However, the irony remains that the advanced economies and liberal democracies of the G7 often fail to address the most pressing issues of our time, namely socio-economic imbalances within their own countries and between the many regions of the world. As Beijing attempts to revitalize parts of the world through the Belt and Road Initiative (BRI) infrastructure programs, Washington realizes that it needs a stronger diplomatic presence in Europe after the Trump administration. The G7 summit attempts to overshadow the chronic and structural economic issues of the West that tend to multiply socio-economic imbalances.
There are urgent global needs for cooperation, investment, and development, especially in Europe and its hardest-hit regions, where many Mediterranean nations had not yet recovered from previous crises. Europe’s macroeconomic imbalances, debt levels, and youth unemployment are burdens for the West, and poverty in Africa, Asia, Latin America, and Oceania is catastrophic, yet the G7 formulates its mandate around criticisms of the political systems in China and Russia. The West is preoccupied with geopolitical threats related to China and Russia but fails to solve the internal inequalities and demographic trends that jeopardize its future. China has reacted to this need throughout the world with the Belt and Road Initiative (BRI) in terms of investment.
The G7 nations control 70 percent of the world’s wealth but only account for 30 percent of the world’s economic output. This fact does not necessarily need to trigger a global redistribution of wealth or a Western shift towards socialism. Nevertheless, it should prompt these countries to adequately invest in the countries and societies directly relevant to the Western community of nations. Europe, in particular, needs significant investment in its southern periphery and around East and Central Europe, the Balkans, North Africa, and the Middle East.
During the Cold War, the U.S., Britain, France, Italy, Germany, Japan, and Canada, the G7 members, accounted for 59 percent of world GDP. Now, they make up 45 percent.
China fills the vacuum in these regions because the G7 does not do enough for the middle class in these countries. China overtook the U.S. as the European Union’s largest trading partner, while Washington lectures individual European countries on their relationship with China instead of helping to improve their living standards through investment and productive projects.
Thus far, the G7 response has been to implement a global minimum tax on multinational corporations, which should generate higher revenues for governments to spend more on productive and targeted projects. However, President Biden will face opposition at home from Republicans, which would halt global adoption of the plan.
While G7 rhetoric appears more hostile to China, the U.S. and China can cooperate on global tax rules, setting a route to “zero-carbon,” recovering from the pandemic, or reinforcing multilateral collaboration. There is still space for what seems a majority view in the EU that the West’s relations with China must rely on “cooperation, competition and systemic rivalry” rather than confrontation. However, the failure of liberal democracies to maintain some level of control during the pandemic proves that China’s system is efficient in dealing with significant global problems.
Although the G7 nations have significant differences, they appear committed to ‘building back better’ under Biden’s leadership with international efforts in vaccinations, pushing fiscal recovery plans, reformulating global trade systems, supporting the green revolution and sustainable jobs, strengthening global partnerships, and embracing open and accessible societies with ‘liberal’ values.
These points, directly lifted from the latest G7 communique, sound wonderful but undoubtedly oppose the political systems in China and Russia. The G7 commitment also clearly states that they will plan to investigate the origin of COVID-19 while criticizing China’s state-interventionist involvement in the global economy. The communique also mentions human rights violations.
That being said, the G7 is relevant because its members are significant geopolitical entities and economies. However, their fixation on China and Russia, opposed to addressing the economic decline of western economies and income inequality, proves that it is politically more popular to sharpen rhetoric toward Beijing than improve the economic situation of their respective countries.