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- [00:02]
A
Most people think the world is split between two camps, the United States and China. But a growing number of countries are doing something very different, working with both sides at the same time. The big question is, in a world where the superpowers are competing, are these middle countries quietly gaining influence and could they end up shaping the next global order? Hi, everyone, I'm Lynn Thoman and this is three Takeaways. On three Takeaways, I talk with some of the world's best thinkers, business leaders, writers, politicians, newsmakers and scientists. Each episode ends with three key takeaways to help us understand the world and maybe even ourselves a little better. Today I'm excited to be with Richard Fontaine. Richard is one of the leading voices on U.S. strategy and global geopolitics. He's the CEO of the center for New American Security and has spent years at the center of US Foreign policy debates, serving on Capitol Hill, advising senior officials, and writing widely on how the international order is shifting. Welcome, Richard, and thanks so much for joining Three Takeaways today.
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B
Thank you. It's great to be here.
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A
Most people assume Brazil's biggest economic partner is the United States. It isn't. It's China. How did that happen?
- [01:38]
B
China's economic gravity has continued to grow over the decades. And we're in the strange phenomenon now where China is the top trade partner of most countries in the Western hemisphere. That, of course, was the United States for a very, very long time. It's a reflection both of China's appetite for inputs, especially raw materials, the likes of which come from countries like Brazil, and its exports, particularly of lower cost and increasingly somewhat higher cost manufactured goods which are exported to countries throughout the hemisphere. And so you have a real rewiring of the top trade relationships between countries like Brazil compared to the way it used to be.
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A
And it's not just Brazil. It's other countries in South America as well.
- [02:27]
B
China is the number one trade partner of most countries in the Western Hemisphere, most countries in Latin America, I mean, virtually every country in Latin America, and I mean, this is also true in other regions of the world. It's the top trade partner of most countries in Southeast Asia. It's top trade partner with a lot of countries around the world, including countries that sometimes consider themselves skeptical of Chinese geopolitical intentions, or at least at a minimum, non aligned with China, but nevertheless have a deeply intertwined economic relationship.
- [02:57]
A
It's so shocking, I think, to most people. China and Brazil are even talking about a railroad across South America from Brazil's Atlantic coast all the way to the Pacific Coast. What does that tell us about the relationship between Brazil and China?
- [03:15]
B
Well, one, it shows how interested countries are and how forthcoming China has been, particularly in infrastructure building in different places. I mean, one can travel in Latin America, in Africa, in Southeast Asia, in lots of the so called global south, and see Chinese infrastructure projects literally all over the place. Buildings here, bridges there, railroads here, ports there. And for China, there's economic and sometimes geopolitical advantages to these kinds of projects. And countries that wish to upgrade their infrastructure or build it where they haven't before find it attractive to have potentially low cost financing for those kinds of projects.
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A
And even India, which has border clashes with China and decades of tension, but trade between the two countries keeps climbing. How does India pull off that balancing act?
- [04:15]
B
Carefully. India had to manage its tricky relationship with China even before 1962 and everything that happened that year between the two countries and so has become practiced over the years at maintaining a robust economic relationship with China. But nevertheless, it has its limits. So for example, India banned Chinese apps like TikTok and other things way before other countries really even thought about it. That was a product, among other things, of the skirmishes that took place in the Himalayas between the two countries. India tends to be pretty deeply skeptical of Chinese intentions in their own region. And of course the border dispute is a matter of serious difference, but nevertheless they balance that with a trade relationship and physical proximity because they have to live alongside China.
- [05:06]
A
Can you talk more about what partnering with China looks like in practice? Ports, railways, power plants, telecom networks, Chinese
- [05:16]
B
workers, all of those things. China will often provide investment and financing for projects in countries. Sometimes we'll bid on projects where there's no non Chinese bidder available to do so. Provide expertise. And in terms of what we would put in the realm of foreign assistance, often no strings attached kinds of foreign assistance. I mean, the United States typically, for example, has tied its assistance to things like improvements in human rights or rule of law or things like that. China, that's not the way that they do things. China provides diplomatic benefits to countries and to their leadership in terms of visits and summits both in Beijing and in other countries as well. And China provides here and there these kinds of economic benefits from trade, from investment, from infrastructure building, from technology transfer, from the transfer of expertise. Chinese workers, again, all of which is a quite attractive package to any especially developing country that is looking to improve a lot of its people.
- [06:25]
A
You've written this wonderful phrase, make me less dependent. Can you explain what that means?
