Last Saturday, leaders of the G-7 nations meeting in Hiroshima issued a 40-page communique addressing, most importantly, their relations with China.
The communique was touted as demonstrating G-7 unity and strength against Beijing’s economic warfare, but the China language instead reflects disarray and incoherence.
Embarrassingly weak, for example, is the Taiwan passage.
It is essentially unchanged from recent G-7 statements, ignoring China’s rapidly rising menace during the same period. Similarly, the G-7 urged China to speak directly to Ukraine, but referred only to a peace “based on territorial integrity,” not on the full restoration of Ukraine’s sovereignty as well as its territorial integrity — a restoration all NATO members profess to support.
By resorting to bromides regarding both Taiwan and Ukraine, the leaders of the global West do precisely the opposite of what they intend: They reveal weakness rather than unity and strength.
An Empty Slogan
The communique is weakest and least coherent on the G-7’s economic relationship with China, the very front where current Chinese efforts at regional and global hegemony are playing out. Instead of forthrightly confronting Beijing’s economic aggression, the Hiroshima document relies on a slogan, a sure signal of inadequate strategic substance. The communique adopts the mantra first unfurled by the European Union and quickly adopted by the Biden White House.
The slogan holds that the G-7 nations favor “derisking, not decoupling” their economies from China. This is a bumper sticker in search of a meaning, masking both the European Union’s flat unwillingness to acknowledge the Chinese threat, and significant policy disagreements and inadequacies within the G-7. It reflects not so much a failure of leadership in bringing along the lagging Europeans, but a collapse of U.S. resolve at the very outset.
The G-7 communique is quick to say, “we are not decoupling or turning inwards.” In fact, the concept of “decoupling” was always a straw man, an exaggeration implying near-cessation of business between China and the West. Deployed in America by those who overprize economic relations with Beijing — placing their importance above American national security — the term aimed to panic businesses and policymakers who were beginning to awaken to the re-emergence of significant international political risk. This “project fear” meaning of decoupling was never accurate.
Nor was “decoupling” ever seriously suggested in the sense of a government-mandated, latter-day industrial policy. Such an approach was no more likely to succeed than other industrial policies, which all rest on the assumption that politicians and government bureaucrats are better at making economic choices than markets. Existing levels of trade and investment between the global West and China are, for well or ill, too complex to believe that top-down government decision-making would lead to anything other than confusion and disorder.
Where government-directed decoupling is necessary, and should be expedited, is where it can eliminate dependency on goods and services that significantly impact U.S. national security. Both the Trump and Biden administrations have imposed significant sanctions on China in the high-tech field.
Chinese President Xi Jinping.
Europe trails far behind. France and Germany still see China almost exclusively through an economic prism, as repeatedly confirmed by statements from German Chancellor Olaf Scholz and French President Emmanuel Macron.
Even the United Kingdom is torn, with significant debate between the hawkish Conservative parliamentary party and a China-friendly Ten Downing Street.
China Decouples
The hollowness of the “derisking, not decoupling” mantra is most evident at the level of individual firms, which have no practical way to derisk without decoupling. They must either reduce capital investment, or at least not increase it; withhold intellectual property (at risk from decades of Chinese piracy); reduce supply-chain reliance; find other markets; or take other defensive measures, depending on the circumstances of the particular firm. Many companies are already deeply engaged in reducing or hedging their risks, but others are not. These latter may ultimately pay the greatest economic price for their lack of diligence.
In due time, the sum of national-security prudence and businesses’ political-risk decisions will determine the extent of decoupling, not the G-7’s false dichotomy.
Tellingly, China is already far along in decoupling from the West, preparing for future military conflict by reducing its dependence. In what should have been required reading for G-7 leaders at Hiroshima, Ross Babbage’s The Next Major War demonstrates what Beijing was doing while we slept. Babbage explains four decades of China’s policy of so-called dual circulation, or “two markets, two resources.” Beijing’s “domestic market [was] a resource to protect and insulate, while foreign markets were to be penetrated and exploited.” He quotes McKinsey’s conclusion that “‘China has been reducing its exposure to the world, while the world’s exposure to China has risen.’”
Chinese President Xi Jinping with the first lady during the Moscow Victory Day Parade on 9 May 2015.
