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China and US economic interdependence hasn't lessened

Ian Bremmer shares his insights on global politics this week with a look at the China-US economic relationship, North Korea's missiles tests, and the New York Times' investigation of the US drone strike in Afghanistan.

China owns more than $1 trillion US debt, but how much leverage do they actually have?

I mean, the leverage is mutual and it comes from the enormous interdependence in the economic relationship of the United States and China. And it's about debt. And it's about trade. It's about tourism. It's about sort of mutual investment. Now. There is some decoupling happening in terms of labor, increasingly moving domestic in terms of the China five-year plan, dual circulation focusing more on domestic economy, and in terms of data systems breaking up, the internet of things, being Chinese or American, but not both. And indebtedness is part of that. But I don't see that unwinding anytime soon. And certainly, the Chinese knows if they're going to get rid of a whole bunch of American debt, they wouldn't be as diversified in global portfolio. Not as great, it's much riskier. And also, the price of those holdings, as they start selling them down would go down. So, I don't think there's a lot of leverage there, frankly. I think the leverage is interdependent.

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What We're Watching: Finger-pointing over Greek fires, US military's vaccine mandate, Kim Jong Un's sister's tirade

Fire and anger spread in Greece: The Greek island of Evia and surrounding areas have been ablaze for almost two weeks now, destroying hundreds of homes and ripping through more than 56,655 hectares of land. As the climate-linked wildfires have spread to the greater Athens area and beyond, public anger with the government has been boiling over, too. Local officials say that the national government has failed to provide adequate support for hard-hit communities, including aerial reinforcement needed to help put out fires raging through the forests. Critics also say that in many places, ill-equipped fire crews are relying on locals to help save homes and forestry from multiple blazes. PM Kyriakos Mitsotakis, for his part, apologized (sort of) for any shortcomings in the government response, but said that his government had done whatever it could to tackle a natural disaster of "unprecedented dimensions." But angry residents pushed back, arguing that despite previous assurances, Athens didn't invest in recruiting more firefighters, as well as firetrucks and fire bombers even though there has been indication for some time that severe droughts and heatwaves are making wildfires more extreme — and frequent.

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What We’re Watching: EU COVID pass mess, Bolsonaro in trouble, Kim Jong Un’s latest shakeup

EU rolls out COVID digital certificate: As of today, the EU's long-awaited COVID Digital Certificate system — a centralized database of residents' vaccination status and test results — is up and running. Good news for those wishing to travel around the bloc again this summer, right? Not so fast. First, countries worried about the more infectious Delta COVID variant are still permitted to restrict travel from countries where the strain is prevalent. Second, some EU member states are still not fully integrated with the system, so the usual testing and quarantine requirements are in place. Third, the system greenlights people who have received vaccines approved by the European Medical Agency, but not others such as the WHO-approved Sinovac or Sputnik V, which are being administered, for example, in Hungary. As with its vaccine rollout, we predict the bloc's vaccine (gasp!) "passport" scheme will be initially glitchy, but ultimately work out fine.

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What we’re watching: Tigray ceasefire, Peruvians protest endless election, North Koreans cry for Kim, Tour crash suspect vanishes

Ceasefire in Ethiopia: In a stunning about-face, Ethiopian forces on Monday withdrew entirely from the Tigrayan capital of Mekelle, and declared an immediate, unilateral ceasefire. War has raged in Tigray since November, when a dispute over election dates ignited long-simmering tensions between Tigrayan militants and Ethiopian government forces. Since then Ethiopian government troops, aided by soldiers from neighboring Eritrea as well as irregulars from other parts of Ethiopia, have waged a brutal campaign in the region — pushing it to the brink of famine and, human rights watchdogs say, committing war crimes. In recent weeks, Tigrayan forces had mounted a forceful counterattack, regaining control over vast swaths of the region. The current ceasefire is meant to last until the end of the planting season, in September. Can the central government and the local Tigrayan leadership reach a more durable political agreement before then? After eight months of war, there is little trust and lots of bad blood.

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What We're Watching: Biden-Putin summit, North Korea's food crisis, Tunisian constitutional reform

No fireworks in Geneva: Russian President Vladimir Putin and US President Joe Biden sat together for four hours on Wednesday, and as we anticipated in Signal, both leaders agreed to continue to cooperate where they can and to continue to pursue their national interests, as they see them. They're now expected to work together on nuclear disarmament. That's good, since these two countries still account for most of the world's atomic weapons. They're also open to exchanging prisoners, a welcome development. But more importantly, Biden and Putin set down their red lines: for the US it's the critical infrastructure that should be off-limits from hackers, and for Russia it's further expansion of NATO. US sanctions will remain in place. If the summit was a "success," it's only because expectations were low. Curb your enthusiasm indeed. For now, we'll be watching to see whether US-Russia ties enter a period, however brief, of the stable and predictable relations Biden says he wants, or if some new controversy triggers a new war of words.

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What to expect from Biden-Putin summit; Israel-Hamas tenuous ceasefire holds

Ian Bremmer shares his perspective on global politics this week:

How did the Biden-Putin summit go?

Well, we don't know, because it's not over yet, but I'll tell you, the opening, the opening looked fine. They shook hands. They're well prepped. Putin had to be on time because Biden was coming later. That made it a little bit easier. I think this is so overdone. This is not Gorbachev-Reagan. This is Russia in the context of a much more important strategic priority, China, for the United States. I expect little is going to come out, in terms of substance. The meeting will be cordial. There will be some desire to work together on things like arms control. The big question will be, what exactly is said, and if anything is committed to on cyberattacks, how the US is going to respond because so far Biden's looked pretty weak on that issue.

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