G7 Summit: The G7 countries are looking for balance with China and a unified position on “economic coercion”

Now, the Seven leaders feel they are being held hostage (by China).

In recent years, Beijing has not been afraid to impose trade sanctions on countries that displeased it. The sanctions included South Korea, after Seoul acquired a US missile defense system, and sanctions were also imposed on Australia during the recent period of cold relations.

The EU was particularly upset when China blocked exports from Lithuania, after it had allowed Taiwan to set up a de facto embassy there.

It is therefore unsurprising that the Group of Seven industrialized nations have condemned what they see as a “worrying increase” in China’s “weaponization of economic vulnerabilities”.

This economic coercion, they said, aims to “undermine the foreign and domestic policies and positions of G7 members as well as partners around the world.”

They called for an end to “risks”, a policy championed by von der Leyen, the president of the European Commission attending the summit.

This policy is a more moderate version of the US idea of ​​”decoupling” from China, as they will talk tougher in diplomacy, diversify trade sources, and protect trade and technology.

They also launched a “Coordination Platform” to counter coercion and work with emerging economies. While there is ambiguity about exactly how this will work, it is likely that we will see countries help each other through increased trade or financing to overcome any obstacles China puts up.

The G7 also plans to strengthen supply chains for critical commodities such as metals and semiconductors, and strengthen digital infrastructure to prevent piracy and technology theft.

But the biggest stick they plan to use against China is multilateral export controls. This means working together to ensure that their technologies, especially those used in the military and intelligence, do not end up in the hands of “bad actors”.

The United States is already doing this, by banning the export of chips and chip technology to China, and Japan and the Netherlands have also joined in. The G7 is making it clear that such efforts will not only continue, but also escalate, despite Beijing’s protests.

They also said they would continue to crack down on “inappropriate transfers” of shared technology through research activities. The United States and many other countries have been concerned about industrial espionage and have imprisoned people accused of stealing technology secrets for China.

At the same time, the G7 leaders have been clear that they do not want to cut the cord with Beijing.

Not many in their talk of economic coercion mention China, in an apparent diplomatic effort not to point the finger directly at Beijing.

When they talked about China, they were careful in their word choice.

They have sought to appease Beijing, saying their policies are “not designed to harm China nor do we seek to thwart China’s economic progress and development”. They were not “disengaging or turning inward”.

But they also put pressure on the Chinese to cooperate, saying that “a rising China that plays by international rules will be of global benefit.”

They also called for “frank” participation, which would enable them to express their concerns directly to China, indicating their willingness to keep lines of communication open despite the tense atmosphere.

We will not know how Chinese leaders and diplomats in particular will handle the G7 message. But state media in the past attacked the West for trying to deal with China in two ways (carrot and stick), while criticizing Beijing they are also working to enjoy the fruits of their economic partnership.

For now, Beijing has chosen to fall back on its usual angry rhetoric in its public response.

China clearly anticipated the G7’s pronouncements, and in the days leading up to the summit, state media and its embassies ran articles accusing the United States of economic coercion and hypocrisy.

On Saturday evening, they accused the Group of Seven of working to “defame and attack China” and lodged a complaint with Japan, being the host of the summit.

They also urged other G7 countries not to become “partners of the United States in economic coercion,” and called for “stopping the gangs’ method of forming special blocs (alliances)” and working to “contain and strike other countries.”

It is worth noting that China also sought to establish its own alliances with other countries, and late last week, in conjunction with the launch of the G7 summit, hosted a parallel meeting with Central Asian countries.

It remains unclear whether the G7 plan will succeed, but it is likely to be welcomed by countries that have demanded a clear strategy for dealing with China’s encroachments.

Andrew Small, an expert on Indo-Pacific and China, hailed the statement from the summit as a “genuine sense of consensus,” noting that it expressed the “center” view of the G7.

Dr Small, associate fellow across the Atlantic at the German Marshall Fund think tank, said: “There are still major debates going on about what ‘risk-free’ actually means, how far some sensitive restrictions on technology export should go, and what kind of collective action should be taken.” taken against economic coercion.

“There is now a clear and explicit framework on how to rebalance economic relations with China among the advanced industrial economies,” he added.