G7 blasts China for ‘non-transparent and market-distorting’ practices

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G7 leaders have signaled that they will seek to extricate themselves from economic dependence on China.

G7 leaders on Tuesday condemned China’s “non-transparent and market-distorting” international trade practices in an end-of-summit statement called “unprecedented” by the United States.

The statement, which also pledged to reduce ‘strategic dependencies’ on China, came hours before the leaders were due to join a larger group of their counterparts at an EU summit. NATO in Madrid.

There, the 30-member alliance was also set to toughen its stance against Beijing in an update to its “strategic concept”.

The United States has long cast a wary eye on China over its trade practices, which Washington says are designed to give Chinese companies an unfair advantage over foreign ones.

Russia’s invasion of Ukraine and Beijing’s refusal to distance itself from Vladimir Putin has prompted other countries, including export giant Germany, to also reconsider their economic dependence on the Asian giant.

Beijing’s increasingly strident claims to much of the South China Sea have also raised concern over its military ambitions.

In their closing statement after a three-day summit in the Bavarian Alps, the G7 leaders signaled that they would seek to break out of economic dependence on China.

They pledged to “foster diversification and resilience to economic coercion, and reduce strategic dependencies”.

A U.S. official called the collective statement “unprecedented in the G7 context” by acknowledging “the damage caused by China’s market-distorting and non-transparent industry guidelines.”

The leaders also expressed concern over human rights abuses in China, urging Beijing to respect fundamental freedoms.

They stressed that the situation in Tibet, and in Xinjiang, where there is “forced labor”, “concerns us at the highest point”.

The statement also urged China to “honor its commitments” under the Sino-British joint statement, in which Beijing agreed that Hong Kong could retain certain freedoms and autonomy for 50 years under a “One countries, two systems”.

He pressured Beijing to pull Russia out of Ukraine.

“Serious danger”

German Chancellor and host of the summit, Olaf Scholz, underlined the “ambivalence” of relations between the West and China.

But he said in an interview with the Welt daily that it was now “very clear that we need to diversify our supply chains and our exports”.

It also means “having an eye on the whole Asian zone, because many countries have risen, not only China”.

After several years of detente and cooperation as China economically caught up with the West, Beijing has since taken on a more assertive tone on the world stage.

Western allies recognize that the world’s biggest challenges, including climate change, cannot be solved without Beijing’s cooperation, but have become more cautious about China’s actions and goals.

The export powerhouse has offered billions in investments and loans in recent years to build roads, railways and bridges in the world’s poorest countries.

Although welcomed with enthusiasm at the beginning, some host countries later found themselves in debt.

Scholz recently warned that China’s lending spree to poorer countries, particularly in Africa, poses a “grave danger” that could plunge the world into the next financial crisis.

Critics have also accused Beijing of seeking to buy influence in the south.

To offer an alternative to the world’s poorest, the G7 on Sunday pledged $600 billion for global infrastructure programs.

European Commission President Ursula von der Leyen said the huge program showed partners in the developing world “they have a choice”.

Beyond economic aid, Western allies are also poised for the first time to pivot their military strategy to meet challenges posed by China as they gather in Madrid for a NATO summit.

The “strategic concept” update is the alliance’s first in a decade.

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