The Russian-Ukraine War has re-shaped global trade and forged a new alliance | Money news

Most of the policy makers in Westminster, especially in other places around the UK, have never heard of Shanghai’s cooperation organizations, geopolitical groupings that currently hold a peak meeting in Tianjin, but hear me why we all have to give great attention to it.

Because the more attention you pay for the grouping of these 10 Eurasian states – especially China, Russia and India – the more you begin to realize that the long -term consequences of the war in Ukraine Maybe far beyond the European border, changing the contours of the world as we know.

The best place to start with this is in February 2022, when Russia Attack Ukraine. At that time, there were some important characteristics in the global economy. The amount of goods exported to Russia by G7 – Grouping the equivalent of rich industrial countries – almost the same as Chinese exports. Europe is busy sucking most of Russian oil.

But rolling to export today and G7 to Russia has gone to almost zero (consequences of sanctions). Russian assets, including government bonds previously owned by the Russian central bank, have been confiscated and their fate quarreled. But Chinese exports to Russia, far from falling or even flat, have increased sharply. Exports of Chinese transportation equipment rose nearly 500%. Meanwhile, India has switched from imports in addition to no Russian oil to rely on the country for most of its raw imports.

Indeed, so much oil is now imported by India from Russia that the US said it would impose a “secondary tariff” in India, doubling the rate of tariff paid on Indian goods imported to America to 50% – one of the highest levels in the world.

The result is Ukraine, in other words, not only misery and war in Europe. This is a sharp difference in economic strategies throughout the world. Some countries – especially members of the Shanghai cooperation organization – have doubled their economic relations with Russia. Others have a tiring Russian business.

And by doing that, many of the Asian countries have begun to imagine something they have never imagined before: the future of the economy that does not depend on American financial infrastructure. Once upon a time, Asian countries were the biggest buyers of the American government debt, some to give them the dollar they needed to buy crude oil, which was generally in US currencies. But since the invasion of Ukraine, Russia has begun to sell its oil without baking it in the dollar.

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At the same time, many Asian countries have reduced the purchase of US debt. Indeed, part of the explanation for this new increase in the yield of US and British government bonds is that there is less request for them than foreign investors than before. The world changes – and the foundation of what we call globalization is shifting.

The second reason from behind to pay attention to the Shanghai cooperation organization is that while once the time the members contribute a small part of the global economic output, today the faction is increasing. Indeed, if you adjust economic output by calculating purchasing power, part of the global GDP calculated by the meeting of countries in Tianjin almost overtake the GDP parts calculated by developed countries in the world.

And the last thing to note – something that seems to really make no sense only a few years ago – is that China and India, who have vowed rivals, are closer to the restoration of economic relations. With India who now faces swingteing rates from the US, New Delhi sees a little loss on a rare journey to China, to pin relations with Beijing. This is a seismic moment in geopolitics. For a long time, the two most populous countries in the world of disagreement. Now they are increasingly moving in each other.

That is a small consequence will be predicted when Russia invades Ukraine. But that can be very important for geopolitics in the coming decades.