Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: On the first day of September, Chinese President Shi Jinping
Speaker 2: hosted Russian President Vladimir Putin, Indian Prime Minister, and around
Speaker 2: the Mody and more than twenty other foreign leaders in
Speaker 2: the port city of Tanjin. The occasion the annual summit
Speaker 2: of the Shanghai Cooperation Organization or SEO.
Speaker 1: So the Shanghai Cooperation Organization is a regional security block.
Speaker 2: Daniel tan Kit is Bloomberg's executive editor for Asia Economy
Speaker 2: and Government. He says, the SEO as an organization isn't
Speaker 2: that important, but at the summit, there was one particular
Speaker 2: moment that made the occasion significant.
Speaker 1: Mody being really chummy with Putin and with she smiling broadly.
Speaker 1: They were laughing about something. She was holding Mody's hand
Speaker 1: at one point, a lot of backside. It was just
Speaker 1: old friends getting together, and it was significant because Mody
Speaker 1: hasn't actually been to China in seven years, so this
Speaker 1: wasn't like we talk all the time. Now. She and
Speaker 1: Putin talk all the time. They meet up regularly and
Speaker 1: they do this all the time. But Mody joining the group,
Speaker 1: that was highly significant. He's back in the fold, so
Speaker 1: to speak.
Speaker 2: China and India have clashed over border disputes for decades.
Speaker 2: Their relationship hit rock bottom in twenty twenty after fighting
Speaker 2: along the border in the contested Western Himalayas left soldiers
Speaker 2: on both sides dead, But at Tinjin there were no
Speaker 2: signs of hostility. Instead, Dan says Mody's presence at the
Speaker 2: summit and his chummy interactions with Putin and She were
Speaker 2: deliberate signals aimed squarely at one person.
Speaker 1: All of this has to be seen in the context
Speaker 1: of what happened last month, with Trump essentially putting on
Speaker 1: punitive tariffs onto India, calling India's economy a dead economy,
Speaker 1: really dialing up the insults to Modi. So when Mody
Speaker 1: joins and he's smiling with Putin and She, that's essentially
Speaker 1: a message to Trump saying, look, I don't need you,
Speaker 1: I have options. I'm not going to be bullied and
Speaker 1: pushed around by you. I'm not going to kowtow to
Speaker 1: what you want. It doesn't really mean that Mody is
Speaker 1: jumping into China's camp, but it does mean he can
Speaker 1: be friends with everyone's too, and nobody's going to tell
Speaker 1: him what to do. Especially Trump.
Speaker 2: This is the Big Take Asia from Bloomberg News. I'm wanha.
Speaker 2: Every week we take you inside some of the world's
Speaker 2: biggest and most powerful economies and the markets, tycoons, and
Speaker 2: businesses that drive this ever shifting region. Today in the show, China, Russia,
Speaker 2: and India appear to be forming a new and powerful partnership.
Speaker 2: What's driving the bromance between she Putin and Mody and
Speaker 2: what could it mean for Trump? The image of she
Speaker 2: Putin and Mody holding hands and laughing together in Tianjin
Speaker 2: was a striking moment that went viral. But beyond the symbolism,
Speaker 2: this apparent alliance could have big consequences politically and economically, Dan,
Speaker 2: What does each country want from this alignment?
Speaker 1: Russia needs money. It's got its two biggest buyers of
Speaker 1: energy there, India buys a lot of oil from Russia.
Speaker 1: Having India buy oil gives them hard currency. Same with China.
Speaker 1: China has been the primary economic partner of Russia and
Speaker 1: is stuck by Russia ever since Putin's invasion of Ukraine.
Speaker 1: It's been its most important economic partner to the extent
Speaker 1: where Putin really needs China to stay aflow and fight.
Speaker 2: This war, and what about MODI in India? What's in
Speaker 2: it for them?
Speaker 1: India, they were buying Russian oil because it's cheaper, and
Speaker 1: India's got a big population, it's very price sensitive. So
Speaker 1: if they can keep costs down, keep inflation down, that's
Speaker 1: politically good for Modian, good for India's economy. With China,
Speaker 1: India also needs inputs for its manufacturing sector, so it
Speaker 1: needs Chinese expertise, needs engineers, it needs inputs so factories
Speaker 1: can get what they need to assemble in India and
Speaker 1: ship that overseas. So if India wants to be a
Speaker 1: manufacturing center, it also needs good relations with China, and
Speaker 1: there's increasing realization in Delhi that that is essential to
Speaker 1: move forward. And just politically, when Trump is going after you,
Speaker 1: these are your friends, They're willing to welcome you with
Speaker 1: open arms, and so it gives MODI some strategic depth
Speaker 1: in that sense.
