I’ll explain what will change on China, Libya and Big Tech after Biden’s G7. Speak Pelanda
The conclusions of the G7 commented and analyzed by Carlo Pelanda, professor of geopolitics and economics
After the G7 summit in Carbis Bay, there is much talk of that "return of America" promised by President Joe Biden and also of relations between China and Europe, with Prime Minister Mario Draghi opening the memorandum for a review agreement on the Belt and Road Initiative (or New Silk Road) signed by Italy in 2019.
For Carlo Pelanda, geopolitical analyst and professor of economic geopolitics at the Guglielmo Marconi University in Rome, "the scenario has changed", and Biden has managed to "bring the Europeans on board" in his Chinese containment plan. Not as much as he would have liked, though.
Professor Pelanda, how did the G7 go for Biden? How clear was the change in approach with respect to Donald Trump?
In 2017, both Republicans and Democrats agreed that China had to react: this glue, dictated by America's will to continue to be the first world power, is a fact. But then Donald Trump interpreted the mandate in a somewhat provincial way, trying to reduce the trade deficit with Beijing and obtain benefits for US farmers. He shifted the grand strategy to the level of commercial detail: he did not succeed. He thought he could do it in an 'Americanist' way, without involving the allies: he did not understand that to condition China it was necessary to create something bigger than her, that is, an alliance between democracies on a global level.
Joe Biden, on the other hand, understood it. At the G7 in Cornwall he obtained 70% of what he had set: it is not a little. He brought the Europeans on board, although not as he wanted, because Europeans have a greater dependence on China than Americans and have fewer resources to confront the eventual loss of the Chinese market. Biden understood this and was satisfied.
Even if the Europeans wanted to soften the opposition with China, Biden still managed to get them to say important things about distancing from autocratic regimes. A first border was therefore created based on the values of democracy as opposed to those of autocracies. From here then a whole series of initiatives will develop.
Speaking of initiatives: Biden has launched a response to the New Silk Road, Build Back Better World (B3W). Which areas of the world do you think it will turn to?
Yes, confidential drafts on this project had been circulating for a long time. Let's say that the general objective is to fight China in Africa and South America, gray areas where it is necessary to offer more advantageous alternatives to those coming from Beijing. It's not easy. Resources will have to be spent and somehow two blocs will form: the area of democracies and the area of Chinese influence.
The ultimate goal is to reduce China's influence within its national borders. Americans and Europeans have already severely severed China's links with the rest of the world. In fact, the grand strategy of the United States says that China can be a big economy, but it must stay where it is and not expand beyond its territory. There is no aim for regime change : no one would have the money to refinance and contain China's disorder.
Not all G7 members see China in the same way. It seems to me that Europe has some reservations to take sides. What is Italy's position? And what about the New Silk Road memorandum?
The memorandum with Italy was a document of intent, in fact it has already been canceled. The New Silk Road is in trouble: China is threatening but not that strong; she doesn't have the money she needs to plug the internal banking and overcapacity crisis. It has a debt hole equivalent to 150 percent of GDP that it manages to hide, but it needs money to cover it. Much of China's New Silk Road programs have in fact been cut or reconverted to give priority to those areas where Beijing is safer to export manufacturing.
American democracy needs to wave the flag of the Chinese threat to justify commercial expansion in Africa and South America.
Is there anything the United States can do to reduce that European dependence on China you were talking about?
America should create an integrated and global market of democracies, which has a Euro-American center and which aims to replace the Chinese market with the Indian one.
However, the scenario has changed. America has re-engaged, and this shifts the balance in favor of the world of democracies. American diplomacy has shown itself to be intelligent, crafty, and has given up on showing arrogance. I give an example. Germany cannot have problems of conflict with China and Russia because its economy would be severely affected. Trump had threatened sanctions, while Biden invited Angela Merkel, as the first European leader, to Washington to discuss the issue together.
However, Europeans still have some perplexity about America's reliability: they are already looking at the mid-term elections and the possible consequences should Biden lose the majority.
Returning to the G7, what do you think of the so-called "minimum tax" for large technology companies? It will do? What would it mean for Big Tech?
The Democratic Biden administration will try not to upset the big American tech companies, which are an important ally ahead of the mid-term elections.
These companies can easily afford to pay a little more in taxes, their business is not in trouble. What concerns them rather is direct taxation, that is, the European approach. And then we will use the trick of the minimum tax, which will be – after a long journey – a compromise between governments and multinationals. Governments will be able to say that they have taxed the multinationals, and in return they will get an end to the demonizing pressure against them. The substance, however, does not change.
Referring to Libya, Mario Draghi said that "the first requirement is to implement the cease-fire", and therefore that foreign mercenaries leave the country. How is the Libyan scenario?
Draghi brought home a first American commitment to persuade Turkey to remove its mercenaries. The Russians, from Wagner, have not been fighting for a long time. The scenery is good enough. America has been supporting Italy over Libya, and this for some time: in the transition period between Trump and Biden, the American imperial bureaucracy had taken stock of the situation and decided that Italy could not be left alone with the Russians .
Italy, for its part, has done quite well. The scenario is obviously uncertain, even if still a little nuanced, but fundamentally we can bet on the stabilization of Libya. There is also an Italian-French convergence, even if not yet armored.
There will be pressure towards Turkey: the negotiations are already underway; the Americans were missing, but now there will be. Turkey will ask for something in return, but it is not yet very clear what. Democracies threaten, in words, the stick against Ankara, but they must give it a carrot on the economic level. Although Turkey tends to ask for more than what is possible.
Russia, on the other hand, is negotiating with the United States its presence in the Mediterranean and its surroundings. Moscow is present in international scenarios because it wants to be recognized as a global power: it is afraid of falling into the jaws of China, which wants to eat it.
However, there is a good chance that eventually there will be fewer soldiers fighting in Libya. In addition to external presences, however, there are two hundred tribes in Libya that must be satisfied, and they will be satisfied only with the full resumption of oil production. The picture is however quite positive.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/mondo/joe-biden-cina-g7-pelanda/ on Mon, 14 Jun 2021 12:21:12 +0000.