The G7 countries agreed, on Saturday, to adopt a new tool by the end of 2023 “at the latest” to diversify international supply networks, in an effort to reduce their dependence on China in this strategic area, according to AFP.
This mechanism provides for granting financial aid to middle- and low-income countries, exchanging skills and establishing partnerships with them to help them assume an increasingly important role in this basic mechanism of global industry, according to a statement issued by the finance ministers of the seven countries at the end of a three-day meeting in Niigata, central China. Japan.
The mechanism, whose major axes were revealed in April, will be carried out in cooperation with the World Bank and other relevant international organizations, according to the statement.
The mechanism of “strengthening a supply network of resistance and inclusive” or “Rise” according to the initials of its name in English aims to help countries not only extract raw materials for industry, but rather give them the ability to transform them locally, which will avoid to some extent resorting to China to perform such services.
However, the finance ministers did not present this new tool as an anti-China plan, nor did they mention China in their statement.
They explained that “diversifying supply networks can contribute to protecting energy security and helping us maintain macroeconomic stability.”
They reaffirmed their “steadfast” support for Ukraine, denouncing the “illegal and unjustified war of aggression” waged by Moscow.
On this occasion, the Group of Seven indicated its determination to “confront any attempt” to circumvent the economic and financial sanctions it imposed on Russia, without announcing specific new measures in this regard.
The Niigata meeting, in which the governors of central banks in the seven countries and officials of major organizations such as the International Monetary Fund and the World Bank also participated, touched on a number of other topics, including concerns about the banking sector and combating climate warming.
But the meeting constituted a special forum for exchanging views before the summit of the Group of Seven leaders at the end of next week in Hiroshima, western Japan, according to Agence France-Presse.-
And the G7 finance ministers warned, on Saturday, of the increasing uncertainty in the global economy, according to Reuters.-
“The global economy has demonstrated resilience in the face of multiple shocks, including the coronavirus pandemic, Russia’s war on Ukraine, and associated inflationary pressures,” the finance ministers said in a statement after the meeting.
“We need to remain vigilant and be agile and flexible in our macroeconomic policies amid growing uncertainty over the global economic outlook,” the ministers said in the statement.
Regarding problems in the banking system, the statement said that policy makers will address “gaps in data, oversight and regulation in the banking system”.
The finance ministers maintained their assessment issued in April that the financial system is “resilient” thanks to financial regulatory reforms implemented after the 2008 global financial crisis.
The statement showed that while warning of the continued “increasing” of inflation, the central banks of the Group of Seven reaffirmed their commitment to price stability and ensuring that inflation expectations remain sober.
The participants again condemned Russia’s invasion of Ukraine and pledged to strengthen monitoring of cross-border transactions between Russia and other countries.
Discussions also touched on matters related to China, as Japan, which chaired the meeting this year, led efforts to diversify supply chains and reduce heavy dependence on the second largest economy in the world.
Finance ministers set a deadline by the end of the year to launch a new plan to diversify global supply chains in the statement, according to Reuters.
There are perceptions that the new plan will include the G7 providing aid to low- and middle-income countries so that they can play a greater role in supply chains for energy-related products, such as mineral refining and processing of manufacturing supplies, according to Reuters.