Post G20 Geopolitical Implications

The geopolical implations post the G20 meeting in India are important. Our analyis highlights several important areas to monitor.  Inclusion of the African Union (AU) and the proposal for a middle east transport corrider to connect India with Europe are significant.  Then the upgrade of relations between Vietnam and US that coincided with the G20 Summit was a key development.

In addition, the fact that Premier Xi from China was not present at the G20 showed the tension between India and China.  In addition, China was defeated in its attempt to prevent G20 meeting from being held in the US in the future.

This shows the increasing risk to the world order and the fractured state of affairs.  The big question is that geopolical risk is increasing thus valuations for certain companies that are more exposed to the US (and allies) versus China technology split needs to be considered more.   In addition, don’t expect close cooperation to solve future financial crises, there might be less incentive for countries to cooperate.

African Union in the G20

Recent news about the BRICS countries seeking to change the world order away from the Post World War II United States led order lost some steam.   The G20 has now accepted the African Union as a group similar to the European Union into the circle.  This initiative was win for India and Modi.

Middle East Transport Initiative

Agreement on developing a transport corrider linking the Middle East better with India and Europe is seen as a counter to the Chinese Belt & Road Project (BRI).  This will counter the influence of China in the Middle East and is again seen a win for India and Modi.

Vietnam and US Relations

Biden left on the last day of the G20 Summit to visit Vietnam in order to upgrade relations to the highest level.  This was needed by Vietnam to counter China in the disputes in the South China sea.