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Biden persuades G7 to be more competitive towards China

Bernd Riegert Carbis Bay, United Kingdom
June 12, 2021

The US leads efforts to create a western alternative to China's New Silk Road project, but the EU is wary of setting up an anti-China coalition. Bernd Riegert reports from Carbis Bay.

Joe Biden, Queen Elizabeth II, Boris Johnson and Emmanuel Macron
Citing China for its forced labor practices is part of President Joe Biden's campaign to persuade fellow democratic leaders to present a more unified front to compete economically with BeijingImage: Jack Hill/AP Photo/picture alliance

The Group of Seven (G7) rich industrialized nations and the EU are presenting a harmonious front at their summit in the Cornish seaside resort of Carbis Bay in southwestern England. Diplomats seem pleased new US President Joe Biden is making transatlantic cooperation possible once again.

While heads of state and governments meet in small groups or stroll along the beach, the US is doing its best to persuade the G7 states to take a tougher line towards China, said one German diplomat involved in the negotiations. He said President Biden had declared China's efforts to become the strongest economy in the world as the biggest challenge of this century.

Biden needs to come on strong at the G7 summit in order to keep critics and supporters of his predecessor Donald Trump in check, Anthony Gardner, former US ambassador to the EU, tells DW from Brussels. European states would do well to follow Biden if they want to prevent Trump's return to the presidency, he added.

EU attitude more nuanced   

Germany's G7 delegates gave the impression that generally they agreed to following a robust course towards Beijing. They said that human rights violations — with regard to the Uyghur minority — the pro-democracy movement in Hong Kong or dissidents on the mainland, had to be raised and condemned.

However, the EU's attitude in Carbis Bay is that China is not only a systemic and economic rival, but a necessary partner in many areas. German Chancellor Angela Merkel said there could be no real progress with regard to the climate crisis without Beijing. After all, China is the biggest emitter of harmful gases. It aims to be carbon neutral only by 2060, whereas, the EU has set 2050 as its goal.

One US diplomat said that Joe Biden had criticized forced labor in China, particularly concerning the Uyghur minority, "very strongly." He agreed that many Europeans had also condemned the forced labor but said they were not in agreement as to how to respond. An EU diplomat said that sanctions had to have an effect and not only be symbolic.

The US is more concerned than the EU by China's military provocations and threats in the South China Sea, which will be on the agenda at Monday's NATO summit.

Both the US and the EU have imposed sanctions on China because of human rights violations. However, ahead of doing this, the EU signed a trade deal with Beijing which Washington was very critical of.

The Comprehensive Agreement on Investment (CAI), which has not been ratified, is currently frozen. The European parliament refuses to debate it as long as Beijing maintains its sanctions against European lawmakers.

A freight train departs from a railway port in Latvia as a worker watches
China has invested billions into infrastructure projects around the world to build up its political influenceImage: picture-alliance/dpa/Imaginechina/L. Qiang

'Build Back Better'

What is new is that the G7 richest democracies have agreed to set up a global infrastructure partnership. Biden arrived in Cornwall with the firm intention of driving through his "Build Back Better World" investment plan. The summit's host, UK Prime Minister Boris Johnson, who envisages a new transatlantic bond between North America and Europe, praised the idea.

As yet, it is unclear how this will actually work. What is clear is that it will be a kind of alternative to China's Belt and Road initiative, said diplomats in Carbis Bay. Since 2013, China has set up economic partnerships with dozens of the world's poorer states in Africa, Asia, Latin America and Europe, into which it is reported to have invested $3.4 trillion (approximately €2.8 trillion).

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The partners have been lured with cheap loans and huge investment into infrastructure, such as roads, railways and ports. Beijing hopes to build up its political influence in the world with the cooperation. 

Critics of the project — also known as the New Silk Road— say that Beijing does not ask questions with regard to good governance, corruption and human rights when allocating funds.

Greece, Hungary and Italy are just three of the 15 EU member states involved in the project.

Group photo of G7 leaders on beach
This is the first non-virtual G7 since the coronavirus pandemic broke out Image: Patrick Semansky/AP/picture alliance

'Details yet to be discussed'

The G7's alternative infrastructure plan is supposed to mobilize billions. Though it has not yet been clarified where the money will come from, the White House did indicate that private capital might be invested into a fund. A high-ranking European diplomat said that the idea was also to better coordinate and promote already existing investment projects.

"It is not as if the G7 states aren't already a very big investor in the world," said one G7 diplomat. But this new initiative will not only be about investing in railways, bridges and roads, but also establishing factories, where vaccines can be produced, for example, according to the G7 resolutions. No decision has been made with regard to who will manage the initiative and from where. "Many details have yet to be discussed," an EU diplomat familiar with the matter said.

Joe Biden and Angela Merkel with Jan Hecker
White House officials have said President Biden wants the leaders of the G7 nations to speak in a single voice against forced labor practices targeting China's Uyghur Muslims Image: Guido Bergmann/Bundesregierung/REUTERS

The EU has warned this should not be about establishing a US-led anti-China coalition."From a Washington point of view, Germany especially is seen as a stumbling block," said German European Parliament Greens Member Reinhard Bütikofer. "Merkel's government is one of the most difficult stumbling blocks in developing transatlantic relations. In the chancellor's office, there is lot of skepticism."

He explained that the German chancellor was skeptical of Biden's tough stance on Beijing because of Germany's strong economic interests in China's export market.

Angela Merkel and Joe Biden will soon have a chance to discuss these issues — and more — in greater detail when the German chancellor becomes the first top European leader to visit the new US president in Washington next month.

This article has been translated from German.

Angela Merkel: G7 "not just talking" about infrastructure plan

Bernd Riegert
Bernd Riegert Senior European correspondent in Brussels with a focus on people and politics in the European Union