Leaders of the Group of Seven agreed there’s a need to de-risk, not decouple from China, and acknowledged challenges posed by the mainland’s practices which “distort the global economy.”
“We are not decoupling or turning inwards,” the G-7 said in a joint statement released over the weekend as leaders met in Hiroshima, Japan. “At the same time, we recognize that economic resilience requires de-risking and diversifying.”
Leaders added, “We will seek to address the challenges posed by China’s non-market policies and practices, which distort the global economy. We will counter malign practices, such as illegitimate technology transfer or data disclosure.”
Reiterating the stance, President Joe Biden said at a press conference on Sunday: “We’re not looking to decouple from China, we’re looking to de-risk and diversify our relationship with China.
He explained that means taking steps to diversify supply chains, “so we’re not dependent on any one country for necessary product. It means resisting economic coercion together and countering harmful practices that hurt our workers. It means protecting a narrow set of advanced technologies critical for our national security.”
Speaking after the G-7 finance ministers and central bank governors’ meeting earlier this month, U.S. Treasury Secretary Janet Yellen said China’s behavior is “a matter that should be of concern to all of us.”
“There have been examples of China using economic coercion on countries that take actions that China’s not happy with from a geopolitical perspective,” she said, citing China’s trade disputes with Australia and Lithuania as examples.
In their statement the G-7 leaders said, “We will foster resilience to economic coercion. We also recognize the necessity of protecting certain advanced technologies that could be used to threaten our national security without unduly limiting trade and investment.”
The world’s leading democracies said the group will “reduce excessive dependencies in our critical supply chains” while emphasizing the need to cooperate with China, citing its role in the international community and the size of its economy.
“We stand prepared to build constructive and stable relations with China, recognizing the importance of engaging candidly with and expressing our concerns directly to China. We act in our national interest,” the statement said.