- The US-China clash in the technology field has become a key war; whoever wins in AI, quantum computing, semiconductors, and 5G will define the future of power.
- The G2 pairing will probably be the main factor determining the world order for many years to come, with intense rivalry and limited cooperation likely to persist.
- India’s strategic position is shaped by its ability to balance between the US and China, leveraging the rivalry to expand its influence while maintaining autonomy.
- If India can sustain high economic growth, strengthen governance, and build technological capability, it could emerge as a pole in global affairs beyond the G2.
The idea of “G2” – a possible superpower duopoly of the US and China – has become one of the most important dimensions for interpreting the geopolitics of the 21st century. Even though the G2 is neither an official organisation nor a formal body, it mirrors the fact that the two powers are more and more the ones who decide the global results in economy, technology, and security. To be able to grasp this situation and India’s role in it, it is necessary to have a clear understanding of the world order that is being formed and is already surrounding us.
Historical Origins: From Cooperation to Competition
G2’s origin is traced back to China’s astonishing opening of its economy under Deng Xiaoping in the late 1970s, which turned out to be the first step of the G2 journey. America, through its large multinational companies, was able to access cheap manufacturing and the huge consumer market, while the latter was gaining the world’s attention through the hitherto unheard-of growth and poverty alleviation for hundreds of millions of people. The term “G2” came into the limelight in about 2009, when economist C. Fred Bergsten and historian Niall Ferguson were talking about global problems through US-China cooperation, thus praising that G2 should be institutionalised.
The 2008 financial crisis had an impact on the whole world financial system, and the US, in particular, lost part of its power, while the winner was the dragon, holding massive dollar reserves and keeping its economy growing. The Obama government was the first to consider this idea and, consequently, established the Strategic and Economic Dialogue, a high-level forum for bilateral engagement, as a way of getting close to the other side. The vision of an American-Chinese partnership was, however, not to last. By 2015, conflicts had erupted on several fronts. Among China’s aggressive actions in the South China Sea, the heavy government subsidies for industry, the concerns over the setup up and Xi Jinping’s power grabbing were signs that the country was taking an iron-handed approach.
The trade war of the Trump administration that began in 2018 with the imposition of tariffs on billions of dollars of Chinese goods marked a clear transition from engagement to competition on the strategic level. The Biden administration has been pretty much supporting this narrative and, therefore, continuing to regard China as the major geopolitical rival of the US.
The Current Landscape: Decoupling and Competition
The current G2 partnership, as per the analysts, is described as ‘strategic competition’, which is a rivalry through different domains such as economy, technology, military strength and influence. This competition is more complicated and unpredictable because it is happening in an interconnected global system rather than in the bipolar Cold War world with separate blocks.
The economic aspect is still considerably huge. The US and China combined represent around 40% of the world’s GDP. Even though there are tensions, they remain each other’s largest trading partner, forming a competitive interdependence relationship. They are gradually straining the relationships in the sectors relevant to the sensitive decoupling strategy, along with the thousands of miles of supply chains, which are not too easily disassembled since they have taken years of hard work to build.
The US-China clash in the technology field has become a key war. Winner in the battle for superiority in AI, quantum computing, semiconductors and 5G networks will be the one who lays down the power of the future. Each of the US bans on semiconductor exports to China and the Chinese effort on industrial self-sufficiency in the tech sector, dubbed “Made in China 2025”, are actions that perfectly portray the competition.
The military battleground of tensions is mostly the Taiwan Strait, the South China Sea and different interpretations of regional order. China’s rapid expansion of military capabilities is seeking to displace American military dominance in the Indo-Pacific area, while the US is quite active in keeping its alliances and troop presence. The nuclear side of things makes the situation even more complicated, with China enlarging its stockpile, whereas the US is upgrading its old nuclear arms.
Timeline of Transformation
- 1979-2001: Normalisation and economic integration; the era of China’s “reform and opening up”.
- 2001-2008: China’s WTO membership; fast economic growth; deeper interdependence.
