by Patrick Fearon-Hernandez, CFA | PDF
For the last two years, we’ve written a great deal about the evolving China-led geopolitical bloc and Beijing’s allies within it, including top partner Russia and other like-minded nations such as North Korea, Iran, Cuba, and Venezuela. We believe the geopolitical challenge to the United States and its allies from the China/Russia bloc will change the world’s political, military, economic, technological, social, and cultural landscapes for decades to come, with huge implications for investors.
Of course, Beijing doesn’t have total control over its bloc. We suspect Chinese leaders were discomfited when Russia launched its poorly conceived invasion of Ukraine in February 2022. By late 2023, however, the Russian military had improved its performance and stabilized its control over almost 20% of Ukrainian territory in the country’s east and south. At the same time, many politicians and voters in the U.S. and Europe had begun to resist providing more military aid to Ukraine. In this report, we examine the longer-term geopolitical, economic, and investment implications if U.S. and allied aid to Ukraine ends for good, with a focus on the implications for the top members of the China/Russia bloc and the U.S. bloc.