Isolating China will be ‘impossible and dangerous,’ analyst says, as the G-7 gets tough on Beijing

The G7 sent its strongest message ever to China over the weekend, but one analyst warned that isolating Beijing would be “impossible” and “dangerous”.

Concerned about economic coercion, the world’s seven largest economies agreed at a summit in Hiroshima, Japan, to reduce risks and keep supply chains away from China. Western countries are increasingly aware that their economies are heavily dependent on China. The coronavirus pandemic has revealed the intricacies of critical supply chains, a reality further exacerbated by the ongoing war in Ukraine.

In a joint statement after the summit, the G7 said: “Our policy approach is not designed to harm China, nor do we seek to impede China’s economic progress and development… At the same time, we recognize that economic resilience requires to- Adventure and variety.”

After the G-7 announcement, China summoned the Japanese ambassador and ordered the company to stop buying from US chipmaker Micron.

Giuliano Noci, vice-president for China at Politecnico di Milano, told CNBC’s “Squawk Box Europe” on Monday that the G7 showed a “monist” attitude towards China.

“(President Joe) Biden talked about de-risking rather than decoupling. Decoupling was a curse in the US a month ago, but it’s clear that decoupling is almost impossible for several products given how intertwined the supply chains are in China, said Noci.

De-risking refers to reducing dependence on China to a certain extent, rather than completely severing ties.

“It should be clear that isolating China is not only impossible on the one hand, but also dangerous on the other,” Noch said.

The Biden administration’s shift perhaps underscores the realization that it will take enormous effort and economic pain to separate its economy from China’s.

According to the U.S. Census Bureau, the U.S. recorded transaction failed Merchandise trade with China in 2022 is about $383 billion.Last year’s data showed record high In trade between nations, there is evidence of the economic difficulties of separation.

The G7 leaders further expressed their concerns about the situation in the East and South China Seas, and supported “no change” to the status quo in Taiwan.

“China’s maritime claims in the South China Sea have no legal basis, and we oppose China’s militarization activities in the region,” they said.

“We are moving beyond a unipolar world with the U.S. as a superpower” into a bipolar or multipolar world, Nurse said in an interview with CNBC.

British Prime Minister Rishi Sunak said China is the biggest challenge to world security and prosperity. The Chinese embassy in London described this as “aslander Ignoring the facts,” Reuters reported.