THE G7 GROUP looks increasingly like what it is: the United States allies among the world’s largest economies.
Its 1,600-word statement at its Hiroshima summit on ‘economic coercion’, addressed to all countries but clearly directed at China, hitches the EU’s ‘derisking’ approach to economic relations with Beijing to Washington’s ‘decoupling’.
The commonalities are diversification of supply chains, especially for critical minerals and semiconductors, protection of trade and technology, including more robust cyber defences against hacking and IP theft and more stringent export controls to keep technology out of the hands of China’s military and intelligence services, and a tougher diplomatic stance towards China overall.
Beijing has responded sharply but in a pro-forma way. It accused the G7 of interference in its internal affairs over Taiwan, Hong Kong, Xinjiang and Tibet, called for the United States to stop what it says is bullying to coerce allies to disrupt the stability of global supply chains and urged the G7 to abandon its ‘Cold War mentality’.
The G7’s statement on economic coercion is a rebuff to Beijing’s efforts to divide Europe internally and with the United States on China policy, using the sticks and carrots of China’s economic power.
Yet not an unexpected one in Beijing. Its response is directed less at Europe and more at the Global South, of which China presents itself as the champion of an anti-West coalition rejecting the historic exploitative hegemony of the past.
The G7 is also competing for the hearts and minds of the Global South, some of whose members are not enthusiastic about a straight swap of Chinese hegemony for US hegemony. It has launched a ‘coordination platform’ to counter coercion and work with emerging economies. Details are vague, but G7 members will likely seek to increase their trade and aid with sympathetic Global South economies.
Japan will likely play a pivotal role in the Asia-Pacific in this regard. However, China has a massive head start there and in another key region of competition, Africa. It is difficult to see the G7 closing the gap significantly.