The pressure is growing: G7 is struggling to deal with China

The pressure is growing
G7 grapples with dealing with China

05/19/2023, 4:00 p.m

Without jeopardizing the relationship, the G7 countries are looking for a harder line on dealing with China at their summit in Hiroshima. But they don’t really agree on what this line should look like. China is already feeling the headwind and countered right from the start.

Diplomats insist that it will not be an anti-China summit. But criticism of China is omnipresent at the G7 summit of democratic economic powers in Japan. “Our policy towards China must change because China has changed,” said EU Commission President Ursula von der Leyen in the round of heads of state and government in Hiroshima, after the visit to Itsukushima Shrine and the “family photo”. about dealing with the leadership in Beijing.

“China has become more repressive at home and more outspoken abroad, especially in its neighborhood.” The relationship between the US and China is worse than ever. The Europeans are at odds with the emerging great power. In Germany, there is a fear of dependence on the second largest economy. The Europeans do not always agree with each other or with the Americans about the right pace.

In Hiroshima, China is more in focus than ever before at a G7 summit. The Europeans and the US are particularly offended by the “unlimited friendship” that China has with Russian President Vladimir Putin. To date, Beijing has not even condemned the war of aggression in Ukraine. In its rivalry with the USA, China is making a front with Russia against the West and wants to build a new world order.

Its aggressive stance on the global stage, threats against Taiwan, claims in the East and South China Seas, and economic muscle flexing make China appear less and less as a partner or competitor and more as a rival.

USA and China cannot live without each other

China feels the headwind of the G7, counters right at the start. It dismisses the group as a “small clique” – puppets steered by the US into a confrontation with China. The United States is using “various rogue means” such as sanctions, economic blockades, military threats and political isolation, it says in a tit-for-tat response to plans by the G7 to denounce China’s “coercive economic measures”. “Western countries, led by the United States, are pursuing comprehensive containment, encirclement and suppression of China,” state and party leader Xi Jinping is firmly convinced. That’s why he’s banking on China’s independence – like the Europeans and Americans when they discuss “risk reduction” or “diversification” or even “decoupling”.

In his foreign policy, US President Joe Biden is taking a hard line against China, which is seen as the biggest competitor and greatest geopolitical challenge. The US is spending a lot of energy building alliances with key players in Asia to counter China’s thirst for power. Like the Europeans, they always try to emphasize that this is not about an “anti-China alliance” and that nobody has to decide between them and China.

Biden left the punitive tariffs against China in force, which his predecessor Donald Trump, who he otherwise hated, had introduced. He also promotes his “America First” policy, just calls it something else. The Democrat initiated large-scale investments in the United States to make America’s supply chains more independent – above all from China. This applies in particular to critical technological areas such as semiconductors. “We will ensure that the supply chain for America begins in America,” Biden said. Biden even saddled Trump’s course: the USA imposed export restrictions to deny China access to US technologies. He is currently considering regulating private-sector investments from the USA abroad – at least for sensitive technologies. That too would be aimed at China.

The dilemma in all of this: the two largest economies cannot do without each other. China is one of the three largest trading partners for the United States, right after its direct neighbors Canada and Mexico. Biden’s line is therefore: America does not want a conflict with China, but rather tough competition – and cooperation wherever possible and necessary. But there is a lack of trust. There is too little talk to each other. Experts warn of misunderstandings between the two armed forces. Never before has there been so much talk about the threat of a war over Taiwan, as Biden wants to use US troops to help the island’s democratic republic in the event of a Chinese attack. “Whoever plays with fire will get burned,” warns China.

Europeans agree that they are far too dependent on China

When the G7 states warn against “unilateral attempts to change the status quo,” they mean not just Russia in Ukraine, but also China and its claim to power in Taiwan and the East and South China Seas. When they condemn “non-market-conforming practices”, they also turn against China. Nevertheless, dealing with China should somehow be cooperative: According to von der Leyen, decoupling from China is neither feasible nor in Europe’s interests. “Therefore, we should keep the lines of communication open and work with China on areas such as climate change, pandemic preparedness, financial stability and nuclear proliferation.” But weaknesses in economic relations should be reduced.

Even if the G7 group demonstrates unity, there are differences. Even within the federal government, the triad of China as partner, competitor, system rival is intoned differently. Foreign Minister Annalena Baerbock is tougher on China, Chancellor Olaf Scholz more reserved. Division of labor according to the “good guy, bad guy” method? Or fundamentally different approaches? The answer might lie somewhere in between. Both are aware of China’s economic importance and now want to broaden relations with Asia in order to reduce dependency. “No decoupling, but smart derisking,” said Scholz.

Europeans agree that they are far too dependent on China – and that Beijing often violates European values ​​in an unacceptable manner. There is no common answer to this yet. Dependencies on China vary – and by who would suffer more from retaliation. The People’s Republic is Germany’s most important trading partner.

But where does Europe see itself between China and the USA? French President Emmanuel Macron warned that EU states could become “vassals” without strategic autonomy. He would like Europe to confidently seek the role of a third superpower between the US and China. The chancellor sees it differently: “Anyone who nostalgically indulges in the dream of a European superpower, who indulges in fantasies of a national superpower, is stuck in the past.”