Connexion
This is partially based on a Pascal Coppens Book launch. His book is called China’s Next Miracle. He describes that the book launch (Europe) went far beyond his own expectations because the interest in China and its ‘miracles’ has become real. He explains that people are ready for a new narrative. They feel that something big is unfolding — and they want clarity.
In my selected and reworked writing, his work targets one of the biggest misconceptions shaping today’s geopolitics and economy. It so happened that AHH and I had a conversation about AI in the US and whether a real bubble is developing. I explained at the time that the AI in the US will develop a bubble because they are not making it usable. The next step is to develop AI for business, and they are not doing that, but the developers are trading with themselves. Pascal’s work was interesting from that perspective.
He states:
There Is No AI War Between China and the US. And believing there is may be the biggest distraction of our time.
Why the illusion of an AI race persists.
“Who here uses ChatGPT or Grok weekly?” Almost all hands go up. Then: “Who here uses a Chinese AI model weekly?” Just a handful.
So the conclusion seems obvious: the US must be winning.
But when you look at the reality on the other side of the world, the picture changes instantly. Over 500 million Chinese use a local LLM every week. And NVIDIA’s Jensen Huang openly states that half of the world’s AI developers are in China — while many developers in the US are also Chinese.
So why do we still perceive that China is “behind” in AI?
Because we see what comes out of China as the “artificial” part of AI, while we trust that the “Intelligence” part of AI is being built in the U.S.
Why there is NO AI war: A versus I
We imagine a race because we assume China and the US are trying to run the same race. They aren’t. Their AI worlds could not be more different.
A versus I.
China’s AI strategy revolves around four A’s. The US strategy revolves around four I’s.
China’s AI model:
Accessible: China is doubling down on open-source. DeepSeek triggered a nationwide shift where almost every Chinese tech company now builds its models with open source and open collaboration. Open-source is not a side project in China — it is the national direction. China uses AI to maximise access, and not restrict it.
Affordable: Chinese companies know how to scale and optimise. Instead of overinvesting in giant models or hyperscale compute, China made AI cheap, efficient, and fast to deploy. Affordability is not an accident — it is a strategy to win the Global South, where most people cannot pay $20 per month for AI services from OpenAI or Microsoft. China sees AI as a lever to become the service factory of the non-Western world.
Applicable: China’s focus is not on building one universal model like ChatGPT. China goes mostly vertical. Sector by sector. Business by business. Application by application. The country builds AI that solves real problems in healthcare, logistics, schools, factories, and government services. The AI hospital in Beijing, operating without doctors and diagnosing 20,000 patients per week, is one of the clearest examples of this approach. AI is not a product, it is not an operating system — it is an application engine – like your browser but only designed for how you use it.
Augmenting: China’s government views AI as a tool to strengthen society, not disrupt it. It invests heavily in AI governance — not to slow AI down, but to collectively build global trust so adoption accelerates. Beijing’s AI ambition is to augment humanity, not impose AI on it.
The US AI model:
IP-guarded: American AI companies build proprietary systems surrounded by deep moats. Their foundation models are protected, closed, and monetised through APIs. (In other words, you cannot just use it, you have to use a bridge between yourself and the model) The strategy is clear: defend the intellectual property at all costs.
Investment-driven: American tech companies rely on locking us in with subscription models to recover billions in investment. The whole stock value of their company relies on future returns. AI became a business model, not a public good as it started off with at OpenAI.
Infrastructure-focused: The US sees AI through the lens of chips, compute power, hyperscalers, and AGI. Performance is the priority. Bigger models, more GPUs, more data, more power. The goal is to build the most capable frontier models on earth.
Imposing: The official US AI Action Plan frames AI as a zero-sum game that the US must win to preserve its global technological dominance. The approach is competitive, not collaborative, and explicitly prioritises American leadership over global governance.
It is clear that we have two models, two futures and no AI war.
Once you understand the A’s and the I’s, the myth of a US-China “AI war” collapses instantly. The US and China are not competing for the same markets, users, or outcomes. One wants global dominance. The other wants mass adoption and global service capacity.
You cannot have a war when you are playing different games.
The real competition is not China versus the US.
And on each of these axes, China and the US are positioned on opposite sides. In my old career in IT, we said, “Sell the sizzle, not the steak.” China has turned that on its head. They are giving the steak away.
Europe’s blind spot
Europe continues to look mainly toward the US, absorbing American narratives and ignoring Chinese realities. This is very dangerous. Because if Europe chooses only proprietary American AI, we risk becoming digitally colonised by systems we cannot control — something I explicitly warn about in China’s Next Miracle.
Meanwhile, China’s approach to regulation, governance, safety, and AI for public good is actually far closer to European values. But geopolitical distrust prevents forward-looking dialogue. Europe is staring at the wrong player once again.
China’s Next Miracle — and our choice
What I witnessed at the book launch was encouraging: people are beginning to appreciate that China is no longer copying the West. It is flipping the innovation model — performing a global Fosbury flop. AI is accelerating China’s transformation.
There is no war. There is only a profound divergence of models. And the future will be shaped by those who dare to see it clearly.
So the real question for business and all technology is: Do we dare to jump differently? Do we dare rethink innovation the way China is?
The AI future will not be decided by who has the best or biggest AI model, but by who dares to flip the model entirely. The AI industry in the US will bubble. In China, it will soar.
A worldwide move to multipolarity is not easy. From that perspective, it behooves us (me specifically, as I have no patience for the fiddle and faddle) to be more patient, more understanding, and more resolute. There is nothing better on the table, and I cannot think of anything better in terms of global governance, fairness, equality, and sovereignty. The opportunity is there, right in front of us.
