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Isolating China would be ‘impossible and dangerous,’ says analyst, as G-7 tussles with Beijing


US President Joe Biden wants to remove the danger from China.

Mandel Ngan | Afp | Getty Images

The G-7 issued its strongest message to China over the weekend, but one analyst warned that isolating Beijing was “impossible” and “dangerous.”

The world’s seven largest economies agreed at a summit in Hiroshima, Japan, to de-risk and diversify their supply chains from China, amid concerns about economic pressures. There is a growing awareness among western countries that their economies are heavily dependent on China. The coronavirus pandemic has shed light on the intricacies of critical supply chains, but the ongoing war in Ukraine has further exacerbated this reality.

In a joint statement after the summit, the G-7 said: “Our policy approaches are not designed to harm China nor do we seek to hinder China’s economic growth and development…At the same time, we recognize that economic stability requires de-risking and diversification.”

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

Giuliano Noci, vice-rector for China for the Politecnico di Milano, on Monday told CNBC’s “Squawk Box Europe” that the G-7 shows a “unitarian” view against China.

“[President Joe] Biden spoke in terms of de-risking and not in terms of decoupling. Decoupling was the magic word in the United States a month ago, but it is very clear that, because of the role played by the Chinese market for many products, because of the level of intertwines in the supply chains , it’s almost impossible to decouple,” Noci said.

De-risking aims to ease some dependencies on China, rather than completely severing the relationship.

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

The shift from the Biden administration may have underscored the realization that it will take a lot of effort and economic pain to separate its economy from China.

Figures from the United States Census Bureau show that the US recorded a trade deficit of goods with China will be about $383 billion in 2022. Data from last year shows a high record of trade between countries and is evidence of the difficulties of separating their economies.

The G-7 leaders continued to express their concerns about the situation in the East and South China Seas and to support “no change” in the status quo in Taiwan.

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

Speaking to CNBC, Noci said that “we are going beyond a unipolar world” with the US as a superpower, and entering a bipolar or multipolar world.

British Prime Minister Rishi Sunak said that China is the world’s biggest challenge to security and development. The Chinese embassy in London described it as “malicious slanders to ignore the facts,” according to Reuters.

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