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G7 strategy against China

Context: 

In a recent statement issued at the end of the leaders’ summit in Hiroshima, Japan, G7 countries said they would build economic resilience for themselves, based on a strategy of “diversifying and deepening partnerships and de-risking, not decoupling”. 

What does “de-risking” mean?

  • De-risking, a finance concept that is a diplomatic buzzword currently, refers to a reduction of reliance on China in the economic sphere while not turning inwards or trying to prevent Chinese growth. 
    • Decoupling is used here as an alternative to an economic boycott.
  • The US State Department describes de-risking as “the phenomenon of financial institutions terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, risk”. 
  • Simply put, de-risking is to move business away from areas that are considered risky in terms of the returns they could generate.
  • Back in 2016, the World Bank had said that global financial institutions were increasingly terminating or restricting business relationships with smaller local banks in some regions in order to “de-risk”, as it is often perceived that such banks would not be able to pay back loans.
  • In the context of China, de-risking can be interpreted as a reduction of the reliance on China in the economic sphere — for the supply of materials or as a market for finished goods — so that potential risks to trade and disruption of supply chains are reduced.

News Source: Indian Express

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 Final Result – CIVIL SERVICES EXAMINATION, 2023.   Udaan-Prelims Wallah ( Static ) booklets 2024 released both in english and hindi : Download from Here!     Download UPSC Mains 2023 Question Papers PDF  Free Initiative links -1) Download Prahaar 3.0 for Mains Current Affairs PDF both in English and Hindi 2) Daily Main Answer Writing  , 3) Daily Current Affairs , Editorial Analysis and quiz ,  4) PDF Downloads  UPSC Prelims 2023 Trend Analysis cut-off and answer key

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 Final Result – CIVIL SERVICES EXAMINATION, 2023.   Udaan-Prelims Wallah ( Static ) booklets 2024 released both in english and hindi : Download from Here!     Download UPSC Mains 2023 Question Papers PDF  Free Initiative links -1) Download Prahaar 3.0 for Mains Current Affairs PDF both in English and Hindi 2) Daily Main Answer Writing  , 3) Daily Current Affairs , Editorial Analysis and quiz ,  4) PDF Downloads  UPSC Prelims 2023 Trend Analysis cut-off and answer key

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UDAAN PRELIMS WALLAH
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Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

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