As I said, over the past year, in one way or another, we have seen countries, groupings, governments, and governance wrestle with the question of which regional pole to align with. These smaller non-civilizational countries will spin like spinning tops, one day here, the other day there. Yes, one has to be active in your region, but it is not necessary to ally in a multipolar world because the world is your oyster. Alliances shift according to national interest. The values remain, once these little countries learn it. Pakistan, which has been acting strangely in recent months, is seeking regional supremacy and has begun a move, as they think they are playing chess or something. They will lose, as there is no place for supremacy in a multipolar world.
PAKISTAN’S PLAN FOR NEW SOUTH ASIAN BLOC
Pakistan’s latest pitch to form a new regional grouping — potentially including Bangladesh, China, and other South Asian states — signals its desire to rewrite the regional playbook at a moment when the South Asian Association for Regional Cooperation (SAARC) is effectively frozen after Op Sindoor.
But can a “SAARC-minus-India” really work?
Deputy PM Ishaq Dar argues that South Asia has been stuck in “zero-sum thinking.” With India–Pakistan dialogue frozen for over a decade, Pakistan sees little value in waiting for SAARC to revive.
Pakistan senses an opening:
Pakistan–Bangladesh relations have warmed.
Bangladesh–India ties are strained after Sheikh Hasina’s ouster and her subsequent refuge in India.
China’s regional influence continues expanding across connectivity, infrastructure, and security.
Pakistan’s proposal remains more aspirational than actionable. Smaller states may welcome dialogue on trade, climate, or connectivity — but formal membership in a bloc perceived as “China-backed” or “India-excluding” carries real political risks.
Countries like Sri Lanka, Nepal, the Maldives, and Bhutan could show tentative interest in specific initiatives, especially economic ones. But none are likely to openly join a grouping seen as sidelining India.
So, what are the options for a country like Pakistan in this fast-moving, multipolar world? It is hard and harsh, but to become honorable, they must mend fences with India. (Otherwise, Trump will see an opportunity and make another peace lol).
What I would suggest is that they go to the new mediation center China recently opened and mediate with India. Go with honor, go with honesty, and solve your problems, Pakistan. You are fresh meat for a color revolution, if it has not already happened. India as well. India has a greater implied responsibility here, and they are equally hardheaded.
Stop wasting the world’s time with an attempt at regional supremacy that impresses no one.
While some analysts have mistakenly concluded U.S. escalation toward Venezuela represents a “retreat” from Asia or even Eurasia, and a transition from pursuing global primacy toward carving out an American “sphere of influence,” the U.S. is much more likely attempting to complement its continued encirclement, containment and confrontation with both Russia and China by eliminating one of their more vulnerable allies—Venezuela—in a bid to escalate rather than withdraw from Washington’s ongoing war against multipolarism.
Paulo Nogueira Batista Jr. at the Valdai Club
There are two sections to this.
First is the discussion at the Valdai club and second the following talk by Think-BRICS. This is not casual reading, but instead requires careful study.
—
The need to face up to the deficiencies of the Western-controlled monetary and financial system should lead the BRICS to better organize themselves going forward in order to remove at least in part the internal obstacles to change. Although some sensitive matters, such as the possibility of creating a new reserve currency, are only feasible in the longer term, the group should continue to work towards providing practical alternatives not only for themselves but for developing countries as a whole.
This paper discusses the topic of BRICS monetary and financial initiatives with a focus on Russia’s chairmanship of the group in 2024 and next steps. In so far as monetary and financial matters are concerned, the point of departure of the BRICS is the widely recognized dysfunctionality of the dollar-centered system, a consequence of two distinct factors: a) the weaponization of the US dollar and of the Western crossborder payment network; and b) the structural weaknesses of the economy of the United States, the country issuing the hegemonic international currency. The BRICS, rightly or wrongly, are often seen as the main potential source of alternatives to the current flawed international monetary and financial system.
Paradoxically, as we will see, the US wants to monopolize the role of undermining the dollar and the current international system. Among the countries of the BRICS, Russia is one of the most, if not the most interested country in promoting the discussion and implementation of alternatives to the current international monetary and financial system dominated by the United States and its allies.
The reason is well-known: Russia and Russian banks and firms have been a direct target of sanctions, including exclusion from the Western-sponsored cross-border payments framework and, most notably, the freezing of as much as half of the country’s international reserves, to the tune of US$ 300 billion, after the beginning of Russia’s special military operation in Ukraine. A number of other countries, including Iran, one of the new BRICS members, have also been targeted by the West in similar ways. Thus, it was to be expected that Russia would do its best to advance BRICS discussions of financial matters.
Kindly download the Valdai Club report here: https://valdaiclub.com/files/50206/
Think-BRICS was involved in starting the discussion with Batista and post Valdai discussion, picked up this report and continued the discussion. It was good to see that the proposals arriving from this track align in broad terms with Michael Hudson’s discussions on a new financial system and what is needed. The two accompanying videos are at the end.
The Storm and the Blueprint: Charting the BRICS’ Monetary Liberation
BRICS’ strategic move toward financial independence: Weaponization drives the push for parallel banks, the BCBPI, and a new non-Western reserve system.
The international financial landscape today resembles a high-stakes, unscripted drama, where the established world order, centered on the US dollar, is visibly cracking under the weight of its own political and fiscal pressures. At the heart of this unfolding story stands Paulo Nogueira Batista Jr., the Brazilian economist whose experience spans the highest echelons of global finance, from the International Monetary Fund (IMF) to the founding of the New Development Bank (NDB).
Batista Jr.’s proposal, famously titled ‘Beyond the Dollar,’ provides a comprehensive blueprint for the BRICS grouping to construct a new, independent monetary architecture. This vision, first previewed during an interview on ‘Think BRICS’ and subsequently subjected to intense scrutiny during a public debate at the Valdai Club in Moscow, does more than merely catalog the dollar system’s flaws; it maps a daring, two-track path toward global financial sovereignty.
Act I: The Crisis Defined—A Weaponized System on a Cracked Foundation
Batista Jr. grounds his call for a new system in the widely recognized dysfunctionality of the dollar-centered system. He argues this breakdown stems from two distinct, interconnected factors: the calculated weaponization of financial mechanisms and the structural weaknesses inherent in the U.S. economy.
The Financial Sword: Weaponization and the Loss of Confidence
The key driver forcing BRICS nations toward alternatives is the West’s tendency to use its currency and financial architecture as a geopolitical weapon to punish non-cooperative countries.
SWIFT and Exclusion: Cross-border payment systems like SWIFT (Society for Worldwide Interbank Financial Telecommunication) have been transformed into tools of coercion. If a country “displease[s] western bosses,” it risks being “thrown out of the system,” as Russia experienced.
Institutional Capture: The dollar, the IMF, and the World Bank are all used as geopolitical weapons, ironically undermining the very institutions the U.S. helped create.
The NDB’s Shackles: This weaponization reaches even the heart of BRICS institutions. Batista Jr., having helped build the NDB, revealed that the bank stopped lending to Russia, a founding member, solely out of fear of sanctions. Had the NDB continued, it risked losing its credit rating, dictated by the “triopoly” of American credit rating agencies (Moody’s, Standard & Poor’s, Fitch). Similarly, the bank fears accepting new members like Iran, Cuba, or Venezuela due to the potential negative impact on its credit rating.
Secondary Sanctions: This coercive environment affects not only targeted nations (such as Russia and Iran) but also trading partners. Countries like Brazil, for instance, bear the risk of potential secondary sanctions for trading with nations deemed “toxic” by the West.
As Dmitry Birichevsky, Director of the Department of Economic Cooperation at the Ministry of Foreign Affairs of the Russian Federation, observed during the Valdai debate, what happened to Russia can happen to any country, noting that Western nations “themselves force us to do that,” having “deprived” partners of the opportunity to use the dollar and euro through limitations.
The Rotting Foundation: Structural Weakness of the Hegemon
Confidence in a reserve currency rests on the health of the issuing country’s financial arrangements. Batista Jr. points out that U.S. macroeconomic fundamentals are no longer solid, noting that Americans “continue to preach but no longer practice solid economic policies.”
Fiscal Disarray: U.S. fiscal policy is in disarray, with public debt continuously increasing as a proportion of GDP, and the political system failing to deliver necessary surpluses.
Privilege and Resistance: The U.S. maintains its privilege of covering large deficits simply by issuing currency. This economic advantage explains America’s “determined resistance to any proposal or initiative that could weaken the status of the dollar”.
Batista Jr., drawing on his eight years as an IMF Executive Director, stresses the sobering reality: the West will not allow fundamental reform of the international monetary and financial system established since World War II. Therefore, the path forward for BRICS must be to “start off from scratch”.
Act II: The Blueprint Unveiled—A Fiduciary Alternative
Acknowledging that the existing system is unreformable and that reliance on bilateral settlements in national currencies is ultimately limited by imbalances, Batista Jr. sets the long-term goal: the creation of a new international reserve currency.
Dispelling False Solutions
Batista Jr. methodically dismisses two frequently discussed alternatives:
Commodity Backing (e.g., Gold): A trustworthy currency requires stability, but gold and other commodities are “intrinsically unstable.” Tying a new currency to a commodity anchor would make it “prone to instability” as prices fluctuate.
The Renminbi (RMB): Although the RMB is the only Global South currency large enough to potentially pick up the slack, its full internationalization would likely damage China’s successful export-led economic model, which relies on capital controls and stable exchange rates. Internationalization would require China to liberalize its capital account and allow currency appreciation, exposing it to the instability and “vagaries of international finance” that could threaten its industrial sector—a risk of de-industrialization similar to that seen in the United States. Batista Jr. argues that replacing US hegemony with Chinese hegemony would merely be “changing six for half a dozen”.
The New Fiduciary Currency (The IIB Model)
The proposed solution is a fiduciary currency inspired by Keynes’s concept of Bancor. Crucially, this would be an international currency with no domestic role; it would circulate alongside the national currencies of the participating countries, not replace them.
To implement this, three institutional steps are required:
International Issuing Bank (IIB): A new, “simple, lean” institution must be created, as existing structures like the NDB or CRA are “not fit for the job”.
Issuance: The IIB would issue two things: the new currency and new bonds.
Backing Mechanism: The new currency would be convertible into IIB bonds, and these IIB bonds, in turn, would be freely convertible into a basket of bonds of the participating countries. This structure ensures confidence, backed by the commitment of the sponsoring states.
The Necessary Transitional Steps
Recognizing that establishing a full reserve currency is a medium- to long-term endeavor, Batista Jr. prioritizes immediate transitional devices:
New Unit of Account: A simple, SDR-like basket of currencies from participating countries, weighted by relative economic size. This unit would fluctuate based on the weighted fluctuations of the currencies in the basket. It should be named the “new unit of account,” rather than BRICS-specific, to allow non-BRICS countries to join.
BRICS Cross-Border Payment Initiative (BCBPI): This proposal aims to create a more efficient, transparent, safe, and independent digital payment infrastructure based on national currencies. To overcome the BRICS’ internal consensus barriers, this initiative must be explicitly designated as voluntary and non-binding.
These steps are critical to solve the “very severe limitation” of bilateral settlements: the inability of participating countries to register large trade imbalances without accumulating currency that may not be convertible or may be subject to depreciation (e.g., Russia accumulating Indian Rupees).
Act III: The Confrontation—Voices from the Valdai Debate
The discussion at the Valdai Club served as a crucible, testing the feasibility and political realities of the ‘Beyond the Dollar’ proposal. The speakers offered layers of insight, revealing both fervent support and profound geopolitical hurdles.
The Supporters: Necessity and Sovereignty
Dmitry Birichevsky strongly endorsed the necessity of building separate channels. He agreed that replacing one center of domination with another is not the goal; rather, the BRICS are moving toward a multicentric world. He confirmed Russian leadership supports the BCBPI, emphasizing the need for closed circuits, special companies, and separate channels to avoid restrictions.
