After Hiroshima, the G-7 charts out a future relationship with the mainland using two interchangeable terms. finews.asia looks at what it means for finance.
For the average Westerner, G-7 statements can seem like memories of a bygone era. The communique released Saturday after the Hiroshima summit was no different.
It had the usual carrot-and-stick references. Mutually beneficial partnerships and common democratic values were interlaced with mentions of economic coercion, the Ukraine war, and the aftereffects of the pandemic.
Looking beyond the adrenalin rush from the angry geopolitical to and fro related to the South China Sea and Taiwan (collated Google search engine result), what is perhaps the most surprising is how modulated the overall tone appeared to be related to China, at least in the economic sense.
Stable Relations
After the current round of incriminations ebbs away, it is likely something banks and bankers in Asia should take to heart as the final statement indicates the G-7 aims to build «constructive and stable relations» with China while continuing to engage with them candidly.
«It is necessary to cooperate with China, given its role in the international community and the size of its economy, on global challenges as well as areas of common interest» the statement indicated.
What is interesting here is that the international community seems to be giving the country's economic strength the necessary due that mainland observers probably thought was lacking in the past.
International Rules
More importantly than that, they seemed intent on assuaging the country saying the G-7 is not designed to «harm» China nor do they seek to «thwart China’s economic progress and development».
«A growing China that plays by international rules would be of global interest. We are not decoupling or turning inwards. At the same time, we recognize that economic resilience requires de-risking and diversifying,» the statement said.
The G-7 did then explicitly reference the usual geopolitical and human rights concerns and asked the mainland to do more related to Russia, something that more than likely sparked off the current round of recriminations.
Trying to Diversify
It was also noteworthy that US President Joe Biden reflected the substance of the message in a media conference afterward in that he said that the G-7 was not looking to decouple but de-risk and diversify from China.
He also discussed the approach to Taiwan in greater detail than had previously been the case, and in a way that could potentially be expected to defuse the situation over time, although it might be a bit premature to say that right at this moment.
Still, it seems like the approach from the G-7 is clear. They have left the door open for China in a way that might not be immediately apparent, and it is now up to the mainland to decide how to take things from here.
In the economic and geopolitical sense, the terms they used are somewhat interchangeable. The main thing from here on out for Chinese observers is to determine whether you can de-risk and diversify without having at least some decoupling involved.
