US-China Relations for 8 November 2025

US-China Relations Latest News

• U.S. President Donald Trump’s reference to a “G-2” with China has revived debates about a potential U.S.-China duopoly, raising concerns among allies.

Introduction

• When U.S. President Donald Trump announced before meeting Chinese President Xi Jinping that “THE G2 WILL BE CONVENING SHORTLY!”, it reignited debates about the future of U.S.-China relations and the possible sidelining of key allies. 
• The reference to the G-2, a concept implying a U.S.-China duopoly in global leadership, signals a shift in tone that could unsettle Washington’s partners in Asia and beyond. 
• At a time when geopolitical fault lines are already deep, this framing challenges the balance built through multilateral institutions and strategic groupings like the Quad.

The Origin of the G-2 Concept

• The idea of a “G-2” was first introduced in 2005 by economist C. Fred Bergsten, then Director of the Peterson Institute for International Economics. 
• He proposed that the United States must prioritise bilateral relationships with key global actors, the European Union, China, Japan, and Saudi Arabia, to stabilise global economic systems and energy flows.
• Following the 2008 global financial crisis, the G-2 idea gained momentum, with Bergsten arguing that effective global economic recovery and climate action would be impossible without U.S.-China cooperation. 
• The concept was not intended to replace the G-20 or institutions like the IMF or WTO, but to “supplement and strengthen global governance through pre-coordination” between the two biggest economies.
• Prominent thinkers also supported the idea, and even the Obama administration explored its feasibility during the early years of U.S.-China engagement under Hu Jintao.

The Changing Nature of China’s Global Posture

• Two decades later, the global order has shifted dramatically. 
• China is no longer the cautious power that once adhered to Deng Xiaoping’s dictum to “hide your strength and bide your time.” 
• Under President Xi Jinping, Beijing has asserted itself across multiple domains, from the South China Sea to the Taiwan Strait and global technology infrastructure.
• This transformation has redefined China’s interactions with the U.S. and its allies. 
• China’s Belt and Road Initiative (BRI) has expanded its economic footprint, while its military modernisation has challenged American dominance in the Indo-Pacific.
• Consequently, the Trump administration (2017-2021) was pivotal in reframing China from a “strategic partner” to a “strategic competitor.” 
• The 2017 U.S. National Security Strategy explicitly identified China’s actions as threats to the rules-based international order, leading to trade wars, tariff barriers, and renewed security cooperation in the Indo-Pacific.

Trump’s G-2 Framing: A Return to Bilateralism

• Trump’s recent embrace of the G-2 language marks a sharp contrast to his earlier confrontational stance. 
• While the 2017-2021 phase was characterised by decoupling and trade hostilities, the “G-2 framing” suggests recognition of China’s great-power status and potential equal footing in global decision-making.
• For many U.S. partners, this framing raises concerns of strategic ambiguity. 
• It could signal a transactional pivot, where Washington negotiates directly with Beijing on key issues such as trade, technology, and security, potentially marginalising traditional allies.
• Such bilateral prioritisation contradicts the multilateral Indo-Pacific vision promoted through the Quad (U.S., India, Japan, and Australia) and other alliances aimed at countering China’s regional assertiveness.

Global Reactions: Allies’ Concerns and Diplomatic Ripples

• India
  • India faces a complex diplomatic recalibration. 
  • The imposition of 50% tariffs on Indian goods by the Trump administration strained bilateral trade ties, leading to the postponement of the planned Quad Leaders’ Summit. 
  • Diplomatic discussions even hinted at a potential Quad restructuring where the Philippines could temporarily replace India, a move that reflects both India’s independent stance on global issues and Washington’s evolving calculus.
  • However, given India’s growing economic and strategic weight, many observers argue that any sustainable Indo-Pacific architecture cannot exclude India.
• Japan and Australia
  • Both have expressed unease over the G-2 rhetoric. 
  • For them, the revival of the Quad in 2017 was a direct response to Beijing’s aggression in the South China Sea and its growing military presence. 
  • A U.S.-China rapprochement could dilute Washington’s commitments and leave allies vulnerable to unilateral shifts in American policy.
• ASEAN States
  • Southeast Asian countries, particularly those within the ASEAN bloc, view the development cautiously. 
  • While they welcome reduced tensions between Washington and Beijing, they fear that a bilateral G-2 understanding could come at their expense, potentially undermining their regional autonomy and interests.

Implications for the Global Order

• If the U.S. and China move toward a G-2 model, smaller states could face strategic marginalisation. 
• The rules-based order, which relies on consensus-building through global institutions, may weaken as decision-making becomes concentrated between two superpowers.
• Conversely, some analysts argue that even a temporary U.S.-China conciliation could help stabilise trade flows and de-escalate tensions, especially in areas such as semiconductor supply chains, climate negotiations, and global economic governance.

Source: IE | TH