G7 & NATO summits: Disparities on China continue to pull US, EU apart; for now, B3W can’t replace BRI

·13 min read

Joe Biden's visit of Europe on his first overseas trip as US president culminated in G7 summit, NATO ministerial and a one-on-one with Russian president Vladimir Putin in Geneva. Leaving the last assignment aside which has its own dynamic, the first two gave us a glimpse of the unfolding power politics between the US and China and the onset of great power competition with unmistakable Cold War overtones.

The biggest argument against calling the unfolding conflict 'Cold War 2.0' is the assertion that, unlike the USSR, China is a lynchpin of the world economy and dominates global supply chains in a way that it is impossible to firewall those linkages. China's domination of these critical arteries has also proved immune to global shocks. The summitry between the US, Europe and world's most wealthy nations shows that the US is keen to challenge this notion and test the resilience of the argument.

It is also evident that creation of power blocs remains central to American foreign policy doctrine when faced with strong strategic challenge from a peer competitor. The Biden administration €" that has sought to take allies and partners along to bring collective pressure on China in a bid to advance American interests €" has framed this rivalry as an ideological and existential struggle between democracies and autocracies and made it a focal point of its foreign policy.

For instance, just before heading off to Cornwall on the southwest coast of England for the G7 summit, Biden explained his agenda in an op-ed for The Washington Post: "Will the democratic alliances and institutions that shaped so much of the last century prove their capacity against modern-day threats and adversaries? I believe the answer is yes. And this week in Europe, we have the chance to prove it."

This presents a problem because many European nations €" including its leading economies €" have their own reasons for not wanting to antagonise China. French president Emmanuel Macron considers joining an anti-China bloc an erosion of strategic autonomy. German chancellor Angela Merkel, who was instrumental behind the EU-China Comprehensive Agreement on Investment (CAI) deal, prefers selling more Volkswagens, Daimlers and BMWs to China than calling out Chinese Communist Party's lies, territorial aggrandizements and violations of human rights.

These disparities continue to pull the trans-Atlantic partnership in different directions. Going into the G7 and NATO summits, Biden had to tread carefully. The summit communiques, media conferences and background briefings indicate that the US president has been successful in rallying allies to take a more adversarial position on China.

On measuring up to the China challenge in terms of concrete outcomes and showcasing demonstrable benefits of democracy to developing and swing nations, the answer is less clear. Be it a viable vaccine plan to inoculate the world, tackling China's distortive economic manoeuvres or presenting an alternative to Chinese loans, investments and infrastructure, the G7 summit offered more hype than substance.

Even so, Biden has managed to push the needle in arriving at a consensus with a reluctant Europe over China's malevolent rise. That is not a mean feat. The final G7 communique settles on the sharpest collective rebuke of China since 1989 when Chinese authorities cracked down on students and demonstrators at Tiananmen Square. China is mentioned by name albeit only four times but there are numerous indirect references in the 25-page document criticising its actions and policies. Alternate plans have been mooted to wean states away from China's influence.

Wall Street Journal called it the "most comprehensively critical of China since the summits began in 1975". One useful metric of comparison is the 2019 G7 Leaders' Declaration in Biarritz, France €" the last in-person meeting between the leaders €" that had failed to mention China by name.

This time, on contentious issues such as Xinjiang, Hong Kong, Taiwan, Covid-19 and East and South China Seas, the G7 communique ticks all the boxes and manages to sound tough, signalling common ground between Europe and the US despite policy differences. On the pandemic and China's role in obstructing and snuffing out a transparent investigation into the origins of Covid-19, the G7 statement calls for "a timely, transparent, expert-led, and science-based WHO-convened Phase 2 COVID-19 Origins study including, as recommended by the experts' report, in China."

The communique also refers to China's repressive policies in the restive Xinjiang region where the ruling CCP has imprisoned more than one million Uyghur Muslims of Turkic origin in "reeducation camps" and subjected the rest of the ethnic population to "intense surveillance, religious restrictions, forced labor, and forced sterilizations."

Clause 49 of the G7 statement also hits out at China's policies in Hong Kong where the CCP has cracked down on the freedom and rights of residents and promulgated a draconian national security law to nullify the 'one country, two systems' framework and bring the region under tighter mainland control.

