Following a recent summit in Italy, leaders of the G-7 industrialized countries issued a lengthy communique laying out plans to address a wide range of global concerns, including promoting economic resilience and confronting non-market policies and practices that undermine economic security, particularly those employed by China.
The G-7 members said they seek constructive and stable relations with China, recognize its importance in global trade, and are not trying to thwart China’s economic development or decouple from Beijing economically. At the same time, they reiterated their concerns about China’s “persistent industrial targeting and comprehensive non-market policies and practices that are leading to global spillovers, market distortions and harmful overcapacity in a growing range of sectors,” which the White House said include solar, wind, electric vehicles, lithium-ion batteries, medical devices, mature-node semiconductors, steel, aluminum, and others.
These factors are driving G-7 member efforts to de-risk and diversify their supply chains by working with each other and partner countries to expand industrial capacities and reduce critical dependencies and vulnerabilities. For example, they are encouraging international partnerships to make critical minerals and critical raw materials supply chains more diversified, transparent, resilient, responsible, circular, resource-efficient, and sustainable. They also intend to support local value creation in critical minerals supply chains in line with World Trade Organization rules and emphasized the importance of accelerating related initiatives such as the Partnership for Resilient and Inclusive Supply Chain Enhancement and the Mineral Security Partnership.
Also with respect to China the G-7 members said they (1) plan to strengthen diplomatic efforts and international cooperation, including in the WTO, to build resilience to economic coercion, a tactic of which China is often accused, (2) intend to continue to take actions to “protect our workers and businesses from unfair practices,” also a frequent complaint lodged with Beijing, and (3) urge China to halt its “ongoing support for Russia’s defense industrial base,” particularly through the transfer of dual-use materials, though they did not set forth any potential ramifications.
Regarding broader trade issues, the G-7 members (1) launched a working group aimed at strengthening the resilience of transport flows and networks in response to threats like Russia’s attempts to disrupt maritime trade in the Black Sea and Houthi attacks on commercial vessels in the Red Sea, (2) said they will use existing and new tools to tackle non-market policies and practices like harmful subsidies and forced technology transfers (particularly when used in attempts to establish dominance), and (3) pledged increased cooperation on streamlining the implementation of export controls to protect critical and sensitive technologies.
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