A G7 rebooted as a Sinophobic crusade will have few if any takers due to members’ rising dependence on Chinese goods and markets
by Pepe Escobar with permission and first posted at Asia Times
The upcoming G7 in Cornwall at first might be seen as the quirky encounter of “America is Back” with “Global Britain”.
The Big Picture though is way more sensitive. Three Summits in a Row – G7, NATO and US-EU – will be paving the way for a much expected cliffhanger: the Putin-Biden summit in Geneva – which certainly won’t be a reset.
The controlling interests behind the hologram that goes by the name of “Joe Biden” have a clear overarching agenda: to regiment industrialized democracies – especially those in Europe – and keep them in lockstep to combat those “authoritarian” threats to US national security, “malignant” Russia and China.
It’s like a throwback to those oh so stable 1970s Cold War days, complete with James Bond fighting foreign devils and Deep Purple subverting communism. Well, the times they are-a-changin’. China is very much aware that now the Global South “accounts for almost two-thirds of the global economy compared to one-third by the West: in the 1970s, it was exactly the opposite.”
For the Global South – that is, the overwhelming majority of the planet – the G7 is largely irrelevant. What matters is the G20.
China, the rising economic superpower, hails from the Global South, and is a leader in the G20. For all their internal troubles, EU players in the G7 – Germany, France and Italy – cannot afford to antagonize Beijing in economic, trade and investment terms.
A G7 rebooted as a Sinophobic crusade will have no takers. Including Japan and special guests at Cornwall: tech powerhouse South Korea, and India and South Africa (both BRICS members), offered the dangling carrot of a possible extended membership.
Washington’s wishful thinking cum P.R. offensive boils down to selling itself as the primus inter pares of the West as a revitalized global leader. Why the Global South is not buying it can be observed, graphically, by what happened for the past eight years. The G7 – and especially the Americans – simply could not respond to China’s wide-ranging, pan-Eurasian trade/development strategy, the Belt and Road Initiative (BRI).
The American “strategy” so far – 24/7 demonization of BRI as a “debt trap” and “forced labor” machine – did not cut it. Now, too little too late, comes a G7 scheme, involving “partners” such as India, to “support”, at least in theory, vague “high-quality projects” across the Global South: that’s the Clean Green Initiative , focused on sustainable development and green transition, to be discussed both at the G7 and the US-EU summits.
Compared to BRI, Clean Green Initiative hardly qualifies as a coherent geopolitical and geoeconomic strategy. BRI has been endorsed and partnered by over 150 nation-states and international bodies – and that includes more than half of the EU’s 27 members.
Facts on the ground tell the story. China and ASEAN are about to strike a “comprehensive strategic partnership” deal. Trade between China and the Central and Eastern European Countries (CCEC), also known as the 17+1 group, including 12 EU nations, continues to increase. The Digital Silk Road, the Health Silk Road and the Polar Silk Road keep advancing.
So what’s left is loud Western rumbling about vague investments in digital technology – perhaps financed by the European Investment Bank, based in Luxembourg – to cut off China’s “authoritarian reach” across the Global South.
The EU-US summit may be launching a “Trade and Technology Council” to coordinate policies on 5G, semiconductors, supply chains, export controls and technology rules and standards. A gentle reminder: the EU-US simply do not control this complex environment. They badly need South Korea, Taiwan and Japan.
Wait a minute, Mr. Taxman
To be fair, the G7 may have rendered a public service to the whole world when their Finance Ministers struck an alleged “historic” deal last Saturday in London on a global, minimal 15% tax on multinational companies (MNCs).
Triumphalism was in order – with endless praise lavished on “justice” and “fiscal solidarity” coupled with really bad news for assorted fiscal paradises.
Well, that’s slightly more complicated.
This tax has been discussed at the highest levels of the OECD in Paris for over a decade now – especially because nation-states are losing at least $427 billion a year in tax-dodging by MNCs and assorted multi-billionaires. In terms of the European scenario that does not even account for the loss of V.A.T. by fraud – something gleefully practiced by Amazon, among others.
So it’s no wonder G7 Finance Ministers had $1.6 trillion-worth Amazon pretty much on their sights. Amazon’s cloud computing division should be treated as a separate entity. In this case the mega-tech group will have to pay more corporate tax in some of its largest European markets – Germany, France, Italy, UK – if the global 15% tax is ratified.
So yes, this is mostly about Big Tech – master experts on fiscal fraud and profiting from tax paradises located even inside Europe, such as Ireland and Luxembourg. The way the EU was built, it allowed fiscal competition between nation-states to fester. To discuss this openly in Brussels remains a virtual taboo. In the official EU list of fiscal paradises, one won’t find Luxembourg, the Netherlands or Malta.
