NO. 36 JUNE 2021 Introduction

First Summit of the Anti-China Coalition Cornwall G7 Highlights BRICS Weakness Heribert Dieter

The 2021 G7 Summit of the heads of state and government of the seven leading indus- trial nations (Germany, France, Italy, Japan, Canada, United States, United Kingdom) will be held in Cornwall, UK, from 11 to 13 June. As host, British Prime Minister Boris Johnson has placed future relations with China at the top of the agenda. That priori- tisation is reflected in the guest list: Australia, India, South Korea and South Africa. The Cornwall G7 has been set up to develop a broad alliance against an increasingly aggressive China. The German government tends to play up China’s economic signifi- cance and risks slipping into an outsider role, enabling a totalitarian state for eco- nomic gain.

The Summit’s motto “Build Back Better” any illusion that it might be on the path to sounds innocuous and constructive. As the a market economy. Covid-19 pandemic becomes manageable, China is seeking a degree of self-isola- the leading industrial nations are thinking tion, and is simultaneously asserting its about the shape of the expected recovery interests much more forcefully than during and the question of tackling future pan- most of the first three decades after its demics. While these are undeniably impor- economic opening at the end of the 1970s. tant, the crucial question for the 2021 G7 This is more than noisy rhetoric: Beijing’s is: How should the other six position them- actions contravene treaties and interna- selves in the new Cold War between China tional law. It was the violation of the Sino- and G7 member United States? British Joint Declaration of 1984, which The question ensues from the massive granted special status to the former British transformation of China’s foreign and ex- colony of Hong Kong, that led most of the ternal economic policy. President Xi Jin- G7 governments to reconsider their assess- ping’s line of reducing China’s dependency ment of Beijing’s reliability. on the global economy has significant implications for the OECD countries. And the country’s push for economic autonomy presages another transformation of the international division of labour and dispels

Johnson Channels Trump ing a democratic counterweight to China, simply replacing Russia with South Africa. This applies especially to the British govern- The British prime minister’s decision to ment and Prime Minister Boris Johnson. So invite countries especially affected by Chi- much has changed since 2015, when Xi was nese aggression sends a message to Beijing: given a royal welcome in London and the the Western industrial nations are not pre- rare honour of being invited to address both pared to turn a blind eye to its aggression. chambers of parliament. Queen Elizabeth China’s support is on the wane across and General Secretary Xi drove to Bucking- the world, nowhere more so than in the ham Palace in the Diamond Jubilee State United States. There is now a broad public Coach. The two governments spoke of a consensus – extending well beyond the “golden era” in their bilateral relationship. Beltway – that it is time to “stand up to That all changed in 2019, with protests China”. China is increasingly seen as the in Hong Kong followed by the imposition central challenge not only for the United of a draconian new security law on 30 June States but for the entire Western world. 2020. As well as criticism of Beijing, London also altered its visa rules to offer all Hong Kong citizens eligible for the so-called “Brit- China’s Popularity Slipping ish National (Overseas)” passport a path to permanent settlement in the United King- Beijing is losing friends over its foreign dom. This applies to about three million policy. A survey in the G7 countries people, or about 40 percent of Hong Kong’s in autumn 2020 found clear majorities population today. That alone demonstrates holding negative views on China, ranging the dismal state of the bilateral relationship. from 62 percent in Italy to 86 percent in This generous offer to take in so many Japan. Growing mistrust towards China has Hong Kong citizens is all the more striking, become the central issue of international given that control over immigration was politics. one of the central motives of the Brexit Responsibility for this decline in standing debate. Resettling these Hong Kong citizens lies in the first place at the door of Presi- could become the biggest such migration dent Xi Jinping, who has abandoned the since the expulsion of about 30,000 East caution of his predecessors and encouraged African Asians from Uganda and Kenya in a cult of personality not seen since the era the late 1960s and early 1970s. This time, of Mao Zedong. Xi takes a hard line domes- though, there is little objection to the plans, tically and internationally, provoking ten- with British opinion polls showing two- sions that affect not only relations with the thirds support. United States but also with two of the coun- Boris Johnson does not mind offending tries invited to Cornwall: Australia and India. Beijing, which regards the visa question as interference in China’s internal affairs. Johnson’s stance appears to be driven not Diverging Economic Interests only by British ire over violations of the within the G7 1984 Treaty but also a belief that the geo- political escalation compels London to take Exports are often regarded as an indicator a stand. of economic performance, although export Johnson’s invitation to Australia, India, concentration can also make an economy South Africa and South Korea originates highly vulnerable. The G7 nations and their in a proposal made by President Donald guests in Cornwall differ in their degree of Trump exactly a year ago. Trump called for dependency on exports to China. the establishment of a G11, comprising the Australia, South Korea and Japan all G7 plus Australia, India, South Korea and depend on China for a significant share Russia. Johnson co-opted the idea of form- of their overall exports, while the United