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B
Well, if you travel around and talk to a Lot of countries that describe their economic dependence on China. And this is not just developing countries, but countries in Europe that export automobiles to China, or countries in Asia that rely on Chinese financing for a lot of projects at home, whatever it may be. None of the kind of geopolitical concerns about Chinese intentions is lost on the leadership of these countries. But on the other hand, this kind of economic relationship in particular is a source of good things for their country. And so there is often this sense that countries would like to be less dependent on China, but not yet, and for other reasons. They'd like to be less dependent on the United States, but not yet. And so that's kind of where they find themselves.
- [07:23]
A
And you've called this building geopolitical insurance. What does that mean?
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B
So you began by talking about folks who see the world is kind of divided into two blocks. And that's a little too stark to account for the way things are because of the existence of those who don't fit into those blocks. So there is at least a semi coherent axis of upheaval of what we've called it, Russia, China, Iran, North Korea, working together more closely. And then there's a relatively liberal, although some increasingly fractious these days, you know, kind of block of allies in the United States and in Japan and South Korea and Australia and Europe and so forth. Okay, fine, so you've got those, but you also have these global swing states in the middle, as I've called them, which are a group of, you know, medium sized or larger countries that want alignments with both blocks. They want a mix of security and economic benefits from both, and they're not going to join one or the other. And this, whether you call it hedging or multi alignment or maintaining simultaneous connections to both sides, is a form of geopolitical insurance. Rather than throwing all in with one side and then among other things, either losing out of the benefits that ties with the other side might convey or pulling in the antipathy of the other side. And so it's a form of geopolitical risk insurance to essentially diversify your portfolio of international relationships.
- [08:50]
A
And is this caused more about fear of China, or is it about Russia's invasion of Ukraine, or doubts about American reliability, or really all three.
- [09:02]
B
I think a lot of this is driven by the reality of China's economic rise at the same time as countries worry, in part because of that economic rise, about China's geopolitical intentions and how assertive and aggressive it's been in different parts of the world. So that's kind of the economic and geopolitical reality on the Chinese side, which is coinciding with doubts about American reliability and engagement in different parts of the world. But at the same time, the United States obviously continues to have the biggest market in the world and the most powerful military in the world, which is not nothing. So for these global swing states, having access only to the benefits of alignment with one side or the other, but instead get a mix of benefits from both, then that's what they will do. I think it's less about the. The Russian invasion of Ukraine, although, you know, that's the backdrop against which some of this is taking place.
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A
Europe long assumed the US Security umbrella would always be there. Has that thinking changed? And are Europeans now realizing that depending too much on even close allies can be risky?
- [10:11]
B
Yes. I was at the Munich Security Conference, as so many people were last month, and the common refrain from many in Europe was, we can't count on the United States anymore. This is a country that, instead of offering to protect us against invasion, like was the case during the Cold War, instead appears to covet our own territory like Greenland and constantly disparaged our allies and suggest that they might not be there if the balloon went up and there was some sort of contingency. I actually think that some of that is overblown. I think if NATO were attacked, then the United States would be there for Europe, even despite all of the ups and downs and erraticism of the current administration. But the bigger problem for Europe right now is that they don't have much in the way of alternatives. So they can say, well, we doubt the United States would defend us if it was necessary, but China's not going to defend Europe and Russia's not going to defend Europe. Russia's the entity they're worried about, and Europe is not, not yet in a place to defend itself and won't be in a place to defend itself in any time in the near future. And so European allies are in this position where they both worry about American reliability and are dependent on it.
- [11:29]
A
Are these swing countries pushing back on both Washington and Beijing when it suits them?
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B
They are. And you're also seeing them to some degree coordinate with one another or choosing issues on which to coordinate with, you know, the United States on one side or Russia, China on the other, and kind of build international narratives and try to get greater representation for themselves on the kind of international tables and things like that. They will push back. I mean, it really. So these kind of swing states that we're talking about, Brazil, India, Indonesia, Saudi Arabia, South Africa, Turkey, they push back in a variety of different ways and it really depends on the country. So you see a country like South Africa pushing back in lots of different ways against American policies and positions. You see a country like Saudi Arabia pushing back much less or at least publicly, and then other ones are kind of in the middle, but all want to maintain some sort of productive relationship with the United States without throwing all
- [12:25]
A
in with the US if everyone is trying to be more self reliant at once, do you think that makes the world more stable or less stable?
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B
Probably less stable. We talk often in foreign policy circles about the so called rules based international order, or the liberal international order or whatever you would like to call the panoply of rules and norms and principles and institutions that have guided international behavior really since the end of World War II, if not the end of the Cold War. And lots of countries, including the United States, express great discontent with the way things are right now and wish to find something else, but that something else has not yet come into existence. And what it might look like is not even clear. And so we're exiting this period where some aspects of what we call this liberal international order are falling away or getting weaker, and yet they haven't been replaced by new things. And so I think we're in for a potentially decade long or so period of greater disorder until we enter a new international dispensation.
