G7 has its ‘tail between its legs’ due to China’s support for Russia

Leaders are discussing measures to counter Beijing’s economic policies, which they say are unbalancing global trade.

G7 leaders believe China’s support for Russia’s defense industrial complex poses a “long-term threat” to European security, as the group seeks to toughen its stance on Beijing’s economic policies, which they say are unbalancing global trade. The US has long pressed its European partners in the G7 – France, Germany, Italy and the EU – to align more closely with its tougher approach to China, arguing that the country’s role in propping up President Vladimir Putin’s regime while he waging war against Ukraine means that Beijing has chosen to ally with Russia against the West.

G7 leaders will discuss China on Friday, on the second and final day of the group’s summit in Puglia, southern Italy. The talks come days after the EU announced new tariffs on Chinese electric car makers, which the EU says are benefiting from unfair subsidies, and the US imposed new sanctions on Chinese companies that supply semiconductors to Russia, which could help its war machine.

“The approach towards China is tougher than before; the Europeans are definitely moving in that direction,” said a G7 diplomat involved in the talks, adding that the group’s statement after the summit will reflect this change in assessment. “The era of naivety towards Beijing is definitely over now and China is to blame for that, honestly.”

US President Joe Biden said on Thursday: “China is not supplying weapons, but rather the ability to produce those weapons and the technology available to do so. So it is actually helping Russia.”

A senior Biden administration official told reporters on Friday that China’s support for Russia’s “defense industrial base” was a “critical issue.” This was not just because of the impact on Ukraine, but because it would help Russia develop capabilities in areas such as missiles and artillery, which “would pose a long-term threat to the security of Europe and is a concern for all G7 members.” , the official added.

Bilateral trade between China and Russia was US$240 billion last year, according to Chinese customs, an increase of 26% compared to 2022.

G7 leaders will also discuss ways to counter what they say is China’s industrial overcapacity, which European leaders are especially worried about because it could be used to flood their markets with low-priced products, particularly in emerging green technologies.

Top US officials have sharply increased their warnings about China’s clean energy exports, and Washington recently raised its own tariffs on Chinese clean energy products sold in the US.

“China’s support for subsidies for electric vehicles, lithium-ion batteries, solar panels and other items has contributed to overcapacity in nearly all Western markets,” the Biden administration official said.

“This will be reflected in the statement, and actions that follow from this will be taken individually by G7 countries,” the official added.

Via Financial Times.