Today’s divide is techno-economic, driven by overlapping concerns about industrial competitiveness, national security and geopolitical advantage. The speed is alarming, even to those orchestrating it.

Consider semiconductors. In April 2025, the Trump administration blacklisted dozens of Chinese entities from semiconductor trade. China responded by restricting rare earth exports – gallium, germanium and magnesium – essential for chip manufacturing outside Asia.

By October, China asserted extraterritorial control over any foreign-made product containing even 0.1% Chinese-origin rare earths, effectively weaponising supply chains. A one-year truce negotiated at APEC in Busan bought time, but both sides have hardened their domestic production mandates.

China’s “Big Fund,” initially USD 20 billion, later expanded to over USD 35 billion, aims to build an entirely domestic chip ecosystem.

The US is matching ambition with policy: The Strategic Framework for Cooperation with Saudi Arabia (signed November 2025) explicitly targets rare earth security, while Project Vault, announced in February 2026, committed USD 12 billion to establish a US Strategic Critical Minerals Reserve.

In AI, the split is already visible in architecture. US companies – NVIDIA, with its CUDA ecosystem; OpenAI; Google – have built an intelligence stack accessible only with semiconductor exports controlled by Washington.

China’s Huawei, SMIC and ByteDance are rapidly developing parallel systems. Cyberspace fragmentation is not hypothetical; it is happening. The question has shifted from whether there will be two technospheres to how quickly the split will accelerate.

Money, redefined
If technology is the skeleton of bifurcation, currency and payments are its nervous system. For seven decades, the US dollar has dominated global finance through SWIFT, the Belgium-based messaging system that processes approximately USD 6 trillion daily. That hegemony is eroding faster than Washington anticipated.

China’s Cross-Border Interbank Payment System (CIPS) now has 1,467 indirect participants across 119 countries, linking 4,800 banks in 185 countries. Russia, sanctioned and defiant, reported in 2024 that 90% of its trade within BRICS was conducted in national currencies rather than dollars.

The renminbi is already used in 50% of intra-BRICS trade, compared to just 2% in global payments as recently as May 2025.

At the Rio de Janeiro BRICS summit in July 2025, Brazil’s presidency formally advanced a “BRICS Cross-Border Payments Initiative” leveraging central bank digital currencies and blockchain technology.

The initiative avoids the symbolic provocation of a single BRICS currency – a proposal that would trigger immediate American countermeasures – but achieves practical de-dollarisation nonetheless.

A gold-backed “Unit” and the “BRICS Pay” platform remain under discussion, with full deployment expected by 2027.

Tellingly, these systems were conceived and built without western participation or oversight. The New Development Bank, founded in 2014, increased local-currency lending to member states by 41% in 2025, allowing countries to avoid dollar-denominated debt and the currency risks that accompany it.

Unlike the IMF or World Bank, the NDB imposes no policy conditions. It is a form of financial sovereignty. For emerging economies chronically squeezed by foreign exchange constraints, it is revolutionary.

The mineral wars
Rare earth elements are neither rare nor exotic. Dysprosium, terbium, neodymium – they are found in magnets, semiconductors and military systems from jet engines to guidance systems. They are the sinews holding both economies together.

China dominates: It controls 55% of rare earth mining capacity and 85% of global processing capacity.

This is not accident; it is the result of two decades of sustained state investment unencumbered by environmental regulation western competitors face.

The West is scrambling. Australia, backed by USD 1.25 billion in government-guaranteed loans, is scaling midstream capacity and now hosts 89 active rare earth projects – far ahead of Canada (18), Brazil (13) and the United States (12).

In May 2025, Lynas Rare Earths became the first non-Chinese company to produce commercial quantities of dysprosium oxide.

The US Trump administration has moved aggressively: A USD 400 million equity investment in MP Materials, a USD 150 million loan for heavy rare earth separation, and commitments to price floors.

Saudi Arabia, recognising the strategic windfall of its Jabal Sayid deposit, estimated at 552,000 tonnes of heavy rare earths, has signed bilateral frameworks with the US and Japan. Yet even optimistic analysts expect a decade or longer before non-Chinese capacity remotely challenges Beijing’s hold.

