G7 studies combating China’s ‘economic coercion’, says US – 05/11/2023 – Market

US Treasury Secretary Janet Yellen said on Thursday that many G7 members share US fears about “economic coercion” that China uses against other countries and are weighing how to combat that stance. .

Yellen told reporters in an interview that Washington had also long considered the possibility of imposing additional, narrowly targeted restrictions on foreign investment into the Asian country, and had been discussing that prospect with G7 allies.

She said the US government had been discussing the possibility internally for some time, but had not defined its approach. The Biden administration is committed to discussing the issue with partners and allies and finds coordinated action by like-minded countries to be most effective and helpful.

China will be in the focus of G7 financial leaders when they meet in the Japanese city of Niigata this week.

Current group chairman Japan is leading new efforts to diversify supply chains and reduce its heavy dependence on China, the world’s second-largest economy and second-largest external holder of US debt.

U.S. lawmakers have been pressing the administration to increase oversight of investments by U.S. companies and individuals in other countries, particularly China, citing concerns over national security and supply chain issues, and calling on President Joe Biden to issue a decree.

“We have been talking with our G7 peers, and I hope we will continue these meetings, at least in some informal way,” Yellen said, when asked about the expected decree.

She said any US action would be “narrow in scope and target technologies where there are clear national security implications”, without giving a timeline for action.

Yellen said the G7 – which groups the US, Japan, Germany, UK, France, Italy and Canada, as well as the European Union – will also continue to work to mitigate geostrategic risks and combat economic coercion, citing a speech last month. , in which she said Washington would retaliate against Chinese actions to dominate foreign competitors.