G7 opposes China’s “economic coercion”

During the G7 summit in Hiroshima, UK Prime Minister Rishi Sunak emphasised that China represents the most significant challenge to global security and prosperity. He stated that China’s increasing authoritarianism at home and abroad is a cause for concern. The G7 leaders made two separate statements addressing their position on contentious issues such as the Indo-Pacific and Taiwan, with a key focus on “economic coercion”.

The G7 faces a delicate balancing act as their economies have become interdependent with China through trade, despite growing competition and differing views on human rights. The concern is that they may be held hostage by China. Beijing has not hesitated to impose trade sanctions on countries that have displeased them, including South Korea and Australia. The European Union was alarmed when China blocked Lithuanian exports due to their support for Taiwan. This has prompted the G7 to condemn the “weaponisation of economic vulnerabilities” and call for “de-risking”.

The G7 plans to counter economic coercion by establishing a coordination platform to collaborate with emerging economies. The details of this platform are still vague, but it is likely to involve increased trade and funding to bypass any blockages imposed by China. Strengthening supply chains for critical goods like minerals and semiconductors, as well as enhancing digital infrastructure to prevent hacking and technology theft, are also part of their strategy. Multilateral export controls, particularly for military and intelligence technologies, will be a key tool.

The G7 is clear that their efforts to counter economic coercion will continue and intensify, despite China’s objections. While they have avoided explicitly naming China in their statements, they seek to engage in candid dialogue and express their concerns directly. They aim to strike a balance, stating that their policies are not intended to harm China, but a growing China that adheres to international rules is in the global interest.

China had anticipated the G7’s stance and responded with criticism and accusations of economic coercion and hypocrisy from the US. They lodged a complaint with summit organiser Japan and urged other G7 countries not to be complicit in economic coercion. China’s response reflects its attempt to counter the G7’s statements and build alliances of its own. The success of the G7’s plan remains uncertain, but it is seen as a welcome development by those seeking a clear strategy to address China’s actions.