At the annual summit of the Group of Seven (G7) leaders on Friday, June 14th, their meeting on the final day was focused on their relationship with China. The G7 also sought a collective response to Beijing’s support for Russia’s military expansion, with the United States arguing that China’s assistance to Russia has intensified the conflict in Ukraine.
On the first day of the conference held in southern Italy, the G7 reached an agreement to provide a $50 billion loan to Ukraine, secured by frozen Russian assets.
While many details are yet to be finalized, G7 members (United States, Canada, Japan, Germany, France, Italy, and the United Kingdom) and the European Union (EU) are expected to contribute to this loan, with funds set to be delivered to Kyiv by the end of this year.
German Chancellor Olaf Scholz stated, “Today, we have taken a highly historical step.”
He added, “This is also a clear signal to Russian President that he cannot wait and hope to win this war one day by supporting a country’s financial problems in Ukraine.”
While Ukraine dominated discussions on the first day of the summit, it is anticipated that “China” will be the key topic on Friday morning.
It is expected that world leaders will express concerns over China’s manufacturing overcapacity and Beijing’s support for Russia.
Following the signing of a bilateral security treaty with Ukrainian President Zelensky at the summit, U.S. President Biden remarked to reporters, “China (Chinese Communist Party) is not just providing weapons, but the ability and technology to produce these weapons, effectively aiding Russia.”
Biden stated that the G7 has agreed to take collective action against China’s provision of “materials needed for war machinery” to Russia.
At a time when trade relations between Beijing and the West are deteriorating, the U.S., Japan, and the EU, as an informal member of the G7, have expressed concerns over China’s “overcapacity.” They argue that China’s inappropriate subsidies, particularly in green energy and technology such as solar panels and electric cars, flood global markets with unfairly cheap products, threatening the survival of many Western companies.
John Kirby, a spokesperson for the U.S. National Security Council, told reporters before the summit, “We will push back against China’s non-market policies, which have had harmful effects globally.”
On Tuesday, the EU announced that it would impose additional tariffs of up to 38.1% on imported Chinese electric cars starting in July, a move that could provoke retaliation from China and indicates the EU is gradually aligning its position with Washington.
This week, the U.S. imposed new sanctions on Chinese companies supplying semiconductors to Russia. The increasingly assertive stance of China towards Taiwan and its sovereignty claims in the South China Sea against the Philippines have raised serious concerns in the United States.
However, G7 still faces divisions on how to address China’s state subsidies, with Europe still hoping to avoid a full-blown trade war with China.