Business

G7 threatens China with further sanctions over Russia war support


Unlock the US Election Countdown newsletter for free

G7 leaders have issued their starkest warning yet to China over its support for Russia, attacking Beijing for “enabling” Russia’s war in Ukraine, and threatened more sanctions if Beijing keeps transferring material used by Moscow’s defence industry.

The joint statement at the end of their summit in Italy included a far tougher stance towards China than in the past, exposing the escalating frustration both in the US and Europe with Beijing’s critical support to Russia during the war in Ukraine.

“China’s ongoing support for Russia’s defence industrial base is enabling Russia to maintain its illegal war in Ukraine and has significant and broad-based security implications,” the G7 leaders said in a joint statement.

“We call on China to cease the transfer of dual-use materials, including weapons components and equipment, that are inputs for Russia’s defence sector.”

The US has long pushed for its European partners in the G7 — the EU, France, Germany and Italy as well as the UK — to hew more closely to its more hawkish approach to China, arguing that the country’s role in propping up President Vladimir Putin’s regime as it wages war against Ukraine means Beijing has chosen to side with Russia against the west.

One US official on Friday said China’s backing of Russia posed a “long-term threat to Europe’s security and is of concern to all members of the G7”.

That view is now increasingly shared within the group. On Friday, the world’s leading advanced economies also said they were willing to take new steps to punish China financially, including through sanctions. The US and EU have already sanctioned Chinese companies that they say have helped Russia import goods banned under western embargoes.

“We will continue taking measures against actors in China and third countries that materially support Russia’s war machine, including financial institutions, consistent with our legal systems,” they said.

According to one person familiar with the talks, the discussions on China featured “strong language” on Beijing’s support for Russia and its role in helping Moscow circumvent western sanctions.

That came alongside what the person said was “a willingness to act against Russian-Iranian co-operation, including military equipment and battlefield knowledge”.

A second person familiar with the talks said: “The era of naivety towards Beijing is definitely gone now and China is to blame for that, honestly.”

As well as concerns about China’s ties to Russia, the G7 is also becoming more confrontational about Beijing’s economic policies.

The talks come days after the EU announced new tariffs on Chinese electric carmakers, which it says are benefiting from unfair subsidies, and after the US imposed new levies on clean-energy products and other imports from China last month.

G7 leaders will say they are ready to do more to combat what they see as policies leading to “global spillovers, market distortions and harmful overcapacity in a growing range of sectors”.

“We will continue to take actions, as necessary and appropriate, to protect our workers and businesses from unfair practices, to level the playing field and remedy ongoing harm,” the statement will say.

Yet there is not complete harmony inside the G7 over how to respond on the economic front.

Ursula von der Leyen, the European Commission president, told her fellow G7 leaders on Friday that they should agree to “follow the principle of ‘do no harm’ to each other” when taking countermeasures, according to a person briefed on her prepared remarks. “We should be mindful that measures any of us introduces do not have negative effects on each other, including unintended,” she said.

“China is everywhere in the G7, to be frank,” said a senior EU official. “The question we have is how to calibrate our actions to take in response.”

Chinese state media attacked the summit, with government news agency Xinhua noting protests in Brindisi, a city 60km from the venue, over environmental issues and the Israel-Hamas war in Gaza. 

The state-backed nationalist tabloid Global Times tried to portray the US as manipulating its G7 allies in Europe into taking action against Russia and turning against China on issues such as Ukraine and industrial overcapacity. 

But the Global Times said some European countries had strong commercial relations with China and were anxious to avoid a trade war.

“Amid internal conflicts and inconsistent policies, it’s already challenging for G7 countries to find their own direction, let alone set ‘rules’ for the world,” it said.

Additional reporting by Joe Leahy in Beijing



Source link