QUOTE – FOCUS: G-7 courting of supply chain partners a crack at new order
The envisaged creation of a “mutually beneficial” partnership with developing nations for resilient supply chains is testimony to how the Group of Seven rich nations that have dominated international trade and finance is transforming itself to cope with what some experts call the “post-globalization” era.
Economic security is among the major G-7 agenda items this year under the presidency of Japan. Behind it lies a sense of alarm about China’s tighter grip on critical components that has threatened the national security of other major powers.
With less than a week to go until a summit in Hiroshima where Prime Minister Fumio Kishida’s middleman skills will be put to the test, the G-7 finance chiefs concluded their talks on Saturday with an agreement on the launch of the supply chain partnership by the end of this year.
While the G-7 members are united in punishing Russia for its unprovoked war on Ukraine, the group is grappling with the conundrum of not being too harsh nor too easy on Asian powerhouse China.
“The role of the G-7 has increased again,” said Martin Schulz, chief economist at Fujitsu. “The current technology confrontation, especially between the United States and China, and the Russian attack on the post-world war order require cooperation and a common position among the middle powers” in the group.
Even within the G-7, the United States is more aggressive about countering what Treasury Secretary Janet Yellen described as “economic coercion,” while Japan is seeking to take a balanced approach to China, an assertive neighbor but a key trading partner.
The G-7 plans to enable low- and middle-income countries to play bigger roles in the supply chains of critical components necessary for decarbonization, such as electric vehicle batteries, solar panels and rare earth materials.
The group’s members hope that developing nations will benefit from sustainable growth by fostering their own domestic industries through investment and financial aid, while the global push for carbon neutrality will gather momentum backed by stable supplies of components for clean energy.
“Throughout the pandemic, we have witnessed the adverse effects of supply chains excessively concentrated in one place,” Japanese Finance Minister Shunichi Suzuki told a press conference after the G-7 meeting.
While Japanese officials dismiss the idea that the supply chain partnership initiative is directly linked to China, experts say any diversification away from the world’s second-largest economy, or “de-risking,” is easier said than done.
“In a globalized world, countries stayed out of markets in pursuit of free trade and deregulation. We are in a post-globalized era when countries intervene for political and national security reasons,” said Kazuto Suzuki, a professor of international political economy at the University of Tokyo.
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Read the full article on Kyodo news.


PARIS – In recent weeks, there has been no shortage of speeches by prominent leaders discussing their countries’ relationships with China and the potential economic fallout of geopolitical fragmentation. This is a welcome, if much-belated, discussion. But it must address a fundamental question: Can rivalry and economic integration coexist and, if so, under which terms? The answer will determine the fate of the global economy.
In February 2020, Jennifer Harris and Jake Sullivan published an article highlighting the need for a shift in economic thinking. When it came to managing globalization, they noted, foreign-policy professionals have largely deferred to the “small community of experts who run international economic affairs.” They urged national-security specialists to step up, recommended a proactive stance on public investment, and advocated a more guarded approach to trade opening.
Geopolitics and international economics have long operated under two distinct paradigms. Foreign-policy experts often see global politics as a zero-sum game in which one country’s gain is another’s loss. By contrast, economists tend to focus on the potential for mutual gains from multilateral cooperation and market-led integration. These contradictory paradigms were married to each other by the shared belief that trade and openness were in the best interest of the United States. America’s hegemonic status had its drawbacks, but the benefits outweighed the costs.
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Read the article written by Jean Pisani-Ferry on the Project Syndicate website.