"In the context of our respective responsibilities in the multilateral system, we will cooperate where it is in our mutual interest on shared global challenges, in particular addressing climate change and biodiversity loss in the context of COP26 and other multilateral discussions. At the same time and in so doing, we will promote our values, including by calling on China to respect human rights and fundamental freedoms, especially in relation to Xinjiang and those rights, freedoms and high degree of autonomy for Hong Kong enshrined in the Sino-British Joint Declaration and the Basic Law."

On Indo-Pacific and Taiwan, the G7 statement mirrors US position. "We reiterate the importance of maintaining a free and open Indo Pacific, which is inclusive and based on the rule of law. We underscore the importance of peace and stability across the Taiwan Strait, and encourage the peaceful resolution of cross-Strait issues. We remain seriously concerned about the situation in the East and South China Seas and strongly oppose any unilateral attempts to change the status quo and increase tensions."

Shortly before the release of the G7 communique, the White House had released a 'fact sheet' on Sunday (June 13), stating that the "United States and our G7 partners remain deeply concerned by the use of all forms of forced labor in global supply chains, including state-sponsored forced labor of vulnerable groups and minorities and supply chains of the agricultural, solar, and garment sectors€"the main supply chains of concern in Xinjiang."

This rhetorical alignment on China in the final statement was achieved reportedly after an intensive back and forth between the US and its allies. Canada wanted to insert the names of two of its citizens held hostage by Beijing in retaliation for Ottawa's detention of Huawei executive Meng Wanzhou, there was dissonance on mentioning China's use of forced Uyghur labour in Xinjiang. According to Politico, that quoted US officials involved in the negotiation, "France (was) broadly supportive of singling out China over its forced labor practices, but EU, German and Italian diplomats were more hesitant."

The New York Times reported on similar lines, citing US officials who said that "Germany, Italy and the European Union were clearly concerned about risking their huge trade and investment deals with Beijing or accelerating what has increasingly taken on the tones of a new Cold War."

It is not surprising to note, therefore, that the communique's section on "forced labour", Clause 29, failed to mention the name of any specific country even though the reference leaves little room for doubt.

"We are concerned by the use of all forms of forced labour in global supply chains, including state-sponsored forced labour of vulnerable groups and minorities, including in the agricultural, solar, and garment sectors€¦ We therefore task G7 Trade Ministers to identify areas for strengthened cooperation and collective efforts towards eradicating the use of all forms of forced labour in global supply chains, ahead of the G7 Trade Ministers' meeting in October 2021."

"Identifying areas" for "collective efforts towards eradicating the use of all forms of forced labour" sounds remarkably lame and a bureaucratic excuse for inaction from some of the world's most powerful and wealthy nations. As if the areas are yet to be identified. Also worth noting that for all the political positioning, there was no consensus on banning companies belonging to the G7 grouping from benefitting from forced labour.

The Australian Strategic Policy Institute (ASPI), a think tank, published a report in March 2020 identifying 82 global brands whose supply chains in China were running factories that employed Uyghur Muslims in conditions that indicates "forced labour". In its report, ASPI said, "Under conditions that strongly suggest forced labour, Uighurs are working in factories that are in the supply chains of at least 82 well-known global brands in the technology, clothing and automotive sectors, including Apple, BMW, Gap, Huawei, Nike, Samsung, Sony and Volkswagen."

The prevarication and failure to take concrete action on this vexatious issue indicate a gap between G7's rhetoric and outcome. Referring to Xinjiang, Hong Kong, Taiwan, or calling for a fuller probe into the pandemic's origins is a start but strong words in communiques won't be enough in shaping the behaviour of China. On the more consequential issues, such as China's manipulative economic policies, once again the statement appears ambiguous and weak, not clear and outcome-oriented.

"With regard to China, and competition in the global economy, we will continue to consult on collective approaches to challenging non-market policies and practices which undermine the fair and transparent operation of the global economy."

These half-hearted lines are immediately followed by pledge to "cooperate" with China "where it is in our mutual interest on shared global challenges, in particular addressing climate change and biodiversity loss in the context of COP26 and other multilateral discussions." The European dilemma is evident.

Scratching the rhetorical alignment that G7 nations managed to hammer out €" that has been called a "diplomatic win for Biden" €" reveals a squeamish underbelly.

