With its strength in critical sectors like batteries and chips, South Korea’s suitability as a friendly shore is coloured by its companies’ dependence on Chinese inputs and demand. Extending China waivers for Korean companies, as the US has done, only undermines its own industry policy.
Albanese’s Australia has made restarting dialogue a priority, while in the US, Republican complaints reflect a growing sense of more Chinese investments being approved. And in India, retail giant Shein’s app is making a comeback, even as carmakers import battery parts from China.
China is not only the world’s largest electric vehicle market, but controls much of the supply of critical minerals needed for EV battery manufacturing. Nevertheless, by engaging its automotive sector, plugging loopholes in legislation and working with its allies, the US might still have a shot at coming out on top.
With the US withdrawal from world affairs in past years and growing weaponisation of the dollar, more countries are choosing to prioritise their own needs. Washington must take the cue and craft its own multi-alignment strategy.
Rather, the EU’s Critical Minerals Act and Net-Zero Industry Act addresses supply security concerns raised by the Ukraine war, and climate change.
The spectacular rise of Adani Group has helped to power India’s energy transition and provided a riposte to China’s Belt and Road project. But the recent stock rout in Adani shares highlights the economic risks of creating a domestic giant.
Beijing’s economic coercion drove Australia to seek alliance in earnest with the US, Japan and India to counter the ‘China threat’. Now with the China-Australia trade relationship improving by the day, questions will be raised about Canberra’s commitment to Quad objectives.
India’s strategic autonomy irks Washington but, unlike other allies, it does not need America to save the day. The US should capitalise on India’s rising role on the world stage and in the Global South.
Russia’s invasion of Ukraine and the events that followed have revived discussions on increased dependence on adversarial nations. Whether in the developed West or the Global South, countries are asking hard questions about the kind of globalisation practised in the past two decades.
The list of technologies the US wants to bring closer to home include semiconductors, solar panels and batteries for electric cars. This goes hand in hand with securing supply chains of critical minerals, such as lithium.
A series of poor financial decisions by the Rajapaksas, including attempts to capitalise on China-India rivalry by signing investment deals with both, have left Sri Lanka in crisis. With competition growing between China and the US in the region, other Pacific island nations must avoid falling into the same trap.
Expanding the BRICS grouping would help build an alternative to the Western alliance and enable countries in the Global South to avoid economic shocks from sanctions. However, China dominating this new world order would not suit India, which is already under pressure from the West over its oil purchases from Russia.
If the IPEF seems to offer little to its Southeast Asian members, that’s because it was never really meant to. Instead, the framework is another attempt to bring India into the Western fold while positioning it more strategically in the Indo-Pacific trade network.
Commodity price rises are increasingly seen as a product of Western sanctions on Russia, leaving those in the Global South to fend for themselves. As BRICS nations seek to help those in need while resisting Western criticism of their foreign policies, a growing desire for a parallel mechanism is becoming evident.
India’s imports of Russian arms, fossil fuels and more only partly explain why it has not joined the West’s sanctions against Russia. India has feet in both the global south and the Western alliance, and it wants a multipolar world where it does not kowtow to any great power.
India needs to support its energy champions to hasten its shift from fossil fuel dependence to a green economy. Reliance Industries, Adani Enterprises and the Tata Group are showing the way by expanding their renewable energy interests.
While the Quad’s move to secure semiconductor supply chains is welcome, India’s focus is less on geopolitics and more on its domestic economy. The transformation to a digital economy will make chips essential, increasing the need for India to secure a home-grown supply.
India can be a regional economic balancer by absorbing supply chains moving out of China, which would enhance its ability to take on China. Trump was proactive in expanding the US-India partnership, and Biden should build on this.