Will Biden’s ‘little Nato’ G7 unity push cause an ‘economic iron curtain’ to fall over US-China relations?

The US president must navigate a delicate balance between countering China’s economic coercion and sowing more division, according to observers
Washington risks earning further ire for ‘inciting bloc confrontation’ – accelerating decoupling and driving China closer to Russia, they say

US-China relations

Maria Siow

Published: 9:30am, 17 May 2023

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US President Joe Biden is expected to emphasise unity among Group of Seven countries during his visit to the Asia-Pacific, and highlight Washington’s dedication to the region amid escalating tensions with China and the ongoing conflict in Ukraine, analysts said.

Biden is attending a G7 summit this Friday in Japan’s Hiroshima, where he will deepen ties with long-time allies. He had then planned to travel to Papua New Guinea as the first sitting US president to visit the tiny island state and head to Sydney for a meeting with leaders of the Quad – but late on Tuesday scrapped the latter two stops in favour of returning to the US to negotiate with Republicans over raising the US debt ceiling.

While seeking to reassure partners at the G7 summit, Biden must navigate a delicate balance between countering China’s economic coercion and avoiding further division among US allies, observers said.

Jacob Stokes, senior fellow at the Centre for a New American Security’s Indo-Pacific Security Programme, said the aim of Biden’s trip was to convey the message that the US was actively leading a coalition of like-minded allies and partners seeking to strengthen the rules-based international order in the region.

From left: Australian Prime Minister Anthony Albanese, Biden, Indian Prime Minister Narendra Modi and Japanese Prime Minister Fumio Kishida in Tokyo for a Quad leaders’ summit last year. Photo: AP

“That coalition aims to do so both by deterring coercion and aggression from China, and by offering alternatives for solving key challenges facing the region and the world,” he said.

Biden’s trip was also aimed at “reaping the benefits” of his administration’s work in building a “latticework” of institutions and partnerships across the region, Stokes said, such as through the Quad and deepened relations with Pacific nations.

In recent months, Washington has strengthened ties with the Quad – a security grouping described by US Secretary of State Antony Blinken as a “critical vehicle” for engaging Asian nations – members of which also include Australia, India and Japan.

Apart from reopening an embassy in the Solomon Islands in February, the US also opened an embassy in Tonga last week and agreed with Micronesia to renew a strategic pact.

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Marc Lanteigne, an associate professor at the University of Tromso in Norway, said that amid regional concerns about Chinese and North Korean military activities, Biden was also expected to fully outline how Washington would continue to protect its regional allies.

“Biden will be seeking to reassure partners in the Asia-Pacific that the US will not be distracted by Ukraine, and that it is in the region’s interest to strengthen security cooperation, such as through improved Japan-South Korea ties,” Lanteigne said.

In recent months, China has intensified military operations and conducted large-scale drills around Taiwan, including after then-US house speaker Nancy Pelosi’s visit to the self-ruled island in August.

In April, a Chinese coastguard ship attempted to block a Philippine patrol vessel in the South China Sea and nearly collided with a Philippine fishing boat; while in February, the Philippines’ coastguard complained that its Chinese counterpart had twice shone a military-grade laser at its ship, causing temporary blindness among the crew.

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“Beijing will be unhappy with any further moves in the Asia-Pacific to create what has been frequently derided as a ‘little Nato’ or an attempts by Nato to expand influence into the Pacific,” Lanteigne said, referring to Japan’s plans to host a Nato liaison office in Tokyo, a move Beijing described as an attempt to “interfere in regional affairs and inciting bloc confrontation”.

Ying Zhu, director of the Australian Centre for Asian Business at the University of South Australia, said Biden wanted to build a “little Nato” in Asia to contain Russia and China, focusing in particular on the potential challenges from Beijing.

Apart from gathering the G7 around Ukraine, Biden would also send a broad message of unity on Indo-Pacific security in the face of regional security challenges, said Mark Cogan, associate professor of peace and conflict studies at the Kansai Gaidai University in Osaka.

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“[Biden will] send a signal that there is a region-wide partnership on critical issues such as climate change, maritime security and economic cooperation,” Cogan said, adding that Biden was likely to indicate that American presence was indefinite.

With the G7 expected to outline proposals on countering China’s “economic coercion”, this would send a message that Beijing “is not a reliable partner”, Cogan noted.

“The trick is not to abuse China on the issue by inflaming nationalist tendencies or putting smaller countries in a difficult position where they … become the target of coercive activities,” Cogan said, adding that a smarter solution was to build more robust trade agreements, maritime security measures, and reinforcing supply chains.

“The wedge between China and the US will remain, as it is politically popular for both, but it does not need to create divisions for US allies.”

A fighter jet takes off during combat readiness patrol and military exercises around Taiwan carried out by the Chinese military in April. Photo: Xinhua via AP

China carried out 73 incidents of economic coercion aimed at 19 countries between 2020 and 2022, according to a February report from the Australian Strategic Policy Institute, including trade sanctions, investment restrictions, tourism bans and popular boycotts.

Masato Kamikubo, a professor at Ritsumeikan University’s Graduate School of Policy Science in Japan, said it might be difficult for the G7 to issue a “harsh critical message” against China’s economic coercion as Europe was less threatened by Beijing’s rapid military and economic expansion when compared to Japan and the US.

“If the resulting message to China is weak, I believe Biden could individually issue a strong message to China,” Kamikubo said.

However, Biden was unlikely to deliver a separate statement on nuclear disarmament and non-proliferation, so whether Japan could persuade the US “will be a test of the strength of Japanese diplomacy”, he said.

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Sending a message of nuclear abolition would be an indication of the summit’s success for Japanese Prime Minister Fumio Kishida, Kamikubo added, with Japan the only country to have suffered a nuclear attack.

Aaron Jed Rabena, a research fellow at the Asia-Pacific Pathways to Progress in Manila, said the emphasis on Beijing’s economic coercion could bring about greater decoupling and lead to an “economic iron curtain” between China and the US and its allies.

“The more the West does this to China, the closer Russia-China relations will become,” Rabena said.