Marco Fernandes (BRICS Civil Council) reinforced the necessity of a reserve currency by highlighting the practical failures of bilateral settlements, noting Russia’s predicament of accumulating the equivalent of $40 billion in rupees from trade with India. Fernandez offered a strategic expansion to the proposal: leveraging BRICS’ deterrence power by de-dollarizing commodity markets (food, energy, and critical minerals). He noted that BRICS members control significant shares of global production (60% of gas reserves, 50% of oil reserves, and 85% of rare earth reserves), suggesting this leverage could shift trade away from the dollar, citing the Russian-led proposal for a BRICS grain exchange.
Most tellingly, Fernandes shared a conversation with a “pro-West liberal Iranian banker” who, despite initial criticism of his own government, concluded that the only viable path might be the formation of two distinct economic blocks: the West and the BRICS-led Global South. Batista Jr. responded that he agrees with this analysis, stating that “we already are in a situation of two blocks” and must adapt accordingly.
Rasigan Maharajh (Tshwane University of Technology), backed the geopolitical diagnosis, noting that U.S. power is maintained through the mobilization of “internal allies” (powerful domestic constituencies, or what Batista Jr. referred to as “fifth columns”) in other nations. Maharaj stressed that Multilateral Development Banks (MDBs) are political instruments, not neutral, reinforcing the need for BRICS to strive for multipolarity and polycentrism rather than attempting to reform institutions established under U.S. hegemony.
The Skeptics: Internal Obstacles and External Fury
The most penetrating criticisms focused on implementation feasibility and geopolitical pushback.
Radhika Desai (University of Manitoba) elaborated on the systemic flaw, arguing that the problem is rooted in the dollar system’s reliance on financialization (asset bubbles) to temporarily counteract the Triffin dilemma.
Desai insisted that the primary domestic obstacle is the “fifth column”—national elites in countries like Brazil, India, and South Africa who are attached to the dollar system because it serves as a tax and financial haven for their wealth. She emphasized that any viable alternative, like the Bancor model, requires substantial capital controls to ensure economic sovereignty, a measure highly resisted by these elites.
Desai predicted that the dollar system’s internal contradictions—the bind between fighting persistent inflation and preventing a crash of the “everything bubble”—may force a crisis that creates the necessary “aperture” for alternatives to succeed.
Anna Tsibulina (Integration Processes Department) raised doubts about the irreversibility of U.S. decline, recalling that the U.S. successfully navigated past crises (e.g., after Bretton Woods through the petrodollar agreement). Her core concern was the unprecedented resistance the U.S. would mount against a parallel monetary system. She questioned how the new currency could be shielded from this “ferocious” resistance, and worried that, given China’s inevitable economic weight, the new unit of account might become de facto China-centric. Batista Jr. conceded that the new currency would indeed be China-centric but suggested “compression factors” could mitigate excessive domination. He agreed that pursuing this direction requires political courage, given the certain U.S. opposition.
The Geopolitical Gauntlet: Consensus and Courage
The debate highlighted that external U.S. resistance is only half the battle; the BRICS grouping must overcome its own internal operational hurdles.
The Consensus Trap: The BRICS’ rigid practice of deciding by consensus, often interpreted as virtual unanimity, effectively grants veto power to any individual member. As the group expands (now 10 full members plus 13 partners), this consensus rule becomes a “recipe for paralysis”.
Working Around the Veto: The solution proposed by Batista Jr. and reflected in the Kazan declaration is crucial: explicitly defining new initiatives, like the BCBPI, as voluntary and non-binding. This allows a “coalition of willing and able nations,” including subsets of BRICS members and non-BRICS nations, to advance without being held hostage by members vulnerable to U.S. pressure or attached to the status quo (the “fifth column”).
Managing Expansion: Batista Jr. recommends that the BRICS freeze or slow down expansion, arguing that “strength does not necessarily lie in numbers”. While expansion increases prestige, multiplying participants increases the obstacles to practical progress and makes decision-making significantly harder.
The ultimate threat to this endeavor comes from the U.S., which has intensified its opposition, demonstrated vividly by Donald Trump’s threats during his 2024 campaign to impose 100% tariffs on countries engaging in activities that undermine the dollar’s status. Batista Jr. interprets these “arrogant statements and threats” as an ambiguous signal—a sign not just of traditional power, but of the weakness of a declining hegemon forced to maintain dominance through “admonitions and coercion” rather than natural acceptance. The U.S. decay, exemplified by political turbulence, is seen as deeper and less reversible than past crises.
The ambitious endeavor charted by Paulo Nogueira Batista Jr. is not a short-term project, but a medium- to long-term endeavor requiring “strategic patience” and political courage. The ‘Beyond the Dollar’ proposal is, in essence, a recognition that the BRICS and the Global South have already been thrust into an environment of two separate economic blocks—and must build structures that guarantee their sovereignty and stability outside the orbit of the declining, weaponized dollar system.
The challenge of creating a fiduciary international currency and a payment architecture independent of the current system is immense. It is like trying to forge a new anchor for a global fleet while still navigating a financial storm. The builders (BRICS nations) must not only contend with the fury of the former flagship (the U.S.) but also manage deep divisions and inertia among their own crew members (the consensus rule and domestic elites) who prefer the dubious safety of the old port. Yet, as the internal contradictions of the existing system ripen toward crisis, having a prepared, credible alternative becomes the ultimate insurance policy for true economic liberation.
The discussion at the Valdai Club errors out for me.
Please find it here: https://vk.com/video-214192832_456239331
With the world economy transitioning towards what some term as fragmentation and/or regionalization, there may be new groups of countries and regional blocs that are likely to ascend to greater prominence on the international stage. In particular, the so-called middle powers are becoming increasingly active in consolidating their efforts in the world economy, while also exploring the possibilities for reforming the current system of global governance. Some of these middle powers such as Vietnam in Southeast Asia, are among the most dynamic in the world economy, while also playing increasingly important roles in their respective regional integration blocs. The world’s “golden middle” may hold the key to the future growth dynamics of the global economy and the creation of new pathways to international economic cooperation, including via the formation of a platform for regional integration arrangements.
One of the issues with the lack of consolidation among the regional powers of the global economy is the “identification problem” for such members[1] of the international community – while for small and large economies the criteria and scale of analysis have been extensively explored, the layer of middle powers and its role for the world economy have been accorded relatively less attention. We refer to the middle powers (used here interchangeably with the term “regional powers”) as economies with a significant regional (but not quite global) clout/influence (including through their respective RTAs) whose size is well above the criteria for small economies as defined by the IMF and the World Bank. Such economies may include the likes of Malaysia and Thailand in Southeast Asia, Saudi Arabia in the Middle East, Argentina in South America.
In terms of growth dynamics, middle powers are likely to account for a rising share of global GDP on the back of the outperformance of middle-sized developing economies. One of the successful growth stories among the middle powers of the Global South is Ethiopia that exhibited GDP growth rates consistently in excess of 6% in each of the years within the 2020-2025 period[2]. Another dynamic growth story in this country category is Vietnam that posted positive growth rates in each of the years in the 2020-2025 period, with an annual average rate of more than 5.2%[3]. Overall, existing estimates of the share of the middle powers in global GDP based on proxies such as the shares of BRICS/BRICS+ or the emerging markets and developing countries (EMDCs) suggest a rising trajectory, with the EMDC category already accounting for nearly 1/2 of global GDP in current prices (more than 60% in PPP terms) and nearly 2/3 of global growth[4].
More generally, there may be reasons why in today’s setting there is a need and scope for middle powers to play a greater role in the global economy and global economic governance:
There is inherently less rivalry among the middle/regional powers compared to large powers vying for world leadership
In a world of mounting geopolitical strife, middle powers have a greater neutrality potential compared to small or large economic powers
With the regionalization of the world economy it is the regional powers (frequently being the main drivers of economic integration in their respective regions) that are taking on greater prominence in the world economy
Middle powers account for a rising share of global economy, while also pertaining to one of the most disenfranchised categories of countries in the world economy
Indeed, compared to large and small economies, middle powers have greater scope for maintaining a neutral stance on the international stage. While large powers are frequently obsessed with geopolitical ambitions and small countries find it hard to maintain neutrality and independence under the pressures from the largest players, the middle powers have more scope to withstand such pressures, particularly in case they create stable and resilient RTAs in their respective regions as well as networks/platforms among their regional arrangements.
Despite their notable potential, middle powers appeared to be somewhat left out in the current system of global governance that favored large developed economies. In fact, there may be a phenomenon that could be referred to as the “middle power trap”, whereby the role of middle powers in global institutions such as the IMF and the World Bank (Bretton Woods institutions) is undermined by the disproportionate share of votes accorded to the largest powers, while on the other hand in other institutions such as the UN and the WTO voting is so fragmented that the middle powers also lose out, this time at the expense of smaller constituencies.
For middle powers then, the way out of the trap may be associated with the creation of a new layer of global governance – one may refer to it as the middle layer positioned between that of global institutions (IMF, WTO) and the country-layer composed of individual national economies. This middle/intermediate layer could be formed by the regional integration arrangements, in which the middle powers play a crucial role. Thus far, no such layer for regional arrangements has been created in the world economy.
A system of global governance with a regional layer of cooperation among regional integration arrangements would arguably have better resilience with respect to geopolitical shocks both in terms of ex-ante reduction in national-level tensions and in terms of ex-post conflict resolution (as the regional layer would facilitate the role of regional organizations in peace mediations). In the economic sphere, such a layer would benefit the international community via:
Greater development of regionalism and regional ties across the main regions of the world economy
Lowering dependence on the economic performance of large economic powers via a more regionalized/decentralized pattern of economic cooperation
Boosting South-South economic ties that are currently well below potential, partly due to the lack of a well-developed framework of regionalism
The dynamics within the “middle power” belt of the world economy could have increasingly palpable implications for the rest of the international community. Greater consolidation of middle powers and their ability to exploit their comparative advantages in boosting regional (RTA) and inter-regional (inter-RTA) trade could improve their longer term growth potential, which in turn may be conducive to the expansion in the ranks of the middle class in these emerging markets. This in turn could set in the virtuous circle of greater wealth-creation propping up social and political stability, which in turn would support further economic expansion. The reverse is what appears to have been in motion in the preceding decades, whereby a high degree of fragmentation among the middle powers resulted in low impulses towards intra- and inter-regional trade, leaving many regional powers in the “middle-income trap” and depriving these economies of the benefits of growth and social/political stability.
Greater coordination and a cooperative platform for regional powers could lead to the formation of a “middle bulge” of neutrality and a more “normal distribution” of voting shares/influence/policy-making in international organizations and the global economy more generally. Such a segment of middle powers in the global spectrum could be similar to the role of the median voter that performs a stabilizing role in the socio-economic dynamics and electoral processes. This in turn could act to attenuate the power excesses of large powers that increasingly would compete to get closer to the center of the global political spectrum by concluding alliances with middle powers, much as electoral contenders seek to secure the support of the median voter. This appears to be already playing out with respect to such a centricity-driven regional bloc as ASEAN, whereby competition among the global powers such as the US and China has been intensifying to forge closer alliances with this regional grouping.
But while the benefits from greater consolidation of middle powers and the creation of a platform for regional integration arrangements appear to be plausible, the more difficult question concerns the constituencies, blocs or groups of economies that would opt to launch such a platform. Anything along the lines of a non-aligned movement (NAM) lacks a constructive vision and sufficient momentum for economic cooperation. The G20 group is dominated by large economies with polarized and highly competitive ambitions – so far calls for the creation of an inclusive platform for regional integration arrangements along the lines of a regional R20 remained unaddressed.
