically, the left is not opposed to a new rise of the middle bourgeoisie, as it may lead to the NEP, the golden age for the leftists. What was the NEP? “A tiny retreat for a big leap”, to quote Lenin. It is the first link in the process of rebuilding the USSR, which was on the verge of economic collapse, after the “war communism” era. It is the emergence of the petty and middle bourgeoisie under complete state control while the large bourgeoisie was suppressed. It is perhaps the most democratic period in Russia since the principality of Kyiv. (The latter leads to a secondary contradiction between the dictatorial “pro-military” wing of the first group and the “popular” wing demanding democracy at the most.)

2) Economically, the right, the “financial bloc”, is not against a new rise of the middle bourgeoisie as long as the interests of the big bourgeoisie are safeguarded. Because the big bourgeoisie will swallow the others anyway if these interests are preserved. Moreover, if the concessions envisioned by the second group are realized, they will be swallowed by a more fattened big bourgeoisie, which is particularly appealing.

Conflict and predictability

At the November 16 Cabinet meeting, Putin inquired as to whether the Ministry of Finance had given its approval before approving Denis Manturov’s request to expand the car loan program to include military personnel and partial mobilization conscripts. This was noteworthy because it demonstrates that the powers of the ministries are split by distinct boundaries and how, in the conflicts between them, the approval of the ministry in charge is sought first rather than the president’s. This is not an isolated instance. The likes frequently happen; especially in the conflicts between finance and industry, and between the “military bloc” and others.

It also points out that one of the most meaningless concepts of bourgeois political science, “totalitarianism”, which has become so fashionable these days, actually has no objective foundation because there is nothing like the application of “total” authority at all. Contrarily, the jurisdictions are established with distinct borders. Unless there are exceptional circumstances, the president does not meddle in these divided powers. The act of establishing boundaries does not result from a situation in which people gather to discuss the best form of “governance”. Rather, the lines are drawn because the conflict aiming at different political and social objectives continues and rules are set to prevent the conflict from spiraling out of control.

For this reason, I have always found absurd the tendency to explain Russia’s state decisions (in any area from militarism to foreign policy, from economic policy to the fate of offshore calculations) with the momentary, unpredictable, surprise decisions of a group of “totalitarian” decision makers. Politics is so determined with clear lines, and the institutions’ authority is so thoroughly defined to avert conflict to lead to war, therefore, few surprises are encountered. As a result, grasping the process only depends on understanding the conflict.

Conflict of authority and temporary retreats

The blocs jealously guard their authority, one another’s meddling is unwanted and repulsed even stingingly.

The “military bloc” and the “financial bloc” came into such a conflict at the end of April. General Secretary of the Security Council “Mr. Siloviki” Patrushev said that they were developing a financial system in which the ruble would be pegged to the currency basket and gold, but Central Bank Governor Nabiullina categorically denied this with almost an off-protocol discourse.

This really is a crucial matter. Suppose that contracts for international trade with Kazakhstan as a “friendly” or even an ally nation can and are made in rubles and tenge, but in any case, a “universal equivalent” (we are forced to use Marxist terminology) is needed by which these sums in rubles or tenge are evaluated. How about this universal equivalent? If “de-dollarisation” in global trade is not (and it is not) just a nice rhetoric, something else must be found. The “finance bloc,” which was still looking for methods to stay within the imperialist system, rejected Patrushev’s plan, which called for this to be a basket of gold and foreign currency, while the “military bloc” withdrew to prevent usurpation. However, this was the inevitable conclusion of the process. The following was reported by RBK on November 19: “One of the sources of RBK claims that even if commerce with Kazakhstan is conducted in national currencies, how many rubles will equal to one tenge is determined by the dollar rate of the tenge. For this reason, banks are collaborating with the Central Bank and the Ministry of Finance on a project that will allow some departure from cross-currency calculations.” The “financial bloc” appears determined to avoid even indirectly returning to the gold (or oil) standard, instead attempting to create a “currency basket” that is nothing but a hybrid dollarization. At least for now, the “financial bloc” assures to include banks, the sacred altar of the neoliberalist age, into this process.

Will it be a hit or a miss? It is doable. Does it mean the liquidation of dollarisation? No. It is inevitable that a new (one!) universal equivalent will be found if they are determined on this issue (and the troika’s sanction terror pushes them to determination, even if they don’t want to). It doesn’t matter if this equivalent is the “evergreen” gold or yuan or “oil of the earth,” or sheepskin.