Speaker 2: Now, energy is such a crucial component to these relationships,
Speaker 2: and I want to into that a little bit more.
Speaker 2: Following the summit and the military parade in Beijing, you
Speaker 2: had gas Prom, Russia state controlled energy giant, saying it's
Speaker 2: signed a binding deal with China to build a new
Speaker 2: gas pipeline called Siberia two. What is that deal entail
Speaker 2: and why is it so important?
Speaker 1: So Russia has been wanting this deal to go through
Speaker 1: for years and it comes up every time she and
Speaker 1: putin me and we never really get anything. So the
Speaker 1: fact that we got something on paper indicates that there's
Speaker 1: progress here. So what does the deal entail? We got
Speaker 1: some details from Gazprom. The chief executive officer, alexey Miller
Speaker 1: said that Gasprom could ship as much as fifty billion
Speaker 1: cubic meters a year for thirty years, so at full capacity,
Speaker 1: it would be equal to nearly a third of total
Speaker 1: Russian pipeline exports to Europe back in twenty twenty one.
Speaker 2: Dan shays, while the deal is big, it wouldn't offset
Speaker 2: what Russia would sell to Europe if it had the opportunity,
Speaker 2: and it's not clear exactly when the project will move forward.
Speaker 2: The two sides still haven't agreed on how much China
Speaker 2: will pay for Russian oil, which is a key sticking point.
Speaker 1: What people are saying is that they want a deal
Speaker 1: that is far below what Gasprom charges customers in Europe
Speaker 1: and is essentially what Russians pay for it. Which is
Speaker 1: a low price. So for China, they're looking for a
Speaker 1: deal here and they're probably going to get one.
Speaker 2: This comes as the US and its European allies have
Speaker 2: made sanctions on Russian oil and gas a pain point
Speaker 2: right to bring putin to negotiate peace with Ukraine and
Speaker 2: in the war. What does this mean for the US
Speaker 2: then in terms of this.
Speaker 1: Deal, Yeah, it's interesting if you look at how the
Speaker 1: US is trying to pressure Russia right now, it's mainly
Speaker 1: targeting India. So why is that the case. China's Russia's
Speaker 1: most important economic partner. It's buying a lot of energy.
Speaker 1: The problem is that Trump already is put massive tariffs
Speaker 1: on China earlier this year, up to one hundred and
Speaker 1: forty five percent. Then China cut off rare earths and
Speaker 1: Trump realized he needed those for military applications and other things,
Speaker 1: including cars and all sorts of sectors. So they reached
Speaker 1: a deal where Beijing would keep the rear ears flowing,
Speaker 1: they would bring taris down to a certain level, and
Speaker 1: there's sort of a truce in an equilibrium now. So
Speaker 1: there's not many options for Trump here. That's why he's
Speaker 1: hitting India because he can raise Harris on India, and
Speaker 1: there's not much India can do about it. What's interesting
Speaker 1: is that she decided to announce this. Now, he didn't
Speaker 1: give us many details, and this thing might all fall
Speaker 1: apart still, but it certainly sends a message to Trump.
Speaker 1: You know, you're hitting India for financing Russia's war effort
Speaker 1: by buying cheap oil. Well, hey, we're going to buy
Speaker 1: gas for thirty years and keep financing his regime. And
Speaker 1: there's not much you can do about it.
Speaker 2: Now, how is this Club of three good for China?
Speaker 2: And she's image, she.
Speaker 1: Jipig, wants to be this diplomat, the state's statesman, someone
Speaker 1: in the world can turn to as an alternative to
Speaker 1: the US led world order. Now, if you think about
Speaker 1: the Biden administration, there was at one point, right after
Speaker 1: Putin's invasion of Ukraine, the US is really trying to
Speaker 1: isolate Russia on the world stage and isolate China along
Speaker 1: with it, and get every country to gang up against
Speaker 1: those two and put sanctions on and China was feeling
Speaker 1: the pressure at that time. Now fast forward to today,
Speaker 1: and it's the exact opposite. You have Putin going to Beijing,
Speaker 1: and you have a bunch of other countries, including India,
Speaker 1: including democracies. You know this notion that the Americans were
Speaker 1: pushing for a long time, which is, you know, you're
Speaker 1: an authoritarian regime. You're against the tide of history destroying
Speaker 1: the rules based order. Now, Siziping is in Beijing talking
Speaker 1: about how all countries need to be equal. Strong countries
Speaker 1: shouldn't pressure weak countries. Everyone needs to follow international law.
