G-7 to issue joint statement condemning China's economic coercion

The United States and its allies are expected to increase pressure on China at this week's Group of Seven summits in Japan, with an expected joint statement rejecting economic retaliation against nations over policy disputes and other disagreements.

The anticipated statement isn't expected to mention any country by name. Still, concerns mount among the U.S. and its allies over Beijing's increasing use of what its critics call "economic coercion" to show its displeasure with other countries.

Members of the G-7 have long felt the sting of economic coercion when they have become crosswise with Beijing. China, for instance, curtailed rare-earth exports to Japan after a spat over a boating collision. It stopped buying Canadian canola oil after authorities there arrested a Huawei Technologies executive at the request of the U.S.

In Europe, China halted most of its imports from Lithuania in 2021 after allowing Taiwan, the self-ruled island Beijing considers part of its territory, to open a representative office.

Chinese authorities also recently questioned staff at consulting firm Bain & Co.'s Shanghai office and raided the Beijing offices of the due-diligence firm Mintz Group, detaining its staff members.

Russia's invasion of Ukraine has also heightened alarm among Western democracies over the tactics of authoritarian governments.

"Many G-7 members share a common concern with this kind of activity and are looking to see what we could jointly do to try to counter this kind of behavior," said Treasury Secretary Janet Yellen last week in Niigata, Japan, during a gathering of G-7 finance ministers.

Representatives of top G-7 leaders, including President Biden, are finalizing details for the annual meeting that starts Friday.

"The U.S. and Japan are fairly united," said Thomas Cynkin of the Atlantic Council's Scowcroft Center for Strategy and Security. "But the Europeans have been very reluctant."

G-7 foreign ministers in April issued a communiqué saying they were "committed to increasing our vigilance and enhancing our cooperation to counter threats that are meant to undermine not only our interests but also global security and stability, including economic coercion."

Beijing rejects assertions it has done anything wrong, saying it is the U.S. and other G-7 countries that violate international rules through espionage, military interference, and economic coercion of its own.

"When it comes to international rules," Chinese Foreign Ministry spokesman Wang Wenbin told reporters at a briefing in Beijing last week, the U.S. "is in no position to point fingers at other countries."

The U.S. and other countries have long complained about Chinese economic behavior, including closing its markets to foreign competition and failing to protect foreign intellectual property. However, until recent years, they did little about it.

The U.S. hardened its position under former President Donald Trump, who imposed tariffs on Chinese imports in retaliation for those and other practices. For the G-7 to take on China would be another step away from a long-held belief among the U.S. and allies that trade ties are the glue that binds adversarial nations together.

"For decades, we have been optimizing global technology supply chains around 'just in time delivery,' and now we're moving to a new era of 'just in case,'—where we're thinking, 'What if China did this? And what if China did that?'" said Gregory Allen, a technology policy analyst at the Center for Strategic and International Studies, a Washington, D.C., think tank.

The U.S. Chamber of Commerce recently said that Beijing's increased scrutiny of foreign businesses, conducted under its new anti-espionage law, sharply increases "the uncertainties and risk" of doing business in China.

The U.S.-based memory chip manufacturer Micron finds itself in a particularly vulnerable position. Mainland China accounted for roughly 11%, or $3.3 billion, of Micron's annual sales in 2022—and earlier this year, Beijing announced a review of the company that could ultimately wall off its products from the Chinese market. Analysts have linked China's threat to Micron to the U.S. export control policy.

China largely avoided targeting U.S. businesses until recently, but it has a history of using coercive tactics against some of the U.S.'s close allies during diplomatic disputes. Australia suffered a ban on shipments of its wine, coal, and other products following its inquiry into Covid-19 origins.

Taiwan saw some food exports to China blocked after former House Speaker Nancy Pelosi's visit there last year.

Key Points

• The G-7 countries are concerned about China's increasing use of economic coercion to achieve its political goals.
• China has used economic coercion against countries such as Australia, Canada, and Lithuania.
• The G-7 countries are expected to issue a joint statement condemning China's economic coercion.
• The G-7 countries are also expected to discuss ways to counter China's economic coercion.