FT: US-China Great Game Outcome May Hinge on Forces Beyond Either Power's Control

The Quick Take

• Financial Times draws parallel between US-China competition and the 19th-century Anglo-Russian Great Game for global influence
• Analysis suggests middle powers — including India, the EU, and ASEAN nations — may hold decisive leverage over the contest's outcome
• The geopolitical competition has direct capital flow implications as supply chain diversification accelerates toward neutral economies

The Financial Times' framing of US-China competition as a new Great Game analogizes the rivalry to the 19th-century Anglo-Russian contest for influence in Central Asia. The comparison is analytically significant: the original Great Game's outcome was shaped less by the two principals than by the fragmentation of Afghanistan, Persia, and the Ottoman Empire as pivotal buffers. The implication is that middle powers — the EU, India, ASEAN states, and Gulf nations — may hold decisive leverage over how the US-China competition ultimately resolves, making third-party positioning a critical investment variable.

The Great Game framing has direct implications for capital allocation in emerging markets. Countries positioned as neutral pivots or valued supply chain alternatives, including Vietnam, India, Mexico, and Saudi Arabia, attract premium investment flows from multinationals restructuring supply chains away from binary US-China exposure. Investors in frontier and emerging market equities benefit from elevated allocations to non-aligned states. US and Chinese multinationals face growing cost of hedging geopolitical risk, as maintaining dual supply chains consumes incremental capital that would otherwise fund shareholder returns.

Watch multilateral trade agreement progress among ASEAN and Gulf states as the indicator of whether middle powers are successfully leveraging their position between the US and China. India's trade deal negotiation pace and its market opening decisions toward both major powers will be a key signal. The macro variable is the technology decoupling speed: if semiconductor, AI, and biotechnology export controls deepen and extend to allied country compliance requirements, global supply chain restructuring accelerates, magnifying both the investment risks and opportunities in non-aligned economies.

Synthesized from 1 source.