Challenging China through isolation deemed "impossible and perilous," warns analyst, as G-7 takes a tough stance.


U.S. President Joe Biden wants to de-risk from China.

In a move that reverberated around the globe, the G-7 sent a resounding message to China during its recent summit in Hiroshima, Japan. However, amidst the robust measures, one analyst cautioned that attempting to isolate Beijing would be a futile and hazardous endeavor.

The seven largest economies on Earth reached a consensus to de-risk and diversify their supply chains, reducing their reliance on China and safeguarding themselves against economic coercion. Western nations have increasingly recognized their heavy dependence on China, a realization further magnified by the intricate dynamics of critical supply chains that the COVID-19 pandemic and the ongoing Ukraine conflict have underscored.

In a joint statement following the summit, the Group of Seven emphasized, “Our policies are not aimed at harming China, nor do we seek to impede China’s economic progress and development. … However, we acknowledge that economic resilience necessitates de-risking and diversification.”

Responding to the G-7’s announcement, China summoned the Japanese ambassador and mandated companies to halt purchases from American chipmaker Micron.

Giuliano Noci, vice-rector for China at Politecnico di Milano, conveyed on CNBC’s “Squawk Box Europe” that the G-7 exhibited a “unified” standpoint against China.

“President Joe Biden emphasized the concept of de-risking rather than decoupling. Decoupling was the United States’ buzzword until recently, but it is now evident that due to the Chinese market’s significant role in various industries and the complex interdependence within supply chains, decoupling is nearly impossible,” Noci asserted.

De-risking entails reducing dependencies on China rather than severing ties entirely.

Noci emphasized, “It should be abundantly clear that isolating China is not only practically unfeasible but also highly dangerous.”

The Biden administration’s shift in approach reflects the recognition that detaching the U.S. economy from China would require substantial effort and inflict economic pain.

Data from the United States Census Bureau revealed a trade deficit in goods with China of approximately $383 billion in 2022. Last year’s figures reached a record high in bilateral trade, underscoring the formidable challenges involved in disentangling the two economies.

G-7 leaders further expressed concerns over the situation in the East and South China Seas and lent their support for maintaining the status quo in Taiwan.

“We reject China’s expansive maritime claims in the South China Sea, as they lack a legal foundation, and we condemn China’s militarization activities in the region,” the leaders asserted.

In an interview with CNBC, Noci contended, “We are transitioning beyond a unipolar world, where the United States held superpower status, and moving toward a bipolar or multipolar world.”

British Prime Minister Rishi Sunak identified China as the most significant challenge to global security and prosperity. The Chinese Embassy in London rebuked this statement as “baseless accusations that ignore the truth,” according to Reuters.

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