The economic club looks like a political arena. Indonesia and its president Joko Widodo celebrate this week the new edition of the G20, in a heavy geopolitical climate. Beyond the economic divergences -the richest countries fight against inflation, for example, while the less powerful (South Africa, Indonesia) engage in a fight against the debt burden-, this summit offers a context closely linked to issues economic and political rivalries.
At the center of the debates, the invasion of Ukraine will be partly a non-issue, due to the absence of its main leader, Vladimir Putin. Certainly heated by the cold reception received in 2014 at the G20 after his invasion of Ukraine, the Russian leader did not make the trip. This, while the conflict fuels the explosion of prices, the disruption of value chains and the strangulation of less developed economies due to food shortages.
What poison the discussions. India and China have not officially shown their rejection of the Russian operation in Ukraine, and the Westerners are asking them to account: Emmanuel Macron, who will discuss with Putin right after the summit, recalled on Monday that he wanted China to “put pressure” on Moscow. Turkey, the Kremlin’s privileged intermediary to circumvent sanctions, also arrives in Bali crowned with its decisive role in unblocking trade and agricultural flows in the Black Sea. And beyond the shadow cast by the war in Ukraine, tensions have rarely been as high in recent years, between trade dissension and sovereignty issues.
China and the United States, first hand in hand
The first area of confrontation obviously opposes China and the United States. The two colossi are going through a moment of sharpened rivalry, and the US press this weekend stressed the importance of this G20 in the evolution of their relations. “This is sort of the first superpower summit of version 2.0 of the Cold War,” former Obama adviser Evan S. Medeiros said at the New York Times.
Joe Biden and Xi Jinping officially met this Monday for the first time since the start of the pandemic: although the two men have known each other since 2017, the US president had never received the Chinese leader since he took office. So it was time for courtesy expressions: Joe Biden said he wanted to “manage differences and prevent competition from turning into conflict”, when Xi Jinping indicated that he expected a “sincere” dialogue to “find the right direction “. Statements that join the official Chinese communication before Xi’s arrival in Bali.
On the political level, the two superpowers are opposed on the question of recognizing the Russian invasion -Beijing is not firm on the issue-, on respect for human rights in Xinjiang and on the fair supervision of the inclinations of North Korean power.
Taiwan flea wars
But the political rivalries have also moved to the economic aspect: the two economies are advancing towards greater sovereignty in the field of semiconductors, to the point that many observers see in the production of these chips, essential for technological development, the source of future world conflicts.
In a recent book, the American researcher at Tufts University, Chris Miller, suggested, for example, that semiconductors would play the same role as steel or nuclear power during World War II and the Cold War. At the same time, Russia was noted for its frantic search for old chips in Ukrainian theaters of conflict, to maintain its military fleet and circumvent embargoes.
Washington has been particularly aggressive this year on the issue of chips. In summer, the US administration invested 52,000 million dollars (not counting various incentives) to promote the production of chips made in usa, winning a comfortable majority for the measure in Congress; in the fall, he enacted new limits on the export of critical materials to China. With a clear objective.
It’s hard to disentangle the military stakes from the economic stakes: The chip market weighs in at $530 billion and could triple by 2030. But the development of computing power also serves to strengthen national military arsenals. Above all, China is considering a way out of these supply tensions: Taiwan. The island, through its Taiwan Semiconductor Manufacturing Company (TSMC), weighs 53% of the chip market in 2022.
Nancy Pelosi’s August visit, speaker of the US House of Representatives, on Taiwanese soil, had reignited tensions, allowing the CCP to remember that the island, under its “one China” theory, belonged to it.
The tensions over the tokens, in addition to being the umpteenth episode of the ongoing commercial rivalry between the two leading world powers, thus promise long-term political consequences. Hence the importance and unusually strategic overtone of the Biden-Xi discussion during this G20.
“Decoupling” and Western rivalries
Third great economic pole, Europe is submerged in the tensions between Beijing and Washington. Caught between the temptations of China to back down and the return of US strategic protectionism, he is the last defender of multilateralism. A position that is even more difficult to maintain given the continuous increase in inflation and the expected slowdown of its economy.
At the center of the likely discussions of this G20, energy and the fight against inflation in the United States should return: the Europeans have had a bad experience with American investments through the Inflation Reduction Act, which promises billions in tax incentives for energy companies that are established. in the U.S. Bruno Le Maire, for example, denounced the BFM business unfair competition from this plan, while Europe tries to attract manufacturers of batteries, or even electric vehicles.
Faced with competition, member states may be called upon to act alone: Germany, already rebuked for its €200 billion energy plan, which other eurozone members have perceived as a threat to their budgetary and economic-political cohesion, for example, has recently been very enterprising with regard to China. In early November, for what was the first trip by a European leader to China since the start of the pandemic, Olaf Scholz said he wanted to “further develop” economic cooperation with Beijing.
Berlin fears a Chinese “decoupling”, whereby Beijing would become independent from other economies by strengthening itself in key industrial sectors. In a recent note, the Jacques Delors Institute explained that the decoupling of the US and Chinese economies, and the isolation of the latter, would have “a direct impact on European companies”, forcing them to play on both sides. He advocated strengthening European standards and keeping in touch.
This Indonesian G20 should be an opportunity for bilateral talks on these issues. As a prominent feature of this type of meeting (this is also the case of the G7), the Old Continent will be represented both by some of its members (Germany, France, Italy, Spain) and by the continental institutions themselves (Commission and Council). What, perhaps, push for a harmony of speeches.
Source: BFM TV