The rising number of middle powers applying to join BRICS would suggest that such a platform for regional arrangements could be launched on the basis of a BRICS+ formation. Thus far there is limited headway in this direction that mostly revolves around the framework of the potential cooperation between BRICS economies and the two Eurasian regional blocs – Eurasian Economic Union (EAEU) and the Shanghai Cooperation Organization (SCO). The presence of such heavyweights of the Global South as China and India within the BRICS core necessitates an open and inclusive approach from these large powers in order for BRICS+ to perform the role of a platform for middle powers.
Another possibility is for the regional blocs themselves to launch such a platform. Perhaps of all the regional blocs in the Global South, it is ASEAN that could lead such an effort, given its centricity and neutrality credentials, its economic dynamism and its diversified network of alliances with countries and regions across the world. ASEAN is also the hub for a relatively large number of dynamic and ambitious middle powers such as Vietnam, Malaysia and Thailand.
Notwithstanding its potential benefits, the creation of a platform for middle/regional powers may be fraught with difficulties. One of the pitfalls in this respect is the intra-regional competition and tensions among some of the middle powers that are striving for regional leadership – the competition among some of the largest economies in Africa is one of the cases in point. Another problem is the lingering power of distance in cross-regional trade flows that limits the scale of consolidation among the various regions of the global economy. This is particularly problematic with respect to South-South trade and the under-trading compared to potential among the leading regional economies of the Global South.
In the end, middle powers may be the newly discovered juste-milieu of the global economy. They in effect could become the main beneficiaries of a shift away from a unipolar setting in the global economy to a regionalized framework as one of the possible modalities of a multipolar global governance. The consolidation of the middle powers may enable the international community to build new layers of global governance as well as a bulge of neutrality and stability that attenuates the power excesses of large/global powers. The regional/middle powers may lead the process of a re-assembly of global economic governance that is accompanied by stronger regional integration impulses and a closer cooperation among the main regional integration arrangements.
From BRICS+ Analytics
“No mountain or ocean can distance people who have shared aspirations,” China’s President Xi Jinping said in July 2024, addressing leaders from fellow Shanghai Cooperation Organization (SCO) member states and a few other nations, in Astana, Kazakhstan.
It is not reaching too far, saying that this year’s 25th SCO Summit (SCO) in Tianjin, China, from 31 August to 1 September 2025, fulfilled – and more – President Xi’s vision of 2024. The summit caused a tectonic shift in the conventional world order.
China’s Assistant Foreign Minister Liu Bin told a news conference in Beijing, shortly before the SCO summit, that the 2025 SCO event be “One of China’s most important head-of-state and home-court diplomatic events this year”.
As the Economist says, “A New Reality is Taking hold”. The “new reality” is not anti-US or anti-West; it is just separating the western unipolar aspirations from the newly created multi-polar, or perhaps better, multi-block, world, where countries aim at a peaceful cooperation towards a joint future with shared benefits.
The SCO was established in 2001 by China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. Today the SCO consists of ten member States, with headquarters in Beijing. In addition to the founding members, SCO members have increased by India, Iran, Belarus, and Pakistan. SCO members account for 23% of the world’s GDP and for 43% of the world’s population.
Further attendance included high-level government officials from Myanmar, Egypt, Cambodia, Nepal, Indonesia, Malaysia, the Maldives, Turkey, as well as the Association of Southeast Asian Nations (ASEAN) Secretary-General Kao Kim Hourn, and UN Secretary General, Antonio Guterres.
This year’s summit, made clearly the SCO the guiding light for the Global South which includes the 11 BRICS countries, plus the 10 BRICS partners, added at the 16th BRICS Summit in Kazan, Russia, in October 2024.
While even the UNSG, Mr. Guterres, was invited – while the UN was or still is (?) considered by the US and the West in general, as the World Organization in the western camp – President Trump felt snubbed by China, “left out” from the world shifting SCO event in Tianjin.
So, Trump invented a last-minute opportunity to leave his mark on the meeting by requesting President Xi literally on the eve of the SCO summit for “military talks”, a phone call between the two Defense Ministers [in the US now called War Minister, as the Ministry of Defense has been re-christened by Trump as War Ministry].
The Chinese Foreign Ministry said that Beijing rejected the proposal, reasoning “a lack of mutual understanding between the two countries”, asking a pertinent question: “Is there any sincerity in and significance of any communication like this?”
Of course not. Trump just wanted to interfere in the SCO summit, showing his self-styled emperor head. But to no avail. The West was absent – the “naked emperor” as well as his European puppets, the (almost) defunct European Union, and especially the non-elected and every time more rejected European Commission (EC).
Imagine, just a few weeks earlier a delegation of the EC, including Kaja Kallas, the Commission’s High Representative for Foreign Affairs, the Commission’s top-diplomat, so to speak, visited Beijing to discuss tariffs, but on the side, they were insinuating that China should distance herself from Russia.
So much aggression, let alone undiplomatic thinking and acting – like at home spending taxpayers’ money destined for social programs, instead for a monster armament to go to war against Russia – aggression and a war philosophy that can only lead to a EU downfall – which is accelerating by the day.
To add insult to injury, the symbolic leader of the EU, Germany, her Chanceller Friedrich Merz, said recently: “Putin is a war criminal. He is perhaps the most serious war criminal of our time that we have seen on a large scale. We must be clear about how to deal with war criminals: There is no room for leniency”.
It is time for the Real World, the Global South, to distance themselves from the western warmongers and war-makers. This is just happening with the 25th SCO Summit – a new awakening for Peace, cooperation, and togetherness in the spirit of working towards a future of shared benefits.
A future with shared benefits is not possible by western economic standards and principles, that followed since 1989 the so-called Washington Consensus, an un-stated agreement between the three most powerful western financial institutions, the Federal Reserve, the International Monetary Fund (IMF) and the World Bank – to “subdue” the “emerging and developing world” with debt, so as to get a hold of their natural resources.
