A new era of globalization

As Presidents Vladimir Putin and Xi Jinping meet in Uzbekistan for the first Shanghai Cooperation Organization (SCO) summit since the pandemic broke out, Russian and Chinese companies are scrambling around the world to circumvent a US ban on imports of key microchips, and the United States worries about Chinese steel in its F-35 bombers.

The Ukrainian war, rising tensions over Taiwan and the general deterioration of relations between Moscow, Beijing and the West have turned globalization upside down since the start of the covid-19 pandemic in early 2020. This brings increasing challenges to supply chains, which until recently have not been questioned.

The consequences are widespread and continue to develop. Europe is rushing to reduce its dependence on Russian gas, Ukraine and its Western allies are working together to deny Russia the Western and Taiwanese chips it needs for long-range missiles, while Chinese and American firms alike are trying to find a way to survive. and progress without using each other's products

It is a dynamic that produces multiple unintended consequences. This Sunday's meeting in Uzbekistan - also the first foreign visit by a Chinese leader since the start of the pandemic - is designed to signal deeper unity and cooperation between Moscow and Beijing, whose troops took part together in the Vostok military exercises in eastern Russia this month.

Last Sunday, Indian Prime Minister Narendra Modi announced he would join the gathering, whose participants are among the most assertive members of a growing group of powers positioning themselves as a non-aligned middle ground between the Russia-China axis and the West.

If the course of the war had not changed, the SCO summit would have been a diplomatic victory for Putin. Modi's presence in particular serves as a reminder of the limited success of Western efforts to cut Russia off from the rest of the world. Indian companies have continued to buy and invest in Russian energy during the war, and the Kremlin has done well to mediate between New Delhi and Beijing after the 2020 Himalayan border standoff.

However, instead, the summit is taking place in an atmosphere of significant Russian losses following the Ukrainian offensive near Kharkiv, and new uncertainties in the Kremlin's backyard following the worst clashes between Armenia and Azerbaijan since the 2020 Nagorno-Karabakh war.

Putin-Xi meeting

The meeting between Putin and Xi was closely watched because of possible indications that the two countries want to further deepen the relationship that has become significantly closer in the past two years. Beijing was initially relatively reserved towards the Kremlin in the immediate aftermath of the invasion, fueling speculation that Putin had not adequately informed the Chinese leader of the scale of the attack.

Since then, however, one gets the impression that the two presidents have become closer, both eager to be independent from the West and especially the United States, both economically and militarily. An analysis by Britain's Royal Institute last month showed that Russia's weapons remain heavily dependent on Western and Taiwanese-made microchips, amid global efforts by the United States and Ukraine to cut supplies while Russia halted its energy exports and blocked Ukrainian grain.

The result of those procedures is complex. China bought 17 percent more Russian crude between April and July than a year earlier, 50 percent more natural gas and six percent more coal, paying in rubles and yuan and further reducing its dependence on the US dollar. Western sanctions, which have further deepened the relationship between the two countries, may be one of the topics of the summit in Uzbekistan, along with a possible acquisition of defense equipment.

Despite its technological advances in recent years, China remains heavily dependent on microchips and other high-tech components from the US and Taiwan, which have limited supplies to Chinese firms. New restrictions are expected. Earlier this month, US chipmaker Nvidia announced that US authorities had ordered it to stop exporting two major artificial intelligence chips to China, citing concerns that their products could be used for military purposes.

A complex world

As European efforts to reduce dependence on Russian gas and the Pentagon's discovery that every one of the 835 active F-35 bombers contain banned Chinese steel alloys show, sharing supply chains in a deeply intertwined global economy has its challenges.

US officials are reportedly already seeking an exemption to allow the F-35 to be used, saying the material - part of the magnet - should not compromise the aircraft's safety. However, more broadly, Washington has been working for years to diversify its sources of technological components and materials.

This Sunday, US Secretary of State Anthony Blinken and Commerce Secretary Gina Raimondo visited Mexico, pledging to help the country develop its own semiconductor and electric car industries to reduce dependence on China and Taiwan. Like Modi and Turkish President Recep Tayyip Erdogan, Mexican President Andres Manuel Lopez Obrador has opted for a "non-aligned direction" between East and West.

So did several Central Asian leaders who are also attending the CSO summit this Sunday - an often uneasy direction in the Russia-China world. Kazakhstan's President Kasim Zomart Tokayev is treading a particularly unpleasant path, daring to publicly criticize Putin over Ukraine and reaching out to the European Union even as Russia has shown it is prepared to shut down key export pipelines through the country's territory.

Putin and Xi have carefully planned their stay in Kazakhstan, where the Chinese leader first announced Beijing's Belt and Road Initiative in 2013. That neither has succeeded in outright dominance is a reminder of the difficulties both face as they try to consolidate their power. in a complex interconnected world.

As the war in Ukraine has shown, it is a world where states are increasingly willing to take more risks in order to have more power and pursue their interests. But as the two leaders may discover in Central Asia, it may also be a world that does not tolerate simple solutions and divisions.

The author is a Reuters columnist

Translation: N. Bogetić