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Table 1 Table 2

Merchandise exports to China in 2020, Merchandise exports to China in 2020 G7 members and guests, share of total (US$ billion) exports (percent) Country Exports Country Exports Japan 140.5 Australia 39.7 South Korea 132.6 South Korea 25.9 United States 124.6 Japan 22.0 Germany 110.4 South Africa 11.5 Australia 100.0 United States 8.7 France 20.1 Germany 8.0 India 18.9 India 6.9 Canada 18.8 Canada 4.8 United Kingdom 18.6 United Kingdom 4.7 Italy 14.8 France 4.1 South Africa 9.9 Italy 3.0 Source: International Monetary Fund (IMF), Di-

Source: International Monetary Fund (IMF), Di- rection of Trade Statistics, own calculations. rection of Trade Statistics, own calculations. dom might feel free to pursue a more reso- States comes ahead of Germany. None of lute line than Germany. But both the United those countries, nor France or the United States and Australia have a great deal to Kingdom show any reticence over conflict lose, without that deterring them from with China, as evidenced by their willing- practicing a value-based foreign policy and ness to maintain a military presence in the responding firmly to violations of inter- Pacific. national law. A slightly different picture emerges in the absolute figures. Germany is Europe’s biggest exporter to China, although only Test Case Australia slightly ahead of Australia, which has less than one-third of Germany’s population. Australia is extremely dependent on ex- Germany’s large export volume is often ports to China and has experienced massive cited as a justification for its soft line political intimidation. That puts a special towards China, but this does not actually edge to Canberra’s invitation to Cornwall. stand up to scrutiny. In fact in 2019 trade In fact Beijing has worked to intimidate and with Poland and Hungary was larger than blackmail many countries in recent years; trade with China. South Korea and Sweden to name but two. So Germany is not in fact excessively In November 2020 the Chinese embassy dependent on China. Yet Beijing possesses in Canberra demanded that the Australian no better advocate in Europe. This was seen government address a list of fourteen griev- very clearly at the end of 2020 during the ances. The complaints included funding German EU Council Presidency, when Ber- supposedly “anti-China” research at the lin prioritised passage of the EU-China Australian Strategic Policy Institute; Aus- Comprehensive Agreement on Investment tralia’s positions on Taiwan, Hong Kong over Washington’s objections. and Xinjiang; its call for an independent The data in Tables 1 and 2 does suggest investigation of the origins of the SARS- reasons why France and the United King- CoV-2 virus; the ban on Huawei technology

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Table 3 A Quad Meeting

German merchandise imports from and exports to In parallel to the G7 meeting, the heads Eastern Europe and China in 2019 (€ billion) of state and government of the Indo-Pacific Quadrilateral Security Dialogue will also Country Imports Exports Total meet in Cornwall. Australia, India, Japan and the United States held an initial virtual China 77.0 96.3 173.3 summit on 12 March 2021. While military Poland 63.6 65.8 129.4 cooperation between Australia, Japan and Czech Republic 52.7 44.5 97.2 the United States is well established, Indian Hungary 29.1 26.9 56.0 participation in the “Pacific NATO” is new Sum: Poland, Czech 145.4 137.2 282.6 and reflects growing tensions between Republic, Hungary New Delhi and Beijing. While Prime Minis- ter Narendra Modi will remain in India on Source: Eurostat, own calculations. account of the prevailing coronavirus situa- tion, the other three heads of government in the Australian 5G network; and the will meet in person in Cornwall. blocking of more than ten Chinese invest- At the March meeting it was already ment projects as well as restrictions in clear that Washington is determined to fields such as infrastructure, agriculture counter Chinese aggression in the Indo- and animal husbandry. Pacific and forging broad alliances to back Prime Minister Scott Morrison enjoys this up. Within just a few months the Biden strikingly strong support for his China Administration has succeeded in mending policy, despite the enormous pressure the rifts left by President Trump and plac- applied by China and Australia’s great ing cooperation on a new footing. dependency. In 2020 82 percent of Austral- France and the United Kingdom have ians backed sanctions against Chinese offi- been supporting the Quad with naval cials implicated in human rights violations. contingents, although France lays weight So why are Australians not afraid to stand on operational independence; its nuclear up to China? attack submarine SNA Emeraude has been Two factors are significant. Firstly, in the Indo-Pacific since September 2020. Australian society has been experiencing Concerted action by a large group of coun- Chinese pressure for some years, and has tries sends a clear message: China’s viola- discussed the issue in depth. For many tions of international law will not be Australians obeying Beijing’s demands is accepted. simply unthinkable. And it helps that many This spring London sent a strike group Australians are well aware that China de- to the Pacific, led by the country’s only air- pends on Australian resource exports. Bei- craft carrier, HMS Queen Elizabeth. The fleet jing can do without Australian wine and also includes a Dutch frigate and an Ameri- lobster – but not without Australian iron can destroyer. On board the Queen Elizabeth ore, currently priced around US$180/tonne are eighteen F-35B combat aircraft, ten versus production costs of about US$10/ from the US Marine Corps and eight from tonne. Doing without iron ore from Aus- the British Royal Air Force. As well as tralia would have serious repercussions for demonstrating solidarity and interoperabil- China’s manufacturing and construction ity, London, Washington and The Hague sectors. No other supplier is in a position are also displaying military muscle in East to replace Australia. Asia. Germany’s plans to send the frigate Bayern to the Indo-Pacific on a freedom of navigation mission appear unconvincing. Without embedding in a broader naval

