China’s ‘economic coercion’ also a focus at G7

May 21, 2023  -BBC News -Yesterday, we saw the G7 leaders put out a statement promising to combat the “disturbing rise” of economic coercion.

China was not mentioned directly – but the statement was clearly aimed at accusations of Beijing that it has used its vast power to punish or persuade smaller countries to fall in line.

Australia and Lithuania are just the latest examples of countries that have have seen Chinese trade retaliation in response to political decisions.

So concern over Beijing’s economic influence has been one of the cornerstones of leaders’ discussions here.

But G7 leaders are scratching their heads about how to deal with the problem. You can’t just “de-couple” – or break off ties – with the world’s second largest economy. This is especially true for European countries and Japan.

So they’ve settled for a policy of “de-risking” and “diversifying”. That means not being as dependent on China economically by spreading some of your investments and supply chains away from the country.

Even though China wasn’t named yesterday, Beijing knew who it was aimed at and issued a furious reply. They say the G7 is conducting a coordinated ‘smear’ and ‘attack’ on China and that the original economic coercer is actually the US.