Poor Signals From the G-7
However, China was far from successful in insulating itself. Its dependence on massive energy imports and other raw materials remains a critical weakness — one very difficult for China to correct in the foreseeable future, given its lack of domestic mineral and hydrocarbon resources.
The global West is only belatedly grasping the extent of China’s theft of intellectual property, massive protectionism, and governmental subsidies. As the gauzy era of globalization dissipates, political risk has re-emerged as a central factor in international business, especially with China. Political risk is not and never was confined to the world’s economic fringes. Under Deng Xiaoping’s policy of “hide your capabilities and bide your time,” Beijing convinced too many Western politicians and businesses of the fantasy that China was little more than a pure economic play. This holiday from history is over, and China’s misdeeds and threats, politically, economically, and militarily, are increasingly evident.
G-7 meetings come and go, and their leaders’ statements fade quickly. The impression that will not fade after the Hiroshima summit, certainly not from the minds of policymakers in Beijing, is that the great industrial democracies are still divided and unsure about how to oppose China’s economic warfare against them. The global West’s disarray only encourages Xi Jinping’s belligerent tendencies.
Ambassador John R. Bolton served as national security adviser under President Donald J. Trump. He is the author of “The Room Where It Happened: A White House Memoir.” You can follow him on Twitter: @AmbJohnBolton.
James
May 24, 2023 at 6:51 pm
“Nero Fiddled as Rome burned”
Is perhaps the best description of likes of John Bolton!
Not only these so called “experts” have proven to be wrong time and again when it comes to foreign policy, but their warmongering has without a doubt made the world a worse place.
Torn apart middle east and Libya with the side effect of astronomical increase in the middle eastern and African refuge flow into Europe is just one of their brilliant achievements!
We live at a time when American cities are literally falling apart in front of our eyes. Be it the relentless homeless takeover of our cities or the never ending flow of migrants From the third world.
And yet likes of John Bolton, in their characteristically out of touch manner, cannot stop obsessing over events literally half way around the world in Taiwan, Ukraine or Iran!
What a civilizational disaster John Bolton has been.
Commentar
May 24, 2023 at 7:53 pm
G7 is a gathering of fascist nations not unlike the infamous Tripartite Pact of the tumultous 20th century.
Starting with 3 founding members the Tripartite Pact later added many more. Same as G7.
The G7 has failed to solve problems. See places like haiti and numerous latin american nations where jails and prisons are packed to overflowing where riots and clashes are common.
Instead the G7 has added more problems. Like ukraine and taiwan. And galloping inflation and runaway interest rates. And ballooning arms purchases and a increasingly militarized world.
China led by xi jinping has adopted a copycat-of-USA globalized approach in its dealings with other nations and G7 replies with a devious war-as-the-ultimate-solution answer to china’s globalista policy.
In the end, the G7 and china will fight it out on the globalized stage, with predictably disastrous results for humankind and the global environment or climate.
G7 is a grouping of fascist countries and thus provides zero solution to current world problems, only contributes stunning singular ability to exacerbate them.
To counter the G7, other free nations not belonging to similar fascista-class alliances need to immediately strengthen their economic military clout and develop their space industry and start developing & deploying fleets of spaceplanes and spacebombers.
len
May 24, 2023 at 8:21 pm
By our own designs starting with President Nixon.
The various US administrations have emboldened
China through the American corporate quest for profit,
and our government’s assistance to provide.
Outsourcing our industrial superiority never was such a good idea
from a national security standpoint. It only took 50 years to figure that out. Who has been driving the train for all these years? The corporations are the likely answer.
We certainly have the best government money can buy.
Not concerned to let a snake or in this case
a Red Dragon into our house, I say that literally.
Should we go to war with China to regain our empire,
with a ‘How I Learned to Stop Worrying and Love the Bomb’ mentality? That is a big stick no one can afford to wield. Otherwise China is highly favored by metrics and home field advantage.
We speak about Chinese efforts at regional and global dominance
playing out. The Chinese have learned well from our examples of
both industrialization and military hegemony.
China quickly learned how to play the Western fiddle.
‘Both the Trump and Biden administrations have imposed significant sanctions on China in the high-tech field’. We might as well have called Xi Jinping nasty names in Yiddish for all the good that sanctions have done. ‘The G-7 nations favor “derisking, not decoupling” their economies from China’.
