EXCLUSIVE: G7 Summit Report Targets China’s ‘Economic Coercion’

WASHINGTON, May 12 (Reuters) – Leaders of the Group of Seven (G7) nations are to discuss concerns about China’s use of “economic coercion” abroad as part of a major joint statement to be released next week, a U.S. official said. Well versed in debates.

The statement, part of an overall statement to be released by leaders during their May 19-21 summit in Hiroshima, Japan, is expected to be accompanied by a detailed written plan on how the seven advanced economies will work together. Economic coercion” from any country.

The key G7 report is set to include “a section specific to China” with a list of concerns covering “economic coercion and other behaviour”. [People’s Republic of China],” the official said Friday.

A separate “economic security report will talk more about the tools” used to counter coercive efforts from any responsible countries, including planning and coordination, the person said. In each case, the statements are expected to be higher than previous statements from the G7.

US President Joe Biden has made China the centerpiece of his foreign policy, working to keep a tense and competitive relationship, including with self-ruled Taiwan, from escalating into open conflict.

The G7, which includes Canada, France, Germany, Italy and the United Kingdom, is closely tied economically to China, the world’s largest exporter and a key market for many of the seven nations’ companies.

Last month, China called for a G7 foreign ministers’ report that touched on similar topics of “arrogance, prejudice against China” and made complaints to this year’s G7 host, Japan.

Under Biden’s predecessor, President Donald Trump, G7 statements often referred only superficially to issues involving China. The Biden administration has pushed for more direct reports.

The joint statement issued each year by all G7 leaders is intended to signal that powerful countries are aligned on a range of political and economic issues.

G7 members will also have the opportunity to further cooperate with China in areas such as climate.

“We’re not for decoupling the US and Chinese economies, we’re for de-risking, we’re for diversification,” the US official said. “That principle is very unifying.”

Negotiations on the precise language of the leaders’ joint declarations are subject to diplomacy and fine-tuning before they are released during the summit.

China Tests G7 Alliance

The G7 meeting will be a test of how far members, all rich democracies, can agree to a common approach with China, the world’s second-largest economy.

China’s terms are a key issue in ongoing talks by G7 finance leaders in Niigata, Japan, where they have focused on reducing the “over-reliance” of their countries’ supply chains on Chinese manufacturing, including low- and middle-income countries through partnerships.

“The U.S. wants to get something hard on paper in terms of the deal and other countries are interested, but they’re not interested in putting the details on paper about these various tools and instruments of economic statecraft,” senior Josh Lipsky said. Director of the Atlantic Council’s Center for Geoeconomics.

In particular, some G7 members are skeptical about signing on to restrictions on outbound investment in China.

The policies are being drafted to help deny China’s military access to tools it could use to gain technological superiority, and many in the Biden administration see them as complementary to export controls that limit access to certain semiconductors that have the same goal.

“Of course, each member of the G7 is going to carve their own path in China to some extent, but there are also some sort of principles that unite the G7 in a common approach to China,” the US official said.

US Treasury Secretary Janet Yellen, who is traveling to the G7 finance meeting in Japan, said on Thursday that China had clearly used economic coercion with Australia and Lithuania.

A lack of progress on resolving the US debt ceiling impasse hung over the meeting. A meeting scheduled for Friday between Biden and top lawmakers has been postponed until early next week, as Biden’s Democrats and Republicans seek a compromise to avoid a catastrophic default.

Nevertheless, US officials expect the president to attend the two-day summit as planned, followed by trips to Papua New Guinea and Australia aimed at improving Washington’s approach to the China-dominated Asia-Pacific region.

Reporting by Trevor Hunnicutt; Edited by Heather Timmons

Our Standards: Thomson Reuters Trust Principles.