EDITORIAL ANALYSIS : A belligerence towards Beijing that is unsettling

Source: The Hindu

Prelims: Current events of international importance,G7, Doha Agreement, limited liability partnerships (LLPs), Global South etc.

Mains GS Paper II: Bilateral, regional and global grouping and agreements involving India or affecting India’s interests etc

ARTICLE HIGHLIGHTS

Beginning with a trade war in 2018, S. policy towards China has morphed into a draconian technology denial regime aimed at hobbling China’s rise.
- The U.S. has taken major steps across the Indo-Pacific to shore up its military edge.

INSIGHTS ON THE ISSUE

Context

Group of Seven (G7):

It is an intergovernmental organization that was formed in 1975.
The bloc meets annually to discuss issues of common interest like global economic governance, international security and energy policy.
The G7 countries are the UK, Canada, France, Germany, Italy, Japan and the US.
All the G7 countries and India are a part of G20.
The G7 does not have a formal constitution or a fixed headquarters.
The decisions taken by leaders during annual summits are non-binding.

Major purpose of the G-7:

It is to discuss and deliberate on international economic issues.
It sometimes acts in concert to help resolve other global problems, with a special focus on economic issues.

The G-7 summit views on China:

Condemning its “economic coercion” and “militarisation activities”.
It created a new group to deal with hostile economic actions, mainly by China, to coerce nations.
Measure to review all outbound investment to China on the issue of security.
New Washington Consensus designed to re-establish U.S. hegemony.
Technology denial to China and turning the old Consensus on its head by protectionism and a new industrial policy based on state subsidies.
Reach out to China and claim that all that Washington wants is to “de-risk and diversify” its economy, and guard its key technologies using a “ small yard with a high fence”.

Impact on China and US:

Both countries are jostling for power and influence across the world.
Extreme competition” over technologies may have initiated the conflict.
- But insecurities are increasingly bringing military and nuclear instruments to the fore.
Most experts say that controls may slow China.
- It is impossible to prevent it from developing its own technologies.
- Example: The Russian experience shows that sanctions are not easy to work.
S. export restrictions to over 600 Chinese entities( last couple of years): China does not see much difference between “de-risking” and “containment”.

China’s response:

Its immediate response to the G-7 was to order its infrastructure companies to stop buying from Micron
Dressing down the Japanese Ambassador in China over the G-7 communiqué.

Fallout for the US:

The French President refused to be a vassal state of the U.S.
The chief of Nvidia, world leader in AI computing, has warned that the battle over chips risks “enormous damage” to the U.S. technology industry.
- China makes up roughly one-third of the U.S. industry’s market
It would be “impossible to replace as both a source of components and an end market for its products”.
There are more than a dozen companies such as Micron who derive between 25% to 50% of their revenue from China.

What does the US want?

The U.S. wants China in the new Washington Consensus on its terms
- Setting limits as to what China can aspire to in the fields of technology and military.

Issues with Washington Consensus:

Old Washington Consensus was largely in the area of economics, the new suffers from an overdose of geopolitics which is also feeding into local U.S. politics as well.
The U.S. is in a state of decline and that the old Washington Consensus gutted U.S. industry and impoverished its middle and poorer classes.
Instead of dealing with this outcome through effective policy, the Democrats and Republicans fiddled around with their pet policies — one encouraging entitlements and the other tax cuts.

Way Forward

China wanted to be powerful, but not necessarily a global hegemon in the American style.
The U.S. itself is by far the most powerful country in the world, militarily and economically, and current trends suggest that it is likely to remain so.
With its allies the EU, the United Kingdom, Japan and Australia, it will continue to be ahead of China in every measure.
China has achieved a great deal: It may have stolen IP, and will continue to do so, but it has also put down serious money in developing its tech and education sector.
China seems to have lost out in its diplomacy where it has created significant adversaries through its assertive behavior, be it in the East Sea, South China Sea or the mountains of Ladakh.
The U.S. is not the smartest country while dealing with global geopolitical challenges.
- Its enormous wealth and power and echo-chamber think tanks make it difficult for it to understand distant countries and cultures.
American tendency to fight first and ask questions later:
- Vietnam, Afghanistan and Iraq are proof of that.
S. estrangement with China enhances India’s geopolitical value, something the present ruling dispensation is reveling in.
Sino-American hostility may bring benefits to India, a breakdown would be catastrophic, for not just India but also the world.