Why China and Russia Are the Biggest Winners of India's G20 Presidency

The inclusion of the African Union and the consensus statement, which are being touted as India's achievements, tells a lot about where India stands in the Sino-US rivalry.

Ironically, the greatest achievements of the G20 Summit under India’s presidency – the inclusion of the African Union and the consensus statement – benefit the two leaders markedly not there: Xi Jinping and Vladimir Putin. Since both are being touted as Indian achievements, it should shine a focus on where India stands in the Sino-US rivalry that dominates global politics.

More than a year after Russia’s invasion of Ukraine, only the most stubborn refuse to acknowledge that we are living in a bipolar world, divided between those aligned with the US and those aligned with China. Unfortunately, because the only bipolar contest that most people are familiar with is the US-USSR Cold War, the new rivalry is not properly understood, especially the role of post-colonial countries, the erstwhile ‘Third World’, now often called ‘the Global South’.

The key difference is that of interlinkage. The US-USSR contest was primarily a military one, with NATO and the Warsaw Pact countries carving out the world into areas of influence. There was almost no economic interlinkage between the two rival camps, as they championed economic systems that were at loggerheads with each other. In the current contest, the richest American companies such as Apple or Tesla are either sourcing their products from China or are desperate for a share in its market.

As the US and its allied countries such as Europe, Australia, Canada, Japan, and others increasingly perceive China as a “systemic rival”, the question is what can they do? The first step has been to create or reinforce military alliances, whether NATO, the Quad, or AUKUS. And the second step has been to deny China and its partners particular global goods where the US and its allies have a dominant position. This has been activated through the denial of state-aligned Chinese companies such as Huawei from providing 5G services, the semi-conductor ban initiated by the US, as well as denial of Chinese companies from buying key infrastructure in the US or aligned countries.

Prime Minister Narendra Modi with Russia’s President Vladimir Putin, left, and China’s President Xi Jinping during the G20 summit in Osaka, Japan in 2019. Photograph: Sputnik/Mikhail Klimentyev/Kremlin via Reuters

For China, the second approach is far more dangerous for its long-term plans. China’s per capita GDP in 2022 was a little less than USD 13,000 – about the same as the global average, America’s was over USD 75,000, and that of the European Union, just under USD 40,000. For China to achieve its objective of being a great power, it desperately needs to bridge the gap. It is the centrepiece of the CCP’s promise to the Chinese people – that only the Party can return them to greatness, and the status of the Middle Kingdom, between earth and sky. But there is little that China can do to directly push back against these restrictions. The US and its allies control major parts of the global economic system, as demonstrated by the sanctions against Russia, Iran, and Cuba, among other countries.

The contest, therefore, moves to the unaligned countries, the Global South. In some ways, this seems familiar. The Cold War was largely waged as a hot war in developing countries, with the US and the USSR backing opposing warring parties in Latin America, Africa, the Middle East, as well as South and Southeast Asia. But this is also where the similarities end. Despite Russia’s war against Ukraine and the possibility of a Chinese invasion of Taiwan, there are a few hot wars where the US and China are on opposing sides. And unlike the Cold War, where this opposing space allowed relatively unaligned countries such as Egypt, the former Yugoslavia and India – as well as China, which claims much of the glory of the first meeting of non-aligned parties, the Bandung conference, as its own – to pursue policies that benefited their own people by playing one superpower off another, very few such possibilities now exist.

This is why the consensus statement of the G20 is so striking, and why the inclusion of the African Union stands to benefit China and Russia more than anybody else. The consensus statement, by using very bland language, obviates the fact of Russian aggression. Because Russia has long claimed that it is actually NATO that is waging war against Russian territoriality and sovereignty, it can claim the consensus statement as its own. No wonder the Russian delegation was delighted, and the Ukrainians furious, at the outcome.

This normalisation of Russia was attended by the inclusion of the African Union as a partner to the G20, widening – by a large margin – the countries that now get to have a formal say in economic systems. The ability of the US and its allies to exclude China and its partners from global systems received a significant setback, less than a month after BRICS widened its membership to include Iran, Saudi Arabia, Egypt, Argentina, the UAE, and Ethiopia.

In the game of excluding China and its partners from significant parts of the global economy, India’s G20 presidency was an undiluted success for China. The question, of course, is why the US and its allies went along. Part of the belief is that in helping deliver a successful G20 outcome, and especially the inclusion of a key institution of the Global South such as the African Union, India will be able to rival China as the spokesperson of the Global South.

But, to quote former US president Bill Clinton, “It’s the economy, stupid.” For the Global South, whose median per capita GDP is far below that of the US and its key allies, China’s desire for a more open global trade is far more attractive than one which restricts trade with China. India, with a per capita GDP of under USD 2,500, is definitely part of that.

During the Cold War, India pursued an international strategy focussed on decolonisation, open trading between blocs (even if its economy was substantially under state control), and the use of international law and institutions. This allowed it, to some degree, to sidestep the US-USSR rivalry and become a key voice in the Global South.

It now pursues a narrow strategy of strategic self-interest in the service of economic growth, virtually indistinguishable from China’s – so much so that it has uttered not a word of direct condemnation on happenings in Xinjiang, Hong Kong, or Taiwan, and has facilitated the normalisation of Russian trade. India may claim the success of the G20 as its own, but the key prize, the strengthening of the position in the Global South has been Russia’s and China’s.

Omair Ahmad is an author and journalist