ELMAU CASTLE (AFP) - Group of Seven (G-7) leaders on Tuesday (June 28) condemned China's "non-transparent and market-distorting" international trade practices in an end-of-summit statement that hit out directly at Beijing for the first time.

The statement, which also pledged to reduce "strategic dependencies" on China, came hours before the leaders join a larger group of their counterparts at a Nato summit in Madrid.

There, the 30-member alliance was also poised to toughen its stance against Beijing in an update of its "strategic concept".

The United States has long cast a wary eye at China over its trade practices, which Washington believes are designed to accord an unfair advantage to Chinese companies over foreign firms.

Russia's invasion of Ukraine and Beijing's refusal to distance itself from President Vladimir Putin has meanwhile prompted other countries, including export giant Germany, to also reconsider their economic reliance on the Asian giant.

China says sanctions on Russia cannot resolve the Ukraine crisis and has criticised the United States and its allies for supplying arms to Ukraine.

“G-7 countries only make up 10 per cent of the world’s population.
They have no right to represent the world or to think their values and standards should apply to the world,” Chinese foreign ministry spokesman Zhao Lijian told a press briefing on Wednesday, when asked about the G-7 communique.

In their closing statement following a three-day summit in the Bavarian Alps, the G-7 leaders signalled that they would seek to extricate themselves from economic dependence on China.

They vowed to "foster diversification and resilience to economic coercion, and to reduce strategic dependencies".

The leaders also voiced concern about human rights violations in China, urging Beijing to respect fundamental freedoms.

They stressed that the situation in Tibet, and in Xinjiang, where there is "forced labour", "is of major concern to us".

The statement also urged China to "honour its commitments" under the Sino-British Joint Declaration, in which Beijing agreed Hong Kong could keep some freedoms and autonomy for 50 years under a "One Country, Two Systems" model.

It also pressed Beijing to get Russia to withdraw from Ukraine.

Serious danger

After several years of detente and cooperation as China caught up economically with the West, Beijing has since taken a more assertive tone on the world stage.

Western allies acknowledge that the world's biggest challenges, including climate change, cannot be solved without Beijing's cooperation, but have become more wary about China's actions and aims.

The export powerhouse has over recent years offered billions in investments and loans to build roads, rail and bridges in poorer countries around the world.

While greeted enthusiastically in the beginning, receiving countries have later found themselves mired in debt.

German Chancellor Olaf Scholz recently warned that China's years-long lending spree in poorer countries, particularly in Africa, poses a "serious danger" that could even plunge the world into the next financial crisis.

Critics have also accused Beijing of seeking to buy influence in the south.

To offer an alternative to the world's poorest, the G-7 on Sunday pledged US$600 billion (S$832 billion) for global infrastructure programmes.

European Commission President Ursula von der Leyen said the huge programme showed partners in the developing world "that they have a choice".

Beyond economic aid, Western allies are also poised for the first time to pivot their military strategy to address the challenges posed by China.

The update of the "strategic concept" is the alliance's first in a decade.