So could this all be just a P.R. coup? It’s possible. The major problem is that at the European Council – where governments of EU member-states discuss their issues – they have been dragging their feet for a long time, and sort of delegated the whole thing to the OECD.
As it stands, details on the 15% tax are still vague – even as the US government stands to become the largest winner, because its MNCs have shifted massive profits all across the planet to avoid US corporate taxes.
Not to mention that nobody knows if, when and how the deal will be globally accepted and implemented: that will be a Sisyphean task. At least it will be discussed, again, at the G20 in Venice in July.
What Germany wants
Without Germany there would not have been real advance on the EU-China Investment Agreement late last year. With a new US administration, the deal is stalled again. Outgoing chancellor Merkel is against China-EU economic decoupling – and so are German industrialists. It will be quite a treat to watch this subplot at the G7.
In a nutshell: Germany wants to keep expanding as a global trading power by using its large industrial base, while the Anglo-Saxons have completely ditched their industrial base to embrace non-productive financialization. And China for its part wants to trade with the whole planet. Guess who’s the odd player out.
Considering the G7 as a de facto gathering of the Hegemon with its hyenas, jackals and chihuahuas, it will also be quite a treat to watch the semantics. What degree of “existential threat” will be ascribed to Beijing – especially because for the interests behind the hologram “Biden” the real priority is the Indo-Pacific?
These interests could not give a damn about a EU yearning for more strategic autonomy. Washington always announces its diktats without even bothering to previously consult Brussels.
So this is what this Triple X of summits – G7, NATO and EU-US – will be all about: the Hegemon pulling all stops to contain/harass the emergence of a rising power by enlisting its satrapies to “fight” and thus preserve the “rules-based international order” it designed over seven decades ago.
History tells uss it won’t work. Just two examples: the British and French empires could not stop the rise of the US in the 19th century; and even better, the Anglo-American axis only stopped the simultaneous rise of Germany and Japan by paying the price of two world wars, with the British empire destroyed and Germany back again as the leading power in Europe.
That should give the meeting of “America is Back” and “Global Britain” in Cornwall the status of a mere, quirky historical footnote.
What can the USA give Putin in the fight against China? Nothing.
Thank you, Pepe, for another informative article.
“What goes around, comes around.”
When the US stopped being a productive nation back in the 80s and beyond, a FATAL error was made: by off-shoring millions of labor jobs. The end result was to witness the Rise of The Elite. Slowly, the entire US economy became Financialized.
Banks, Big Insurance, and Real Estate, was gamed by the wealthy few, Then came the financialization of private hospitals, pharmaceutical giants, and now most all US universities. Most States have been bankrupted by the huge loss in taxpayer $$, leaving most State functions: water, utilities/sewage, etc.were captured by these Elites, making much higher costs for the state citizens.
America is swiftly becoming a 3d World nation for most citizens here.
Thank you sir good articles and good comments. I also see the fews takeover of roads& highways
reconfigure them as toll roads that you have to pay to drive through. With the decline of clean water and
clean air, near future we will have to pay for all of these if we want to live.
Banks have now collateralized just about the whole of the airline industry in order to keep them flying the friendly skies, if they dont make it back from covid, and it doubtful that they will, we’ll have to bailout another industry as the industry reinvents itself and compete against that.
Me thinks the banks are wearing one too many hats.
Here in Italy it is sometimes debated (not in MSM of course) whether endorsing a commercial deficit policy is a “fatal error” or just what an Empire has to do in order to maintain its predominance in the medium-long term (by keeping large parts of the world bounded to itself). We had the Roman Empire, so we know something.
But, from an imperialistic point of view, the US are behaving less wisely than the Romans, so it’s highly probable that their hegemony is not going to last more than the Romans’ one did.
Terrific piece. The decline of late-stage American capitalism has progressed to the point where the very survival of the American Empire requires constant debt monetization (aka money printing) to prop up financial markets, over-priced real estate, the Pentagon and support ongoing wars. This is becoming increasingly unsustainable as debt levels continue ballooning- (since Mar 2020, US debt increased $7 trillion; cumulative debt exceeds $27 trillion), inflation is increasing and the dollars status as the world’s reserve currency is being increasingly undermined. The US ruling elite view the China-Russia-Iran axis as an intolerable obstacle to US global hegemony. Biden is trying to enlist increasingly recalcitrant US vassals and ‘allies’ in this fight.
