The North-South corridor: the rise of the East

The International North-South Transport Corridor is a 4,500-mile network of ship, rail, and road routes for moving cargo between India, Iran, Azerbaijan, Russia, and Central Asia. However, due to the recent normalisation of relations between regional enemies, Saudi Arabia and Iran (negotiated by China) has altered the North-South Corridor to include those nations.

The rapprochement of the previously frosty Sunni and Shiite nations is potentially the start of a new coalition of the East including China, Russia, Iran, India, and Saudi Arabia with a unified goal to isolate the U.S. and other Western nations from Eastern markets. A Chinese-brokered peace signifies the beginning of the end of U.S. influence in the East as a whole.

Even though the U.S. had its catastrophic failures in the Middle East over decades, it still had a strong, albeit controversial, relationship with the Saudis. For almost a hundred years, the U.S. and Saudi Arabia have forged a solid partnership which, although borne out of self-interest on both sides, remained beneficial and consistent. The Saudis provided oil to the U.S. and received economic and military support in return. This relationship flourished more than ever in recent years, with Donald Trump being highly proactive towards and supportive of the regime of Mohammed bin Salman (MBS) – something which stirred no small amount of controversy due to MBS’ catalogue of human rights abuses, mayhems in Yemen and the assassination of Jamal Khashoggi. However, actions taken by the Biden administration and the conflict in Ukraine has pushed the Kingdom away from the U.S. and into the arms of China and Russia.

Many Western media outlets were initially doubtful of the longevity of the Middle Eastern détente and thought it was all ‘mouth and no trousers’, something to distract the U.S. and the West. However, the world is already starting to see the impact of the Saudi Arabia and Iran ‘friendship’. The conflict in Yemen, which has devastated the country and has been the main staging ground for the two regional superpowers’ proxy war, is hopefully coming to an end, with a major prisoner exchange being a good start.

Roughly 900 prisoners are expected to be exchanged over the next couple of weeks. While there is still a long way to go with ending the conflict, the fact that these measures have already been taken so soon after the normalisation is promising. If peace in Yemen can be achieved, it will be a sturdy foundation for Saudi Arabia and Iran’s relationship, making this new Eastern coalition very strong.

As a result, the U.S. is at serious risk of being forced out of the Middle East both politically and economically. China’s ultimate goal in brokering peace in the Middle East is to isolate the West from the East, to remove any influence the U.S. has from the region and damage it around the world. Additionally, this geopolitical shift has also contributed to what is being called “the de-dollarisation of the world economy”. Now that Saudi Arabia has agreed to sell oil to China in yuan and is potentially becoming part of the BRICS, the power that the U.S. dollar once had is starting to diminish. Being the world’s second-largest economy, China has been advocating for a more multipolar currency system to reduce its reliance on the U.S. dollar. If more nations adopt alternative currencies for trade and investment, it could reduce Beijing’s dependence on holding massive amounts of U.S. dollars in its foreign exchange reserves. Additionally, this trend may potentially facilitate the internationalisation of the yuan and enhance China’s influence in the global financial system.

The North-South corridor is expanding. China, using its diplomatic skills to increase trade and improve relations with Saudi Arabia, Iran, India, and South Africa, is starting to unify the East to form an economically powerful union to counter NATO and the EU. Iran and Saudi Arabia are set to join the China-Russia-led Shanghai Co-operation Organisation (SCO), an economic and security bloc that includes India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan, and Uzbekistan as members. The West is losing its market position in the East and in Africa (which China, Russia and India are slowly taking over) and while it is focusing its attention on Ukraine, the East has been developing and setting itself up to overtake the West in terms of economic prosperity and dominance, all of this under the direction of China.

KCS Group Europe continues to monitor the activities of both Russia and China in partnership…

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