The sword of balance

Fine, but where is the Kremlin in this picture? As with military-political issues, the Kremlin adopts a pragmatic attitude on political-economic matters, but this pragmatism is not unprincipled in the latter ones, just as it was in the former issues. In the political-economic matters, the Kremlin seeks to strengthen the middle bourgeoisie on the account of the big bourgeoisie, just as it is resolved to continue the battle until it achieves its minimal political objectives in the military-political issues (which means removing the Kyiv regime from being a current or potential threat to Russia in one way or another). The Kremlin’s current position therefore aligns with the second group; yet the Kremlin is already a conflicting alliance in its own image, as the blocs’ positions may shift in line with the balance of power, but they will keep doing so peacefully.

An example: At the November 16 meeting I mentioned above, Putin did not hesitate to attack the banks, the holy altar of the “financial bloc”: “Banks simply and cheerfully offer minor loans (…) but then these people become eternal debtors. Banks, with all due respect to these financial organizations, drain the lifeblood of the population. Obviously, it is needed to put an end to this.”

Although the Kremlin’s perspective is entirely discernible empirically, there remains a theoretical issue in the middle of the room. This is a problem I have touched on many times before: Bonapartism as a particular kind of authority in post-Soviet Russia.

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Chinese diplomacy ascendant under Xi: All roads lead to Beijing

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Beginning in late 2025 and extending throughout 2026, one of the most striking developments in world politics has been the successive convergence of major powers upon Beijing. Direct, high-level engagement with China by actors at the very core of the global system—such as the United States, Russia, the United Kingdom, France, and Germany—is widely interpreted as a potent signal of a shifting international order. These visits are indubitably far from routine diplomatic encounters. Rather, they represent symbolic and strategic maneuvers indicative of a fundamental realignment of the world’s power centers. In particular, the intensive engagement with China by four of the permanent members of the United Nations Security Council within a brief window demonstrates that Beijing has evolved far beyond a mere economic powerhouse, establishing itself as a principal locus of global diplomacy.

For decades, the global order was predominantly US-centric. Following the end of the Cold War, the United States attained an unrivaled position militarily, economically, and diplomatically. China, conversely, was viewed as a rapidly growing economy defined primarily by its manufacturing capacity and cheap labor force. While Beijing possessed influence within the global system, the primary decision-making mechanisms of world politics remained firmly anchored in Washington. However, the transformation of the past two decades has elevated China from a mere economic giant to the epicenter of global strategic competition.

Today, China stands as one of the most pivotal actors in world trade. The vast majority of global supply chains are intricately linked to Chinese networks. Across a multitude of critical sectors—ranging from electric vehicles and battery technologies to artificial intelligence and solar energy—China has established itself as both a dominant producer and a global standard-setter. This immense economic capacity has naturally engendered commensurate political and diplomatic leverage. Global leaders now recognize that international challenges cannot be effectively managed by bypassing or ignoring China.

It is precisely here that the core significance of these recent visits to China becomes apparent. Donald Trump’s journey to Beijing to meet with Xi Jinping underscored that despite the intense rivalry between Washington and Beijing, direct engagement has become an absolute necessity. Similarly, while Vladimir Putin’s strategic alignment with China has long been established, Moscow’s deepened cooperation with Beijing in the wake of its profound crisis with the West has significantly bolstered China’s geopolitical weight across Eurasia. Meanwhile, British Prime Minister Keir Starmer’s visit was interpreted as a sign of Europe pivoting toward a more pragmatic trajectory in its policy toward China. The prior engagements of French President Emmanuel Macron had already demonstrated that Europe has no desire for a complete decoupling from China. German Chancellor Friedrich Merz’s discussions in Beijing were particularly noteworthy from an economic standpoint, as the Chinese market remains indispensable to German industry. Furthermore, the intensive diplomatic relations maintained by Serbian President Alexander Vučić with China demonstrate that Beijing’s influence on the European continent is by no means confined to major Western European states. Through infrastructure investments, transport projects, technology transfers, and defense cooperation in recent years, Serbia has emerged as one of China’s closest partners in Europe.