As long as the US$$ remains the central currency used around the world, it will continue to be the world’s hegemony because that usage of $$s around the world always returns to its home base.That’s WHY
It’s only when China, Russia, Eurasia, parts of Africa, Latin America currencies leads to CRITICAL MASS, (Dr. Michael Hudson) then and only then will the US financial sector begin to fragment.
As it stands today, the American social problems keep accumulating, making it more difficult for millions of its citizens. But the masses there are a big part of the problem on a generational basis, millions have been “dumbed down.”
and drugged up. an altered reality is the only means by which millions can cope, and millions more simply tune out via drugs.
As long as China and Russia stick together, it will be very, very difficult to peacefully pry Germany away from that huge Eurasian market that it already is doing very well serving (and getting limitless cheap, reliable and relatively clean energy from). Short of some nefarious Hail Mary false-flag operation aimed at turning one on the other.
> “The controlling interests behind the hologram that goes by the name of ‘Joe Biden’ have a clear overarching agenda: to regiment industrialized democracies – especially those in Europe – and keep them in lockstep to combat those ‘authoritarian’ threats to US national security, ‘malignant’ Russia and China.”
In my view this slightly misses the “overarching agenda”, which is not strictly to oppose a rising China or defiant Russia, but to oppose a genuinely multipolar international order which is incompatible with the Washington’s desired unipolarity. China and Russia, as strong sovereign nations, are the foremost advocates of this internationalism, but the movement is fundamentally global and decentralized. Indeed, the battle is presently most intense in those nations that are actively seeking to recover sovereignty, from Palestine to Germany, Syria to Nigeria, Peru to Belarus, Mexico to New Zealand.
The principle error of the West is viewing the conflict through a Cold War, “Great Power” framework–which implicitly trivializes power relationships as inherently linear and bilateral. Fundamentally, this framework is a relic of early 20th century industrialism, in which all systems can be reduced, atomized, linearized, mechanized. However, it is totally unfit for the current state of technology and global affairs, and explains the mind-boggling schizophrenia of Washington’s strategies toward Russia and China. Picture the Washington Cold Warrior’s brain: it has one, and only one, compartment for ‘Enemy’. Yet the antagonism to Washington is fundamentally distributed; there is no single tangible “Enemy”. Rather than adapting the framework, the Cold Warrior psychotically bounces between China, Russia, China, Russia, Iran, Venezuela, China, and is utterly incapable of formulating a coherent and correct path forward. This inability of Western leadership to think in terms of nonlinear, irreducible systems–in the era of the Internet, AI, Connectivity, Ecological Collapse–represents the inevitable doom of the present configuration of Western civilization.
Great Power geopolitics? More like Crackpipe geopolitics. Utterly barbaric.
Brilliantly articulated, in a few precise words, the most accurate comment I’ve read in a long time on the worldwide (spider) web. Thank you dear!
Awesome and brilliant comment
New draft legislation, dubbed the “Anti-Foreign Sanctions Law,” was submitted to the National People’s Congress (NPC) Standing Committee for a second reading on Monday. It is expected that the draft will be approved by the top legislative body in China on Thursday. The details of the draft have not been made public. However, according to a Xinhua report, the Chinese government will launch multiple corresponding counter-measures against entities and individuals in relevant countries, meaning the United States, from the beginning of 2021.
The law has been passed. Specifics of ‘anti-sanction’ measures will be developed and enacted later.
The path to endless hegemony is over the Silicon Road. The US has to have a decisive edge in technology or it cannot hold its post as unipolar king of the global mountain.
Though DARPA/Pentagon and NSA/CIA/FBI drive the vital technology sector of the US, the brains of US technology reside in the High Tech Mega Corporations of Silicon Valley, Seattle, Massachusetts and Israel.
These corporations are from whence the US potential for continued dominance rides.
Ingeniously, the EU (soon to be joined by the US) have built speed bumps if not roadblocks called increased taxes placed on the very entities they must use to catch up to China+Russia. Add the burden of Green Climate filtering all decisions on what ‘vehicle’ to use on the Silicon Road, and you have an ineffective game plan for the future. It will come down to throwing big money at the issues the US must control. Thus, the Senate passed a bill, soon to be law, with funding of $250 Billion.
$52 Billion is marked directly to bring the semiconductor industry onshore from Taiwan, Japan and South Korea. This is the golden egg of high technology. US leads the world in patents on the semiconductor machinery and processes. China is behind by 5-7 years, but can make a leap forward as it finally focuses its resources on matching the world’s standard, now 2 nm chips. In 2-3 years, China may get to that standard. The question is where will the US be? The target often moves in technology.
