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