So, G2 is back in the news. For the uninitiated, G2 was first used by the American economist Fred Bergsten in 2005 to suggest macroeconomic coordination between US and China. What was curious about Bergsten’s proposal was that in 2005 when he made the proposal, US GDP was close to 13 trillion dollars, as opposed to China’s which was barely 2.3 trillion dollars. Also, Bergsten’s proposal for a G2 predated the financial crisis and the great recession of 2008. So, what was really behind Bergsten’s thinking?
The global economy had declined noticeably during 2005 compared to a strong and broad expansion in 2004, and projections of future growth were fraught with uncertainty and risk. The decline was due partly to enormous global imbalances, including the rising external deficit of the United States on the one hand, and growing surpluses in the Asian, European and oil-exporting economies on the other. Taken together with rising oil prices, and exacerbated by natural disasters and geopolitical instability, the global economic environment was precarious, to say the least. Fred Bergsten saw this and felt strongly that US and China must seriously coordinate on international economic issues. Bergsten’s foresight lay in the fact that he knew China’s economic trajectory was on the rise; this was important because at a time when China’s GDP was around 2.3 trillion dollars in 2005, Japan, Germany and the UK had higher GDPs. But China between 1995 and 2005 had tripled its GDP and Bergsten drew his inference from that.
While the G2 began with “international economic coordination”, the financial crisis and the subsequent recession in 2008 strengthened the G2 like never before both within and outside the G20. By 2009, China also became the second ranked economy of the world by GDP, vindicating Bergsten’s theory. Also, by then, G2 had mutated to coordination on strategic issues with both Kissinger and Brzezinski arguing strongly that China and the US must work together not just on economic issues but also global challenges like climate change. In 2009, Hillary Clinton, the then Secretary of State on a visit to Beijing declared that the opportunities for US and China to work together are unmatched anywhere in the world!
By the middle of 2010 though, experts were enthusiastically pronouncing the demise of G2. Interestingly, China sitting down with India, Brazil and South Africa ( remember the BASIC coalition) at the Copenhagen climate change conference was not taken kindly by the US. America’s approval of arms sales to Taiwan in 2010 and the Dalai Lama’s visit to meet President Obama in February 2010 was a setback and returned both China and the US to old suspicions and friction.
Elizabeth Economy, the American political scientist and China specialist wrote in May 2010 in Foreign Affairs that: The sticking points in U.S.-China relations are mirrored in China’s relations with rest of the world. The European Union and Japan, for example, find it no easier to negotiate with China on issues such as trade, climate change, cyber conflict, and the Dalai Lama. As a result, the United States is more likely to make progress when it spends time and energy cultivating allies throughout the rest of the world. We shouldn’t shed any tears for the G-2. Its demise enables us to make real progress with China by looking elsewhere.
The question is therefore why President Trump surprised everyone by putting out the social media message on 29th October 2025 that: The G2 will be convening shortly. On November 2, 2025, President Trump posted “My G2 meeting with President Xi of China was a great one for both of our countries. This meeting will lead to everlasting peace and success. God bless both China and the USA!” On the same day, the US Secretary of War Pete Hegseth posted “As President Trump said, his historic G2 meeting set the tone for everlasting peace and success for the U.S. and China.” It is therefore fair to assume that G2 has now become part of the Trump administration lexicon.
As always, words matter in diplomacy. So, it is important to understand what the Trump administration really means when it talks of G2. The following interpretations are worthy of consideration:
> One interpretation may be that it simply means a meeting of the two most important powers in the world. No other meaning may have been attached to it. President Trump’s words must always be taken seriously, but almost never literally. Observers have noted that China has not used the G2 formulation but said more broadly that China and the US must be friends and partners working together.
> Perhaps the most widely shared interpretation is one of the US accepting strategic parity with China. This is crucial since China has been demanding this as a matter of right for quite sometime now. In fact, the biggest gain for President Xi Jinping, especially from a domestic audience perspective, is that China has finally attained strategic parity with the US.
> The most substantive interpretation of the use of G2 by President Trump is the inherent assumption that US and China will first and foremost ensure their bilateral ties are back on track thus subsequently enabling the two sides to engage in far-reaching cooperation to tackle global challenges. Basic to this interpretation is that both US and China are seeking a balance of power leading to some kind of strategic equilibrium. Jeffrey Sachs has made an interesting distinction between “spheres of influence” and “spheres of security” suggesting that while the former is detrimental to the sovereignty of small states, the latter may be compatible with the sovereignty of small states. The suggestion is that the US and China, respectively, could have their own spheres of security (if not influence) in the Western Hemisphere and the Western Pacific. It is not clear at all that the US at present concerns itself with such niceties. Be that as it may, this implies, at a minimum, that the US stands ready to fundamentally reset its ties with China. If true, it would be a striking departure from the US strategy towards China, not only from the Biden era but from Trump 1.0 when China was considered an implacable adversary by the US establishment.
President Trump is nothing if not capricious. So it is hard to make predictions on his watch. But on current evidence, the last interpretation above seems a stretch and a tad implausible. There are just too many imponderables and too many flash points in the relationship between US and China. The forthcoming US National Security Strategy may provide a hint or two. But then again, it may not be the last word on the subject.
Ambassador Dr Mohan Kumar is the Director General of the newly established Motwani Jadeja Institute for American Studies at the OP Jindal Global University. Views are personal.
Diplomacy and Geopolitics 