The common denominator among these visits was the pursuit of direct engagement with Xi Jinping. Xi is no longer viewed merely as the leader of China; for many nations, he has become a preeminent figure shaping the future of the global system. The transformation of China under Xi into a more centralized, visionary state structured around long-term strategic planning has magnified the personal significance of his leadership. Today, the international community is intensely focused on Xi Jinping’s decision-making. Consequently, pilgrimages to Beijing represent an effort to establish a direct, unmediated channel to Xi himself.

Symbolism is of paramount importance here; in international politics, the optics of “who travels to meet whom” are central to the perception of power. If global leaders continuously travel to Beijing while Xi travels sparingly—yet remains the figure everyone seeks to audience with—it naturally reinforces the message: Xi Jinping is no longer just the leader of China, but a chief architect of the global system. Remarkably, Xi’s reduced international travel has not diluted China’s influence. On the contrary, Beijing’s emergence as the primary destination of diplomatic pilgrimage projects an image of profound self-assurance. To many observers, this stands as one of the most visible symbols of a shifting world order. By rendering their respects in Beijing as much as in Washington, global leaders signal that the global equation is now being formulated here.

This shift is driven by tangible geopolitical realities. The contemporary world operates within a highly interdependent framework. While intense competition defines US-China relations, their economies remain deeply intertwined, rendering total decoupling virtually impossible. Across a vast spectrum of critical arenas—including trade, semiconductor technology, artificial intelligence, energy security, the Taiwan question, the Russia-Ukraine war, the Iranian crisis, and global supply chains—China has emerged as a decisive actor. Consequently, no major power, including Washington, can formulate a viable global strategy by sidelining China.

For Europe in particular, the China question has grown increasingly complex. The period between 2022 and 2024 saw Europe adopt a more hawkish and distant posture toward Beijing. However, slowing economic growth, energy crises, and trade frictions with the United States have compelled Europe to seek a more balanced approach. The pivot of European leaders toward Beijing reveals that complete economic decoupling from China would carry prohibitive costs for Europe. This dynamic also underscores the divergent internal priorities within the US-led Western bloc.

China’s rise should not be viewed solely through the prism of its relations with the West; the sphere of influence Beijing has cultivated across the Global South is of equal significance. In recent years, Chinese influence has expanded dramatically across Africa, Latin America, Central Asia, the Gulf States, and South Asia. Within this context, Pakistani Prime Minister Shehbaz Sharif’s visit to China carries profound weight. The China-Pakistan relationship has long been characterized as an “ironclad friendship.” Through the Belt and Road Initiative, China has constructed ports, railways, energy facilities, and critical infrastructure in numerous countries, most notably Pakistan. Furthermore, unlike Western financial institutions, Beijing extends credit and investment with fewer political conditionalities. Consequently, many developing nations view China not only as a vital economic partner but also as a geopolitical counterweight to the West.

All of this inevitably raises the question: “Is China ascendant?” Based on the current landscape, the answer must be in the affirmative. For global leaders, Beijing has now emerged as a diplomatic hub as critical as Washington. Moreover, beyond its sheer economic scale, China is increasingly distinguished by its capacity for conflict resolution. Its pivotal role in facilitating the Iran-Saudi Arabia normalization, coupled with its close ties to Russia and its sweeping influence over the Global South, has significantly amplified Beijing’s diplomatic gravity.

The diplomatic traffic observed throughout 2026 highlights a fundamental truth: the world is no longer unipolar or monocivilizational. Opposite the United States stands a China capable of challenging it economically, technologically, culturally, and diplomatically. Consequently, this new era diverges sharply from the unipolar structure of the “American Century,” resembling instead a multipolar, multi-civilizational order where all actors cooperate and compete with one another simultaneously.

Xi Jinping’s position is central to this paradigm shift. For many leaders today, meeting with Xi in Beijing is not merely a matter of bilateral diplomacy, but a strategic imperative for positioning oneself within the global balance of power. This has immensely enhanced Xi’s personal prestige. Within the international system, there is a growing consensus that on most critical issues, “if Beijing is not at the table, no resolution can be complete.” The acceleration of visits to China since late 2025 is not merely a reflection of a crowded diplomatic calendar; it must be understood as a tangible indicator of a shifting world order. Beijing has transcended its status as an economic core to become one of the primary power centers of global politics. Consequently, Chinese President Xi Jinping is emerging as one of the most influential figures of this new, multipolar, and multi-civilizational world order.

