Niigata (Japan) | The Group of Seven's top financial leaders united Saturday in their support for Ukraine and their determination to enforce sanctions against Russia for its aggression but stopped short of any overt mention of China.
The finance ministers and central bank chiefs ended three days of talks in Niigata, Japan, with a joint statement pledging to bring inflation under control while aiding those suffering the most from surging prices.
They also committed to collaborating to build more stable, diversified supply chains for developing clean energy sources and to “enhance economic resilience globally against various shocks.” The statement did not include any specific mention of China or assertions regarding “economic coercion” in pursuit of political objectives, such as penalizing the companies of countries whose governments take actions that anger another country.
Talk this week of “economic coercion” by China had drawn outraged rebukes from Beijing. Officials attending the talks in this port city reportedly had balked at overtly condemning China, given the huge stake most countries have in good relations with the rising power and No. 2 economy.
The finance leaders' talks laid the groundwork for a summit of G-7 leaders in Hiroshima next week that President Joe Biden is expected to attend despite a crisis over the US debt ceiling that could result in a national default if it is not resolved in the coming weeks.
Treasury Secretary Janet Yellen has warned that would bring an economic catastrophe, destroying hundreds of thousands of jobs and potentially disrupting financial markets across the globe. No mention of the issue was made in the finance leaders' statement.
The stakes for the global economy and stability are high, Japanese Prime Minister Fumio Kishida said as the finance talks drew to a close.
“The international community is facing a historic turning point, facing divisions and conflicts such as Russia's invasion of Ukraine and Sudan,” Kishida said in a statement issued late Friday.
The G-7 will “resolutely reject the threat or use of nuclear weapons and uphold the international order based on the rule of law,” Kishida said. “As G-7 chairman, I will convey my strong will to have an impact on history.” The G-7's devotion to protecting what it calls a “rules-based international order” got only a passing mention in the statement released Saturday.
The leaders pledge to work together both within the G-7 and with other countries to “enhance economic resilience globally against various shocks, stand firm to protect our shared values, and preserve economic efficiency by upholding the free, fair and rules-based multilateral system.” The G-7 economies comprise only a tenth of the world's population but about 30% of economic activity, down from roughly half 40 years ago. Developing economies like China, India and Brazil have made huge gains, raising questions about the G-7's relevance and role in leading a world economy increasingly reliant on growth in less wealthy nations.
China blasted as hypocrisy assertions by the U.S. and other G-7 countries that they are safeguarding a “rules-based international order” against “economic coercion” from Beijing and other threats.
The group was also expected to voice confidence in the global financial system despite recent turmoil in the banking industry and the potential of a default on the U.S. national debt if Biden and Congress do not resolve soon an impasse over the debt ceiling as the government runs out of funds to pay its bills.
As host of the G-7 this year, Japan was also seeking support for launching a “partnership” to strengthen supply chains to reduce the risk of disruptions similar to those seen during the pandemic, when supplies of items of all kinds, from medicines to edible oil to high-tech computer chips, ran short in many countries.
Tensions with China, and with Russia over its war on Ukraine, have loomed large during the talks in Japan, the G-7's only Asian member.
The G-7 finance ministers and central bank chiefs said they would discuss ways to prevent what they are calling “economic coercion” by China. That drew sharp retorts from Beijing.
China is a victim of economic coercion, Chinese Foreign Ministry spokesperson Wang Wenbin said Friday.
“If any country should be criticized for economic coercion, it should be the United States. The U.S. has been overstretching the concept of national security, abusing export controls and taking discriminatory and unfair measures against foreign companies,” Wang said in a routine news briefing.
China accuses Washington of hindering its rise as an increasingly affluent, modern nation through trade and investment restrictions that Yellen said were narrowly targeted to protect American economic security.