Joe Biden's Focus at the G7 Summit: Countering China's Excess Capacity and Utilizing Frozen Russian Assets for Ukraine

Last year, when the leaders of the seven wealthiest economies gathered in Hiroshima, Japan, they condemned China's increasing economic security threats and committed to support Ukraine against Russia's aggression whenever necessary. U.S. President Joe Biden intends to make a similar request at this week's G7 summit in Apulia, Italy, while also calling for addressing common global challenges. The changing political landscape in Europe and the shift to the right following the recent European Parliament elections could complicate these plans. A knowledgeable source told Voice of America that the United States aims to unite the G7 against China's excess capacity, where production exceeds demand, and to reach an agreement on green technologies and finding a mechanism to use frozen Russian assets to aid Ukraine. The U.S. President plans to use the interest from $280 billion of Russian assets blocked in Western financial institutions to provide Kyiv with tens of billions of dollars upfront. Weeks after announcing new tariffs on Chinese electric vehicles, Biden will ask G7 leaders to counter Beijing's approach of flooding global markets with cheap exports. The rise of far-right parties in the recent European Parliament elections has weakened French President Emmanuel Macron and German Chancellor Olaf Scholz; however, Italian Prime Minister Giorgia Meloni, who is hosting the G7 summit, has consolidated her power. The far-right parties in Europe have differing views on China and Russia, and it remains to be seen whether Ursula von der Leyen can retain her position as President of the European Commission for another five years. Liana Fix, a member of the European Council on Foreign Relations, told Voice of America, "If von der Leyen remains a candidate, we can expect the continuity of the G7 agenda, especially regarding China and Ukraine." Russia considers the blocking of its assets by Western financial institutions following its February 2022 invasion of Ukraine as "theft" and has threatened retaliation if the G7 agrees to Biden's proposed plan. This plan provides a loan of up to $50 billion to Kyiv, which will be repaid to Western allies using the interest generated from Russian assets. Biden's proposal carries more risk than what the European Union agreed upon last May, as there is no guarantee that Russian assets will remain blocked for the duration needed to repay the loan. Armida van Rij, director of the Europe program at the UK-based think tank Chatham House, told Voice of America that the prospect of pro-Putin politicians coming to power in Europe may help garner more support for Biden's loan plan for Ukraine. Concerns over China's industrial excess capacity Desmond Lachman, a senior fellow at the American Enterprise Institute, told Voice of America that the U.S. and Europe undoubtedly share concerns about China's efforts to alleviate its domestic industrial excess capacity through exports. Lachman believes the rise of right-wing parties in Europe could create more urgency to address the issue of China's excess capacity. EU members, particularly Germany and France, which view China as a major export market, are concerned about the possibility of a trade war and wish to avoid it. Giorgia Meloni, Italy's Prime Minister, has made artificial intelligence a top priority at this year's G7 summit and has invited Pope Francis to a special session to address the ethical challenges of AI. Leaders of G7 countries will also discuss how AI impacts the workforce, sustainable development, foreign policy, misinformation, and election interference. Alongside these topics, following the UN Security Council's resolution on a ceasefire between Israel and Hamas, G7 leaders are expected to reaffirm their support for peace negotiations in Gaza.