Today, the diplomatic traffic directed toward Beijing is by no means limited to the United States, Russia, or the major European powers. The efforts of leaders from a vast geographical span—from Serbia and Pakistan to the Gulf States and African nations—to establish direct contact with China render Beijing’s central position in the global system increasingly conspicuous. Consequently, these recent visits are interpreted as signs that the power map of the new international order is being redrawn. For many capitals, the path to understanding global developments and formulating future strategies now runs through Beijing as much as it does through Washington. Thus, the adage “All roads lead to Beijing” is rapidly transforming from a rhetorical trope into a defining reality of contemporary international politics.

Umur Tugay Yücel – Political Scientist & Author of the book “The Decline of American Power and the Rising Powers” (China-Russia-India-Brazil).

X: @umur_tugay

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Israel’s influence over the United States and America’s strategic impasse

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In remarks to the American media, Israel’s genocidal prime minister, Benjamin Netanyahu, declared: “The war with Iran is not over. The enrichment facilities must be dismantled, and the highly enriched uranium must be eliminated.” He insisted that the permanent destruction of Tehran’s nuclear capacity was imperative.

The broader picture in the Middle East is this: the United States is simultaneously attempting to make Israel more effective, more powerful, and territorially larger, while also attacking those countries that unsettle Israel or resist its regional influence. It fragments them, destabilizes them, occupies them. What occurred in Libya, Iraq, and Syria, as well as the joint American-Israeli aggression directed at Iran, must be understood from this perspective no less than from any other.

We know that Israel exercises enormous influence over the United States. The effects and reflections of that influence are visible even in Washington’s relations with Türkiye. Israel influences the United States to such an extent that America loves whom Israel loves and rejects whom Israel rejects. American presidents hesitate to take a step in the Middle East without first consulting Israel or securing its approval. For that reason, it is especially noteworthy that, in recent months, many American experts, politicians, and commentators have openly said of the attacks on Iran: “This is not America’s war; it is Israel’s war. It is wrong for the United States to place itself so completely under Israel’s direction and follow in its wake.” For the first time, Israel is being criticized this openly and this loudly within the United States itself. For the first time, America’s limitless and unconditional support for Israel is being questioned so directly.

The extent of Israel’s hostility toward Türkiye

Israel’s influence over the United States, as seen in the joint American-Israeli aggression against Iran, also became apparent during the ceasefire negotiations. Israel did everything in its power to prevent the United States from accepting a ceasefire. Although Pakistan succeeded in persuading both Washington and Tehran to accept a regional ceasefire, Israel immediately pressured the United States and ensured that Lebanon was excluded from the scope of the agreement.

Israel’s hostile posture toward Türkiye is likewise striking. By supporting terrorist organizations operating against Türkiye, Israel seeks to force the country to exhaust its energy and resources in prolonged struggles against armed groups both domestically and along its immediate periphery. In this regard, the most functional and useful instrument at Israel’s disposal is the PKK terrorist organization. The United States also supports the PKK. Accordingly, the American-Israeli axis jointly backs structures affiliated with the PKK, namely the PYD-YPG in Syria and PJAK in Iran. It will be recalled that Israel also supported the 2017 independence referendum organized in northern Iraq under the leadership of the Barzani administration. Israel announced that, should the referendum produce a declaration of independence, it would be among the first states to recognize an independent Kurdish state separating from Iraq.

The American economy Is not on a healthy trajectory

From an economic standpoint as well, the United States is compelled to wage wars, launch attacks, create new customers for its arms industry, and secure fresh military contracts. The American economy has become dependent on war. Within the country’s dominant sectors, the military-industrial structure occupies a singularly privileged and strategic position. U.S. public debt has surpassed 39 trillion dollars. Private-sector debt, including household debt, has reached 42 trillion dollars. The budget deficit approached 1.8 trillion dollars in 2025. Last year, the trade deficit climbed to 901.5 billion dollars. At the same time, the country’s productive capacity and competitive strength continue to erode.

By attacking Iran alongside Israel, the United States sought not only to neutralize Iran’s missile capacity and nuclear capabilities, but also to alter the regime in Tehran and, if possible, even redraw the country’s borders. It inflicted severe damage on Iran and struck heavy blows, yet failed to force capitulation. It achieved neither its military objectives nor its political aims.

