(Bloomberg) — The Group of Seven launched a new joint mechanism to counter economic coercion, a measure aimed largely at perceived hostile actions by China.
The G-7 Coordination Platform on Economic Coercion will “address the growing and pernicious use of coercive economic measures to interfere in the sovereign affairs of other states,” the UK government said in a statement. It added that China had used its economic power to “coerce countries including Australia and Lithuania over political disputes.”
Bloomberg previously reported that G-7 nations were aiming to send a signal to Beijing this month by announcing a joint effort to counter “economic coercion,” even as member states struggle to agree on more than a broad statement of intent.
British Prime Minister Rishi Sunak will open a session on economic security at the summit in Hiroshima, Japan, on Saturday. The joint mechanism would allow G-7 countries to coordinate in areas including trade and investment restrictions, boycotts and threats such as cyber attacks, but it won’t mean an automatic response to instances of coercion.
“We should be clear-eyed about the growing challenge we face,” Sunak said. “China is engaged in a concerted and strategic economic contest.”
“And when Russia weaponized Europe’s energy supplies, it was a sign of what can happen when we rely too much on states who don’t share our values,” he added.
While member states wanted to better coordinate their responses to China’s economic practices, signing off on tangible measures proved more complicated, according to people familiar with the discussions. Officials wrangled over how tough to be in their messaging to China, particularly arly on specific tools that could be deployed against it. Even as countries seek to diversify their supply chains, many of them, including G-7 states, remain economically intertwined with China.
China has rejected allegations of economic coercion, and accused the US of bullying nations and starting trade wars in a report on “coercive diplomacy” released this week.
—With assistance from Alberto Nardelli and Jenny Leonard.