Subscribe to our weekly newsletter to get it straight to your inbox!
Officers present: (return) Charles Michel (European Council), Mario Draghi (Italy), Suga Yoshihide (Japan) Ursula Gertrud von der Leyen (European Commission)
(front) Justin Trudeau (Canada), Joseph Biden (United States), Boris Johnson (United Kingdom), Emmanuel Macron (France), Andrea Merkel (Germany)
Leaders of the Group of Seven (G7), seven wealthy democracies (Canada, France, Germany, Italy, Japan, UK and US), met last weekend for the first time since Joe Biden was became president. the summit press release stressed the need to coordinate efforts to fight the pandemic, restore and expand economic growth, meet global infrastructure needs, tackle climate change, forge strong partnerships and promote democratic values. The group pledged to cooperate with China wherever possible, but also to work collectively to oppose unfair economic measures and to call on China to respect human rights in Xinjiang, Hong Kong and elsewhere.
The G7 is further committed to mobilizing private capital and working with low- and middle-income countries to meet their vast infrastructure needs. The US influence on these plans is evident in the “Build Back Better World” label for the effort, a global version of Biden’s 2020 campaign slogan. This call to action is an implicit criticism and challenge to China’s Belt and Road Initiative (BRI). The G7 says it will focus on transparency, accountability and environmental sustainability and use multilateral investment standards such as the G20 Principles for Investing in Quality Infrastructure.
Although many in the United States have criticized certain aspects of the BRI, the United States and its allies have not paid Beijing’s attention to the needs of the developing world for railways, highways, ports and other infrastructure. The G7 said it will now work with partners to provide countries with the expertise and funding they need to advance their economies and meet the needs of their people.
Five of the G7 countries have joined the Asian Infrastructure Investment Bank launched by China, which has partnered with the World Bank and the Asian Development Bank on numerous projects. However, many other projects have been funded by Chinese strategic banks along with work done by other Chinese state-owned enterprises. Among the G7 countries, only Italy has officially joined the BRI. We recently looked at the economic and environmental impact of the BRI in Southeast Asia and Central Asia.
The charts below illustrate the extensive economic ties that G7 member countries have with China. Collectively, Japan and the European members of the G7 trade more with China than with the United States. Trade between the United States and Europe may increase, however, if tariffs imposed by the Trump administration are relaxed.