This disequilibrium already started with the 1944 Bretton Woods Conference, during which the World Bank and IMF were created, two institutions which were and still are veto-dominated by Washington. Real economic equality and development had – and up to now – has no chance under these circumstances. Instead, it is abusive exploitation and neocolonialism.
The SCO decision at their Summit, to create an SCO Development Bank bodes well with a new future of togetherness and cooperation. It fits right in with the Chinese Asian Infrastructure and Investment Bank (AIIB). It is a vivid sign of pulling free from the neoliberal western financial institutions making their living by exploiting “socioeconomic development”, instead of enhancing it
Together and perhaps with a newly furbished BRICS New Development Bank, they will allow the Global South to evolve and grow according to their sovereign and independent terms, using instead of an isolating “protective” tariff system – Trump-style – their comparative advantages to deal and trade with each other – tariff-free. No conflicts but cooperation.
See also this https://www.rt.com/news/624196-fyodor-lukyanov-russia-and-china/?utm_source=Newsletter&utm_medium=Email&utm_campaign=Email .
This SCO Summit was not a western style aggression-event of “The Willing”, but a China initiated reorientation of the world order, in which long-term objectives were envisioned by real leaders, who had seen and lived enough of western dictated aggressions, wars and destruction, but instead opted for Peace and Cooperation – and it very much looks like they may succeed.
In his opening speech, President Xi made this point clear: “Humanity is again faced with a choice of peace or war, dialogue or confrontation, and win-win outcomes; or zero-sum games”.
This clearly creates a growing chasm between East and West. The former seeking peaceful constructive development, while the latter are still clinging to their destructive economic model, wars and killing for a growing military complex and a tech-world that goes hand in hand with the agenda of transhumanization and destruction of humanity.
The highly successful SCO Summit in Tianjin was deliberately staged just before China’s Grand Military Parade on Tiananmen Square, marking 80 years since the end of World War II. It was the culmination of a new “World Order”, one of Peace – demonstrating the West, silently but visibly, that a new epoch is about to begin.
The image of presenting the heads of China, Xi Jingpin, Russia, Vladimir Putin, India, Narendra Modi; Iran, Masoud Pezeshkian; and North Korea, Kim Jong UN, side by side – speaks volumes. They embody a new power base – power for Peace and for a new world order of a common future with shared benefits.
——–
Peter Koenig is a geopolitical analyst, regular author for Global Research, and a former Economist at the World Bank and the World Health Organization (WHO), where he worked for over 30 years around the world. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed; and co-author of Cynthia McKinney’s book “When China Sneezes: From the Coronavirus Lockdown to the Global Politico-Economic Crisis” (Clarity Press – November 1, 2020).
Peter is a Research Associate of the Centre for Research on Globalization (CRG). He is also a non-resident Senior Fellow of the Chongyang Institute of Renmin University, Beijing.
World leaders all together at SCO summit
Putin and Xi standing center-stage
A quarter of world’s total area, over 40% of GLOBAL population represented https://t.co/v8vDqv7SFG pic.twitter.com/8UnmvpuO39
— RT (@RT_com) August 31, 2025
—
Unprecedented excitement surrounds SCO
Curious crowds have gathered outside the Conference Center
All eyes on the biggest SCO summit. There are 3,000 journalists covering the events.
—
Russian President Vladimir Putin met with Armenian Prime Minister Nikol Pashinyan on the sidelines of the SCO summit.
At the meeting, Putin said he was “glad to talk” with the Armenian prime minister, as many issues had accumulated “both bilateral and regional.”
Pashinyan called Armenia and Russia “brotherly countries.”
Putin has not yet communicated with Azerbaijani President Aliyev, but according to Ushakov, members of the Russian and Azerbaijani delegations have already been in contact.
—
China and India should strengthen cooperation and deepen mutual trust, Chinese President Xi Jinping says during a meeting with Indian Prime Minister Narendra Modi in Tianjin.
—
As long as China and India remain committed to a partnership based on cooperation rather than rivalry, and view each other as opportunities for development rather than threats, their relations will steadily progress, Xi adds, adding that border issues should not define their ties.
—
Belarusian President Alexander Lukashenko met with Chinese President Xi Jinping, during the talks he noted that Minsk was adopting Chinese experience in many areas.
—
Iran’s President, Masoud Pezeshkian, did not remember the time correctly and arrived late at the Shanghai Cooperation Organization’s opening ceremony, leading to him being absent at the photoshoot in Tianjin
—
Chinese President Xi Jinping during his meeting with Turkish President Recep Tayyip Erdoğan:
China and Turkey should expand cooperation in the field of security and counter-terrorism.
—
Post from Imam Khamenei’s official account on X in Chinese on the occasion of the Iranian president’s trip to China to attend the Shanghai summit:
“Iran and China are two countries with ancient civilizations on the two sides of Asia that have the power to create a transformation in the region and the world. Implementing all the various dimensions of the strategic partnership agreement will help to pave the way for this.”
—
Intermission
“IT WAS DEEP AND NASTY! I started yelling… Who did this, and I want to find out now!”
—
HISTORIC: Armenia & Pakistan establish diplomatic ties at China’s SCO Summit FMs sign documents on sidelines in Tianjin. Pakistan is the only country that doesn’t recognize Armenia
—
The alliance of the elephant, dragon, and bear. The media publish a characteristic photo of Xi, Putin, and Modi at the SCO summit in China.
Western journalists are already writing about how Russia and the countries of the “Global South” demonstrate unity amid contradictions within the West.
—
Turkey gets a cold welcome.
Turkey’s president was among those who came to China to attend the Shanghai Cooperation Organization summit. A meeting took place between the presidents of China and Turkey, during which, according to Turkish sources, “an agreement was reached on regular consultations and cooperation between the two countries.”
