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The New Era of Geopolitical Competition: The G7's Response

The G7's Stand against Economic Coercion

In a recent meeting held in Hiroshima, Japan, the G7, an assembly of the world's leading economies, expressed concerns about the increasing use of economic coercion in international relations. The leaders pledged to counter these practices, emphasizing the importance of maintaining a well-functioning international rules-based system. They reaffirmed their commitment to ensure that sensitive technologies crucial for national security are appropriately controlled, thus ensuring economic resilience and security.


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The Rise of Economic Coercion: A Closer Look

Economic coercion refers to comprehensive strategies that employ non-market policies and practices, such as harmful industrial subsidies and forced technology transfers, to create strategic dependencies and systemic vulnerabilities. The G7 leaders expressed renewed concerns over these practices that exploit economic vulnerabilities and undermine the policies and positions of G7 members and partners worldwide. Their aim is to counter attempts to weaponize economic dependencies and uphold the rule of law.


The Role of China in the Economic Coercion Game

China, with its expanding technological capabilities and industrial might, has been identified as a significant player in this economic coercion game. The West has been critical of China's actions, such as the militarization of the South China Sea and its Belt and Road Initiative. The latter has been labeled "debt trap diplomacy" as it lends large sums to emerging economies for infrastructure projects, leading to concerns over China's growing political control abroad.


The West's Plan: De-risking, Not Decoupling

In response to these challenges, the West aims to enhance economic security for G7 nations by de-risking, not decoupling, from China. This approach involves developing resilience for supply chains and considering export controls and outbound investment measures. The goal is to regain control without stoking further tensions with the world's second-largest economy.


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The Broader Implications and the Path Forward

The G7's concerns extend beyond economic security to the geopolitical arena. Tensions over Taiwan, with its crucial role in semiconductor production, underscore the intertwining of economic and geopolitical interests. Moreover, global challenges like the war in Ukraine, climate change, and supply chain disruptions necessitate cooperation between the G7 and China. Therefore, finding a balance between asserting control and maintaining cooperation is of utmost importance in this new era of geopolitical competition.


In conclusion, the establishment of the "Coordination Platform on Economic Coercion" signals the G7's resolve to address the issue of economic coercion head-on. As the geopolitical landscape continues to evolve, the G7 and other global actors will need to navigate these complexities with care, ensuring that economic competition does not undermine international stability and cooperation.

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