United States President Joe Biden’s plan to unite Washington’s closest allies and take on China just scored a big political win. But it’s going to take a lot more than words to curb the advance of the world’s second largest economy.
The US joined the United Kingdom, Germany, France, Italy and Canada this weekend to deliver the Group of Seven’s strongest condemnation of China in recent decades. The G7 confronted China on just about every sore spot, from allegations of human rights abuses and forced labor in Xinjiang to ongoing political disputes over Hong Kong, Taiwan and the South China Sea. The world’s wealthiest democracies also pushed for a renewed independent investigation into the origins of Covid-19, and promoted a green alternative to China’s Belt and Road, Chinese President Xi Jinping’s expansive plan to boost its trading influence.
The rhetoric, at least, is a step forward for a US president who has been trying to bring his diplomatic partners together to counter what Washington sees as its biggest threat to trade, tech and other issues of strategic importance. Former US President Donald Trump talked tough on China and slapped the country and its prized companies with sanctions. But Trump never really presented a united front with US allies, often burning bridges rather than building them.
The G7’s announcement doesn’t include a ton of concrete steps forward. For example, the group is forming a task force to explore what it called the “Build Back Better World” initiative — a private-sector led plan to “help narrow the $40+ trillion infrastructure need in the developing world” that’s clearly set up as a challenge to Belt and Road. But it has yet to lay out how much the program would cost, which is expected to be funded by US government finance groups, the private sector and the G7 countries.
Similarly, the communique’s calls for China to “respect human rights and fundamental freedoms” in Xinjiang and Hong Kong came with little detail on how to follow through with action, nor did it offer any practical means of safeguarding the stability of the Taiwan Strait and the South China Sea.
China still fired back against the statement, accusing the G7 of deliberately slandering China” and “arbitrarily interfering in China’s internal affairs.” The Chinese Embassy in London called it a “a serious violation of the basic norms of international relations.”
There are a couple of reasons Beijing should be watching its back.
Some Trump-era sanctions were effective at curtailing China’s technological rise — look, for example, at its campaign against Huawei, which watched as its smartphone and 5G businesses were battered by restricting its access to American tech, along with US pressures on Europe and elsewhere to bar the company from extending its reach.
Under Biden, the United States recently expanded a ban on American investment in dozens of Chinese firms. And US lawmakers are advancing a bill that would pour hundreds of billions of dollars into American technology, science and research in yet another challenge to China.
“Irreconcilable differences regarding values and growing frictions with China’s mercantilist and authoritarian model will continue to drive polarization and competition,” said Alex Capri, a research fellow at Hinrich Foundation and a visiting senior fellow at National University of Singapore. He added that “values-driven” frameworks from the West around infrastructure development, trade and supply chain networks are “clearly emerging.”
“Human rights standards around privacy and freedom of speech, fair labor standards and a clean environment will serve to further alienate Beijing,” Capri said.
Such tensions have already played out on a global stage, with many Western companies facing pressure to limit business in China because of concerns about forced labor. In turn, some firms have faced boycotts within China for denouncing the government’s handling of Xinjiang. And just before the G7 summit kicked off, China passed a law to counter foreign sanctions, a symbolic warning that any counter measures taken by the West will be met with strong retaliation.
Even so, it may be tough for the G7 nations to contain China. This weekend, democratic leaders aired serious differences over how best to approach China, as the United States, Britain and Canada urged stronger action against China’s authoritarianism than their allies did.
European countries reluctance to go too hard on China may stem in part from a strong economic reliance: From 2010 to 2019, Germany received €22.7 billion ($27.5 billion) in Chinese foreign direct investment, while Italy received €15.9 billion ($19.2 billion) and France received €14.4 billion ($17.4 billion, according to the Mecrator Institute of China Studies. Even the UK — where relationships with China have been deeply strained over the last couple of years — received €50.3 billion (US$60.9) in such investment. And many of those countries, like Germany, rely on partnerships with China to drive other industries, such as autos, and to provide huge markets for their exports.
“Ultimately, the European Union’s desire for strategic autonomy and Biden’s hunt for allies to primarily counter China will create natural barriers to cooperation,” analysts at Eurasia Group wrote in a note last week ahead of Biden’s trip.