US, China Signal economic Détente with South Korea Agreement
SEOUL, SOUTH KOREA – A recent agreement facilitated in South Korea suggests a potential easing of tensions in the ongoing economic and geopolitical competition between the United States and China. The agreement, details of which remain largely undisclosed, arrives at a time of increasing global financial instability and escalating military posturing.
The progress follows a period where China maintained a relatively neutral stance on the Ukraine war,while simultaneously increasing imports of Russian oil and gas – a practice that indirectly financed the conflict. While China has not committed to halting these imports, it has pledged cooperation with the US in efforts to end the war. This situation is particularly relevant given former President Trump’s previous claim that he could resolve the conflict within 24 hours. China’s continued exports of energy resources to countries like india and Brazil also contribute to the financial support of the war.
Simultaneously, US technology multinational Nvidia has resumed exports of its Blackwell chips to China. These exports had been previously suspended under pressure from the Trump administration,and the chips are critical for advancements in artificial intelligence (AI) technologies. Nvidia recently reached a market capitalization of $5 trillion, exceeding the GDP of Spain and surpassing the combined value of Microsoft and Apple.
Analysts suggest the South korea agreement represents a step towards stabilizing global financial markets,which are currently exhibiting signs of overheating and detachment from basic economic indicators,alongside an emerging bubble in AI-related multinational companies. Concerns are heightened by renewed nuclear testing by Russia, prompting a directive from trump to the Pentagon to reciprocate.
Looking ahead,China is preparing to implement its fifteenth five-year plan (2026-2030),focused on ”reorganization of military power,” with a notable emphasis on technological development. This plan reflects the dynamic often described as “Thucydides’ trap” – the historical tendency for conflict when a rising power challenges a dominant one. China has already achieved purchasing power parity with the US and is projected to surpass it economically in the coming decades. However, the US currently maintains a technological and military advantage, representing China’s primary challenge.
The agreement in South Korea is not viewed as a resolution to the US-China rivalry, but rather a transition to a new phase of “armed peace,” characterized by pragmatic diplomacy from Chinese President Xi Jinping and opportunistic engagement from Trump, expected to continue for decades. The focus of this competition will increasingly center on dual-use technologies, including the submission of artificial intelligence to military capabilities.