This asymmetry explains why minerals are now explicitly geopolitical assets. Countries are not trading them; they are allocating them according to bloc loyalty. China’s December 2025 export control framework codified this as formal policy.

When China tightened dual-use controls on rare earths in January 2026, it specifically targeted Japan. When the US blacklisted MP Materials and USA Rare Earth in June 2026, China retaliated within days. Critical minerals have become strategic hostages.

The countries that refuse to choose
Here is the problem the architects of bifurcation have not solved: What about India? What about Saudi Arabia, Brazil, Indonesia, Vietnam, Turkey and the UAE? These are not minor players. They are resource powers, manufacturing hubs, market opportunities and geopolitical lynchpins.

Collectively, BRICS now represents 46% of global population and 36% of global GDP at purchasing power parity. Yet unlike America or China, they do not have the luxury of choosing a single bloc. Their prosperity depends on access to both. This is the fissure in the bifurcated world.

India’s position is instructive. New Delhi hosted the BRICS summit recently, concluding its third presidency of the organisation since 2012. Simultaneously, India is deepening security partnerships with the Quad (US, Japan, Australia, and itself), hosting American naval exercises, and collaborating on semiconductors and critical

Yet India also hosts Russian nuclear plants, buys 60% of its crude oil outside the western financial system, and has rejected American pressure to divest from Chinese technology.

This is not fence-sitting. It is what Indian strategic thinkers call “multi-alignment with leverage.” New Delhi’s rupee trade mechanism now extends to over 30 countries.

It participates in the Shanghai Cooperation Organisation whilst maintaining Quad discipline. It defended its strategic space within BRICS by formally dissenting from Russia’s proposal for a collective energy pricing mechanism, rejecting any institutional mechanism that would “enforce bloc pricing or penalise trade with Western partners,” according to official minutes of the Energy Cooperation Working Group meeting in Moscow this June.

India wants to play both sides without losing agency to either.

In the Middle East, hedging has become an art form. Saudi Arabia and the UAE are BRICS members yet maintain traditional security ties with the United States. Saudi Arabia imports 80% of its arms from Washington, whilst simultaneously deepening energy partnerships with Beijing.

In April 2025, ADNOC signed three liquefied natural gas contracts with Chinese buyers, including a 500,000-tonne annual purchase from CNOOC. In November, Saudi Arabia signed a Strategic Framework for Cooperation with the US explicitly targeting critical minerals. Both are occurring simultaneously, with no contradiction recognised by either party.

The UAE has taken this logic further. It has diversified defence partnerships beyond the US, signing memoranda of understanding for defence cooperation with South Korea in February 2026 and Pakistan.

Etihad Rail, the 1,200-kilometre high-speed project partly backed by Chinese capital, binds the UAE to Beijing’s Belt and Road infrastructure ecosystem.

Yet the UAE hosts Indian-Pakistan stability talks, channels technology from America, and remains ambiguous about formal bloc commitment. When asked to commit to de-dollarisation at the BRICS summit, the UAE, like Indonesia, distanced itself from the agenda.

Brazil, chairing BRICS in 2025, has been more explicit about its refusal to choose. When Chilean President Gabriel Boric visited Brasília in April and asked about tariffs, President Lula was unambiguous: “We don’t want to trade with the United States or with China. We want to trade with both.”

This is not neutrality; it is active non-alignment. Brazil is simultaneously pursuing agreements with the US on semiconductors and technology whilst deepening BRICS infrastructure partnerships. It is hosting COP30 this November, signalling leadership on climate, an area where both blocs claim priority but neither dominates.

Indonesia’s accession to BRICS as a full member in January 2025 was framed as a strategic gambit for multilateralism and Global South representation. Yet privately, Indonesian diplomats acknowledge the move was also about widening their margin of autonomy in a fragmenting world.

BRICS membership provides access to the New Development Bank’s less-conditional financing, leverage against Western creditors, and a seat at the table where new payment systems are being designed.

But Jakarta explicitly rejected de-dollarisation rhetoric, stating through its foreign ministry that it was “not interested in the issue.” Indonesia wants to access BRICS benefits without inheriting its bloc logic.