This goes back to the corporate entrenchment in government and our built up dependance on Chinese goods. Maybe better said by derisk now, decouple later.
Although China may be decoupling both the US and EU before we are ready, growing its BRICS alliances, utilization of Russian energy and dedollarization.
The foreign policy failures have been numerous over the past decades. Interventionist policy has only exacerbated the situation. As testimony by 911 and our ‘victories’ in the Middle East wars and elsewhere.
The US needs a new 21st century game plan. One of non interventionist foreign policy, peace and prosperity. Guided by the principles of the Constitution that the framers had intended for our Republic. I am not sure we will have fifty more years to figure that out.
TG
May 24, 2023 at 11:20 pm
If I am not mistaken, John Bolton was part of the establishment that Screamed and howled that we had to subsidize (yes, SUBSIDIZE) the export of our industrial base to communist China, because ‘free trade’ (never mind that from 1776 to about 1970 the US was a strongly protectionist state).
The US elites thought that China would be a nice docile low-labor-cost colony, but the Chinese had other ideas. I recall so many op-eds that we HAVE to lower trade barriers to other countries even if they have barriers against us – ‘why throw rocks in your harbor just because other countries have thrown rocks in theirs?’ Utter rubbish.
Now the US elites are having second thoughts, and suddenly ‘protectionism’ is all the rage.
Oceania has always been at war with Eastasia.
If John Bolton cannot demonstrate past opposition to MFN to China (I’ve looked but can’t find anything), he is a lying whore and a traitor to this republic and why should anyone listen to anything he has to say?
Jacksonian Libertarian
May 24, 2023 at 11:32 pm
Actions speak louder than words. So what if leadership is vague, and deceptive. Foreign businesses are fleeing China as the risk of supply disruptions, boycotts, and wartime strategic blockades, become apparent.
The blowback from China’s bioweapon attack on mankind (given all the evidence, only idiots give them the benefit of the doubt) eliminates 1st world input into China’s economy for the foreseeable future (back to the water buffalo level economy before Nixon). Mankind hates them, and the “Made in China” label is a death blow to sales as many boycott China.
Global businesses are desperately building alternative supply chains, with brand new state of the art factories, in safe areas with abundant infrastructure. The stupid money businesses like Apple that didn’t leave with the capital flight of smart money, will suffer huge dislocation costs, and a permanent loss of market share.
dave
May 25, 2023 at 2:50 am
Did you never want to start a war anywhere. Your a moron!
John
May 25, 2023 at 4:20 am
Ok but as a Mitt Romney Republican I have to say the GOP is doing more damage to our military than China ever could by ruling out tax increases to close the budget deficit and allow for an increase of our borrowing limit. This is a GOP manufactured crisis.
The GOP should have allowed an increase in the borrowing limit and then presented its own budget. It is entitlement spending which is driving the deficit. Negotiating drug prices for medicare can save 300 billion a year.
Eliminating the carried interest loophole is not unreasonable.
Raising the medicare tax to cover the yearly trillion dollar Medicare expense is reasonably.
Instead our default will cripple our hypersonic missile and nuclear programs and will add billions to the deficit through interest rate increases and a selfinduced recession. Home prices will collapse and commercial estate will collapse as well followed by a bank collapse. Who needs left wing wokster enemies if the Freedom tea party hobbit caucus is your friend?
Foodude
May 25, 2023 at 6:30 am
I’d be more interested in hearing what Michael Bolton has to say.
Neil Ross
May 25, 2023 at 6:49 am
Why should China be feared if it chooses to pursue the same path to global hegemony that the United States chose 100 years ago?
Walker
May 25, 2023 at 6:51 am
I agree with Bolton, but I think he has more important messages to convey right now about the dangers of another Trump administration and how that is a danger to world politics in both Asia and Europe.
It is partially his responsibility now since he did deal directly with Trump and knows the dangers right away. And we can be sure that Trump won’t be putting any grown men in the room this next time.
TheDon
May 25, 2023 at 7:55 am
Johns an idiot.
Never has any other strategy except war.
China depends on trade with us and eu. In addition their demographics dont look so good.
How about distributing some production to other countries.
Our gov allowed sales of delco battery,ge appliances, magnaquench, buicks 99% chinese built, the list goes on making them a production powerhouse.
