A person cycles past the “G7 Hiroshima” flower at the Hiroshima Peace Memorial Park ahead of the G7 leaders’ summit on May 17, 2023. (Photo: Philip FONG/AFP) (Photo: PHILIP FONG/AFP) via Getty Images)
Philip Fong | AFP | Getty’s paintings
The annual Group 7 Summit officially kicks off on Friday in Hiroshima, Japan.
The leaders of the seven major industrial democracies – Canada, France, Germany, Italy, Japan, the UK and the US – will discuss the future of global relations and the global economy in the face of a series of uncertainties: rising geopolitical tensions, central banks battling rising inflation and ceiling deadlock US debt.
Also in the highlight are the countries invited to the meeting, including Australia, Brazil, India, Indonesia, South Korea and Vietnam – nations which have key roles to play in regional alliances as the rift between Washington and Beijing widens.
Leaders will gather in Hiroshima, a Japanese city devastated by the first atomic bomb used as a weapon of war by the United States in 1945, which killed a whole lot of 1000’s of civilians during World War II.
Nearly eight many years later, the city will welcome world leaders to debate the path to international trade and security as the United States and China vie for influence in a multipolar world amid fears of their separation, and war rages on in Ukraine.
The G7 Hiroshima Summit sign pictured in Hiroshima, in front of the G7 leaders’ summit, May 16, 2023. (Photo by Philip FONG/AFP) (Photo by PHILIP FONG/AFP via Getty Images)
Philip Fong | AFP | Getty’s paintings
The Group of 7, which was formed to debate strategies for coping with the economic crises of the Seventies, meets at an important time when global growth is slowing in the face of rising inflation.
G-7 financial leaders and central bankers finalized a three-day meeting in Niigata last week. They pledged to fight rising costs and ensure expectations of future price movements remain “well anchored”.
“For those who take into consideration what is going on on in world politics… we’re increasingly concerned that the relationship between the United States and China is escalating into conflict,” said Mireya Solis, director of the Brookings Institute for Global Affairs. podcast.
“These are superpowers on the nuclear issue – and that is why I feel Hiroshima provides a really poignant reminder of the need to deal with these issues and avoid an identical consequence,” Solis said.
Ukrainian-Russian conflict
The summit may also be attended by the President of Ukraine Volodymyr Zelensky, who is to hitch the meeting virtually.
Additional sanctions against Russia are also to be announced in Hiroshima.
“There shall be discussions about the status of the sanctions and the steps the G7 will collectively commit to enforcing them,” U.S. National Security Adviser Jake Sullivan on Air Force One told reporters.
The steps will give attention to “ensuring we close the networks of evasion by closing loopholes in sanctions in order that the impact is strengthened and magnified in the coming months,” he said.
“The US may have a sanctions package related to the G-7 statement that can give attention to this enforcement issue,” he said he said reporters.
The European Union is also in talks for a latest wave of sanctions to chop off Russia from finance and technology “in order to reinvent its war machine,” EU Financial Stability Commissioner Mairead McGuiness told CNBC in April.
The Russian invasion of neighboring Ukraine may also be discussed during the tripartite summit, where the leaders of the US, Japan and South Korea meet on the sidelines of the G-7 meetings.
South Korean President Yoon Suk-yeol later faced harsh criticism from the Kremlin he suggested in an interview with Reuters to be open to possible military assistance to Ukraine.
The three leaders are expected to debate closer security cooperation, including a stronger nuclear deterrent in the wake of an escalating provocation by North Korea.
One eye on China
China is also seen as a peace broker as ongoing tensions between Ukraine and Russia pose an “intimidating challenge” to Beijing, analysts told CNBC.
The meeting comes as China this week delivered disappointing data intended to signal a more significant recovery after emerging from strict Covid restrictions.
The momentum of China’s economic recovery appears to be easing, with corporations comparable to Nomura lowering its full-year growth forecast for the economy from 5.9% to five.5%.
“As disappointment sets in, we see increasing risks of slower activity growth, rising unemployment, persistent disinflation, falling market rates of interest and a weaker currency,” Nomura’s chief economist for China, Ting Lu, wrote.
He cited “weak consumer and business investor confidence” behind the rating downgrade.
More tensions
Geopolitical tensions with the US are clouding China’s growth prospects and raising concerns about global supply chains.
US President Joe Biden is also expected to announce an executive order limiting investment by US corporations in China.
Treasury Secretary Janet Yellen told reporters at the G-7 meeting finance ministers and central bankers that the United States is considering measures to counter China’s use of “economic coercion” on other countries.
Biden confirmed that he would meet together with his Chinese counterpart Xi Jinping in the near future, but didn’t provide a particular timeline for when the meeting would happen.
“Is it soon or not, but we are going to meet,” he said in response to an issue about his plans to satisfy Xi.
A White House official said the potential meeting needs to be characterised as perfectly personal and that officials are actively evaluating whether it could occur before the end of the 12 months.