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US to push back against China economic coercion at G7 meeting

US to push back against China economic coercion at G7 meeting
German Chancellor Olaf Scholz (C-R) hosts the plenary sessions Outreach on the second day of the three-day G7 summit at Schloss Elmau on June 27, 2022 near Garmisch-Partenkirchen, Germany. (Photo: Thomas Lohnes / Getty Images)

The US is pressing the need for allies to coordinate against economic coercion, not just military threats, as Japan prepares to host top diplomats from the G7 nations amid heightened tensions with China. 

“That coercion piece is important,” US ambassador to Tokyo Rahm Emanuel said in an interview days before the ministerial meeting begins in the mountain resort of Karuizawa on Sunday. “It keeps the United States in the centre of gravity and helps our allies and alliance and our friends to know that we are in the game.” 

China is set to be a key focus of discussions at the meeting, which will lay the groundwork for a leaders’ summit in Hiroshima next month. Japanese Prime Minister Fumio Kishida has invited a raft of guest leaders from Asia and beyond, including from South Africa and South Korea.

One person not invited is Chinese President Xi Jinping, who has been on a diplomatic charm offensive of late in a bid to push for peace in Ukraine and attract more foreign investment to the world’s second-biggest economy following years of isolation due to strict Covid restrictions. 

Japan has put an emphasis on economic coercion and is aiming for outcomes by the leaders’ summit, people familiar with the deliberations said. 

Meanwhile, a prominent Republican politician has blasted Beijing for what he sees as an unjust pressure campaign. “Coercion is core to China’s economic model,” Representative Michael McCaul, who chairs the House Foreign Affairs Committee, said during a visit to Asia this month.

Xi last week hosted French President Emmanuel Macron, who was forced to defend comments to several media outlets that Europe shouldn’t simply follow the US over Taiwan. Brazilian leader Luiz Inacio Lula da Silva, who is set to meet Xi on Friday in Beijing, this week called on BRICS nations to come up with an alternative to the dollar in foreign trade. 

The G7 will look to refocus the discussion on Chinese economic coercion. Trade ministers said in a statement earlier this month they would seek ways to work together to counter coercion that “undermines economic security”. 

While that statement didn’t mention China, it follows a campaign by the Biden administration to corral support from allies in reducing dependence on Beijing for key elements in supply chains, such as semiconductors. Japan last month became the latest to announce restrictions on exports of some of its most advanced chip technology, following similar moves by the US and the Netherlands. 

Emanuel said China’s strategy on coercion was “part of a defense build-up” and not “some aberration.” In an analysis on the topic distributed to the media, he said a long list of countries including Japan, the Philippines, South Korea and Australia had encountered coercion from China in the recent past. 

The G7 and the US-led Indo-Pacific Economic Framework for Prosperity are potential forums for formalising rules on how to deal with the issue, Emanuel said in the interview. 

‘Diminishing tool’

“The optimal goal would be to know that this is a diminishing tool by China and or Russia,” he added. 

The moves by the US and its allies have attracted criticism from China, which has countered with similar accusations of coercion by the US and urged other countries to resist American pressure. 

Chinese Vice Commerce Minister Wang Shouwen on Wednesday told Japan’s ambassador he was concerned about restrictions on semiconductor exports, and asked Japan to support its efforts to join the regional trade deal known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. The US pulled out of that grouping under former president Donald Trump in 2017.

Meanwhile, Emanuel said the US would continue to press Japan on a long-delayed bill aimed at “promoting understanding” of sexual minorities. Banning discrimination against LGBTQ individuals would be in line with the country’s constitution and public opinion, he said.  

Hopes by activists that the bill might pass ahead of the G7 summit look likely to be dashed, as it remains mired in political wrangling. 

Japan is the only G7 member that doesn’t recognise same-sex marriage or civil unions, nor does it have legislation banning discrimination against LGBTQ individuals. That fact came under renewed focus after Kishida was forced to fire an aide for making discriminatory remarks earlier this year.  

Kishida signed up to last year’s summit communique in Elmau, in which the leaders pledged to ensure that everyone “independent of their gender identity or expression or sexual orientation” has the same opportunities and is protected against discrimination.

“We have ensured that the communique from G7 around LGBTQ issues will be as strong, if not stronger, than what Germany issued,” Emanuel said. “It’s a big issue, it’s an important issue.” BM/DM

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