Meanwhile, though the US and EU will provide massive funding for technology, the Big High Tech corporations have markets to tend to which the Chinese threaten. TikTok and Huawei show that the Chinese can compete, win and dominate. In the digital world, no one stays atop the market forever. Can the US corporations maintain their market dominance while distracted by urgent US government needs?
What we saw in the pandemic panic for the last 16 months is China handled the pandemic and got its economy back up and growing in months. The EU and US are still mired in the sludge of crippled economies and ideological in-fighting over vaccines, masks, closing locations and the impact on sectors vital to their economies.
China is back on the Belts and Roads Initiative. The US is looking for the starting point of its Silicon Road Initiative. Needing its vassals and packaging the US initiative in Europe shows the fundamental weakness of the US strategy. It cannot take on China without Germany inside the US group. Germany already demanded and won the NS-2 energy debate with Biden. This completely defeats the argument to Germans that Russia is the threat to Germany that requires NATO and lockstep obedience to the Hegemon.
Will other nations contribute the technological assistance to empower the US to compete and win against China?
Ultimately, in the digital economic future, Technological Intellectual Property is like Rare Earth minerals. If you have patents, you have power and influence. Ceding to the US as if this is another Atom Bomb project is not going to happen.
Germany has already decided that it cannot say “yes, Master” any longer.
It will be very intriguing to see what other European and Asian vassals do when Biden tells them “our way is the only way”. As Pepe points out, many of them have one foot on the New Silk Road/BRI. They already decided the future is not with the Oceanic hegemony. The want to be part of a multipolar developing world. China and Russia are not a threat to the US. They are the tour guides to the future.
Except these same people have already made a great many mistakes in private that are only now being brought to the light of day.
If those clowns have to juggle just one moore ball, the whole curtain looks be rising with a host of naked and afraid emperor’s standing there in seeming joy for their past accomplishments.
thank you, L445, perhaps you recall china some years ago, 2 i believe, questioning the entire patent field? is it possible, china, russia, eurasia could move forward without such a hobble, abandon it in a similar way to existing the dollar? russia has essentially begun such a move with sputnik V.
Russia’s industrial R&D strategy is different from China’s. Russia invents and innovates what it needs (to defend itself, to supply itself.) It doesn’t pursue the development of consumer products and gadgets.
China has to build products for export. Though it has been building a consumer market domestically, it still must sell things all over the world.
So, patents are not an issue. Sanctions which restrict access and licenses to use impact Russia. Therefore, they are forced, product by product, to create a domestic version that does not violate the West’s patents.
Atop that strategy, the Russians develop dual use technologies, military and civilian spinoffs are common.
“Therefore, they are forced, product by product, to create a domestic version that does not violate the West’s patents.”
Does Russia actually respect the West’s copyright and patent laws?
Nope. Inside Russia anything can be made and sold free of them. Same time, they protect their trade secrets. In the west, you pick one or the other (patent or trade secret).
the Hegemon with its hyenas, jackals and chihuahuas
Couldn’t have said it better myself.
G7 is a joke… and a bad one….
G7 is code for “Who’s your daddy?”.
It’s a spanking festival for the EU deviates and vassal submissives.
Uncle Spank goes to rectify their wrongs.
Look at the fine print of that 15% price fixing, corporate taxing “initiative”.
It targets gross profits over 10% of a company’s net worth. Amazon runs on low margins, not just to provide value, but to crush its competition, hovering somewhere around 6%.
You’ve been had, rich envying suckers.
Love reading your articles Thanks!!
Congratulations, Pepe Escobar on such a concise & delightful-to-read article about the quasi-irrelevance of the Empire of Evil…and its super-human effort to be somewhat relevant.
“Pepe the Great” has been predicting this for basically two Decades, and after these three debacles, “The Hologram” will have struck out, and nobody gets 4 strikes. After he strikes out the Hologram will be told in no uncertain terms to “get the Hell out of my backyard” by a big growling Bear, and when it’s over and done the Hologram will fade away to nothingness. The MICIMATT (Please see Ray McGovern’s articles for the definition) won’t be able to light him up again and then we may be facing a Drunk with fading Power Madman start WWIII try to get the Empire back.
“The EU-US summit may be launching a “Trade and Technology Council” to coordinate policies on 5G”
It is generally wise to remember that the Titanic was lauched but did not arrive at its planned destination, but final destination partly because of distortions caused by fire in “the engine room” since it launched unsafely due to marketing concerns, that “the World Series” is not synonymous with the series with the world participating, and that Boeings don’t often go boing.