Speaker 1: Chiziping is using some of the same language that the
Speaker 1: Americans were using against China for years. And because Trump
Speaker 1: is in office and just breaking norms left and right,
Speaker 1: throwing teriffs on everyone else, He's able to attract all
Speaker 1: these countries looking to She is the more stable option
Speaker 1: right now.
Speaker 2: In the world, and Beijing's gain could be Washington's loss.
Speaker 2: Narender Mody was one of the first world leaders to
Speaker 2: visit the White House falling Trump's return to office. He
Speaker 2: called Trump a great friend, and the two pledged to
Speaker 2: double US India trade to five hundred billion dollars by
Speaker 2: twenty thirty. Now Mody's seen holding hands and laughing it
Speaker 2: up with the leaders of Russia and China, two of
Speaker 2: the US's biggest rivals. How do we get here and
Speaker 2: what could it mean for the US. That's after the break.
Speaker 2: Just two days after President She Putin and Mody put
Speaker 2: the bromance on display in Tanjin, she hosted a second gathering,
Speaker 2: a military parade attended by more than twenty five foreign leaders.
Speaker 2: Mody wasn't there, but Vladimir Putin and North Korea's Kim
Speaker 2: Jong un were the guests of honor. The events guest
Speaker 2: list and its lavish display of weaponry caught the attention
Speaker 2: of President Trump. He took a swipe but She on
Speaker 2: social media.
Speaker 1: He said, May President She and the wonder people of
Speaker 1: China have a great and lasting day of celebration. Please
Speaker 1: give my warmest regards to Vladimir Putin and Kim Jong
Speaker 1: Un as you conspire against the United States of America.
Speaker 1: So clearly he's watching that. He actually said something to
Speaker 1: the effect of, they hoped I was watching, and I
Speaker 1: was watching, So you know, Trump really wanted to meet
Speaker 1: all of these leaders, actually Putin, Kim and She. So
Speaker 1: you know, there's in subtle fomo there, right, I think so,
Speaker 1: I mean, in some ways, I'm sure he wishes he
Speaker 1: was there. He even said, I have great relations with
Speaker 1: all these countries. Like, you know, he's trying to be
Speaker 1: buddy buddy with them. He's really stuck here because in
Speaker 1: some ways he knows that if he capitulates, he will
Speaker 1: look weak. But at the same time he wants to
Speaker 1: be part of this club.
Speaker 2: The parade in Beijing and the summit in Tanjin put
Speaker 2: China's global influence and ambitions on display, and it seemed
Speaker 2: to unite world leaders who are sick of being pushed
Speaker 2: around by Trump. Take India's Narrender Modi. New Delhi has
Speaker 2: long standing ties to Moscow, the date back to the
Speaker 2: Soviet era, and Russia is India's biggest weapon suppliers. Uh's
Speaker 2: invasion of Ukraine has cast a spotlight on the relationship
Speaker 2: and put India in a tough spot.
Speaker 1: India wanted to have good relations with the West. It
Speaker 1: wanted to wean itself off of Russian weaponry in particular
Speaker 1: and get more into the American defense orbit, and of
Speaker 1: course the US wanted India closer as a counterweight to China.
Speaker 1: Now Mody and she, yeah, it wasn't great at all
Speaker 1: since the twenty twenty clash, and India might have gone
Speaker 1: even further than the US in some respects in banning
Speaker 1: Chinese investment and taking kind of a hard line against China.
Speaker 1: So there was certainly no love there and that was
Speaker 1: pretty remarkable to go from that situation to holding hands
Speaker 1: and laughing at like world best Place.
Speaker 2: Now you mentioned how Trump has insulted Mody in the
Speaker 2: past few months. Can you walk us through exactly how
Speaker 2: this relationship has deteriorated to this point between the India
Speaker 2: and US. I mean, how did we get here with
Speaker 2: the US and India being in the state that they are.
Speaker 1: Now If you look back in the beginning of the year,
Speaker 1: Mody went to the White House restored the friendship. And
Speaker 1: this goes back to Trump's first term when Mody invited
Speaker 1: Trump to Goudarat, which is Mody's home state in India.
