G2 (Group of 2)

Why in news?

The Chinese President Xi Jinping and U.S. President Donald Trump was met in Busan, South Korea, on October 30, framed the talks as “a G2 summit”.

• G2 – Refers to partnership between the United States & China, the world’s two largest economies.
• Aim – To jointly address the global challenges – such as climate change, financial stability and international security.
• Modeled after multilateral groups like the G7 or G20, but focused on bilateral cooperation between the world's two dominant powers.
• 1^st coined – In 2005 by a famous economist, Fred Bergsten.
• The “G-2” concept 1^st emerged during the Obama–Hu Jintao summit in 2009.
• Idea gained power – During the 2008 financial crisis, economists in the U.S. and Europe explored using China’s surplus to offset U.S. deficits and help stabilize the global economy.
• Still evolving concept – The G2 remained a conceptual framework and was never implemented formally.
• Revived – During the Busan summit, 2025, Trump referred to the meeting as a “G2 summit,” signaling a renewed interest in bilateral cooperation.
• Key developments in Busan Summit, 2025
  • Trade de-escalation – Both leaders agreed to ease tensions in the ongoing trade war.
  • The U.S. agreed to reduce tariffs on Chinese imports to 47%, establishing a one-year truce on trade tariffs and export restrictions on rare earth minerals.
  • As a result, India and Brazil now face the highest tariffs at 50%, creating competitive disadvantages in global trade.
  • Diplomatic outreach – U.S. and Chinese defense officials met in Malaysia, reinforcing the spirit of collaboration.
  • Trump described China as “the biggest partner of the United States,” suggesting a shift toward strategic engagement.
  • China’s two controls – The decision to cut soybean purchases&  China produces 70% of the world’s total rare earths.
  • The U.S. share is 11%. (India’s 0.7%).
• Trade war highlights a global shift – The U.S. leads in consumption, while China dominates manufacturing and controls key technologies and resources.

References

1. The Hindu | The rise of the G2
2. The Hindu | Trump-Xi bonhomie