- [13:32]
A
Stepping back. The US and China combined account for just over 40% of the global economy. So do these other countries, what you call the swing countries, hold the balance of power and what are the implications?
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B
They don't hold the entirety of the balance of power, but if you look at their aggregate weight, economically, militarily, diplomatically, in terms of the ability to have a play dominant role in each of their regions and their ability to kind of set narratives at the international level, they have disproportionate weight, especially if you combine them. And so that's one reason why we, you know, we've talked in this conversation about these countries sort of courting different forms of relationships with the United States and China. That's another reason why China, and at least until recently the United States have been courting these countries because of their combined geopolitical weight. They're not going to accrue solely to the western side of the ledger, to the axis of upheaval side of the ledger, but on different issues they're going to express different preferences, get involved in different activities. And, and anyone who is looking at these global swing states would want to Engage them in a way in which their activities and preferences reflect our own to the maximum degree possible, and not those of our adversaries.
- [14:50]
A
Before I ask for the three takeaways you'd like to leave the audience with today, is there anything else you'd like to mention that you have not already talked about? Richard, what should I have asked you that I have not?
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B
Well, there's about a million things going on in the world today, including a festering acute military crisis in ir, the Middle east and everything else. The hard part, I think, for American policy right now is to set priorities globally and in terms of countries and issues. And so, you know, for example, I think it's a priority to deal with the global swing states in a way that would ultimately benefit the kind of world that the United States would like to see unfold. But that involves making choices, right? Is China the greatest long term challenge to the United States? I think it is. But Iran, is this, at least, whether it was before or not, is this acute security challenge right now? There's a finite number of military and diplomatic resources to go around. Some of those right now are coming from the Indo Pacific, where China is most active, to the Middle east, where China is less so, but Iran is more so. And so this question of setting the priorities among U.S. foreign policy objectives sort of hangs over all of the news that we read these days and then these long term aspirations the likes of which we're talking about today.
- [16:10]
A
Richard, what are the three takeaways you'd like to leave the audience with?
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B
Well, the first takeaway is that we're living in a deeply contested geopolitical environment. I mean, this is probably pretty obvious, but the world has a rough block that is relatively politically liberal that one might call the west broadly defined, and another one that is relatively illiberal that one might call the axis of appeal, evil in Russia, China, Iran and North Korea and the contest between the views of the one and the other are going to shape the future of international order. And so the stakes are quite high in this. And the second takeaway is that in that contest over the future of international order, there are six countries that are likely to bear disproportionate weight on what the answer ends up being. Brazil, India, Indonesia, Saudi Arabia, South Africa, Turkey. All of those are multi aligned states. They all play dominant roles in their region. They're all determined to maintain ties simultaneously with the U.S. china and Russia. They all seek to reform existing rules and institutions. And together their weight can help to sway the future of international order. And Then the third takeaway is, therefore, the US should have, as one of its foreign policy priorities, engaging those six countries, encouraging these six countries to choose policies that reflect our own preferences and the core principles of the world that we would like to see, as opposed to the world that we would not like to see. That requires working with each of these countries, not only in ways that we haven't before, but ways, frankly, that are quite different than we have now, when we have a range of relationships with each of them, including some that are quite adversarial. So there's a lot of work to do.
- [18:05]
A
What do you mean by working with them in ways we have not before?
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B
I mean, we should be working with all six on issues like military basing to keep military bases for our adversaries out and potentially keep military bases for our allies, and digital infrastructure, which is a new, you know, kind of realm with data centers and AI and all of the things that are going to be economically and potentially politically viable there. On trade arrangements, I mean, we've been going, I think, backwards because we have imposed tariffs on the entire world simultaneously rather than take the opportunities that present themselves for, you know, new trade agreements and relationships with some of these countries. The future of international institutions, I mean, you can take a look around at almost any international institution right now, and it was formed many years ago for a world that is very different than it is now. And so working with these countries about what the future of the array of international institutions should look like, as opposed to what it has looked like, is yet another opportunity. So those are some of the things that would be relatively new in our approach to these countries. But I think it's vital to do.
- [19:08]
A
Richard, thank you. This has been a pleasure and it's been really interesting.
- [19:13]
B
Thank you for having me. It's been a real pleasure here.
- [19:17]
A
If you're enjoying the podcast, and I really hope you are, please review us on Apple Podcasts or Spotify or wherever you get your podcasts. It really helps get the word out. If you're interested, you can also sign up for the Three Takeaways newsletter at 3takeaways.com, where you can also listen to previous episodes. You can also follow us on LinkedIn, X Instagram and Facebook. I'm Lynne Thoman and this is three Takeaways. Thanks for listening.