Speaker 1: And then India was probably the first out of the
Speaker 1: gate to try and negotiate a trade deal. They were
Speaker 1: announcing progress really early after Liberation Day in April, so
Speaker 1: it looked like India could be one of the first deals.
Speaker 1: And then Trump realized what is his leverage against Putin?
Speaker 1: That really took over everything. Mody was just caught in
Speaker 1: that because India was the only bit of leverage that
Speaker 1: Trump had against putin. Now, you could argue, did Trump
Speaker 1: need to call India's economy a dead economy? I think
Speaker 1: that's what stunned everyone was the way he did it.
Speaker 1: He could have done it in a way that was
Speaker 1: more I really don't want to do this. This is
Speaker 1: important now, and you could have done it in a
Speaker 1: way that could save Mody some face. But that's just
Speaker 1: not Trump's style. You know, he goes full in when
Speaker 1: he goes all scorched to earth, all scorched earth, and
Speaker 1: he's used to just you know, using his charm. He'll
Speaker 1: insult you one second and then he'll be your best
Speaker 1: buddy the next. But that's not going to work in India.
Speaker 2: The idea of a strategic triumvit consisting of Russia, India,
Speaker 2: and China goes back to the nineteen nineties, and for
Speaker 2: decades the US has courted India as a counterweight to
Speaker 2: China in Asia, with some success. Still, India has long
Speaker 2: maintained a neutral stance on diplomacy that goes back to
Speaker 2: the Cold War. It rarely shows outright support for either
Speaker 2: China or the US. That's why Dan says this sudden
Speaker 2: souring of relations between the US and India is baffling
Speaker 2: to almost everybody.
Speaker 1: I took to former US officials all over the region.
Speaker 1: I mean everyone is talking just about Trump's you turn
Speaker 1: on India. I'm sure the Indians are wondering the same thing.
Speaker 1: It was so abrupt and in a matter of weeks,
Speaker 1: you just undid really decades of work, and it's going
Speaker 1: to cause decades of damage.
Speaker 2: And how are these new and old relationships that China's forming,
Speaker 2: How are they reshifting the world order? Are we seeing
Speaker 2: a geopolitical realignment of the world order here that China
Speaker 2: is orchestrating and leading at the.
Speaker 1: Moment in some respects, yes, I mean everything is caveated
Speaker 1: in a way because there's no country that really wants
Speaker 1: to choose between the US and China. When countries lean
Speaker 1: more towards China, that's a natural reaction to the US
Speaker 1: using every financial weapon it has to squeeze every country
Speaker 1: out there. If China were to do anywhere near the
Speaker 1: same thing, countries would shift back to the US. That's
Speaker 1: just the way things work now. I think the worry
Speaker 1: among some US strategic planners is that as China grows
Speaker 1: more powerful in countries increase their dependencies on China. It's
Speaker 1: then very hard to reduce those dependencies, particularly if China
Speaker 1: continues to control all the world's manufacturing. The fact that
Speaker 1: China can make all this stuff, the US can hardly
Speaker 1: build a ship anymore. That's why you see the tensions
Speaker 1: that are emerging. And the worry is that, Okay, if
Speaker 1: that gets entrenched, then there is no alternative to China
Speaker 1: for things that you need to run a country. And
Speaker 1: if the US can't provide a credible alternative, then maybe
Speaker 1: you capitulate to some of these geopolitical demands that China wants,
Speaker 1: which is like, you know, you're going to keep quiet
Speaker 1: if China wants to take Taiwan one day or something
Speaker 1: like that. India is not going to jump in bed
Speaker 1: with China. There's just too many obstacles for that to happen.
Speaker 1: They have constant disputes along the border. There's a lot
Speaker 1: of concern about Chinese filtration of the economy. But for
Speaker 1: the moment, those divisions are put aside for a bigger
Speaker 1: problem right now, which is Trump. Trump is the bigger problem,
Speaker 1: And so you put aside all your differences and you
Speaker 1: smile with each other, and you hug each other and
Speaker 1: you focus on the thing that unites you at the moment,
Speaker 1: and the thing that's uniting everybody is the need to
Speaker 1: push back on Trump and not be pushed around by Trump.
Speaker 1: And that's what we're seeing play out in Beijing.
Speaker 2: This is The Big Take Asia from Bloomberg News. I'm Wanha.
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