G7 to vow to diversify global supply chains to address bank regulatory gaps
The Group of Seven’s top financial leaders united 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.
With an aim to address regulatory gaps in the banking system, finance leaders of the Group of Seven (G7) advanced economies set a year-end deadline for launching a new scheme to diversify global supply chains, according to a final draft of their communique seen by Reuters.
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, help countries struggling with onerous debts and strengthen financial systems.
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.”
Related Articles
The statement did not include any specific mention of China or of “economic coercion” in pursuit of political objectives, such as penalizing the companies of countries whose governments take actions that anger another country.
The G7 central banks said they remained “strongly committed” to achieving price stability and ensuring inflation expectations stayed well-anchored, Reuters reported quoting the draft communique.
The global economy has shown resilience against multiple shocks including the Covid-19 pandemic, Russia’s war of aggression against Ukraine, and associated inflationary pressures,” Reuters quoted the draft communique as saying.
“Nevertheless, we need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook,” it said.
The finance leaders’ talks laid the groundwork for a summit of G-7 leaders in Hiroshima next week that President Joe Biden is expected to attend despite a crisis over the U.S. debt ceiling that could result in a national default if it is not resolved in the coming weeks.
Japanese Finance Minister Shunichi Suzuki said that Treasury Secretary Janet Yellen mentioned the issue in a working dinner, but he refrained from saying anything more.
While in Niigata, Yellen warned that a failure to raise the debt ceiling to enable the government to continue paying its bills would bring an economic catastrophe, destroying hundreds of thousands of jobs and potentially disrupting global financial systems. No mention of the issue was made in the finance leaders’ statement.
The G-7′s devotion to protecting what it calls a “rules-based international order” got only a passing mention.
The leaders pledge to work together both within the G-7 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,” it said.
G-7 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 G-7′s relevance and role in leading a world economy increasingly reliant on growth in less wealthy nations.
China had blasted as hypocrisy assertions by the U.S. and other G-7 countries that they are safeguarding a “rules-based international order” against “economic coercion” from Beijing and other threats.
China itself is a victim of economic coercion, Chinese Foreign Ministry spokesperson Wang Wenbin said Friday. “If any country should be criticized for economic coercion, it should be the United States. The U.S. has been overstretching the concept of national security, abusing export controls and taking discriminatory and unfair measures against foreign companies,” Wang said in a routine news briefing.
China accuses Washington of hindering its rise as an increasingly affluent, modern nation through trade and investment restrictions. Yellen said they are “narrowly targeted” to protect American economic security.
Read all the Latest News, Trending News, Cricket News, Bollywood News,
India News and Entertainment News here. Follow us on Facebook, Twitter and Instagram.
also read
Fumio Kishida's LDP wins local elections in Japan, but Ishin emerges as a future challenger
Fumio Kishida's continuation as prime minister and LDP president after the G7 will depend on his political management of factions some of which were bruised in the elections
FM Nirmala Sitharaman on two-day visit to Japan for G7 meeting
Union Finance Minister Nirmala Sitharaman on Wednesday arrived in Japan for a two-day official visit and is scheduled to attend G7 Finance Ministers and Central Bank Governors meeting in Niigata tomorrow
‘Indian economy will perform much better than others, will be investing more in India,’ says Gigabyte VP
Taiwanese tech giant Gigabyte's VP Tony Liao believes that the Indian Economy will be in a much better position than others in the upcoming global recession. He also believes that Indian consumers have an eye for value-for-money products and don't just look at the price.