As the curtain falls on the G7 meeting in Hiroshima, the world’s seven most industrialised countries have sent both Russia and China a clear message of their solidarity and resolve, not only regarding Ukraine but also by aligning with the US in viewing China primarily through a security and geoeconomics lens.
Both outcomes are significant. Before the meeting, there remained considerable differences across the Atlantic on these two issues. It is now clear Europe is moving in a similar direction to the US. That this is occurring will go far in determining whether the advantage remains with the liberal democracies or will shift to a group of authoritarian powers led by Beijing.
The appearance of Volodymyr Zelensky at the G7 spearheaded the group’s presentation of a united front against Russia’s aggression, with a declaration that its “support for Ukraine will not waver” and with a commitment to do so “for as long as it takes”. The group announced new measures to ratchet up the pressure on Moscow in anticipation of Ukraine’s highly anticipated counteroffensive, with the aim being to “starve Russia of G7 technology, industrial equipment and services that support its war machine”.
Restrictions on Russia’s export of diamonds have been flagged, as well as about 300 new sanctions and other measures targeting individuals and entities providing financial and other material support to Russia. Importantly, Ukraine has been given unequivocal support for its maximal position in any future peace negotiation – that the end of the war can only result from the complete and unconditional withdrawal of Russian troops from “the entire internationally recognised territory of Ukraine”. This includes Crimea, which Russia annexed in 2014.
To be sure, transatlantic divisions beneath the surface do remain. Europe’s continued willingness to bear the significant economic costs of imposing deep sanctions on Russia will be severely tested if Ukraine’s spring counteroffensive is unable to make significant territorial gains. Zelensky’s relentless global campaign for greater military support for the war effort comes with the calculation that without renewed battlefield success there will be growing calls on Ukraine to come to an accommodation with Moscow that will inevitably involve the loss of territory. Even so, the key European powers at this stage are not willing to break with the Americans and hand Russia some Ukrainian territory.
On the probably more consequential competition with China, the outcome of the G7 discussions makes for even more grim reading for Beijing. For the first time, the group has adopted a stand-alone “statement on economic resilience and economic security”, including the launch of a “Co-ordination Platform on Economic Coercion” to collectively deter and respond to future economic threats. Driving this is Russia’s weaponisation of Europe’s energy dependency upon Moscow over the past year, and China’s coercive trade strikes on Lithuania for daring to allow Taipei to use the name “Taiwan” on its new de facto embassy.
Resilience here is essentially a byword for “de-risking” rather than completely de-coupling supply chains away from China. This means “friend-shoring”, or setting up supply chains between “trusted” suppliers for critical goods such as critical minerals, semiconductors, and batteries. It also covers technologies and critical infrastructure such as mobile and satellite networks, submarine cables, and cloud infrastructure. The idea is to ensure economies such as China and Russia cannot hold the democracies over a barrel when it comes to these sectors.
Likewise, the G7 statement aligns the major European countries with the US on blocking Chinese access to cutting-edge technologies that can be used for military purposes. This includes a much tighter co-ordination of controls on outbound and inbound investment and exports in critical and emerging technologies. The result will be a significant slowdown in China’s ability to catch up to the developed economies via technology transfer that comes with European companies investing in China, or through Chinese investment in European pharmaceuticals, biotech, robotics, AI, advanced materials, cutting-edge manufacturing and semi-conductor companies.
The US has long seen the EU as a source of “leakage” when it comes to China acquiring the technology and know-how needed to compete with and eventually surpass the Western democracies. Bear in mind that China’s Belt and Road Initiative seeks to include Europe but not the US. The outcome of the G7 meeting makes it much more difficult for China to benefit from economic engagement with the EU at the expense of the US. More broadly, it puts a major spanner in the works when it comes to China’s strategy of dividing the EU and the US.
Finally, the G7’s position on Ukraine, as well as on economic resilience and coercion, sends a firm message to Beijing on the probable consequences of using military force to seize Taiwan. While European nations are unlikely to be involved in a Taiwan conflict militarily, these efforts to “de-risk” their supply chains for critical technologies and materials will reduce the economic costs to their own economies of sanctioning Beijing. It also indicates to Beijing that its use of force will be met with even more severe EU economic and technological sanctions.
Japanese Prime Minister Fumio Kishida has several times warned that “Ukraine today could be East Asia tomorrow”. In linking the coercive and expansionist tendencies of Russia and China, it seems that the EU might well agree.