Rival East and West meetings underline global fault lines

Donald Trump Kim Jong-un east and west meetings G7 Shanghai Cooperation Organisation
US President Donald Trump meets with North Korean leader Kim Jong-un in Singapore.

The past week’s flurry of internationally-acclaimed meetings in both the East and West is something to behold.

Either by coincidence or by intention – three different groups representing the most dominant nations and corporations were meeting around the world in the same week.

In the West, the Group of Seven (G7) group of nations comprised of the US, Germany, Canada, France, the UK, Italy and Japan met in Quebec, Canada.

In the East, the Shanghai Cooperation Organisation (SCO) comprised of China, Russia, Pakistan, India and Iran (in addition to several strategically-placed former CIS states such as Kazakhstan, Tajikistan and Uzbekistan) met in Qingdao, China.

In a bid to show that the East has just as much pomp as the folks over in Canada, Chinese authorities rid half the city of its shopkeepers, residents and tourists to make way for China’s President Xi Jinping, his Russian counterpart Vladimir Putin and Iran’s President Hassan Rouhani.

Pakistani President Mamnoon Hussain and India’s Prime Minister Narendra Modi also attended the meeting in a show of solidarity that goes above and beyond Kashmir – as the organisers intended.

Shanghai Cooperation Organisation Summit Qingdao China Russia 2018
Eastern leaders at the 2018 Shanghai Cooperation Organisation summit held in Qingdao, China.

Last but certainly not least – in the shadow of the glitz and glamour of the G7 and the SCO – the Bilderberg Group met in Turin, Italy this weekend with a host of economic ministers, prime ministers, senators and even royalty.

If all that wasn’t enough, US President Donald Trump just met with North Korean leader Kim Jong-un as part of an “unprecedented” summit in Singapore.

With so many high level meetings taking place at once, world geopolitics and macroeconomics never looked so ominous.

The enemy of my enemy is my friend

It seems that both the East and West are gathering swords and alliances amidst rising tensions in trade and global geopolitics.

The US is currently stuck in a trade spat with both Russia and China including tariffs on steel and manufacturing, while its nuclear armistice with Iran seems to be on the rocks.

In the meantime, Russia and China have stepped away to form their own union with many issues helping to bind these two global superpower competitors together. For one, a common opposition to the strongarm tactics used by the US both geopolitically and economically.

Both Russia and China (as well as several middle-eastern states) have voiced interest in switching away from the US dollar and adopting a common market that excludes the US and the US dollar.

Possibly the most important issue is ongoing oil and gas sales across Asia, which both China and Russia would ideally like to see move away from the US dollar – thereby undermining the influence of the so-called “petrodollar”.

As has been widely reported by the world’s press, the G7 meeting seems to have delivered little more than a fractured realisation that the already meek political will holding the economic group together, has become even weaker.

G7 meeting 2018 leaders
Western leaders at the 2018 G7 meeting in Quebec, Canada.

Not only was nothing agreed by the G7 in Quebec, but it seems the group may as well be referred to as the G6 plus the US. And to think, in the not-too-distant past, the group was called ‘the G8’ with Russia as the 8th nation. Russia was expelled in 2014 following its annexation of Crimea, a strategic geopolitical hot-potato in the Black Sea.

The fact that the combined purchasing power of the SCO countries outweighs the G7 was reaffirmed several times by none other than Vladimir Putin. President Putin said trade and investment among SCO countries were growing and Russia and China would propose a “Eurasian economic partnership for all member states.”

However, in nominal GDP terms, the G7’s US$35 trillion far outweighs the SCO’s US$15 trillion each year.

Aside from the SCO, another group of developing countries stands even stronger to rival the US and the G7 – the BRICS.

Building a yellow BRICS road

The rise of the so-called BRICS nations (Brazil, Russia, India, China and South Africa) is quickly catching up to economic prowess of the G7.

China plans to push this growing might of developing countries to the next level with its “One Belt One Road” initiative otherwise known as the economic Silk Road that promises to interconnect the entire Asian continent with Europe and Africa – a bit of a stick in the spokes to the US and other western powermongers such as the UK, Italy and Germany.

Meanwhile, Iran’s leader Rouhani said the US effort to impose its policies on others is “an expanding danger.”

Further afield on the economic front, Chinese President Xi announced that China would open a US$4.7 billion special lending facility within the bloc’s interbank consortium.

Gathering consequences

Possibly the most meaningful of the three stellar meetings this past week, as far as actual real-world impacts go, may turn out to be the Bilderberg meetings considering that the individuals that have assembled there are mainly representatives of private corporations rather than nation-states, as opposed to the G7 and SCO. Time will only tell.

Bilderberg Group chart
The Bilderberg Group’s connections to major corporations, governments and global think tanks. (click on image to enlarge)

Looking at the three gatherings in comparison, it’s hard to tell what’s more significant – the fact that the meetings are all convening at precisely the same time, whether traditional foes such as India and Pakistan prefer to bury the hatchet in favour of greater enmity towards Western nations, or whether both East and West are now stuck in a publicity grudge match that puts the Cold War to shame.

If the US and Russia produced the Cold War in the 1960’s, have the G7 and SCO produced a ‘Cool War’ today?

The gatherings seem to stand out as public relations stunts with a strong whiff of braggadocio when heads of state are busy slinging insults at each other via Twitter. Following the G7 meeting, Donald Trump disowned a joint summit statement and slated Canadian Prime Minister Justin Trudeau as “dishonest” and “weak”.

With the serious policy decisions made behind closed doors, maybe the ultra-serious politicians have realised that to win the support of the public, they have to appear to be more populist.

What this past week’s series of meetings has unequivocally proved is that global US hegemony is coming to an end – both in terms of Twitter-powered bluster and US dollar-powered economic ascendancy.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.