The entire global economy is in danger from an oversupply of low cost exports from China, said French Finance Minister Bruno Le Maire, while at the identical time there was a hail of criticism from the G7 countries.
“We have a problem with the economic model in which China produces increasingly cheaper industrial equipment because it could pose a threat not only to the EU, not only to the US, but to the global economy,” Le Maire said in an interview with Bloomberg Television. “We have to address this problem.”
Leading industrial nations wish to work together and take tougher motion against overcapacity in China, which they imagine poses a threat to domestic manufacturers.
Meeting of G-7 finance chiefs in Stresa, Italy quoted the country by name after they agreed to “respond to harmful practices” and “consider steps to ensure a level playing field.” These words marked a step up from the sparse and more neutral language on trade that they normally use in communiqués.
Their statement followed Washington’s announcement on Friday that President Joe Biden would reimpose tariffs on a whole lot of products imported from China. Meanwhile, the EU is nearing the top of an investigation into electric vehicle subsidies that’s more likely to result in defensive measures against China’s auto exports.
The EU’s potential tariffs are more likely to be significantly lower than those of the US and will likely be based on a unique approach inside the foundations and procedures of the World Trade Organization.
Le Maire said on the G7 meeting that member countries must increase the exchange of knowledge and conduct a joint assessment of Chinese industrial practices. Nevertheless, he stressed that the EU has all of the needed tools to revive a level playing field.
“Make no mistake about the determination of the EU countries and the French determination,” said Le Maire.
AI cooperation
The French minister said he desired to secure the advantages of years of presidency policy and investments to accumulate his own industrial and technological sectors.
One focus is artificial intelligence, where France wants to keep up its leading position in Europe. This has attracted foreign capital, and Microsoft Corp. announced 4 billion euros invested in French cloud and AI infrastructure this month. Paris-based Mistral AI also announced a partnership with Microsoft in February.
When asked whether he could use government control rules to forestall foreign investors from taking on French technology firms, Le Maire said the present goal was to strengthen cooperation, not block it.
“We will see what opportunities for cooperation there are between Mistral and Microsoft,” said Le Maire. “Currently, Microsoft is investing in France, opening data centers in France and investments by Microsoft in France are very welcome.”
