The G7 Criticize China & Russia While The Real Problem Has Been Poor Planning. What Happens Next?

Op/Ed by Chris Devonshire-Ellis 
The G7 meetings being held in the United Kingdom have been highly critical of both China and Russia, with a combination of the United States, UK, Canada, France, Germany, Italy, and Japan laying out a vision for ‘dealing’ with what have been termed ‘different values’. Australia, India, South Korea, and South Africa have also been invited.

What is the G7? 
The G7 is an informal inter-nation forum of nations considered to be advanced democratic economies. Member states control about 60% of global net wealth, and average about 40% of global GDP. China is not a member as the wealth of its average citizens is not considered high enough, and it is not a democracy. Russia was removed in 2014 after it re-possessed Crimea. The grouping leadership rotates annually, with annual summits being held. Matters of global importance are discussed, with the 2021 meetings especially focused on ‘maintaining Western values’. To this end, it has become politically critical of China and Russia especially.
I discuss these criticisms in this week’s editorial.

Covid-19 Vaccine 
The G7 2021 has agreed to donate 1 billion doses (enough for 500 million people) to what it terms ‘poorer nations’. There have been criticisms of ‘vaccine stockpiling’ by wealthier nations, while numerous charities have suggested the figure needed to provide global coverage is closer to 11 billion. Both China and Russia have been ahead of the curve here, with China providing vaccines to 95 different countries (Bridge) and Russia 60  (Statistica). The G7 nations have accused these nations of ‘vaccine diplomacy’ and using their products for political influence.

Xinjiang & Human Rights 
China’s treatment of Uyghur Muslims in Xinjiang Province has been described variously as a ‘genocide’ and an ‘abuse of human rights’ by the G7. Some 230,000 Uyghurs have apparently been incarcerated in camps (BBC). Xinjiang however borders both Afghanistan, which has been in an Islamic fundamentalism war for the past 20 plus years, and Pakistan, which has Islamic extremism and terrorism problems of its own. The United States, which has had a strong military presence in Afghanistan since 1999, is withdrawing troops alongside those of NATO in September this year; China has been especially worried about the impact of this and the spread of militant Islam into Xinjiang and the rest of China. Russia, which also fought a war against Islamic militants for 12 years, is also highly concerned. China states it has been rounding up Uyghur Muslims more likely to be influenced by Islamic insurgents trying to subvert the local population, the West has sanctioned Chinese officials and accused it of human rights abuses. However, Uyghurs in other Chinese Provinces such as Ningxia – somewhat removed from Xinjiang – do not appear to have been impacted suggesting the issue is a geographic rather than cultural one.

Meanwhile, Narendra Modi, the Prime Minister of India is a guest of the G7, has been virtually attending meetings from Delhi, and is seeking trade agreements with the United States, UK, and EU. Modi’s political party, the BJP is an ultra-Hindu party and has enacted several campaigns against Muslims in India, including making some 4 million stateless and detaining them in camps (BBC), while demolishing mosques. (Al Jazeera) Anti-Muslim riots in Gujarat killed over a thousand Muslims in 2002, (New York Times) under the then State Governance of the current Prime Minister.

China Supply Chain Dominance & Anti-Competition 
China has also come under fire for its dominance of certain global supply chains and especially those of products needed in the new generation of Electric Vehicles, Computers and Green Energy, among others. US President Biden has been asking the G7 nations to support the United States in building new supply chains to counteract China’s ‘unfair practices’ and has pointed fingers at the Belt & Road Initiative as a threat. Examining one of the primary sources of conflict, the supply of Neodymium, a rare earth uses in the production of critical Neodymium magnets, a vital component part in new technologies, reveals a rather different story. (Silk Road Briefing) While the vast supply of Neodymium is mined in China, in fact the mineral is not uncommon, and can be found in the United States. The world’s largest deposits are in Greenland – one reason Donald Trump made the much-ridiculed suggestion the US buys the territory. The reason the US or G7 nations have not commenced sufficient mining of Neodymium however is nothing to do with China – it is because the mineral is highly polluting, releases radioactive elements into the air when doing so and is toxic. China’s supply chain dominance in certain key critical areas is due to their ability to do the dirty work no-one else wishes to. The US and G7’s lack of Neodymium is more to do with poor resource and supply chain management than unfair Chinese practices.

