Japan at the G-7 Gets Its Way on China

Japan at the G-7 Gets Its Way on China
(L to R) U.S. President Joe Biden, Germany's Chancellor Olaf Scholz, Britain's Prime Minister Rishi Sunak, Japan's Prime Minister Fumio Kishida, European Commission President Ursula von der Leyen, European Council President Charles Michel, France's President Emmanuel Macron, Italy's Prime Minister Giorgia Meloni, and Canada's Prime Minister Justin Trudeau take part in a working lunch session as part of the G-7 Leaders' Summit in Hiroshima, Japan, on May 19, 2023. (Ludovic Marin/AFP via Getty Images)
Milton Ezrati
A few weeks ago, a column in this space described Japanese Prime Minister Fumio Kishida’s hopes for the G-7 meetings in Hiroshima. He wanted those powerful economies—Canada, France, Germany, Italy, his own Japan, the United Kingdom, and the United States—to counter Beijing’s unfair and often bullying trade practices. He seems to have got what he wanted.
Those assembled in Hiroshima have announced a joint plan to do just that. Their 41-page communiqué makes overtures to China but also decries Beijing’s “coercive tactics” and seeks to free their economies from such practices by “de-risking” if not outright “de-coupling” them from China. The seven nations meeting in Japan has further created an initiative to “increase our collective assessment, preparedness, deterrence, and response to economic coercion,” according to the U.S. Department of State Department. U.S. Ambassador to Japan Rahm Emanuel explained that the frequency with which Beijing turns to coercion requires a coordinated rather than piecemeal or, to use his words, “ad hoc” approach followed thus far.

As is the case with G-7 communiqués (or any from such international consortiums), this one lacked specifics on what members might do to parry unwanted Chinese policies. Some at the meeting held up as a model a recent European Union (EU) agreement to impose special tariffs on any nation practicing intimidation or otherwise violating standard trade practice. If the G-7 communiqué stopped short of leveling such threats, it did importantly make clear that any unacceptable action—by Beijing or any other nation—would meet a coordinated G-7 response.

Although the G-7 action was orchestrated by Kishida, he had great support from the hostility the United States has of late exhibited toward Beijing’s trade practices. Washington has complained openly about Beijing’s use of industrial subsidies, laws that demand buying only from Chinese sources, and its insistence that foreign firms operating in China must have a Chinese partner to whom the foreign firm must transfer its proprietary technology and other trade secrets. Washington has countered such Chinese policies recently with legislation that offers subsidies to firms that open semiconductor factories in the United States and forbids the sale of advanced computer chips and chipmaking equipment to China. The present administration has also left in place the tariffs first imposed by former President Donald Trump to pressure Beijing to alter the practices that Washington finds so obnoxious.
Japanese Prime Minister Fumio Kishida stands with the logo for a summit of the Group of Seven industrialized nations in Hiroshima, Japan, in May 2023.
Japanese Prime Minister Fumio Kishida stands with the logo for a summit of the Group of Seven industrialized nations in Hiroshima, Japan, in May 2023.

If Kishida knew that he had Washington’s support for his agenda, the European members of the G-7 were an open question. Germany has a great deal of trade with China, and German leadership had visited Beijing to secure more trade. What is more, officials in Berlin had only recently complained that Washington had taken too “confrontational an approach to Beijing.” Also, French President Emmanuel Macron had only recently visited Beijing, where he stressed France’s desire for “strategic autonomy” from the United States and China. Italy had actually joined Beijing’s Belt and Road Initiative (BRI). Though Italian officials had recently suggested that their country might leave those arrangements, Italian Prime Minister Giorgia Meloni emphasized that Italy could leave the BRI and nonetheless have good relations with Beijing, as do Paris and Berlin. Nonetheless, in the end, Tokyo got all these nations and Canada to join with Japan, the United Kingdom, and the United States and sign the joint G-7 statement.

Needless to say, Beijing was not happy. China’s foreign ministry condemned the G-7 communiqué for “smearing and attacking China.” He accused the G-7 of “grossly interfering with China’s internal affairs” and that its actions would “hinder international peace.” Shu Jueting, the spokeswoman for China’s Commerce Ministry, said that China, unlike the G-7, “brings cooperation and opportunity to the world, not confrontation and risk.” She called out the United States and especially Japan for export controls on 23 types of chipmaking equipment.

The G-7 agreement, including Beijing’s predictably extreme response, must have greatly pleased Kishida. He clearly had this as his goal. Now comes the hard part: getting these nations to follow the outline of the communiqué and coordinate responses to China. France and Germany remain suspects in this regard. Many times in the past, they have tried to triangulate between Beijing and Washington. Still, there is some reason to expect a united front aimed at reform in China, which could serve France’s and Germany’s trade interests, even if narrowly conceived. There is also the EU’s retaliatory agreement. Guarantees never exist in the world of trade and diplomacy, but there is still reason to expect some progress because of this G-7 agreement.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Milton Ezrati is a contributing editor at The National Interest, an affiliate of the Center for the Study of Human Capital at the University at Buffalo (SUNY), and chief economist for Vested, a New York-based communications firm. Before joining Vested, he served as chief market strategist and economist for Lord, Abbett & Co. He also writes frequently for City Journal and blogs regularly for Forbes. His latest book is "Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, and How We Will Live."
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