Thank you for inviting me to speak today.
The United States is now mired in not just one but two theatres of conflict—Ukraine and the Middle East. Washington, however, has not lost and will not lose sight of the third theatre, which is the Indo-Pacific and meeting the China challenge in particular. Confronting China as a systemic threat remains one of the few issues that continue to have bipartisan support on Capitol Hill.
The reality is that Washington needs its allies and partners more than ever to face the challenge posed by Beijing.
On the security front, efforts to coordinate operations through mechanisms such as the Quad and AUKUS are moving forward steadily. NATO is pushing the boundaries beyond its mandate to address the China challenge, inviting countries including Japan, Australia and South Korea as observers.
It is on the economic front, however, that a shared vision amongst U.S. allies and partners is needed. Not only is that vision hazy, but a schism amongst like-minded countries is likely to emerge in the form of a new trade war.
To be sure, today there is a G7 consensus to co-operate to boost economic resilience and economic security. There is greater unity in seeking ways to push back against China's leveraging of global interdependence for its political gain. Governments and businesses from the wealthiest nations to the more vulnerable economies of the global south have been pressured by a China that has systematically been weaponizing global economic interdependence. Self-censorship by companies and states to pre-empt Chinese retaliation has become all too common.
For countries across the Indo-Pacific and beyond, the G7's push to have an action plan against Chinese coercion has become a welcome one. Collective economic security arrangements per se may not be in the cards. Nevertheless, there is a way forward to leverage international public opinion against Chinese coercion and to raise global awareness of the risks of Chinese authoritarian rule.
On the other hand, there is no shared vision of an economic victory against China. There is little appetite to decouple from China, but at the same time there is no clarity about how to reduce vulnerability by being exposed so much to China. Curbing Beijing's technology ambitions may be a top U.S. priority, but that's not a concern for the global south. Meanwhile, as tensions between Washington and Beijing show no signs of easing, the goal of Indo-Pacific nations is to ensure continued stability and growth, which must include managing economic relations with China as well as the United States.
Washington's focus remains on protecting its advanced technologies from China and preventing Beijing from integrating civilian and military technology systems. Export controls introduced by the United States support this goal and have been agreed upon by Japan and the Netherlands. However, without buy-in from Japan and the Netherlands, which are the world's biggest semiconductor equipment manufacturers, U.S. efforts to restrict Chinese access to advanced chips and chip making would simply have limited impact. Amid calls for nearshoring and friendshoring in the name of economic security and resilience, we have seen a rise of industrial policy to decrease dependence on trusted allies as well as on foes.
China is, of course, not the only destabilizer to growth, but Beijing's coercive actions and violations of the rule of law have led to a reassessment of economic resilience. A united and collaborative front against Chinese coercion could be the foundation of facing the systemic challenge that China poses to the global economy.
We've come a long way in a short amount of time in terms of understanding the need to focus on economic security. There is no easy solution to protect critical technologies or to stave off economic coercion, but countries such as Canada, which enjoy high trust not only with the United States but also with the international community at large, can play a significant role in protecting and promoting the international rule of law and healthy economic competition moving forward.
With that, I would like to conclude my opening remarks.
Thank you.