G7 finance leaders vow to contain inflation, strengthen supply chains
The finance ministers and central bank chiefs ended three days of talks in Niigata, Japan, with a joint statement pledging to bring inflation under control, help countries struggling with onerous debts and strengthen financial systems.
They also committed to collaborating to build more stable, diversified supply chains for developing clean energy sources and to “enhance economic resilience globally against various shocks.”
The statement did not include any specific mention of China or of “economic coercion” in pursuit of political objectives, such as penalizing the companies of countries whose governments take actions that anger another country.
Talk this week of such moves by China had drawn outraged rebukes from Beijing. Officials attending the talks in this port city apparently balked at overtly condemning China, given the huge stake most countries have in good relations with the rising power and No. 2 economy.
The finance leaders’ talks laid the groundwork for a summit of G-7 leaders in Hiroshima next week that President Joe Biden is expected to attend despite a crisis over the US debt ceiling that could result in a national default if it is not resolved in the coming weeks.
Japanese Finance Minister Shunichi Suzuki said that Treasury Secretary Janet Yellen mentioned the issue in a working dinner, but he refrained from saying anything more.
While in Niigata, Yellen warned that a failure to raise the debt ceiling to enable the government to continue paying its bills would bring an economic catastrophe, destroying hundreds of thousands of jobs and potentially disrupting global financial systems. No mention of the issue was made in the finance leaders’ statement.
The G-7’s devotion to protecting what it calls a “rules-based international order” got only a passing mention.
G-7 economies comprise only a tenth of the world’s population but about 30 percent of economic activity, down from roughly half 40 years ago. Developing economies like China, India and Brazil have made huge gains, raising questions about the G-7’s relevance and role in leading a world economy increasingly reliant on growth in less wealthy nations.
China had blasted as hypocrisy assertions by the US and other G-7 countries that they are safeguarding a “rules-based international order” against “economic coercion” from Beijing and other threats.
China itself is a victim of economic coercion, Chinese Foreign Ministry spokesperson Wang Wenbin said Friday.
“If any country should be criticized for economic coercion, it should be the United States. The US has been overstretching the concept of national security, abusing export controls and taking discriminatory and unfair measures against foreign companies,” Wang said in a routine news briefing.
China accuses Washington of hindering its rise as an increasingly affluent, modern nation through trade and investment restrictions. Yellen said they are “narrowly targeted” to protect American economic security.
Despite recent turmoil in the banking industry, the G-7 statement said the financial system was “resilient” thanks to reforms implemented during the 2008 global financial crisis.
“Nevertheless, we need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook,” it said. (AP)