- 2008-2012: Financial crisis; G2 debate popping up; China’s more and more assertive attitude.
- 2013-2016: Xi Jinping’s ‘Chinese Dream’; Belt and Road Initiative initiated; the conflict in the South China Sea.
- 2017-2020: Trump trade war, tech competition getting more intense, COVID-19 pandemic impacting relations.
- 2021-2025: Biden’s strategy continues; the situation in Taiwan gets worse; semiconductor restrictions; technological decoupling continues.
Future Trajectories: Cooperation, Conflict, or Coexistence?
The G2 pairing will probably be the main factor determining the world order for many years to come. We can identify three general scenarios. The first, or the optimistic path, refers to limited competition, cooperation in areas of climate change and pandemics, etc. Both countries are unlikely to get into a war, as they would face heavy losses, and wise leaders might introduce measures to control the situation.
On the other hand, the cheery scenario brings about a situation where a new Cold War is fought over technological standards, hearts and minds in China and East Asia, and constant warfare over Taiwan. This would lead to the division of the global economy and all other countries having to decide which side to support in this conflict.
What is most likely, however, is a third scenario: intense rivalry but with some areas of cooperation, a long series of diplomatic crises to manage, and a global environment of doubts and hedging tactics. Complete separation and no partnership at all are both ruled out by the intertwined interests and the deep-rooted disagreements.
India’s Strategic Position: Non-Aligned 2.0
India’s power and its consequences couldn’t be overlooked since they were to be at least the plains counted among the autocrat and their allies of the G2. The new power group is composed of a non-confrontational pair of a superpower and its close ally, with the latter being an economically indifferent country. This position has not only been the result of India’s nuclear overtures or its massive economic size, but it has also been such that the US-China rivalry has created opportunities for India to play a more significant role in the international scenario.
India’s political strategy has been characterised by careful consideration of the importance of the country in world affairs. The US-India relations are clarified by the fact that India is recognised by the US as an important strategic partner; therefore, it is not just about the supremacy of the US dollar over the rupee. Throughout these years, India, with its geographical and economic weight, has been the mediator between East and West.
In terms of economy, India is like a phoenix rising from the ashes of China for those companies that want to move their production base away from China. “China Plus One” has become the mantra for Indian manufacturing, although government policies and a lack of good infrastructure are still the major hindrances. With ubiquitous internet connectivity and a tech-savvy generation, India is not only the home to large-scale IT firms like Infosys and Wipro but also a power that can influence tech through its digital economy.
The US sees India as a very important player in the Asian chessboard who can oppose Chinese expansion in the region, while China wants to maintain control over India so that India does not become too close to the US. One of India’s challenges is to use its dual-power position to force the other powers to decide on its side.
The population boom in India, which is composed of young people, will be the major factor in the country’s international relations, as the world will have to deal with the superpower that has a billion young and productive people, while China has a problem with old and unproductive people. If the Indian government can keep the rate of economic growth high, improve governance, and develop technological capabilities, it can be a G2 competitor and more, a pole in global affairs beyond the G2.
Conclusion
The G2 representation corresponds to a reality that gets more and more influenced by the US-China relation, but at the same time, this binary division has its disadvantages. The very fact that other countries, especially India, are quite powerful and important, makes them hard to classify so easily. The upcoming years are going to challenge the international system, which is likely to choose either the accommodation of several power centres or the trend of the G2’s gravitational pull imposing alignment. India’s capacity to take an independent approach while simultaneously having good relations with both sides might serve as a guide to the new, complicated era. The 21st-century narrative will be composed not only by two powers but also by the reactions of the rest of the world to their rivalry.
Divyanka Tandon holds an M.Tech in Data Analytics from BITS Pilani. With a strong foundation in technology and data interpretation, her work focuses on geopolitical risk analysis and writing articles that make sense of global and national data, trends, and their underlying causes. Views expressed are the author’s own.
Pranav S 
Aayush Pal 
Tejashree P V