At their meeting in Japan, the G7 countries expressed their concerns about China’s dependency and economic constraint. There must be cooperation, but dependency must also be reduced. A difficult task, says sinologist Valérie Hoeks. “China is an incredibly important player in the global economy.”
According to Hoeks, China should therefore be seen primarily as a sales market, but also as a supply market. ‘There has long been a trend in China where Western products are being replaced by local products,’ he says. This also has an impact on the global economy. But the tightening of sanctions is now also playing a role in companies operating on the market.’
“Logging out is not a realistic option”
The G7’s call to disconnect therefore seems difficult to implement, even if Hoeks stresses that it mainly concerns raw materials. “We’re incredibly intertwined, so luckily the term ‘decoupling’ has been replaced by ‘derisking,’” he says. ‘Logging out is not a realistic option. 63 percent of rare earth metals come from China.’
Kazakhstan
In an effort to find alternatives, the European Union has signed a pact with Kazakhstan, Hoeks knows, but it’s not a complete solution. “We will have to keep going through a door with China.”
Especially since the raw materials market is largely in the hands of China, says Professor Rob de Wijk. ‘Especially when you look at how China dominates the battery market, for example. The cathodes and anodes are largely manufactured there and you can’t make batteries without them. This is really a big deal.’
Raw material
According to De Wijk, this also applies to chip raw materials, such as cobalt. The mines in the Democratic Republic of the Congo, where cobalt is mined, are owned by the Chinese. “Those vital raw materials then all pass through China,” De Wijk continues. And the point is: it is an autocratic and state capitalist country. The economy is politics and we have to find an answer to this”.
This is not decoupling, says De Wijk, because it is in fact impossible. He therefore agrees with Hoeks that derisking is the way forward. “It’s much more in line with what US Treasury Secretary Yellen said: We have to keep being nice to China or we’re in trouble.”
Source: BNR
Sharon Rock is an author and journalist who writes for 24 News Globe. She has a passion for learning about different cultures and understanding the complexities of the world. With a talent for explaining complex global issues in an accessible and engaging way, Sharon has become a respected voice in the field of world news journalism.
