Behind Russian violence and bluster, China poses the real danger to G7 leaders

G7 leaders in Italy may have stepped up their support for Ukraine by agreeing to charge interest on frozen Russian assets to finance a $50 billion loan to kyiv. But the West also needs to think about how to deal with China, Moscow's biggest ally and its main enabler.

Despite the Kremlin's violence and bluster, few Western leaders doubt that China represents the West's most serious adversary, in both an economic and military sense.

John E Autumn of the Atlantic Councils Eurasia Center and former US ambassador to Ukraine, says the deal to divert interests away from Russian accounts was all the sweeter because it also constitutes a defeat for Putin's partner, the Chinese leader Xi Jinping, who tried to intimidate reluctant G7 members into dissuading them. prevent them from adopting this policy.

However, the G7, led by Joe Biden, will also try to formalize a tougher line against Beijing on several fronts.

G7 leaders on Friday discussed concerns about China's excess industrial capacity, its apparent determination to flood global markets with cheap exports, as well as its support for Russia's war.

Already this week, the United States imposed new sanctions on China-based companies that supply Russia with semiconductors, which Moscow needs to build high-tech weapons.

China does not supply weapons [to Russia] but so the ability to produce these weapons and the technology available to do so actually helps Russia, Mr. Biden told reporters at the summit after signing a bilateral security agreement with Ukraine.

The US Treasury's expanded secondary sanctions mean that banks that still conduct transactions with Russia in countries like China and India will be penalized.

According to Kimberly Donovanfrom the Atlantic Councils Geoeconomic Center: It will be interesting to see how China, and particularly Chinese financial institutions, react to the latest US actions, given how Russia has become economically and financially dependent on China over the over the last two years.

U.S. officials also made clear that foreign branches of designated Russian banks, such as VTB in China and India, would be sanctioned. This will limit how some Chinese companies do business with Russia, although other companies can get around this by conducting business in Chinese renminbi rather than U.S. dollars.

A draft declaration circulating in Puglia on Friday said the G7 was not trying to harm China or thwart its economic development, but would continue to take steps to protect our businesses from unfair practices, to level the playing field and address ongoing harm.

This weekend, after the G7 meeting, world leaders will join Volodymyr Zelensky at a summit in Switzerland to explore ways to end the war in Ukraine, the deadliest conflict in Europe since the Second World War. World War.

Russia is not invited and the event will not achieve kyiv's goal of completely isolating Moscow.

Anticipating a likely torrent of criticism of Russia at the Swiss meeting, Vladimir Putin said on Friday its conditions for an immediate ceasefire, calling on Ukraine to cede four of its regions of Donetsk, Kherson, Luhansk and Zaporizhzhia to Moscow.

Ukraine said the conditions were absurd and Kiev presidential adviser Mykhailo Podolyak said Mr Putin was proposing Ukraine admit defeat.

US Vice President Kamala Harris, French President Emmanuel Macron and the leaders of Germany, Italy, Britain, Canada and Japan are due to attend the June 15-16 meeting in the Swiss mountain resort of Brgenstock.

India, which helped Moscow survive the shock of economic sanctions, is expected to send a delegation. So do Turkey and Hungary, which also maintain cordial ties with Russia.

But despite months of intense lobbying from Ukraine, China will not be there.

Ulrich Schmid, a political scientist and Eastern Europe expert at the University of St. Gallen in Switzerland, called the summit a mixed bag, given Beijing's absence.

The question then arises: is peace really achievable? Mr. Schmid said Reuters. As long as (Russian President Vladimir) Putin is in power, it will be difficult.

But the long-term global great-power rivalry between the West and China also worries foreign affairs experts.

In an essay in Foreign Affairs titled Sleepwalking into War, the Yale historian and China expert Weird Arne Westad compares the tensions between Germany and Britain that led to World War I, with today's deteriorating ties between the United States and China. He concludes that China and the United States appear to be engaged in a downward spiral, which could end in disaster for both countries and the world as a whole.

He points to Beijing's support for Russia and its war against Ukraine as one source of the growing enmity.

China should remember that one of Germany's major mistakes before World War I was to stand by as Austria-Hungary harassed its Balkan neighbors even as German leaders appealed to principle high standards of international justice. This hypocrisy helped start the war in 1914. Currently, China is repeating this mistake in its treatment of Russia, he writes.

Taiwan poses an even greater source of danger. China and the United States appear to be sleepwalking toward a cross-Strait confrontation over the next decade, he says. A growing number of Chinese foreign policy experts now believe a war over Taiwan is more likely than not, and U.S. policymakers are concerned about how best to support the island.

Mr. Westad concludes that it is essential to control the economic confrontation and mitigate potential regional tensions to avoid a repeat of the Anglo-German scenario.

But he believes the West must seek to avoid conflict not only through compromise, but also by adopting a position of strength. Rising tensions between great powers also create the need to maintain credible deterrence.

For the United States, it is essential to give no reason for such mistakes in the coming decade. It should concentrate its military power in the Indo-Pacific, making this force an effective deterrent against Chinese aggression. And it should reinvigorate NATO, with Europe shouldering a much greater share of the burden of its own defense.

Another leading China expert, Steve Tsang, historian and director of the SOAS China Institute in London, said: I he considered a war across the Taiwan Strait unlikely in the coming decade.

But he too has a warning: overall, I think he [Westad] is too alarmist in the short term but not alarmist enough in the long term, unless Xi dies in the next two decades.

The only way for the United States to deter [an attack on Taiwan] is to project a threat ahead of a Chinese invasion which, if implemented, would mean that an invasion would result in a severing of economic ties with democracies, to the point where more than 50% of China's economic ties would end, unleashing forces that could destabilize China. Xi remains in power.

It's a language Xi understands instinctively. But it is an extremely ambitious challenge, because the United States and the West will have to maintain economic integration with China.

In other words, he believes the West must convince China not only that it is prepared to retaliate militarily, but also to take a huge economic hit itself, which would erase several percentage points of the country's GDP .