The chinese study hard and graduate many phds.
Yet
Tie economys and respect go a long way.
Reducing chinese content or multisourcing allows easy sanctions.
Anyway our short sided gov never addresses the real drain of manufacturing and assumes paying for everyone to go to college (party) will work.
Instead of china, how about bringing back nafta? Encourage production in other countries.
India viet nam brazil columbia mexico canada…
Funny hondas are built in indiana, subarus ind, bmw north carolina, but gm cant figure it out.
Anyway
Bolton is an idiot.
Sold Trump out on bs ukraine charge.
Loser, retire.
len
May 25, 2023 at 9:12 am
By our own designs starting with President Nixon.
The various US administrations have emboldened
China through the American corporate quest for profit,
and our government’s assistance to provide.
Outsourcing our industrial superiority never was such a good idea from a national security standpoint. It only took 50 years to figure that out. Who has been driving the train for all these years? The corporations are the likely answer.
We certainly have the best government money can buy.
Not concerned to let a snake or in this case
a Red Dragon into our house, I say that literally.
Should we go to war with China to regain our empire,
with a ‘How I Learned to Stop Worrying and Love the Bomb’ mentality? That is a big stick no one can afford to wield. Otherwise China is highly favored
By metrics and home field advantage.
We speak about Chinese efforts at regional and global dominance
playing out. The Chinese have learned well. from our examples of
both industrialization and military hegemony.
China quickly learned to play the Western fiddle.
‘Both the Trump and Biden administrations have imposed significant
sanctions on China in the high-tech field’. We might as well have called Xi Jinping nasty names in Yiddish for all the good that sanctions have done. ‘The G-7 nations favor “derisking, not decoupling” their economies from China’.
This goes back to the corporate entrenchment in government and our built up dependance on Chinese goods. Maybe better said by derisk now, decouple later. Although China may be decoupling both the US and EU before we are ready, growing its BRICS alliances, utilization of Russian energy and dedollarization.
The foreign policy failures have been numerous over the past decades.Interventionist policy has only exacerbated the situation. As testimony by 911 and our ‘victories’ in the Middle East wars and elsewhere.
The US needs a new 21st century game plan. One of non interventionist foreign policy, peace and prosperity. Guided by the principles of the Constitution that the framers had intended for our Republic. I am not sure we will have fifty more years to figure that out.
Sir Winston the Nazi Slayer
May 25, 2023 at 10:59 am
Maybe China should invade Iraq under false or mistaken pretenses.
That might help the world appreciate how serious the China threat is.
Jim
May 25, 2023 at 11:55 am
The penetration & infiltration of the Chinese government is real… and the undue influence China has gained.
American policy makers have to focus on this undue influence… but there’s a problem… elected officials in Washington (Congressman & Senators) seemingly are also subject to Chinese undue influence.
One way this is expressed: having their right hand reaching behind their back and taking Chinese connected money and with their left hand reaching forward and rattling the saber regarding Taiwan… it’s the shiny object to distract from questionable monies by looking tough on China by suggesting independence.
Makes them look strong & tough and, hey, a saber rattler wouldn’t be taking money from China would they? See Nancy Pelosi.
Notice the “Taiwan Question” wasn’t an issue during Trump’s term… the U. S. was negotiating a trade agreement with China… it wouldn’t have helped the negotiations… those negotiations mostly fell through at the end except a so-called “skinny” trade deal.
Taiwan is a simple issue… recognize Taiwan as part of China… what the official policy of the United State is to this very day… starting @ the 1943 Cairo Conference during WWII, 80 years, and it has never been reneged or abandoned once since then, even during the Korean War & Vietnam Wars.
We don’t want coercion of Taiwan, but peeling off Taiwan from China in a U. S. sponsored & defended formal independence will bring an existential war… that’s how the Chinese feel about Taiwan.
Is that what you want: a regional war against China that would soon widen into full on war against China.
There is no Vital National Security Interest for the United States in precipitate War against China over Taiwan.
War against China over Taiwan is like the Titanic heading straight for the Iceberg… we can avoid it, but not if policy leaders simply want to ram it and hope the Iceberg shatters… not going to happen.
Actually, the South China Sea where the U. S. can confront China and have ready made allies.
