The G7, economic coercion and the art of projection By: Carlos Martinez

5/31/2023

The G7, economic coercion and the art of projection By: Carlos Martinez

Read Now

The rich nations of the group of seven are intent on maintaining their collective interest as world powers at the expense of the global South. Pretending otherwise doesn’t stand up to scrutiny, writes CARLOS MARTINEZ

The stunning hubris and hypocrisy of the imperialist powers was on full display in Hiroshima last weekend, with the G7 condemning China for a “disturbing rise” in its “weaponisation of economic vulnerabilities.”

Coercion is, after all, at the heart of what unites the countries of the G7 — a for-us-by-us club of rich nations with a collective interest in maintaining their place at the top of the geopolitical pyramid.

Each member state built its wealth to a significant degree on the basis of colonialism and the exploitation of the land, labour, resources and markets of the global South.

That the G7’s role in global affairs is to bolster the US-led so-called “international rules-based order” is amply confirmed by the 2014 exclusion of Russia following its intervention in Crimea.

Why wasn’t such an extraordinary measure taken in response to the illegal and genocidal war on Iraq? Or in response to the war of regime change against Muammar Gadaffi, during which Nato countries bombed Libya into the stone age?

Any thinking person can understand the basis of this double standard: that G7 membership is predicated on an acceptance of the US-led imperialist system.

The US is the global champion of economic coercion

The G7 states are all involved in multiple forms of economic coercion, and thus to accuse China of doing so is hypocritical in the extreme.

All G7 member states are currently imposing illegal, unilateral sanctions on Russia and Belarus. The US is applying unilateral sanctions against China, North Korea, Iran, Syria, Cuba, Venezuela, Nicaragua, Eritrea, Zimbabwe and many other countries.

It is a sanctions superpower, “by far the world’s biggest deployer of unilateral coercive measures,” in the words of Columbia University economist Jeffrey Sachs.

According to the US Department of the Treasury’s 2021 Sanctions Review, sanctions designations have increased by a factor of 10 in the period from 2000.

The US imposes unilateral economic sanctions on nearly 40 countries, affecting literally billions of people.

Extraterritoriality and long-arm jurisdiction are used liberally by the US in order to inflict punishment on Iran, Venezuela, Russia and others.

It would be difficult to imagine a more flagrant example of economic coercion than the Helms-Burton Act, under which the US can penalise any company or country that doesn’t comply with its inhumane blockade of Cuba.

These sanctions have no legitimate basis in international law; they are only enforceable to the extent that the US has sufficient economic and military strength to enforce them. That is to say, the US is an international bully and a rogue state.

Furthermore, Western banks and Western-dominated multilateral lending institutions have a long history of issuing predatory loans, with conditions of privatisation and brutal austerity.

China a victim of economic coercion

China is not a perpetrator but a victim of economic coercion. What is the Trump-Biden trade war against China other than an attempt to use tariffs, sanctions, threats and penalties in order to contain China’s development; in order to force China’s government and companies to change their behaviour in order to better serve the interests of US capitalism rather than the Chinese people?

In an attempt to maintain a stranglehold on advanced semi-conductor technology, the Biden administration is implementing a full-spectrum strategy to prevent China from accessing chips made in the US or incorporating US intellectual property.

British economist Michael Roberts described the CHIPS and Science Act, signed into law by Biden in August 2022, as “the next stage in a series of measures to weaken China’s tech capabilities and global influence,” to “crush China’s tech advancement.”

Martin Wolf wrote in the Financial Times that the aim of the chip war “is clearly to slow China’s economic development” and that the CHIPS and Science Act is an “act of economic warfare.”

A notable absurdity here is that Taiwan, a region of China, is forced to comply with the US sanctions regime, and therefore Taiwan Semiconductor Manufacturing Company (TSMC) — the world’s biggest semi-conductor manufacturer — has been forced to stop its exports to the companies on the US Entity List, including Huawei.

Meanwhile, disgruntled at China’s lead in the renewable energy sector, and under the pretext of slander about human rights abuses, the Biden administration has imposed sweeping sanctions on Chinese-manufactured solar energy materials.

This is peak capitalist dystopia, combining economic coercion, propaganda war and ecocide.

Debt trap debunked

It has become fashionable in recent years for Western politicians to accuse China of luring African and Latin American countries into a “debt trap.”

Such accusations are another part of a broader anti-China vilification campaign and have been easily disproved.

Even the most recent edition of the Economist noted that “this criticism is largely unfair” and that in fact “China has financed roads, ports, railways and other needed infrastructure, when private lenders and other countries were often unwilling to do so.”

Tim Jones, head of policy at the charity Debt Justice, said recently: “Western leaders blame China for debt crises in Africa, but this is a distraction. The truth is their own banks, asset managers and oil traders are far more responsible but the G7 are letting them off the hook. China took part in the G20’s debt suspension scheme during the pandemic, private lenders did not.”

China is a major source of finance to developing world countries, but unlike the West, China does not impose loan conditions of austerity and privatisation; its interest rates are typically around half those of Western banks; and it tends to be far more flexible in relation to renegotiation, restructuring and debt relief.

What’s more, the bulk of China’s loans are used to address the infrastructure gap in the developing world. Writing about Chinese lending to Africa, Johns Hopkins University researcher Deborah Brautigam has noted that Chinese loans are “performing a useful service: financing Africa’s serious infrastructure gap.

“On a continent where over 600 million Africans have no access to electricity, 40 per cent of the Chinese loans paid for power generation and transmission. Another 30 per cent went to modernising Africa’s crumbling transport infrastructure.”

Economic coercion this is not.

“Let him who is without sin cast the first stone.” The G7 would do well to address its own shocking record of economic coercion before pointing fingers at China.

Author

Carlos Martinez is the author of the newly launched book The East is Still Red – Chinese Socialism in the 21st Century (Praxis Press).

This article was republished from Morning Star.