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What is meant by “de-risking” in the context of G7 discussions about China? Examine the reasons behind the G7’s emphasis on de-risking measures and their potential implications.

Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

4. What is meant by “de-risking” in the context of G7 discussions about China? Examine the reasons behind the G7’s emphasis on de-risking measures and their potential implications. (250 words)

Difficulty level: Tough

Reference: Insights on India

Why the question:

The G7 talks about “de-risking” in reference to China, a term that refers to reducing economic and geopolitical risks associated with engagement with China.

Key Demand of the question:

To wite about “de-risking”, reasons for it and its implications.

Directive word: 

Examine – When asked to ‘Examine’, we must investigate the topic (content words) in detail, inspect it, investigate it and establish the key facts and issues related to the topic in question. While doing so we should explain why these facts and issues are important and their implications.

Structure of the answer:

Introduction: 

Briefly define “de-risking” in the context of G7 and China.

Body:

First, write about the explanation of de-risking measures -Diversification of supply chains, Reducing dependency on Chinese markets, Enhancing resilience against potential disruptions etc.

Next, write about Reasons behind the G7’s emphasis on de-risking measures – Economic concerns: China’s economic dominance and market manipulation, Geopolitical factors: China’s assertive behavior and territorial disputes and Human rights issues: Violations of human rights and democratic values etc.

Next, write about Reasons behind the G7’s emphasis on de-risking measures – Impact on global trade and investment flows, Challenges and opportunities for G7 countries and Possible consequences for China’s economic and geopolitical position etc.

Conclusion:

Conclude by writing a balanced opinion on the above.