G7 finance leaders vow to contain inflation as talks in Japan wrap up

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The Group of Seven’s (G7) top financial leaders united on Saturday in their support for Ukraine and their determination to enforce sanctions against Russia for its aggression but stopped short of any overt mention of China.

The finance ministers and central bank chiefs ended three days of talks in Niigata, Japan, with a joint statement pledging to bring inflation under control while aiding those suffering the most from surging prices.

They also committed to collaborating to build more stable, diversified supply chains for developing clean energy sources and to “enhance economic resilience globally against various shocks”.

The statement did not include any specific mention of China or assertions regarding “economic coercion” in pursuit of political objectives, such as penalising the companies of countries whose governments take actions that anger another country.

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Japanese Prime Minister Fumio Kishida (Jung Yeon-je/Pool Photo via AP)

The finance leaders’ talks laid the groundwork for a summit of G7 leaders in Hiroshima next week that President Joe Biden is expected to attend despite a crisis over the US debt ceiling that could result in a national default if it is not resolved in the coming weeks.

Treasury secretary Janet Yellen has warned that would bring an economic catastrophe, destroying hundreds of thousands of jobs and potentially disrupting financial markets across the globe. No mention of the issue was made in the finance leaders’ statement.

The stakes for the global economy and stability are high, Japanese Prime Minister Fumio Kishida said as the finance talks drew to a close.

“The international community is facing a historic turning point, facing divisions and conflicts such as Russia’s invasion of Ukraine and Sudan,” Kishida said in a statement issued late on Friday.

The G7 will “resolutely reject the threat or use of nuclear weapons and uphold the international order based on the rule of law,” Mr Kishida said.

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The G7 economies comprise only a tenth of the world’s population but about 30% of economic activity (Shuji Kajiyama/AP)

The G7’s devotion to protecting what it calls a “rules-based international order” got only a passing mention in the statement released on Saturday.

The leaders pledged to work together both within the G7 and with other countries to “enhance economic resilience globally against various shocks, stand firm to protect our shared values, and preserve economic efficiency by upholding the free, fair and rules-based multilateral system”.

The G7 economies comprise only a tenth of the world’s population but about 30% of economic activity, down from roughly half 40 years ago.

Developing economies like China, India and Brazil have made huge gains, raising questions about the G7’s relevance and role in leading a world economy increasingly reliant on growth in less wealthy nations.

China blasted as hypocrisy assertions by the US and other G7 countries that they are safeguarding a “rules-based international order” against “economic coercion” from Beijing and other threats.

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