The top finance leaders of the G-7 countries unified on Saturday in their support for Ukraine. They decided to impose sanctions against Russia for its aggression but refrained from mentioning China.
The G-7 finance ministers and central bank governors concluded three days of discussions in Niigata, Japan, by issuing a joint statement pledging to bring inflation under control. To assist countries struggling with excessive debt and strengthen financial systems.
In addition, they agreed to work together to create more stability. Diverse supply chains for developing renewable energy sources and “enhance economic resilience globally against various shocks.”
The statement did not mention China or “economic coercion” in pursuing political goals. Such as penalising the companies of nations whose governments take actions that enrage another nation.
This week, Beijing issued outraged rebukes in response to rumours that China might take such steps. Officials attending the meetings in this port city reportedly refrained from openly condemning China. This is due to most nations’ immense stake in maintaining good relations with the rising power and the world’s second-largest economy.
A Foundation for G-7 Summit in Hiroshima
The finance leaders’ discussions laid the foundation for a summit of G-7 leaders in Hiroshima next week. President Joe Biden is expected to attend despite a crisis over the U.S. debt ceiling. If it is not resolved, that could lead to a national default in the coming weeks.
Japanese Finance Minister Shunichi Suzuki reported that Treasury Secretary Janet Yellen brought up the issue during a business dinner. But he refrained from providing further details.
During her time in Niigata, Yellen warned that a failure to raise the debt ceiling to allow the government to continue paying its expenses. Which would result in an economic catastrophe. With the loss of hundreds of thousands of jobs and the potential disruption of global financial systems. The issue was not mentioned in the finance executives’ statement.
The G-7’s commitment to preserving a “rules-based international order” was barely mentioned.
The leaders pledge to collaborate within the G-7 and with other nations to “enhance economic resilience globally against various shocks, stand firm to protect our shared values, and preserve economic efficiency by upholding a free, fair, and rules-based multilateral system,” according to the communiqué.
Only a tenth of the world’s population resides in G-7 economies, but they account for roughly thirty percent of global economic activity, down from roughly fifty percent forty years ago. Developing economies such as China, India, and Brazil have made enormous gains, calling into question the G-7’s relevance and leadership role in a global economy that is becoming increasingly dependent on development in less wealthy nations.