China's shadow hangs over private preparations for G-7

LONDON • When the diplomatic emissaries of the Group of Seven (G-7) nations met virtually late last month to prepare the ground for their leaders' summit in June, one problem cropped up over and over again: what to do about China?

Over three days of video conferencing for their second so-called sherpa meeting, officials from the US, Britain, Canada, Japan and their European partners discussed topics ranging from human rights and international development to climate change, according to a diplomat's account of the meeting.

With China viewed in different contexts as either partner, competitor or adversary - or some combination of these - one participant summarised the challenge as finding a common position on how to relate to the world's second-biggest economy, the diplomat said.

Another diplomat emphasised that establishing a shared perspective is important because competition with Beijing will shape geopolitics for generations to come.

Some European government officials have, however, warned of the danger that the G-7 will come to be seen as an anti-China alliance. Chinese officials have claimed the same, saying Beijing is being unfairly targeted as its economic and strategic clout grows.

But the tensions between Beijing's approach and the democratic values underpinning the G-7 are becoming increasingly hard to gloss over, with international scrutiny trained on the treatment of the Uighur minority in China's north-west and the crackdown on the pro-democracy movement in Hong Kong.

So this year's talks, like much of the international agenda, are set to be defined by the one major power not at the table. A spokesman for the British government, which holds the G-7 presidency this year, said the sherpa meeting covered an array of topics, ranging from the Covid-19 pandemic and future health threats to gender equality and climate action.

A North American official described China as an overarching issue that touches many of the topics discussed.

One subject that highlighted the fault lines over China was the "open societies statement", which Britain hopes will be one of the key outcomes of the leaders' summit in Cornwall, England.

The US, Britain, Canada and Japan see the document as an opportunity to address explicitly what they view as uneven competition between democracies and non-democratic regimes, according to the diplomat with knowledge of the talks. But Germany, France and Italy were concerned that such language would be seen as overtly antagonising in Beijing and wanted instead to praise the merits of democracy while also maintaining a constructive attitude towards China.

"The majority would be in the direction of expressing more concern about China," Mr Kunihiko Miyake, a former Japanese diplomat and now adviser to Prime Minister Yoshihide Suga's Cabinet, said in an interview.

With South Africa also invited to certain sessions alongside representatives from South Korea, Australia and India, some of the wider group also want to see a reference to tensions in the Indo-Pacific region, where China has been involved in border scuffles with India, disputes over reefs in the South China Sea, imposed tariffs on Australian goods and flown military aircraft close to Taiwan.

The dilemma is particularly acute for Italy, which is hosting this year's meeting of the Group of 20 (G-20) nations in October and is trying to put together an agenda that will include China. But all the European members consider it a tricky balancing act.

An investment accord between the European Union and China sealed last year is hanging by a thread following Beijing's response to human rights sanctions targeting Chinese individuals and entities over alleged abuses of Uighur Muslims in Xinjiang. Beijing retaliated by imposing punitive measures on a number of European parliamentarians and groups.

The EU has also struggled to maintain a united front over China, with several members, like Hungary, buying Covid-19 vaccines from Beijing without it being approved by the European regulator.

Still, Brussels and Washington are now closer to a common approach to Beijing than was the case under president Donald Trump. They have set up a forum to discuss all issues to do with China, and a recent deal to suspend aircraft tariffs was in part driven by national security considerations and an understanding that hitting each other with penalties while China produced aircraft with government subsidies made little sense.

During a trip to Brussels last month, US Secretary of State Antony Blinken said Washington would not force its allies into an "us-or-them" choice with China.

Other issues in which China featured at the G-7 sherpa meeting included the economy, trade and technology, and how to push back against Beijing's coronavirus "vaccine diplomacy".

In a discussion about Beijing's increasing role in international development, the US argued for an investment programme to rival China's Belt and Road global infrastructure initiative, an idea that President Joe Biden is weighing with Japan's Mr Suga.

There was also a shared understanding that global trading rules need to be overhauled as they do not reflect reality, especially when it comes to China. One official said the G-7 cannot demand that other countries adopt their values, but they can insist that others trade like them.

BLOOMBERG