G7 priorities on Ukraine war and China will face pushback from Global South

G7 efforts to set the international agenda for how to resolve the Ukraine crisis will be complicated by voices from South Africa to Brazil
Meanwhile, US criticism of China’s ‘economic coercion’ rings hollow given that this behaviour is hardly unique to Beijing. Diplomats call it ‘economic statecraft’

David Dodwell

Published: 12:30am, 22 May 2023

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Most international media attention has over the past weekend been focused on the G7 summit in Hiroshima, Japan – what Jake Sullivan, US national security adviser, has called “the steering committee of the free world”.

But for those sensitive to the fast-evolving multipolar world, two other major meetings provided a fascinating counterpoint: the 22 members of the Arab League being hosted by Saudi Arabia, and the first China-Central Asia Summit in Xian. Until recently, such meetings would have passed unnoticed. But that is no longer so.

For US President Joe Biden, the exclusive G7 grouping – comprising Canada, France, Germany, Italy, Japan, the United Kingdom and the United States – has assumed critical importance, despite its awkward “rich country” credentials; it is what one European diplomat has called “the workhorse of Western cooperation”, whose shared concern is to defend the “free and open international order”.

Of course, its primary focus has been Ukraine and reinforcing sanctions against Russia. But not far behind is what the “Washington consensus” believes is the existential threat to world order – China. Here, the US is striving to build agreement around the “national security” threat from China, and to galvanise its closest allies against Beijing’s “economic coercion”.

These G7 agenda priorities – and the less noticed Jeddah and Xian meetings – provide a glimpse into the economic and strategic fragmentation that is developing as an increasingly multipolar world begins to supplant the unipolar hegemony that has since the creation of the post-war Bretton Woods institutions enabled the United States to set the rules for international political and economic relations.

First, Ukraine. The crisis created by Russia’s inexcusable invasion of Ukraine has evolved as a proxy for this fragmentation. While there is agreement on the tragic consequences for Ukraine and its people, and on the urgent need for an end to the conflict, there has been pushback against the Western narrative of an evil Russian President Vladimir Putin who must at all costs be defeated.

Many believe the need for peace overrides the need for victory, and are trying to lay the ground for compromise. Others across the developing world have argued that a war that may be an existential issue to countries in Europe is not a unique priority for nations further afield, which have fierce conflicts closer to home, and which resent rich-country tardiness in addressing the climate and pandemic crises that threaten us all.

The non-aligned preference for peace has given rise to an explosion of potential peacemakers, including not just China, but Brazil, South Africa – which is trying to galvanise a six-member African grouping to help forge peace – the Vatican and even Saudi Arabia. It was no accident that Ukraine’s Volodymyr Zelensky flew to Jeddah at Saudi Arabia’s invitation to address the Arab League summit.

Such a proliferation of leaders representing the Global South who believe they have interests to defend and voices that need to be heard will inevitably complicate G7 efforts to set the international agenda for how to manage and resolve the Ukraine crisis.

Biden’s second G7 priority was to forge agreement on the need to create a collective economic defence framework to manage “economic coercion” by China.

Such coercion was visible in 2010, when China retaliated against Norway by blocking Norwegian salmon exports after a Nobel Prize was awarded to a Chinese dissident. There have also been complaints about China cutting sales of rare earths to Japan due to a dispute over islands in the East China Sea, about an unofficial Chinese boycott of South Korean goods and tourism to the country after it agreed to deploy a US anti-missile system, about Beijing cutting trade with Lithuania after its diplomatic recognition of Taiwan, and about it blocking Australian exports, ranging from wine to lobster, after Canberra sought a formal investigation into the origins of the Covid-19 pandemic.

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At the Washington-based Centre for Strategic and International Studies, Victor Cha says 18 countries and 123 companies have been the targets of such “economic coercion”. Research for the European Parliament complains of “administrative discrimination”, investment barriers, tourism restrictions and simple threats, which occur “behind the curtains”. A paper from the US Institute of Peace says these initiatives are “extralegal, informal, unilateral and meant to be deniable”.

While few challenge the details of this coercive activity, it is tougher to argue that it is distinctive Chinese behaviour. Diplomats worldwide have for generations called such activity “economic statecraft”, all part of the carrots and sticks of managing international power relations, alongside military coercion.

US efforts to single out China as a uniquely dangerous economic predator have drawn fierce criticism from Beijing. In a detailed rebuttal, China’s embassy in Georgia dubs the US “the inventor and master of coercive diplomacy”, pointing out that its use of “economic blockade, unilateral sanctions, military threats, political isolation and technical blockade” present “textbook cases of coercive diplomacy”.

Besides the 1962 US blockade of Cuba, the Plaza Accord which in 1985 forced a massive revaluation of the Japanese yen, and sanctions and blockades used in the Middle East, the embassy also complains about the US’ manipulative use of the dollar, trade controls, “long-arm” jurisdiction, subliminal promotion of US standards, regulations and values, and the parallel use of military coercion.

Among friends at the G7, the US will undoubtedly attract sympathy on the “economic coercion” issue, but for many developing countries, this argument will look very much like the pot calling the kettle black. This fragmented multipolar world is likely to be more fractious and complicated – most of all for the G7 elite.

David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades.