China urges economic cooperation ahead of G7 summit

Key facts

• French President Emmanuel Macron is pushing G7 leaders to address subsidized Chinese exports.
• China's Vice Premier Zhang Guoqing participated in a video conference on global imbalances but resisted specific trade policy changes.
• Participants agreed to continue discussions on global imbalances at the G20 level.
• Europe is considering stronger trade measures against China, with a widening trade deficit.
• Transatlantic coordination on China policy remains challenging, with the U.S. indicating it will not slow its own actions.

French President Emmanuel Macron is seeking a unified G7 stance against what he describes as a flood of subsidized Chinese exports disrupting global markets. However, even before the summit, it is evident that concrete actions may be difficult to achieve, with China showing little inclination to alter its policies and differing approaches between European nations and the United States.

Macron hosted a video conference on global macroeconomic imbalances, attended by representatives from G7 countries and China. Chinese Vice Premier Zhang Guoqing participated, advocating for "true multilateralism" and prioritizing development and inclusive growth, without directly addressing the concerns over trade imbalances. Following the call, Macron's office characterized it as a success, with participants agreeing to continue discussions at the G20 level with IMF support.

Economists suggest that China is unlikely to fundamentally change its economic model to satisfy G7 demands. While France has historically been a proponent of stronger EU measures against China's trade practices, aiming to reduce a significant trade deficit, the broader European approach and U.S. strategy on China are not fully aligned. U.S. Trade Representative Jamieson Greer indicated that the U.S. would not delay its own actions while awaiting European coordination.

Despite the challenges in forming a united front, Germany's Chancellor Friedrich Merz has shown increased willingness to consider tougher measures against China. The European Commission has also committed to addressing the substantial trade deficit with China, with further discussions planned among EU leaders.