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Beijing’s Counter-Sanctions Strategy: A Parallel Financial Order Emerges
While Washington asserts unilateral power, a parallel global financial order is emerging, driven by China and its allies. The Shanghai Cooperation Organisation and Brics bloc are challenging US-led sanctions and advocating for a multipolar world.…
A Bifurcated Global Stage
The US president, Donald Trump, recently used the United Nations General Assembly podium to suggest the quick annihilation of the Islamic Republic, further declaring that Venezuela's oil would belong to the victor. These statements came as the Iran war neared its eighth month, following a UN Human Rights Council finding that there were "reasonable grounds to believe" US forces had committed war crimes. In the same address, President Trump rejected global AI regulation and urged nations to exit the International Criminal Court.
A contrasting global dynamic emerged elsewhere this month. In Bishkek, Kyrgyzstan, all 10 member states of the Shanghai Cooperation Organisation (SCO) convened for its 25th anniversary. Formed in 2001 with six members, this year’s summit yielded 27 documents and the Bishkek Declaration. This declaration explicitly condemned military strikes by the US and Israel on Iranian territory, citing violations of international law. The summit, however, did not launch the proposed SCO Development Bank, despite an agreement to create it a year prior.
The Rise of Non-Western Blocs
Days later, in New Delhi, the 11 Brics members unanimously adopted the New Delhi Declaration. This consensus document urged "maximum restraint" in the Middle East and criticized unilateral sanctions lacking UN Security Council authorization. It also implicitly targeted the global trade war without naming the United States. Host Prime Minister Narendra Modi called upon the Global South to become a "rule shaper" rather than passively accepting externally imposed rules.
Allen Carlson, a political scientist and Chinese foreign policy expert at Cornell University, observes Brics' ascent as a formidable non-Western bloc. He notes that this development signals a fundamental shift in global power over the past two decades. Carlson asserts that Brics has evolved from an nascent power bloc into the core of an emerging international order, with China central to its structure. He argues that while President Trump and his advisors perceive Washington as the global axis, this view no longer holds. Carlson attributes this shift partly to American missteps and partly to President Xi's strategic acumen, concluding that a new global power dynamic is now in play.
China's Financial Architecture
China anchors this evolving architecture, underpinned by a substantial financial pillar. The Asian Infrastructure Investment Bank (AIIB), established in 2016 despite Washington's objections, now boasts 111 approved members. Over its first decade, the AIIB approved nearly USD 70 billion for 361 projects across 40 member states. Its membership includes every AAA-rated sovereign except Liechtenstein, alongside 17 of the G20 countries.
The Iran war has also served as a testing ground for China's Cross-Border Interbank Payment System (CIPS). CIPS reported that its daily average transaction volume reached USD 134 billion in March, reflecting its growing role in facilitating non-dollar settlements.
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