Vietnam faces an even sharper dilemma. As a BRICS partner country and participant in the Regional Comprehensive Economic Partnership, a China-dominated trade bloc covering 30% of global GDP, Vietnam simultaneously hosts the largest US military presence in Southeast Asia and deepens technology partnerships through Quad-adjacent initiatives.
Vietnam’s electric vehicle market surged to 22% of new car purchases in 2024, yet sources technology and capital from both China and Western partners.

Like Indonesia, Vietnam is attempting to capture the benefits of both economic systems whilst resisting subordination to either.

Turkey, designated a BRICS partner country in 2025, has long played great powers against one another. It hosts NATO infrastructure whilst deepening energy ties to Russia. It buys defence systems from Russia and America simultaneously.

Turkish President Erdogan has explicitly stated Turkey will not choose between the US and China. This is not sustainable indefinitely, but it remains politically tenable because neither bloc can afford Turkey’s defection without incurring costs greater than Turkey’s compliance.

The price of autonomy
The architects of bifurcation – Washington and Beijing – are becoming impatient with middle powers. Trump’s second administration has made clear that strategic partners must align, particularly on technology and supply chains.

The threat of 100% tariffs on BRICS members contemplating de-dollarisation (announced January 2025) was not idle rhetoric. It was warning. India and Indonesia responded by distancing themselves from de-dollarisation advocacy. Brazil, under pressure, shelved plans for a BRICS currency.

Yet capitulating has costs too. India’s strategic autonomy deteriorated visibly in 2025 as the US scaled back Indo-Pacific commitments.

The Quad lost momentum. American tariffs on Indian steel damaged industrial policy ambitions. China, emboldened by American retreat, increased border pressure.

By December 2025, when Putin visited New Delhi for 27 hours – his first visit since Ukraine escalated – Indian policymakers sent a clear message: If America will not sustain the partnership, Russia and China become default options.

Similarly, Saudi Arabia and UAE have learned that hedging is exhausting. Each seeks a dominant patron for security; each maintains secondary relationships for economic access. But dominance and secondary status cannot coexist indefinitely.

The structural dilemma facing middle powers is this: The global supply chains that sustain their development are bifurcating faster than their diplomatic flexibility can manage. Indian manufacturers need Chinese rare earths and American semiconductors.

Saudi Arabia needs Chinese capital for Vision 2030 infrastructure and American security guarantees against Iran. Brazilian agriculture depends on access to both American markets (grain imports to feed US livestock) and Chinese commodity purchasing. These are not ideological preferences; they are economic facts.

The fracture deepens
What emerges from the experiences of India, Saudi Arabia, Brazil, Indonesia, Vietnam and Turkey is not a third way, but a growing recognition that the bifurcated world will not function.

Parallel economic systems can coexist if they do not touch. But they touch everywhere: In semiconductors required for both military and civilian infrastructure, in rare earths essential for green energy transition, in payment systems that must settle cross-border trade. The logic of bifurcation is that these chokepoints be controlled. The logic of middle powers is that they remain open.

This is the defining tension of 2026. Washington and Beijing are investing in autarky and bloc discipline. Middle powers are defending what they call “strategic autonomy” or “multi-alignment,” which is really a desperate attempt to maintain access to both systems without being forced to choose.

Both strategies are unsustainable. Either bifurcation continues and deepens, forcing countries to genuinely pick sides, or some mechanism for interoperability emerges.

The World Semiconductor Forum’s May 2025 pledge to create a “resilient and transparent global chip supply system” with 40 nations represented suggests the latter is theoretically possible.

But it requires the dominant powers to prefer a functioning global economy to their own bloc dominance – a preference history suggests is unlikely.

The next bifurcation point will not be a headline moment. It will be bureaucratic: New export control regimes, fresh restrictions on technology transfer, deepened sanctions on rare earth processing. Each will be framed as defensive, justified by security concerns. Each will trigger retaliation.

And with each iteration, middle powers will find their room to manoeuvre shrinking.

India’s “multi-alignment with leverage” works only as long as both sides believe India remains valuable to courtship.

Brazil’s “active non-alignment” depends on a functioning space between blocs. By the time that space closes, there are no good options left – only the choice between unwanted futures.

The world is not building two economies by accident. It is the deliberate architecture of great power competition. But the architects have not reckoned with the fact that most of the world does not want to live in either half.