Xi, Putin and Modi pledge: unity could reshape trade, energy, and the dollar

Introduction:

At the latest SCO summit in China, Xi, Putin and Modi pledge unity to reshape pieces of the security and economic order beyond the US and Europe. For investors, supply‑chain leaders, and policymakers, that message matters: expect deeper coordination among major Eurasian powers—alongside real limits tied to national interests.

What this signals :

• This is about multipolarity, not a formal military alliance. The SCO is a coordination forum that can shape regional rules on trade, security, and tech.
• It nudges the global economy toward parallel systems: alternative payment rails, different digital standards, and new corridors for energy and goods.
• But it won’t flip the system overnight. The dollar’s network effects, compliance risks, and India‑China frictions slow the pace of change.

When Xi, Putin and Modi pledge unity, it’s less a single playbook and more a pragmatic convergence on selective issues—resilience against sanctions, smoother regional trade, and a louder collective voice in setting rules.

Where they align—and where fault lines remain

• More voice for non‑Western economies in global institutions
• Insulating trade and finance from sanctions and export controls
• Building regional infrastructure and logistics corridors
• Coordinating on counterterrorism and regional stability

Fault lines

• India’s strategic autonomy: Delhi cooperates with the West (e.g., Quad), competes with Beijing, and resists any anti‑US framing.
• Economic asymmetry: China’s scale can tilt “unity” in practice.
• Central Asian states balance their own interests, not bloc politics.

Currencies and payments: slow, steady experimentation
Because Xi, Putin and Modi pledge unity on reducing sanction risks, expect incremental shifts in cross‑border settlement:

• More local‑currency trade where feasible (e.g., yuan‑ruble, rupee‑settled pilots)
• Use of non‑SWIFT rails like China’s CIPS and Russia’s SPFS, plus workarounds via intermediaries
• CBDC pilots for cross‑border payments aimed at cheaper, faster settlement with tighter compliance controls
  Reality check: Dollar inertia is powerful. Large contracts, commodities pricing, and global liquidity still favor USD for now. The likely path is dual‑track: gradual growth of alternatives alongside the existing system.

Energy and commodities: corridors over headlines
As commodity linkages deepen and Xi, Putin and Modi pledge unity on long‑term supply, watch for:

• Long‑dated oil and gas deals, discounted barrels tied to logistics certainty
• Overland and maritime routes linking Eurasia to the Indian Ocean and beyond
• Storage, refining, and port upgrades that reduce choke‑point risk
  Expect efficiency gains in regional flows—but also more complex routing as countries balance price, politics, and reliability.

Technology standards: a quiet but crucial battleground
In digital infrastructure and standards, when Xi, Putin and Modi pledge unity, anticipate competing rulebooks:

• Telecom and cloud: preferences for regional vendors and data‑localization rules
• Payments and digital currencies: experiments with cross‑border CBDC corridors
• AI and cybersecurity: proposals for governance frameworks that diverge from US/EU norms
• For global firms, this points to a “multi‑standard” world—products, compliance, and data practices tailored per region.

What businesses should watch next:

• Payment interoperability: Any concrete steps linking CIPS, SPFS, or CBDC pilots
• Energy logistics: New pipeline, rail, or port commitments that lock in long‑term flows
• Trade policy: Tariff tweaks, sanctions exposure, or dual‑use tech controls
• Standards forums: Moves to formalize alternative rules in telecom, cloud, AI, and cybersecurity
• India’s signaling: Wording that emphasizes autonomy versus bloc alignment

Practical takeaways

• Diversify settlement: Add optionality with local‑currency invoicing where practical; assess banking counterparties and compliance risk.
• Map supply‑chain exposure: Identify single‑point failures; consider “China+1,” “India+1,” or nearshoring for critical components.
• Dual compliance: Prepare for multiple technical and data standards; segment infrastructure by region if needed.
• Hedge policy risk: Use scenario planning for sanctions, export controls, and insurance/finance availability along specific corridors.

Outlook:

Ultimately, as Xi, Putin and Modi pledge unity, the global economy edges toward calibrated multipolarity—more redundancy in payments, more regional trade routes, and more competition over tech standards. It won’t replace the existing order quickly, but it will complicate the map. Companies that build flexibility into payments, logistics, and compliance will be best positioned to thrive.

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