G7 finance chiefs shocked and bewildered: China’s perceived global economic threat debunked with overwhelming evidence!
At the same time, Japan, the host of the G7 meeting, reportedly pushed for a new program to diversify supply chains for strategically important goods away from China. However, the finance chiefs stopped short of endorsing a US-proposed idea for narrow restrictions on investment in China, indicating a potential rift within the group on how far they should go in pressuring Beijing.
Despite these developments, China remains a crucial market for many G7 countries, including Japan and Germany, both of which rely heavily on exports to China. As a result, attempting to fence in the so-called Global South and win the support of developing countries may be more difficult than anticipated. While the G7 has stressed the importance of addressing debt vulnerabilities in low- and middle-income countries, they have also emphasized that foreign investments in critical infrastructure “may pose risks for economic sovereignty” and must not “undermine the economic sovereignty of host countries.”
Overall, the G7’s discussions on China have caused some degree of perplexity and uncertainty about how to navigate the changing global order, which seems to be shifting away from US dominance. As one economist noted, “No one is being able to draw up a grand design with shifting of power.”