Free Trade & The Belt & Road Initiative 
Accusations of ‘unfair trade practices’ have dogged China in recent years not least with its Belt and Road Initiative. Accusations of ‘debt traps’ continue to abound, although these have been proven as inaccurate by numerous Western think tanks and Universities. (Silk Road Briefing) When it comes to the occasions that China has had to renegotiate terms, it has been doing so on the G7’s own ‘Paris Club’ (Silk Road Briefing) protocols. China has instead pursued a policy of negotiating free trade agreements – the recent East Asian ‘Regional Comprehensive Economic Partnership’ or RCEP (Silk Road Briefing) is one example and is larger than the United States USMCA and the European Union. The United States, meanwhile, and European Union have been withdrawing from previously made trade agreements, with the US pulling out of the Trans-Pacific Partnership – now the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (Silk Road Briefing), and the European Union freezing the EU-China Comprehensive Agreement On Investment. (China Briefing) It is the West that has become more protectionist of its markets while China and Russia (via the Eurasian Economic Union) have both actively been promoting free trade agreements. 

Use of Sanctions 
The United States began using trade as a sanctions weapon progressively more during the Obama years, with Russia especially being sanctioned by both the United States and EU in 2014 for its occupation of Crimea. Russia was also expelled from the G8 (now the G7) at that same time in punishment. That tendency has continued, with Russian companies involved in building the North Stream pipelines to Europe being sanctioned while at the same time the United States proposes selling the EU its more expensive shale extracted gas. More recently, both have been sanctioning Chinese officials for their perceived roles in human rights abuses in Xinjiang, leading to China pushing back with its own sanctions on EU officials in turn, and introducing an ‘Anti-Foreign Sanctions Act’ (China Briefing) last week. The rise of sanctions as a political measure is on the increase, however it is worth noting who began the practice.

What Lies Ahead 
There are obvious tensions, and at some point, these will need to be quietened down. It also appears to be the G7 who are doing a lot of the antagonism or how are not considering circumstances affecting the position in Xinjiang. The supply chain issue, also a result of poor understanding and planning, shows that the current Western democratic methodologies are insufficient, and in some cases have been corrupted and misused.

China and Russia meanwhile, have long, established leaders who are not going to be going anywhere soon. Compared to the West, they also have educational training in the sciences as opposed to politics. One reason the West may be failing is precisely this educational disparity (Silk Road Briefing) between the leaders of the G7 and those of the East. The United States Government is dominated by career politicians, those in China for example by engineers. A reset of what qualifications are required of democratic leaders for the 21st century and ahead may be required, otherwise we descend into a moray of political theory versus pragmatism, which is where we are increasingly headed for today.

In terms of the outcome, tensions will remain, largely because of the Wests supply chain failings, for some time. Being politicians, they will politicize the issue and blame their competitors, including China and Russia, while seeking to make friends with others that can assist. When it comes to rare earths, a critical component to usher in tomorrow’s newer and to some extent greener technologies, China is currently the largest mining extractor, Russia also has significant reserves. As I point out here US President Biden’s meeting with Russia’s Vladimir Putin on Wednesday takes on a rather greater significance. Russia has minerals the United States wants, and it may not just be sour grapes that the White House has stated there will not be a joint press conference between the Presidents afterwards, although the US President will speak. That maybe to prevent Vladimir Putin from displaying some glee at a deal quietly removing some sanctions.

Elsewhere, other suppliers of rare earths globally with less stringent environmental considerations are Brazil and India. Neither are run by especially pleasant individuals. But hey, when you have something the United States and G7 needs, exceptions can be made. When those exceptions reach production, possibly in three years – it takes time to develop mines – tensions with China in particular, will revert once again to the resumption of trade agreements. President Xi may not be at G7 – but he still manages a middle-class consumer base of 550 million. Xinjiang by then will seem an old, forgotten once fashionable ploy, a means to a political end. In the absence of China and Russia though, the G7 needs to think carefully about who their future new friends actually are, and what they truly represent.

Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates and Visiting Professor at the Higher School of Economics, Moscow State University.


Any views or opinions represented in this blog are personal commentary, belong solely to the contributor and do not necessarily represent the views of Asia Briefing Limited or Dezan Shira & Associates.

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