On other crucial metrics such as building of resilient supply chains that reduces the dominance of China €" on which the Biden administration has announced a swath of actions to take on Chinese state-sponsored capitalism €" the language of the communique appears suitably fuzzy, committing only to "consider mechanisms and share best practices to address risks to the resilience of the critical global supply chains, in areas such as critical minerals and semiconductors."

Similarly, the G7 nations failed to arrive at a consensus on a timeline to end the use of coal, settling instead on an open-ended promise to reduce the usage of the fossil fuel. This obviously makes it difficult for them to target China, a major emitter, on this issue. New York Times quoted Jennifer Morgan, executive director of Greenpeace International, as saying, "it's very disappointing€¦ This was a moment when the G7 could have shown historic leadership, and instead, they left a massive void."

Post the G7 meeting and before heading to Brussels for the NATO ministerial, Biden told reporters at the airport on 13 June that he had just wrapped up an "extraordinary, collaborative, and productive meeting at the G7. Everyone at the table understood and understands both the seriousness and the challenges that we're up against, and the responsibility of our proud democracies to step up and deliver for the rest of the world."

The US president could have gone a little easy on the adjectives. In Brussels, America's European allies €" the "proud democracies" that Biden was speaking of €" issued a strong statement against China in the Brussels Summit Communique but then revealed the deep divisions within the EU on China policy.

French president Macron, who had said at the end of G7 meeting on Sunday (June 13) that the "group is not hostile towards China", a day later after the release of NATO communique told reporters that "NATO is an organization that concerns the North Atlantic, China has little to do with the North Atlantic," stressing that "it's very important that we don't scatter ourselves and that we don't bias our relationship with China."

Macron's German counterpart Angela Merkel called Russia the biggest threat and "above all, a major challenge", and strived to strike a balance by saying "the economic and also the military rise of China is, of course, an issue" but simultaneously warned against "overestimating" China's importance.

The multiplicity of approaches towards China €" there seems to be a French China policy, a British policy that differs from a German strategy and so on €" all revolve around the need for the EU to strike the 'right balance' between cooperation, competition and free trade. EU powers would like to stress on values and principles but not at the cost of angering CCP and hampering car sales. This inconsistency and mismatching of priorities make it difficult for these groupings to arrive at a consequential China policy that can shape Beijing's behaviour instead of just providing a harmless rap on the knuckles.

Some experts, such as Maximilian Terhale of King's College, London, see a potential breach here in trans-Atlantic partnership. Politico quotes him as saying, "the absolute crux in all of this is China €" how do the European allies position themselves vis-à -vis China in light of America's absolutely clear determination to see China as the biggest strategic challenger or threat?... As long as these perceptions of China do not converge, NATO will have a big problem."

Finally, the cornerstone of G7's proposed alternative to China's grand Belt and Road Initiative, cornily named Build Back Better World (B3W), has grand plans of countering China's multi-trillion-dollar infrastructure program by providing a "transparent infrastructure partnership to help narrow the $40 trillion needed by developing nations by 2035" but the initiative is as impressive on paper as it is vague on specifics.

The B3W is ambitious, but lacks a well-defined structure, has no clarity on logistics or financing beyond saying that it will mobilise "private sector capital", which is odd given its scale and it is not clear why low and middle-income countries will rely on an ill-defined patchwork of programs by America and its allies instead of a single, efficient source of funding and execution.

A recent study by Council on Foreign Relations on China's BRI, authored by China experts and US officials, points out that many countries that are signatories to the BRI find it useful that China is ready to "build what host countries want rather than telling them what they should do, and the ease of dealing with a single group of builders, financiers and government officials."

The pushback against China will need more than just ambition and unified statements. The US and its democratic allies must come with a plan that is high on specifics, low on hype, and focused on outcomes and then seek to leverage the openness and transparency of democracies in providing a positive alternative. On evidence, the G7 and NATO summits fail on those metrics.

Also See: Joe Biden to set off on first official overseas visit as president tomorrow; G7, NATO meetings on agenda

China accuses G7 of 'political manipulation' following criticism over record in Xinjiang, Hong Kong

G7 summit 2021: Check out when and where it will be held, list of leaders in attendance

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