“G7: Desperately Seeking Relevancy”
Don’t be overly churlish.
Even the bill matter rhymes
in twelve character times:
Biden and BoJo
The comedy duo
Good to see that the 1996 election team found gainful employment continuing zippiness.
“Biden and BoJo…”
But..that association dates from long ago…Thanks to them Franco died in bed…of aging…allegedly they did not want to “meddle”…when we know meddling is their reason of being..
Thank you Pepe Escobar, the Saker, and the greater Saker community. I appreciate and respect everyone’s insight and commentary. Excellent work, just rock solid.
Thus it is intuitive that the US is an empire in decline. But one needs the respective intuition (that is why I am here at the Vineyard of the Saker).
The greater issue is that more individuals are not getting this insight and commentary. Too many are lazy or just can’t contemplate that they are being “played.” The mob provides great comfort. As we all know – “50,000 lemmings just can’t be wrong.”
Don’t be fooled.
The Crash Test Dummy’s/Biden’s agenda is to corral and compel Europeans to join in America’s Hybrid World War against China.
That is what Biden’s European tour in general is about.
Biden advances anti-China agenda at G7 summit, takes Johnson to task over Brexit
Living in Australia it is becoming impossible to ignore the drums of war. Our defence minister, senior public servants (yes Quite Out Of Line) are openly mentioning it. Australia has become the US attack dog (sacrificial service). The media is pushing it and even in the local takeaway the matter is being discussed (i lost my cool with a stranger last night i am sorry to say).
However both out political parties (actually say three because the Greens are no better) have joined the war chorus.
Even the biggest fools must understand that for Australia to offend China is downright stupid given it is our biggest (by a VERY large margin) trade partner. Therefore to deliberately set out to give offence, which our government has been doing, indicates to me that the plans are a long, long ,long way down the war track. I think it is significant that China is putting up trade barriers to our perishable or consumer products – wine, meat etc, but is still buying iron ore at a great rate. Ominously I heard just this morning that China is also buying wheat and grain at a rapid rate from everywhere. These are clearly security measures – war or drought or economic sanctions all possible but still ominous.
The G7 is basically a war planning meeting, since NATO plus the Quad are in attendance plus two potential recruits – Sth korea (OK already a recruit but wobbly) and South Africa.
There will be no war because they know what will happen to Australia if they strike China.
who will care tuppence for Australia, other than Australians. We are expendable.
We will be encouraged to provoke China and we will be set up as a trial run to test the power of Chinese weapons and their willingness to fight. So if a hot war starts I fully expect Australian ships to be the first targets selected and Darwin harbour the first place attacked. iIf the Chinese look powerful enough the US will sue for peace and duck for cover, leaving Australia to pick up the pieces. Only if the Chinese weapons perform badly will the USA be brave enough to actually attack Chinese boats or planes or ports.
Yup. Australia’s role is serve as American imperial cannon fodder against China.
In other words, Australia = Ukraine
Almost every politician, senior civil servant and judiciary is AZ stooge or is one herself. Just like Canada, but more complete. They’re another vassal state.
Apparently, that ‘global tax’ on MNCs of 15% is, in actuality (if it ever happens) just 7%!
Note to Pepe, in that retinue there are Corgis, Poodles, Schnauzers.
Please do not bring Chihuahuas to this allegory, it is not appreciated by Us From this latitude, completely foreign to that circus. Chihuahuas will tear your ankles to pieces, Corgis and poodles will look fashionable, schnauzers will deafen you with Guau, guau!
What characterizes a 3rd world country is not its (lack of ) wealth, but its contrasts, e.g., insane wealth surounded by insane poverty. By this definition the US already are the richest 3rd world country of the planet.
‘America is back grandstanding, bullshitting and warmongering’ is a better strapline, me thinks.
Grandstanding that it is the world leader. Anyone with brains knows that that train left the station before Biden was elected.
Bullshitting about projects to counter BRI. There’s no-one with any brains that thinks the US is serious, it’s all media flim-flam.
Warmongering: the raison d’etre of the USA IS warmongering. It is a totally addicted warmongerer. It can’t live without its fixing of a war every Presidential term. That’s why it got rid of Trump: he didn’t declare a war. He wanted to bring troops home. He put American lives before MIC profits. TREASON!
The Americans left Europe for the New World. Europe would much prefer it if they stayed there in their neo-feudal paradise, pursuing liberty and happiness without worrying about the rest of us.