G7 takes a tough line on China even as it leaves room open for economic engagement

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When Canada last played host to the G7, in 2018, there was just one reference to Beijing in the resulting 4,000-word leaders’ statement, an expression of concern about rising tensions in the East and South China seas.

How things have changed in five years. Leading into this year’s summit in Hiroshima, Japan, it was clear China would be the major topic of discussion, alongside the war in Ukraine. A communiqué released Saturday included a lengthy section expressing concern about Chinese trade practices, alleged political interference and human-rights abuses, while calling on Beijing to do more to “press Russia to stop its military aggression, and immediately, completely and unconditionally withdraw its troops from Ukraine.”

While emphasizing they did not intend to decouple from China, Group of Seven leaders said “economic resilience requires derisking and diversifying,” and in a separate statement warned of a “disturbing rise in incidents of economic coercion,” another apparent swipe at Beijing.

“Dealing with China is something we’re all going to have to do,” Prime Minister Justin Trudeau said Sunday, the final day of the three-day summit. “It doesn’t mean that we shouldn’t be engaging with China in many important ways.”

He added there were “areas in which we’re going to have to co-ordinate and co-operate with China,” but also space for competition “on economic levels and others,” and “to challenge China” on human rights and interference in other countries’ economies and democracies.

John Kirton, director of the Group of 20 and G7 research groups at the University of Toronto, compared the approach taken toward China by the G7 to the stance laid out by U.S. President Joe Biden last year.

Speaking to Chinese leader Xi Jinping on the sidelines of the G20 summit last year in Bali, Indonesia, Mr. Biden said the United States would “compete vigorously” with China but “competition should not veer into conflict,” and called on the two countries to do more to co-operate on key issues such as climate change and global food security.

Even as the G7 has focused more on China, sparking Beijing’s ire, Dr. Kirton said the language on co-operation was “more extensive than before.” This could be because “the G7 thinks it is winning and is taking a chance on co-operation as a result.”

In their communiqué, the G7 leaders said “a growing China that plays by international rules would be of global interest,” but, under Mr. Xi, China has increasingly sought to supplant the Western-led global order, using its economic might to win over other countries. This effort has stalled, however, in Europe since the war in Ukraine, because of Beijing’s closeness with the Kremlin, while fear of similar conflict in Asia has seen a strengthening of alliances among democracies in the region and rapid militarization.

John Herbst, a former U.S. diplomat and senior director at the Atlantic Council, said G7 leaders seem “to be moving toward the understanding that China is a predatory power that needs to be kept in check.”

A sense the G7 is having success in this regard could explain the outrage from Beijing this past weekend: In a statement, the country’s Foreign Ministry accused the G7 of “hindering international peace, undermining regional stability and curbing other countries’ development.” It said the group had “used issues concerning China to smear and attack China and brazenly interfere in China’s internal affairs.”

Ahead of the summit, Beijing dispatched Foreign Minister Qin Gang to Europe, where he warned of a “new Cold War” and urged countries to “oppose decoupling economies.” As preparations ramped up this month, Beijing tried to paint the group as a “small clique that puts the U.S. first,” even as host Japan sought to expand the G7′s reach by inviting 2023 G20 host India, along with other regional powers and major developing economies.

Along with Washington, Tokyo has been driving the G7 to take a firmer line on China for years, lobbying to insert language over Taiwan – the self-ruled island that Beijing claims and has threatened to invade – in recent communiqués and making Indo-Pacific security a major feature of the Hiroshima summit. While Mr. Qin courted European powers, Japanese Foreign Minister Yoshimasa Hayashi has made trips to Africa, Southeast Asia, South America and Pacific Island nations, all areas where China has major influence.

The battle for influence was on display on the weekend, too: As G7 leaders and their invited guests headed to Japan, Mr. Xi hosted leaders of five Central Asian nations in the central Chinese city of Xi’an. This year marks a decade since Mr. Xi launched his signature Belt and Road Initiative, a globe-spanning trade and infrastructure project modelled on the ancient Silk Road, much of which ran through Central Asia. China has increased investment and engagement in that region as it has faced difficulties in Europe and North America.

“China understands the great power competition is not just about national power, it is more about the competition for the rest of the world,” said Yun Sun, director of the China program at the Stimson Centre, a U.S. think tank. “With its moral flexibility and chequebook diplomacy, China does command significant influence in the developing world.”

Beijing’s still impressive economic sway has been on show this year, with China picking off more of Taiwan’s few remaining diplomatic allies, and countries like Brazil (which attended the G7 on Japan’s invitation) endorsing Mr. Xi’s purported peace plan for Ukraine, widely criticized in the West as inadequate and one-sided. But so, too, have the limits, with a growing rift between China and developed democracies, both in the West and Asia.

Indeed, the most concerning meetings in Hiroshima for Beijing may not have been those between the G7 members themselves, but sideline talks between Japan, South Korea and the U.S., and a meeting of the Quad, which was hastily rearranged after debt ceiling talks in Washington prompted Mr. Biden to cancel a trip to Australia.

In its own statement this weekend, the Quad – Australia, India, Japan and the U.S. – also took aim at Beijing, though it did not mention China by name. The group called for “peace and stability in the Indo-Pacific” and said it strongly opposed “destabilizing or unilateral actions that seek to change the status quo by force or coercion.”

Speaking Sunday, Australian Prime Minister Anthony Albanese, whose government has improved ties with Beijing after a frosty couple of years, said Canberra backed the G7′s stance on China.

“What we need to do is to make sure that we work in a way that enhances the peace, security, and stability in the region,” he said.