May 24, 2023: The G-7 issued its strongest-ever message to China regarding the weekend, but an analyst warned that stopping Beijing is “unattainable” and “dangerous.”
The world’s largest seven economies are agreeing at a summit in Hiroshima, Japan, to de-risk and diversify specific chains away from China between concerns of economic coercion.
There has been increasing awareness among Western nations that their economies rely heavily on China. The coronavirus pandemic sheds light on the intricacies of critical supply chains, but the continuous war in Ukraine has further exacerbated this reality.
In a joint statement developing the summit, the Group of Seven said: “Our policy approaches are neither designed to harm China nor seek to thwart China’s economic progress and development. At the same time, we realize that economic resilience requires de-risking and diversifying.”
Regarding the G-7 announcement, China totaled the Japanese ambassador and ordered the firm to stop purchasing from American chipmaker Micron.
″Biden spoke in terms of de-risking and not in terms of decoupling. Decoupling was the magic word of the U.S. a month ago. Still, it is evident that, given the role played by the Chinese market for several products, given the level of intertwines among supply chains, it is almost impossible to decouple,” Noci stated.
De-risking refers to easing a few of the dependencies on China rather than breaking the relationship.
“It should be clear which isolates China will be not only, on the one hand, which improves but also dangerous, on the other hand,” Noci said.
The shift from the Biden administration highlights the realization that it would take much effort and economic pain to separate its economy from that of China.
The U.S. Census Bureau showed that the U.S. stated a trade deficit in goods with China of $383 billion in 2022. The data from the previous year showed a record high in trade among the nations and is evidence of the difficulties which separate their economies.
G-7 leaders went further and expressed their concerns regarding the situation regarding the East and South China Seas, which supports a “no change” in the status quo of Taiwan.
“There is no lawful basis for China’s expansive maritime states in the South China Sea, and we oppose China’s militarization activities in the region,” they said.
British Prime Minister Rishi Sunak stated that China was the world’s most significant challenge to security and prosperity. The Chinese Embassy in London described this as “malicious slanders in disregard of the facts,” which stated.