Ten years ago, Chinese Communist Party apparatchiks pitched the idea of a G2 world to the Obama administration.
The Obama administration rightly passed on this opportunity.
Today, Xi is fraternizing with Putin.
Why the change from Beijing?
Why go from Washington to Moscow?
Control.
The Chinese Communist Party has one guiding principle, control.
Maintain control of terrority and maintain control of the economy.
When the US government passed on equal spheres of influence, China pivoted to Russia as a means to force a G2 world.
Gideon Rachman recently penned this in the Financial Times: "Reality is that Russia and China have formed an informal alliance because their world views have a lot in common. It is implausible that one of them would peel off and decide to align with America. America is the problem that they are trying to solve."
America poses two vexing problems for China.
America poses a problem of maintaining control of territory - see blue ocean navy and the Malacca Strait.
America poses a problem of maintaining control of the economy - reserved currency and the world's most dynamic marketplace.
So what does this mean for American business?
We have now entered the age of great power competition.
A period of time that is unprecedented in America's history.
A period of time that will see China do all it can to build a G2 world.
Recent data from Europe is a forecast for the years ahead.
This week the European Chamber of Commerce in China (EUCCC) blasted Beijing for letting "ideology," and commitment to COVID zero (control again) dampen economic growth.
The group has called the environment for foreign business in China at its most precarious point in years due to China's harsh COVID zero policies and the government's "inward turn" since the beginning of the pandemic.
"Although Europe and China already sit at opposite ends of a shared continent, it seems they are drifting further and further apart," said EUCCC president Jörg Wuttke. "China's move away from the rest of the world… indicates that, at the moment, ideology is trumping the economy."
You might not have direct business interests in China, but the world's biggest companies do, and the second and third-order effects will be felt by all businesses regardless of size.
According to a study published by the Rhodium Group in mid-September, the four German industrial giants — carmakers VW, BMW, Mercedes, and chemical company BASF — alone account for a third of European direct investment in China.
And 80% of European investments are made by just ten large European companies, according to Jörg Wuttke, president of the European Chamber of Commerce in China.
All businesses will feel any disruption to the Chinese marketplace, be it small or big, from reduced access enforced by the Chinese or forced withdrawal by Western governments.
While Russia has a $1.82 trillion economy, New York City has a larger and more dynamic economy than Russia.
China's economy is nine times larger than Russia's and 100 times more critical for global CEOs, boardrooms, and Wall Street.
When Obama said no to Xi, Xi had to say yes to Putin.
The Russia-China relationship marries China's mercantile business model with Putin's mercenary military — a marriage of convenience and commerce.
The Russia-China relationship is Beijing's pathway to a G2 world.