China has claimed by Right of Conquest and erecting military airstrips on built up coral atolls within other countries Exclusive Economic Zones of 200 miles off shore of their countries… China is way beyond 200 miles claiming almost the entire South China Sea, its seafloor, fishing rights, and control of shipping lanes in the event of war.
The International Court at the Hague has already found China in violation of International Law.
This is where the U. S. should enforce judgement.
Focus on the strongest issues for the U. S., not issues which are a recipe for war… which we might not win or win in a pyric victory… with World War III dead ahead.
Mr. Mike
May 25, 2023 at 11:55 am
Sure signs of lack of credibility are comments like, “corporate quest for profit” and “Mitt Romney Republican”. John Bolton should take up singing. And he should have supported Trump when he had the chance.
K. Hall
May 25, 2023 at 4:03 pm
China is not a threat when you are trying to emulate them.
David Chang
May 26, 2023 at 5:47 am
God bless people in the world.
We shall remember the advice of General George Washington and Commander Abraham Lincoln, not to be used by foreign countries, but to obey Ten Commandments to proclaim God’s grace, because God is justice and love.
Scholars in the United States have accepted Germany’s atheism philosophy since the 19th century, and cooperated with the Communist Party in the 20th century to establish a socialism alliance, so America atheism parties make the current dilemma. Bearing more and more debts, and slowly turned into a German General Staff, and rely on high tech and large machines. If we can’t stop manufacturing the high-tech military, we should cut off most social benefits but keep pensions. And made in the USA.
The modern reason why the U.S. Department of Defense became the headquarters of the German General Staff is that since the 19th century, U.S. universities have accepted Germany’s atheist philosophy, worship science, rely on firepower superiority and mobility, and have manufactured many expensive weapons. However, because the Federal government cannot increase the amount of outstanding debt, the more expensive weapons, the fewer weapons. Moreover, the Democratic Party makes many social benefits like bribery, it is the basic debt issue that the Republicans and Democrats are arguing about. If we can’t stop manufacturing the high-tech military, we should cut off most social benefits but keep pensions. And made in the USA. If most people vote to keep all social benefits, shall we change all military to robots with artificial intelligence?
It is also because the United States is not under God. The policy of the United States is no longer to worship God and maintain the republic, but to worship the people and promote democracy. Therefore, the Democratic-Republican Party, Project 2049, American Enterprise Institute, and Heritage Foundation all promote atheism, and tell people the Taiwan Province of the Republic of China, which believes socialism and evolution, is a model of Asia democracy. But most people in Taiwan Province are just like the CCP in 1920, the Nazis in 1930, Vietnam in 1960, and Afghan in 1973.
According to Ten Commandments, although North Korea, the CCP, Russia, and Iran are a socialism alliance, the Taipei authorities of the Republic of China and the Democratic Party are another socialism alliance. The present and future socialism warfare in Ukraine and Taiwan Strait are still like Hungary socialism warfare in 1956, and it is also like the war between CCP and Vietnam in 1979.
Because of sin, people cannot resolve political disputes with war. People in the world should obey Ten Commandments instead of believing universal value or brave new world.
God bless America.
Jim
May 26, 2023 at 11:29 am
It’s the donor class who don’t want to take significant action regarding China’s undue influence in American government, business, and society.
The donor class is making a pretty penny from the status quo just fine.
“Don’t do anything,” says the donor class…
“But if you have to do something… rattle the saber about Taiwan and look tough.”
Problem is… too many people believe it… and actually want to go to war over an island 100 miles off China’s coast… who has escalation dominance in that fight, China that’s who.
Does Taiwan end up looking like Ukraine, today, or worse… a smoldering pile of rubble on a denuded rock?
What happens to the people of Taiwan?
Meanwhile, the donor class makes Big Money… and the U. S. falls further under the undue influence of Red China… a fascist state, through & through.
So, the donor class has lots of money to spread around… like butter spread over hot toast… that buys influence… let’s not let it get any worse than it already is.
Taiwan is a distraction… the bright shiny object.
Taiwan is also the Iceberg… seemingly the captain wants to hit square in the middle.
For goodness sake, why?
Ben d'Mydogtags
May 27, 2023 at 12:32 pm
The G-7 are like the busted gamblers who keep going back to the casino hoping next time they can win back all their years of past losses. China has rigged the game! Stop playing.