Another American calculation was this: by striking Iran, which sells 90 percent of its oil exports to China, Washington hoped to open a serious breach in China’s energy supply chain. China obtains nearly half of the oil it consumes from Gulf countries such as Iran, Iraq, Saudi Arabia, and the United Arab Emirates. Altogether, 45 percent of the oil China uses passes through the Strait of Hormuz. It should also be noted that the Strait of Hormuz is critically important not only for China, but also for Asia’s major economies such as Japan, India, and South Korea. One must not forget that all three maintain close relations with the United States.

While attacking Iran, the United States also sought to weaken China — and failed

While calculating that Iran would emerge weakened, the United States also intended to batter China in the process. It failed. That failure rendered Washington even more aggressive and drove it into deeper panic. For regardless of what the United States does, the trajectory of history continues to favor China.

Consider the figures. In 1990, China accounted for just 1.8 percent of the global economy. Today, that figure stands at 18.5 percent. In other words, over the past thirty-six years, China’s share of the world economy has increased tenfold. The United States, by contrast, accounted for 34 percent of the global economy in 1985; by 1990, its share had already fallen to 26 percent. Today it has declined further, to 22 percent. As can clearly be seen, America’s share has been steadily diminishing. Across the Atlantic, Europe’s decline has been even more pronounced. In 1990, the European Union accounted for more than 27 percent of the global economy. Today its share has fallen to 17 percent. In other words, over the past thirty-six years, the European Union has contracted by ten percentage points.

This decline in Europe inevitably weakens the European Union’s appeal while simultaneously intensifying internal disputes within the bloc. It has also emboldened those advocating withdrawal from the Union. Following Britain’s departure from the European Union through the 2016 Brexit referendum, similar debates have proliferated across Europe. Those advocating France’s withdrawal speak of “Frexit,” while proponents of Sweden’s departure invoke the term “Swexit.”

These debates are not confined to the European Union alone. Parallel discussions are also emerging within NATO, particularly as President Trump publicly humiliates NATO members and even suggests that the United States itself could leave the alliance. Slovenia, for example, one of NATO’s smaller members, is debating the possibility of putting withdrawal from the alliance to a referendum. For a small-scale country, this is undoubtedly a bold and highly consequential discussion.

What ultimately becomes visible is this: as the United States weakens, the fractures within the Atlantic alliance deepen, and disputes within major Western institutions such as NATO and the European Union grow increasingly severe. The joint American-Israeli attacks against Iran, together with Iran’s resistance, are making those fractures even more visible.

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From Great Power Competition to Strategic Stability: A New Orientation of China-US Relations

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U.S. President Donald Trump paid a state visit to China from May 13 to 15, 2026. For the current turbulent international order, this summit between the two great powers of China and the United States is of extraordinary significance, bringing a degree of certainty to an uncertain world.

A major focus of domestic and international attention is that during his visit to China, Trump appeared far more rational, restrained and pragmatic than he did in Europe. In Europe, he often treated allies with emotional outbursts, unilateral pressure and even public mockery; in Beijing, by contrast, he moderated his tone, chose his words carefully, stressed respect for China and a willingness to cooperate, demonstrating a greater sense of realpolitik and diplomatic propriety.

During his tour at Zhongnanhai, he even remarked that if he gets used to this place, he might not want to leave. He also expressed hope of visiting China again in six months. All this points to productive communications between the two sides. The most important outcome was their agreement to build a constructive China-U.S. relationship of strategic stability. This is clearly a major new development and transformation in China-U.S. relations, which will undoubtedly send strong reverberations, profoundly shaping not only the societies of both nations but also the global strategic landscape and the existing structure of international relations.

What Is the “China-US Constructive Relationship of Strategic Stability”?

Although no joint communiqué was issued nor press conference held following President Trump’s visit to China, the Chinese side nonetheless spoke highly of the trip, describing it as a “historic meeting”. The reason lies in the two sides’ agreement to build a constructive China-U.S. relationship of strategic stability.

Strategic stability originally refers to a state among nuclear-armed powers where mutual deterrence prevents nuclear war. The concept emerged from U.S.-Soviet arms control during the Cold War and now also describes peaceful relations between major powers. In the current China-U.S. context, “strategic stability” is understood broadly to mean that the two countries can maintain a stable framework in their most crucial interactions.

How should we understand the new positioning of a “constructive relationship of strategic stability”? During the meeting on May 14, President Xi Jinping put forward the “four should-bes” to define this new framework: It should be positive stability with cooperation as the mainstay, healthy stability with competition kept within bounds, normal stability with differences under control, and durable stability with peace in prospect. Each dimension of “stability” leaves considerable room for interpretation.

