The agenda for the second day of the G7 Summit in Puglia, Italy emphasised on how their economic interests could be protected without inciting a war with the Peoples Republic of China (PRC). The group of seven rich democracies, USA, Italy, Britain, France, India, Canada, Japan, Germany will discuss the possibility of the fair trade especially when it comes to green technology.
Washington has also claimed that China’s alleged support of Russian Federation’s military operations is driving the Ukraine war to continue and seeks a common response from the G7 to China’s military actions. A Japanese government source told an international media agency that “G7 countries are on the same page vis-à-vis China. Trade relations between China and Western countries had been shaky already before the European Union announced plans to impose new tariffs on Chinese electric vehicles.
The US, Japan, and the European Union often referred to as an eight partner have all flagged China’s so called industrial overcapacity according to an international media agency. The same global media reported that they consider China’s generous subsidies specifically green energy and technology sectors such as solar panels and electric vehicles to be the cause for the unfairly cheap goods sweeping though the global market.
This excess capacity threatens Western companies struggling to compete especially in the growing green technology space. US National Security Council Spokesperson John Kirby told the press before the summit that we will confront China’s non market policies that are leading to global harmful spillovers. China has dismissed the issues, but the US is pressing for a united G7 Front. The G7 countries finance ministers have vowed last month to weigh steps to ensure a level playing field for all countries.
The day before the summit at the Borgo Egnazia resort, the EU announced that it would introduce tariffs up to 38 percent for imported Chinese electric vehicles from the beginning of July. Beijing described it as naked protectionist behaviour and said it reserved the right to file a suit at the World Trade Organisation (WTO). Washington has increased tariffs on Chinese green tech imports including a 100 percent tariff on electric vehicles with Biden calling out cheating on Beijing’s part.
China has also restricted the exports of its minerals required in the telecommunication and electric vehicle industries such as gallium, germanium, graphite. These restrictions threaten international supply chains and have created fear of further curbs on materials needed for electronics. According to international media agencies, analysts warn of near-term supply shortages and hiked prices if China were to further curb exports even as the US and other countries attempt to diversify their supplies and boost domestic production.
Defence and safety concerns were also discussed at the summit especially the allegations of China helping Russia in military expansion. In a press conference, on June 13, 2024, Ukraine’s President Volodymyr Zelenskyy and Biden stated that the G7 had agreed to taking collective action against China for supplying Russia with materials they need for a war machine. The US has accused China for helping defence industry and as a result, the Russia-Ukraine war as well through joint production of drones and exports of machine tools needed for ballistic missiles.
Zelenskyy said in a telephonic conversation, the Chinese president Xi Jinping promised him that he would not send weapons to Russia. “We will see,” Zelenskyy added. G7 leaders will also discuss security in Asia-Pacific where fears of potential conflict are high due to China’s confrontational tactics and militarisation of islands in the South China Sea as well as their manoeuvres against Taiwan.
In the last G7 Summit in Japan, all leaders had agreed that they oppose Chinese militarisation activities in the region. An international media agency reported that the Japanese government source said it was crucial for the leaders meeting in Puglia to send a clear message to Xi that the issue was not merely regional but of concerns to all G7 nations. “All the G7 countries are aware that that we need to convey the message very candidly to the Chinese at the very top level,” the source told an international media agency.
Comments