US-China Relations Updates

From this news, my understanding is that all 7 countries are very scared of China and they don’t have any solid tools to prevent China’s economic coercion. They are running out of ideas, giving themselves a shot in the arm！

Consider these status：

In 2020, the industrial output of the Group of Seven (G7) was 80% of China’s, while in terms of the increase in patents, trademarks, and industrial design, China alone was two, three, and 4.5 times that of the G7.

Reuters quoted a US official familiar with the matter as saying that leaders of the Group of Seven (G7) will discuss concerns about China’s use of “economic coercion ” in international behavior in a joint statement next week.

The G7 leaders will issue a joint communiqué during the summit in Hiroshima, Japan, from May 19 to 21, and the statement may be part of the communiqué. It is expected to be accompanied by a broader written proposal on how the seven developed economies will cooperate to address “economic coercion” from any country.

The official said on Friday that the main G7 statement will include “a special section on China” that lists a range of concerns including “economic coercion and other behaviors that we particularly see from the People’s Republic of China.”

He said that another “economic security statement will provide more detail” on how to counter countries engaged in coercive behavior, including how to plan and coordinate. These statements are expected to be stronger on these issues than previous G7 statements.

Last month, the G7 issued a joint statement by foreign ministers on similar topics, which was refuted by the Chinese Foreign Ministry as “replete with arrogance, prejudice, and the sinister intentions of containing and suppressing China,” and raised concerns with Japan, the host country of this year’s G7 meeting.

The joint statement by G7 leaders released annually aims to demonstrate the unity of these world powers on a range of political and economic issues.

G7 member countries will also stick to the prospect of further cooperation with China in areas such as climate.

“We are not trying to decouple the US economy from China, we are trying to reduce risk, we are trying to diversify,” the US official said. “That principle makes us very unified.”

Negotiations on the exact wording of the G7 joint statement are still being adjusted through diplomatic work before its release during the summit.

The China issue will test the cohesion of the G7 alliance.

The terms regarding China have been the main topic of discussion for G7 finance ministers currently meeting in Niigata, Japan, focusing on reducing their own over-reliance on Chinese manufacturing in the supply chain, including cooperation with middle- and low-income countries.

Josh Lipsky, director of the Geoeconomics Center at the Atlantic Council, said, “The United States wants to write some of the hard provisions into the agreement, other countries are interested but are not interested in putting a lot of the methods and details of economic policy into writing.”

It is particularly evident that some G7 member countries are skeptical of signing control measures and restricting investment in China.

The drafting of these policies is partly aimed at preventing the Chinese military from gaining tools that it can use to gain technological advantages. The United States has already restricted semiconductor technology exports to China for the same purpose, and many in the Biden administration believe that a coordinated G7 policy will be a beneficial supplement to those restrictions.

“The principle that a set of common approaches to the China issue will unite the G7, although each member country will to some extent chart its own course on China,” said the US official cited by Reuters.

US Treasury Secretary Janet Yellen, who traveled to Japan to attend the G7 finance ministers’ meeting, said on Thursday that China has clearly used economic coercion against Australia and Lithuania.

Meanwhile, a lack of progress in resolving the deadlock over the US debt ceiling domestically has left the meeting unresolved. Democrats and Republicans in the Biden administration are seeking a compromise to avoid a catastrophic default, and the meeting between Biden and key members of Congress scheduled for Friday has been postponed until early next week.

Nevertheless, US officials expect Biden to attend the two-day summit as planned, followed by visits to Papua New Guinea and Australia to strengthen US influence in the China-dominated Asia-Pacific region.