G7 focuses on economic security and coercion

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Outcomes of the G7 Leaders’ Summit | Countering economic coercion | Is de-dollarization real? | Immigration policy, trade, and competition | More research from Hinrich Foundation

Outcomes of the G7 Leaders’ Summit

The G7 Leaders’ Summit was notable for its redoubling of efforts to counter Russia, the extraordinary way in which it called out China, and its focus on economic resiliency, resisting coercion, and regulation of AI. Read the full G7 Hiroshima Leaders’ Communique and Statement on Economic Resilience and Economic Security and decide if you agree with Atlantic Council experts who call the G7 Summit a ‘game changer’.

Mentioned publications

1. G7 Hiroshima Leaders’ Communiqué – May 20, 2023
   G7 leaders aim to ensure economic resilience and economic security.

2. G7 Leaders’ Statement on Economic Resilience and Economic Security – May 20, 2023

3. Experts react: A ‘game changer’ G7 summit in Japan – Atlantic Council, May 20, 2023
   G7 leaders consolidate efforts to counter Russia and China while addressing new challenges like AI.

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Countering economic coercion

G7 Leaders announced an initiative to counter economic coercion. What might that effort look like? In reports published earlier this year, the Australian Strategic Policy Institute offers ideas for countering China’s coercive diplomacy, the Center for Strategic and International Studies (CSIS) presents a strategy to deny, deflect, and deter economic coercion, and Victor Cha makes the case for collective resilience in Foreign Affairs. The Economist concludes that Australia faced down economic coercion and came out stronger for it.

Ed Gresser of the Progressive Policy Institute offers options for US-Pacific Islands trade policy.

Mentioned publications

1. Countering China’s coercive diplomacy - Fergus Hunter, Daria Impiombato, Yvonne Lau, Dr Adam Triggs, Albert Zhang & Urmika Deb – Australian Strategic Policy Institute, February 22, 2023
   What can economies do to combat China’s economic coercion?

2. Deny, Deflect, Deter: Countering China's Economic Coercion – Matthew Reynolds and Matthew P. Goodman, Center for Strategic and International Studies, March 21, 2023
   The most salient characteristic of China’s economic coercion is that it is not very effective.

3. How to Stop Chinese Coercion: The Case for Collective Resilience – Victor Cha, Foreign Affairs, January/February 2023
   Collective action could help potential targets to avoid coercion.

4. Australia has faced down China’s trade bans, and emerged stronger – The Economist, May 23, 2023
   Australia’s experience demonstrates the resiliency of its exports and China’s dependence on its goods.

5. Pacific Islands Trade: Options for U.S. Policy – Ed Gresser, Progressive Policy Institute, February, 2023
   How can the US deepen engagement with Pacific Island nations after Biden’s scrubbed PNG visit?

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Is de-dollarization real?

Adam Tooze takes a second look at the debate over the global dollar and the petrodollar in two recent analyses in Chartbook. The Bank for International Settlements explains that the US dollar and commodity prices are now moving in tandem and how this impacts the global economy. CSIS explores the limits of RMB internationalization. Is de-dollarization happening? Barry Eichengreen, writing in VoxEU/CEPR, says no. For a high-level explainer of the debate, look no further than Christina Lu’s piece in Foreign Policy.

Mentioned publications

1. Bucking the buck? Debating the global dollar ... again! and The end of the petrodollar? How macroeconomics may compound geopolitics in shaping the future of the dollar system – Adam Tooze, Chartbook #211 and 212, April 23, and May 3, 2023
   Are geopolitical issues distracting from macroeconomic pressures on the dollar system?

2. The changing nexus between commodity prices and the dollar: causes and implications – Boris Hofmann, Deniz Igan and Daniel Rees, Bank for International Settlements Bulletin no. 74, April 13, 2023
   What does it mean for trade when the US dollar and commodity prices move in tandem?

3. It’s All about Networking: The Limits of Renminbi Internationalization – Gerard DiPippo and Andrea Leonard Palazzi, Center for Strategic and International Studies, April 18, 2023
   CSIS raises and answers two key questions about the prospects for RMB internationalization.

4. Is de-dollarisation happening? – Barry Eichengreen, VoxEU/CEPR, May 12, 2023
   The short answer is “no”.

5. The Bid to Dethrone the Dollar – Christina Lu, Foreign Policy, May 12, 2023
   A brief explanation of the growing conversation around de-dollarization.

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Immigration policy, trade, and competition

Can better immigration policies help economies compete more effectively? Eric Schmidt, writing in Foreign Affairs, advocates for America to fix its immigration system in order to compete with China. The Wall Street Journal reports on what everyone but the US has learned about immigration.

Mentioned publications

1. To Compete With China on Tech, America Needs to Fix Its Immigration System – Eric Schmidt, Foreign Affairs, May 16, 2023
   How can the US reform its immigration law to allow in more skilled workers?

2. What Everyone—Except the U.S.—Has Learned About Immigration – The Wall Street Journal, May 16, 2023
   What are developed economies doing to attract more immigrants?

Mentioned publications from HF:

• What does the G7 summit mean for China?
• Will a “petroyuan” end dollar dominance?
• America is losing its greatest strength: human capital

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