The first dimension: cooperation as the mainstay. Over the past decade, both the Trump administration’s launch of two trade wars and the Biden administration’s building of a “small yard with high fences” and imposing high-tech export controls on China have created massive disruptions to the normal operations of enterprises in both countries and to bilateral trade. As the world’s two largest economies, frequent frictions caused by U.S. policies are clearly abnormal and detrimental to the economic development of both nations and the world. It is therefore essential to return to a tone centered on cooperation.

The second dimension is well-regulated competition. The United States is prone to the Thucydides Trap mindset and harbors deep misgivings about China’s rise and development. Nevertheless, China has no intention of engaging in zero-sum games where one side wins and the other loses. From Chinese perspective, competition between nations is inevitable. Yet the world today faces the fundamental task of expanding common interests rather than dividing existing gains. We embrace sound competition and reject vicious rivalry; otherwise, the world risks repeating the tragedies of World War I, World War II and even the Cold War.

The third dimension is manageable differences. Disagreements are inevitable in China-U.S. interactions. However, if economic, trade, technological, cultural and academic exchanges are all politicized and securitized, even ordinary bilateral issues will escalate into strategic confrontations. A mature major-country relationship does not mean the absence of disputes, but the ability to keep dialogue intact even after disagreements arise.

The fourth dimension is foreseeable peace. It targets the most fundamental and bottom-line principle in China-U.S. relations: the two countries must avoid war. Today’s China-U.S. relationship is no longer a simple bilateral tie between two isolated nations, but two core pillars embedded in the global industrial chain, financial system, technological system and security architecture. Therefore, foreseeable peace requires strategic self-awareness from both sides: competition must not escalate into conflict, and confrontation must never lead to war. Neither side shall gamble the future of 1.4 billion Chinese people, over 300 million Americans and the entire world on an unaffordable conflict for short-term political gains.

These signals released from this summit indicate that both sides are striving to shift their relations from confrontation to a new phase featuring controllable competition and pragmatic cooperation.

The Constructive Significance of the New Positioning of China-U.S. Relations

These “four should-bes” are not a one-sided expectation that China places on the United States, but rather a mutual commitment between the two countries. The definition put forward by the Chinese leader has received high recognition from the U.S. side. Therefore, there is good reason to believe that this new framework will serve as the strategic guideline for China-U.S. relations over the next three years, which will cover Trump’s second term, because it benefits both nations.

For China, what matters more are the strategic gains from this meeting: namely, persuading the United States to embrace a framework of constructive strategic stability. China’s paramount strategic goal is to achieve the great rejuvenation of the Chinese nation, which demands a stable external environment. Yet since Trump’s first term, China has faced containment by the United States and its allies across trade, technology, finance, and geopolitics, posing severe challenges to its development. China has long sought to transcend the Thucydides Trap. While it does not shy away from competition and stands ready to uphold its interests in economic and trade frictions with the U.S., it has no desire for strategic rivalry. Instead, China aims to steer bilateral relations back to a path of rationality, communication, and non-confrontation, so as to secure a stable external environment for economic growth.

For the United States, it places greater emphasis on the pragmatic benefits of this visit. The U.S. signaled its intention to visit China as early as last year, aiming to leverage its perceived victories over Venezuela and Iran to pressure China. However, the war in Iran has yet to end, and it has produced significant blowback against the U.S., exposing few critical realities to the world:

First, the U.S. cannot defeat Iran, and a power unable to subdue Iran has no credible path to conquering China.

Second, although China is the world’s largest energy importer, it faces no imminent risk of energy shortages.

Third, surging domestic inflation and oil prices in the U.S. have stoked public discontent, undermining Trump’s prospects in the midterm elections.

Fourth, the U.S. failed to defeat China in the trade war, instead hitting a wall. In February, the U.S. Supreme Court ruled that the massive tariffs imposed by the Trump administration under the International Emergency Economic Powers Act (IEEPA) were illegal.

Fifth, a series of events like the maiden flight of China’s sixth-generation fighter jet, the May 7th India-Pakistan air battle, the September 3 military parade, and the U.S.-Israel-Iran conflict have convinced the U.S. that military coercion is unlikely to bend China to its will.