SWP Comment 36 June 2021

4 formation, the deployment will remain lations in Xinjiang have persuaded Chan- symbolic. cellor Angela Merkel to change her funda- mental position. This was seen very clearly at the end of 2020, when Germany pushed The End of BRICS? through the EU-China Comprehensive Agreement on Investment despite grave As well as the leaders of the G7 and Quad, concerns among its European partners and two of the five BRICS countries – India and Washington’s request to delay signing. South Africa – will also be present at the Germany stresses the importance of re- meetings in Cornwall. Even if Prime Minis- maining in dialogue with Beijing, for exam- ter Modi will not attend in person, the sig- ple to discuss climate change (with the © Stiftung Wissenschaft nificance of India’s participation is enor- world’s largest CO2 emitter). On the other und Politik, 2021 mous. For decades New Delhi pursued a hand, German export interests are cited as All rights reserved policy of equivocation and led the non- justification for conciliatory policy towards This Comment reflects aligned movement. No longer. After repeated China. the author’s views. spats with China, the Indian government Neither line of argument is convincing. has dropped its reservations and turned to In the past China has repeatedly failed to The online version of the West. follow words with deeds. For example in this publication contains While India’s cooperation with the trade policy, Beijing has repeatedly post- functioning links to other West is flourishing, cooperation among the poned the implementation of reforms asso- SWP texts and other relevant sources. emerging economies has ground to a stand- ciated with its accession to the World Trade still. When the BRICS group (Brazil, Russia, Organisation in 2001. SWP Comments are subject India, China, South Africa) first met in 2009 Beijing’s position on climate change is to internal peer review, fact- some observers saw it becoming a counter- also equivocal. Its construction of coal-fired checking and copy-editing. weight to the G7. That is certainly no longer power stations in Belt and Road partner For further information on our quality control pro- the case. is hard to reconcile with its Paris climate cedures, please visit the SWP The Indian-Chinese relationship is in obligations. The Paris Climate Agreement website: https://www.swp- tatters. Brazil’s far right President Jair of 2015 provides for the CO2 emissions of berlin.org/en/about-swp/ Bolsonaro has shown no interest in deepen- foreign investment to be taken considera- quality-management-for- ing cooperation. China and Russia are all tion, but there is no sign of this in China’s swp-publications/ that remains of BRICS. So it is hardly sur- Belt and Road Initiative. SWP prising that the 13th summit of the BRICS Beijing is naturally aware of the increas- Stiftung Wissenschaft und states, which India was supposed to host ingly hostile mood. It is certainly no coinci- Politik in 2021, has been postponed. In view of dence that just ten days before the Cornwall German Institute for the depth of strife between its two largest Summit President Xi “told senior Com- International and members, the prospects for cooperation munist Party officials it was important to Security Affairs within the BRICS group are dim indeed. present an image of a ‘credible, loveable Ludwigkirchplatz 3–4 and respectable China’”. But there is no 10719 Berlin sign of Beijing deviating from its policy of Telephone +49 30 880 07-0 Cornwall: A Turning Point in self-isolation or abandoning the idea of Fax +49 30 880 07-100 International Relations? “dual circulation”. www.swp-berlin.org The G7 Summit marks a watershed in [email protected]

The preparations for the G7 Summit re- twenty-first-century international relations. ISSN (Print) 1861-1761 vealed that Germany stands apart. While The G7 nations – first and foremost the ISSN (Online) 2747-5107 the United States, France, Japan and the United States and United Kingdom – have doi: 10.18449/2021C36 United Kingdom have responded to China’s recognised the challenge posed by China growing aggression, Germany continues to and are developing new forms of coopera- Translation by Meredith Dale pursue a policy of close cooperation. Neither tion. If Germany continues to insist on con- (English version of the illegal security law in Hong Kong nor ciliation it risks getting left behind. SWP-Aktuell 43/2021) the increasingly obvious human rights vio-

Prof. Dr. Heribert Dieter is Senior Associate in the Global Issues Research Division at SWP and Associate Professor at the University of Potsdam. SWP Comment 36 June 2021

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