Unlock the US Election Countdown newsletter for free
The stories that matter on money and politics in the race for the White House
G7 leaders believe China’s support for Russia’s defence-industrial complex poses a “long-term threat” to European security, as the group seeks to harden its stance on Beijing’s economic policies which it says are unbalancing global trade.
The US has long pushed for its European partners in the G7 — the EU, France, Germany and Italy as well as the UK — to hew closer to its more hawkish approach to China, arguing that the country’s role in propping up President Vladimir Putin’s regime as it wages war against Ukraine means Beijing has chosen to side with Russia against the west.
The G7 leaders will discuss China on Friday, 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 that it says are benefiting from unfair subsidies and after the US imposed new sanctions on China-based companies supplying Russia with semiconductors that could aid its war machine.
“The China approach is tougher than before; the Europeans are definitely moving in that direction,” one G7 diplomat involved in the talks said, adding that the group’s communiqué from the summit would reflect that shifted assessment. “The era of naivety towards Beijing is definitely gone now and China is to blame for that, honestly.”
US President Joe Biden said on Thursday: “China is not supplying weapons but the ability to produce those weapons and the technology available to do it. So it is in fact helping Russia.”
A senior Biden administration official told reporters on Friday that China’s backing for Russia’s “defence industrial base” was a “critical issue”. That was not just because of its impact on Ukraine but because it would help Russia develop capabilities in areas such as missiles and artillery that would “pose a long-term threat to Europe’s security and is of concern to all members of the G7”, the official added.
Putin said on Friday that Russia would agree to an immediate ceasefire and begin negotiations to end the war in Ukraine if Kyiv withdrew troops from four contested regions and the west scrapped sanctions against Moscow.
Bilateral trade between China and Russia was worth $240bn last year, according to Chinese customs, up 26 per cent from 2022.
The G7 leaders will also discuss ways to counteract what they say is China’s industrial overcapacity, which European leaders in particular are concerned will be used to swamp their markets with low-priced goods, particularly in emerging green technologies.
But there is not complete harmony inside the G7 over how to respond.
Ursula von der Leyen, the European Commission president, told her fellow G7 leaders on Friday that they should agree to “follow the principle of ‘do no harm’ to each other” when taking countermeasures, according to a person briefed on her prepared remarks. “We should be mindful that measures any of us introduces do not have negative effects on each other, including unintended,” she said.
Top US officials have sharply ratcheted up their warnings on Chinese clean energy exports, and Washington recently raised its tariffs on Chinese green technologies, a step that some EU officials fear will simply redirect Beijing’s exports to Europe.
“China is everywhere in the G7, to be frank,” said a senior EU official. “The question we have is how to calibrate our actions to take in response.”
The Biden administration official said: “China’s support for subsidies for electric vehicles, lithium-ion batteries, solar panels and other items have contributed to overcapacity in just about every western market.”
“That will be reflected in the communiqué, and actions that will follow from that will be taken individually by G7 countries,” the official added.
Chinese state media attacked the summit, with government news agency Xinhua noting the meeting kicked off amid protests in Brindisi, a city 60km from the venue, over environmental issues and the Israel-Hamas war in Gaza.
The state-backed nationalist tabloid Global Times tried to portray the US as manipulating its G7 allies in Europe into taking action against Russia and turning against China on issues such as Ukraine and industrial overcapacity.
But the Global Times said some European countries had strong commercial relations with China and were anxious to avoid a trade war.
“Amid internal conflicts and inconsistent policies, it’s already challenging for G7 countries to find their own direction, let alone set ‘rules’ for the world,” it said.
Additional reporting by Joe Leahy in Beijing
Read the full article here