From the U.S. perspective, a reality-based assessment compels recognition of China’s international standing. Moreover, China’s neutral stance in multiple global crises has led the U.S. to view it as a rational, predictable, and negotiable strategic rival rather than an entirely uncontrollable challenger.

For the world at large, the realization of strategic stability in China-U.S. relations also contributes to global peace and stability. In this era of major-power games, world development and security are confronted with numerous challenges: rising global unrest and armed conflicts, sluggish economic growth mounting pressures on people’s livelihoods, stagnant technological progress and retrogressive international cooperation, a fractured international order and unbalanced rule-based systems, deteriorating diplomatic atmospheres and setbacks to peaceful diplomacy, ineffective governance over global issues, and small and medium-sized countries being reduced to pawns in great-power contests. The gravest crisis facing the world today lies not in troubles plaguing individual nations, but in the prevalent global state of instability, uncertainty and unpredictability. As the world’s two largest economies, China and the United States bear the responsibility to deliver stable expectations for the whole world.

The Future of China-U.S. Relations

In the short term, the proposal of a constructive strategic stability relationship between China and the United States means there will still be opportunities for positive interactions over the next six months. President Xi Jinping has agreed to pay a visit to U.S. in September 2026, and there is a high probability that the two leaders will meet again at the APEC Summit in Shenzhen and the G20 Summit in the United States again. In other words, the two countries will continue to maintain engagement, intensify cooperation on the basis of managing differences, and foster a favorable atmosphere for multiple rounds of head-of-state diplomacy in the period ahead.

Nevertheless, the “constructive strategic stability relationship between China and the United States” still faces an even bigger test that will determine its true substance. The Taiwan issue is the most sensitive and core issue in China-U.S. relations, representing China’s vital core national interest. This is a bottom line and red line that cannot be traded or trampled on.

On board Air Force One returning to the U.S. after his China visit, Trump laid out his latest “Four Don’ts” on Taiwan: Don’t want anyone to pursue independence; Don’t want to send troops thousands of miles to fight a war; Don’t become a backer for “Taiwan independence”; Don’t easily commit to arms sales to Taiwan.

This statement does not represent a shift from strategic ambiguity to strategic clarity. While the first three “Don’ts” can be seen as a form of strategic reassurance to China, the deliberate ambiguity on arms sales preserves the core tool of “using Taiwan issue to contain China”. In short, Trump has not abandoned the “Taiwan card” during this visit, and he still seeks to use it as a tool to constrain China. Accordingly, whether Trump approves a US$14 billion arms sale to Taiwan, which is the largest single arms deal in U.S. history, will not only test U.S. political commitments but also directly determine whether major conflict between China and the U.S. could break out in the future.

Though this visit facilitates the realization of strategic stability between China and the United States, the structural contradictions between the two sides in ideology, development models, technological competition and geopolitical strategies remain unresolved. In line with the logic of strategic defense, strategic stalemate and strategic counteroffensive, China-U.S. relations have entered the phase of strategic stalemate. Yet how long this phase will last remains uncertain. It is likely to be extremely protracted, spanning two to three decades or even longer until the two countries attain balanced strength across all fields.

China harbors no intention of challenging America’s dominant status, while the U.S. can hardly abandon its attempt to contain China. Hence, during this strategic stalemate, bilateral relations may witness intermittent frictions and truces, with neither side able to subdue the other. Both sides have to cooperate amid competition, which will become the new normal of bilateral ties.

In any case, the vision of a constructive strategic stability relationship is a bitter yet effective remedy proposed by China for China-U.S. relations and global peace. It does not cure minor ailments, but targets the entrenched fatal malady of hegemonic anxiety. This prescription requires joint adherence by both sides. China has demonstrated utmost sincerity and steadfast resolve. Now the ball is in America’s court, especially in the hands of decision-makers in Washington. Will it lay aside arrogance and embrace an equal, stable and sustainable new framework of bilateral relations, or remain trapped in the illusion of acting from a position of strength and rush headlong down the path of confrontation? It is hoped that this Beijing summit will mark a fresh starting point for bilateral ties. If both sides fully implement the constructive strategic stability relationship, reduce emotional decisions and excessive securitization tendencies, and step up pragmatic communication and tangible cooperation, it will prove a blessing for China, the United States and the entire world.

*Dr. Yang Chen
Associate Professor and Executive Director, Center for Turkish Studies, Institute of Global Studies, Shanghai University

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