Like India, Turkey—shunned by the West and its policies—is searching for a foothold in the new global order. Erdoğan’s unstable actions, playing both sides, has failed to secure Turkey a defined or guaranteed role in the world’s future. On one hand, Turkey is a NATO member; on the other, it fights against Russia in Ukraine while expecting the East to open its doors.
Against this backdrop, Erdoğan’s requests to China’s president were noteworthy, particularly his desire to join the massive Belt and Road Initiative—a project the West is actively trying to disrupt. However, China’s biggest issue is the tens of thousands of Uyghur Wahhabi terrorists under Erdoğan’s command, acting as NATO’s proxies to create chaos in China. This issue overshadows everything else.
One of Erdoğan’s key requests was Turkey’s involvement in Syria’s reconstruction with investment from China but China reportedly shown no interest. The terrorist government in Syria, backed by the U.S. and harboring over 8,000 Chinese Uyghurs within its ranks, is not a viable partner for Chinese investment. Similarly, China shows little interest in investing in Turkey itself.
Accordingly, the joint statement following the meeting noted: “The meeting also covered recent developments in Gaza, the Russia-Ukraine war, potential joint steps for Syria’s reconstruction, and regional and global issues.”
Xi suggested to Turkey that the sides should expand practical cooperation, which means .. “Let me see your acts, not your narrative”, and this is how you do it! Xi said: “We must closely coordinate our efforts within such formats as the United Nations, the Group of Twenty, and the SCO, pool efforts to maintain international order and rules, defend international justice and law, contribute to peace and stability in the world,”
—
Speaking at the reception for leaders attending the SCO summit in Tianjin, Chinese President Xi Jinping noted the organization has assumed great responsibilities “for safeguarding regional peace and stability, and for boosting development of various countries in a world of increasing uncertainties and accelerated changes.”
He added he was certain that the gathering would be a success and result in increased international cooperation.
—
The pomp and circumstance is over, and the real work has started. Xi has met with:
Mr Putin is equally as busy. Now imagine that these two leaders each have three or four key supporting diplomats, who know exactly what their leaders want to accomplish, and you can see the sheer amount of hard work and business being attended to. Then imagine that these two leaders work in concert, and you will be able to see the world-changing work that is being done.
The Joint Declaration of the Tianjin summit has been accepted and signed.
At this point we can accept that this summit is the moment where a new World Leadership took the spotlight in a real and material form. China-Russia-India took the undisputed role, not only as leaders of their countries but as the current world leaders. This summit is where we have the words, the declarations, the speeches and the footage that the world has changed. It is The Moment. Modi could still be considered as an estwhile prodical son, returning to the fold.
Now it is for collecting the speeches and the most important of those will be posted up today. Kim Jong-un is on his way to China now and the decisive and thundering full stop to this new world leadership will be the Chinese Military Parade. We can still look forward to Presidents Putin and Xi Jinping talks.
Take a look at this vivid demonstration of multi-polarity. Although ostentatious as it should be at a major summit, all are equally important.
This is how tea and dessert were served to the SCO participants pic.twitter.com/q34isaJvck
— RT (@RT_com) September 1, 2025
This stunning visual comparison will hammer in who the barbarians are.
Eurasian multipolarity
vs.
American vassal system pic.twitter.com/dA29jnqJwX
— Sputnik (@SputnikInt) September 1, 2025
Before we leave this thread for the next phase of the summit, let’s take a look at graqndpa Luka’s comments, and we can point out that these comments were fully endorsed by Xi Jinping and Vladimir Putin as well.
Lukashenko outlines proposals at SCO Summit
Belarusian President Alexander Lukashenko presented his views on SCO development, according to Belarusian news agency Belta:
Indivisible security in Eurasia — recalled Minsk’s initiative to draft a Eurasian Charter of Diversity and Multipolarity in the 21st Century, suggesting the SCO as a main platform for discussion.
SCO Development Bank — called for its creation, along with a unified educational platform.
Security structures — welcomed work on a Universal SCO Center for Countering Security Challenges and Threats and an Anti-Drug Center, urging their early launch.
Independent financial mechanism — stressed the need for an SCO system able to finance cross-border projects, offset sanctions, stimulate use of national currencies, and support cooperation in logistics, energy, digital transformation, and AI.
Trade growth — noted that SCO trade already exceeds $2 trillion and should further expand, with joint funds, digital economy, and green technologies as priorities.
Expansion — Minsk supports SCO enlargement with new members and partners who share the “Shanghai Spirit”: mutual respect, trust, equality, dialogue, and pursuit of common development.
—
Although many challenges exist, we are now in a new world —a fairer world, a truly multipolar world. Let’s reiterate the qualities that Luka mentions: mutual respect, trust, equality, dialogue, and the pursuit of common development. This is a world that considers the people and the citizens of the leading countries as important as the highest dignitaries. Take a moment to take that in and walk with your head held high. You are part of this.
Still have questions? Those will be answered once we have sight of China’s proposal of a New Global Governance, which will be the Governance of MultiPolarity.
A poignant travelogue and historical review of this former pearl port city of the Eastern Mediterranean
Laith Marouf and Hadi Hotait travel to Tripoli, Lebanon’s second largest city, to discover its hidden and neglected treasures, discuss its brilliant past, and analyze threats by the USA to hand it over to the Wahhabi Death-Squads governing Syria today, if Lebanon doesn’t disarm the Resistance.
Filmed on: 2/8/2025
Producer: Hadi Hotait
Montage: Rabih Ghannam
X: https://x.com/TVFreePalestine
TG: https://t.me/freepalestinetv
Insta: https://www.instagram.com/free.palestine.tv/
Substack: https://substack.com/@freepalestinetv
RU: https://rumble.com/user/FreePalestineTV
This is somewhat of a blackpill but the questions asked are valid and pragmatic. No-one should get a pass for allowing genocide.
Lateo.net - Flux RSS en pagaille (pour en ajouter : @ moi)