Nobel Prize-winning economist Joseph Stiglitz told AFP on Friday that “hostile” US policies toward China could split the world into two parts. He urged the West to invest in developing countries instead of giving “lectures” to them.
“It would be a good idea for the other G7 countries to try to put pressure on the U.S. by saying, ‘What you’re doing is making the world into two blocs, and that will be hard,'” the professor said on the sidelines of Group of Seven cabinet talks in Japan.
“We may be in some kind of strategic competition with each other, but that doesn’t mean we have to be so mean.”
Stiglitz warned that Democrats and Republicans in the US trying to show how tough they are on China could hurt efforts to deal with climate change and other world problems.
He also said that Washington’s recent moves to limit Chinese impact on important supply chains couldn’t be explained by worries about Beijing’s political system alone.
“We have a lot of authoritarian friends,” he said, “but what we don’t like is economic and political competition.”
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The West, on the other hand, invests “very little” in developing economies compared to places like China, said the 80-year-old American who used to be the head economist at the World Bank.
He said, “There’s a joke that we tell them what to do and they give us money.”
Finance ministers from India, Brazil, and Indonesia, along with their G7 peers and central bank heads, met in Niigata, Japan, on Thursday for a three-day meeting.
Leaders from these countries and others, like Vietnam and Comoros, which is in charge of the African Union, will be at the G7 meeting next weekend in Hiroshima.
“Some of the other countries here might be able to help convince the G7… that part of the problem is that the G7, especially the US, is not present in Latin America and Africa. “We say we’re competing, but we’re not putting in the money,” Stiglitz said.
Through its huge Belt and Road Initiative, China pays for building projects all over the world. However, Washington and its allies point out that China has to pay back a lot of money for these projects.
It’s not clear if the G7 will make any specific investment plans after their meeting next week. However, they will likely talk about ways to “de-risk” key industries like semiconductors by diversifying away from China.