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Global Econopolitics

From G-Zero to G3 world?

  Executive Research Director


It has been more than a month since US President Joe Biden took office. Style and policy have changed significantly from the Trump era. The way he handles new administration is generally as expected, which arouses some anxiety while there is a lot of positive aspects.

On the plus side, policy predictability has returned to a considerable extent. It is encouraging to hear remarks by Mr.Biden that emphasize international cooperation. On the other hand, one should worry about serious division in the U.S. due to some decisive policies by new administration, and that a new comprehensive strategy for China has not be seen yet.

How to make a difference from the past

It is certain that Mr.Biden so far maintains a tough tone from Trump administration on China and is trying to show a more resolute attitude than Mr.Trump on human rights issues. Perhaps he is also aware of the risk of being seen as weak. However, it is not clear how he differs from previous US administrations.

Of course, it’s only a short time since the administration was formed, and it’s no wonder that a concrete strategy for China is under consideration. However, isn’t there a concern that the policies toward China and North Korea will not work well after the twists and turns, and that they will get stuck in a past pattern of struggling to respond?

Disappointment with China

Mr.Kurt Campbell, appointed to a coordinator of the Indo-Pacific Ocean, is expected to play an important role in the Biden administration’s drawing of Asian policy. In the first half of the Obama administration, he was Assistant Secretary of State for East Asia and Pacific Affairs and was involved in an Asian-focused policy called the Asia Pivot. He is the person who knows the bitter history of the relationship between the United States and China.

Mr.Campbell expressed his deep disappointment with China in a 2018 co-authored piece to Foreign Affairs magazine. He argued that the long-standing US policy toward China, which expected changes in China, had not worked and that wishful thinking must be abandoned (note 1).

Mr.Campbell also co-authored and contributed to the magazine in January of this year, just before joining to the White House (note 2). He pointed out that balance of power and legitimacy are essential to the stability of Asia, with referring to the work of former US Secretary of State Henry Kissinger,

Balance and legitimacy

In his book “A World Restored” in the 1950s, Dr.Kissinger analyzes why Europe in the 19th century after the Napoleonic Wars was able to achieve the next 100 years of “long peace”. The keywords are balance and legitimacy, and Mr.Campbell and his co-author, Mr.Rush Doshi who also joined Biden administration, argue that regional order in today’s Asia works when these two are maintained.

The question is who does what for that. Mr.Campbell argues that rather than form a grand coalition focused on every issue, US should pursue bespoke or ad hoc bodies focused on individual problems. These include the D10 from 10 democracies and groups that address issues such as trade, technology and supply chains.

If the Biden administration aims for such a development, the partners should not be limited to the Asian region. This is because China’s political and economic power extends to every corner of the world, and it is necessary to face it in a framework that transcends Asia. In particular, the presence of Europe will increase in the future.

Europe seeks to more involvement in Asia

Although Europe is geographically distant, its involvement in Asia is rapidly increasing. Not only from the perspective of a growing market, but also the fact that China has come to be seen as a big power that can shake the global order. Thus, Europe’s approach to Asia varies from the economy to the security sector.

Regarding the Indo-Pacific region, the French Government published a report in 2018, and Germany also showed high interest by issuing a guideline on this region decided by the Cabinet in September 2020.

Expectations are high for the Biden administration, which is moving to restore relations with Europe. In December 2020, ahead of the change of government in the United States, the European Commission issued a document calling for the establishment of a new cooperative relationship between the United States and Europe. Candidates for cooperation include actions against the Covid-19, environmental issues such as climate change, technology and trade, and democracy.

Front runner to a carbon-free society

However, it should be noted that Europe is not necessarily a cheering party for the United States and Japan in deepening its involvement in Asia, but is acting based on its own sense of distance and calculation. They share many of concerns about China, but they do not want to be involved in the US-China hegemonic conflict.

Europe’s presence is also growing in areas such as green and digital that will lead to historical changes in the economy and society. Europe is at the forefront of the world with the values that put the response to environmental problems such as climate change at the center of society and the idea of encouraging innovations for that purpose to create new industries.

China, the world’s largest CO2 emitter, has announced a target of virtually zero emissions by 2060. China is focusing on renewable energy, and the market size of electric vehicles is one of the largest in the world. It has become clear that major players of global competition and cooperation for carbon-free societies are the US, China and Europe.

US, China, Europe as Big 3

These Big 3 have also power in the field of digital economy and society, but there are three ways of thinking about how to handle data. The key to international taxation rules that have emerged with the digitization of the economy is the coordination between Europe and the US. Europe aims to strengthen tax collection from US IT companies such as GAFA, while the US prioritizes securing its own interests.

It has been a long time since the phrase “G-Zero”, which means no leader to support and lead the international order, has prevailed. Now it seems that “G3” of the US, China and Europe is becoming a de facto world order. It does not mean that they jointly rule the world, but it simply reflects the reality that these are the three most powerful players.

The United States and Europe will often work together to face China, but they also have a rivalry. The stages and areas G3 affects range from geopolitical issues related to Asia or Africa to global environmental issues, digital economy and society, infectious disease control, human rights and democracy. They are also spreading to new areas such as cyberspace control and AI ethical issues.

You might think if Europe has equal power and ability to the US and China. Certainly, at present, the damage caused by the corona virus is great, and the economic growth rate is inferior to that of the US and China. The EU has been hurt by Brexit, and German Chancellor Angela Merkel, who has led Europe with strong political leadership, will retire this fall.

Not to become a faceless middle power

Still, the EU’s global influence does not appear to diminish. Even after the UK left, the formation and ripple power of norms and rules backed by a huge single market of 440 million people will be maintained. The EU is the only power other than the US and China that can strongly influence on the behavior of US IT giants, for example.

The G3 probably represents just an informal reality. It may be a transitional one and exist until the next stage such as G2 era of the United States and China, or something else, appears as a more full-fledged international order. Even so, the phase we are facing now will be crucial to prevent excessive instability of US-China relations and to prevent future order from going in the wrong direction.

For Japan, relations with the United States are of utmost importance, but Japan needs to maintain its current position which is also valued by Europe and China. Unless devising how to exert external influence, Japan could easily become a faceless middle power with no significant features. Generally speaking, Japan is not good at leading international discussions in new fields and uncharted territory, but in order to stand out and earn respect it should try to take initiatives when needed.

(Note 1) Kurt M. Campbell and Ely Ratner, “The China Reckoning,” Foreign Affairs, March / April, 2018

(Note 2) Kurt M. Campbell and Rush Doshi, “How America Can Shore Up Asian Order,” Foreign Affairs, January 12, 2021

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