G7 Summit In Italy To Address Concerns Over China's Overproduction And Export Controls: Report

The Group of Seven nations is anticipated to raise concerns about China’s overproduction and export controls at an upcoming summit in Italy.

What Happened: The G7 leaders, including the U.S., Germany, Japan, France, the U.K., Canada, and Italy, are expected to discuss the issue of overproduction in China, which is reportedly supported by excessive government backing, reported Nikkei Asia on Wednesday, citing Japanese government sources.

The leaders will also deliberate on countering Chinese export controls on crucial minerals such as gallium, germanium, and graphite, and enhancing supply chains during the three-day summit, which commences on Thursday.

The report indicates that the leaders’ statement is being finalized, considering the stances of Japan, the U.S., and the EU, which oppose overproduction, alongside Germany and France, taking a more cautious approach toward China.

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Why It Matters: The G7’s focus on China’s overproduction and export controls comes amid escalating global concerns about the country’s trade practices. The U.S. has been particularly active in addressing these issues.

The Biden administration has reportedly announced plans to expand sanctions on the sale of semiconductor chips and other goods to Russia, targeting third-party sellers in China. This move was part of a broader strategy to counter Russia’s attempts to evade Western sanctions and support its war efforts against Ukraine.

Earlier in May, the G7 finance ministers and central bankers criticized China’s non-market policies, alleging that they harm global economies. In response, China accused the G7 nations of exaggerating the issue of overcapacity.

U.S. Treasury Secretary Janet Yellen previously called for fair trade with China and urged other central banks to limit currency interventions. She supported President Joe Biden’s view that China’s “enormous subsidies in critical areas of advanced manufacturing have resulted in overcapacity” and flagged them as unfair practices.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote