Real issue is some developed economies' ostrich approach to self-made vulnerabilities: China Daily editorial

France is reportedly considering proposing a video dialogue between the G7 members and China with the aim of addressing "global trade imbalances".

During a G7 finance ministers' meeting last month, French Finance Minister Roland Lescure said France wants to move away from "finger-pointing" and engage constructively with all partners, including China, to resolve trade-related issues.

Although framed as a "global" concern, the "finger-pointing" that accompanies the complaints of a "trade imbalance" voiced by some developed economies is directed primarily at China. Ironically, while such a mindset has become increasingly apparent among some European Union politicians, they strongly oppose Washington's tendency to blame the EU for "exploiting" the United States through its trade surplus. The EU has dismissed the US' justification and threats as absurd. Yet it is the same group of EU politicians who are now trying to copy the US playbook and apply it to the EU's own dealings with China.

Against this backdrop, the proposed dialogue to be held before the G7 summit scheduled for June 15-17 in Evian-les-Bains, France, may provide an opportunity to engage in discussions to avoid harmful tit-for-tat "punishment" practices, demonstrating that trade disputes are best managed through constructive dialogue.

Yet if the purpose of such a dialogue is to address a so-called "trade imbalance" with China, it is starting from a false premise.

China itself records deficits with many other economies such as the Republic of Korea and Australia. The notion that all economies can simultaneously enjoy trade surpluses is mathematically impossible. China's trade surplus with some G7 economies and the EU is not the outcome of its policy. It is largely the result of industrial specialization and the structure of global supply chains.

For years, multinational corporations designed products in the EU and the US, financed them in London, marketed them in Paris and assembled them in China. When those products were shipped abroad from Chinese ports, they appeared in customs statistics as Chinese exports. Yet a substantial portion of the profits goes elsewhere.

Also, many developed economies have spent years restricting exports of advanced technologies to China while simultaneously complaining about bilateral deficits. One cannot block sales in sectors where one enjoys a competitive advantage and then lament insufficient exports. If some G7 members and the EU genuinely seek to reduce their trade deficit with China, relaxing certain export controls would likely achieve more than employing protectionist measures.

China-EU trade remains among the world's largest commercial partnerships, exceeding $820 billion in goods trade last year. Meanwhile, foreign investment in China has shown resilience, with thousands of European companies continuing to expand operations in the Chinese market. Their behavior suggests a more nuanced reality than the political rhetoric often implies. Strong European companies actively seek cooperation with China; it is only some weaker ones that attribute their loss of market share to politicized reasons.

Germany, France, the United Kingdom, Italy and Canada maintain extensive and generally stable commercial relationships with China. Yet when the same issues are elevated to the level of the G7 or the EU, they are frequently recast as "existential threats". That says less about economics than politics. The more immediate issue that advanced economies need to address is inflation driven by energy-market disruptions caused by the Middle East conflict. Higher energy prices are squeezing consumers and undermining growth. If the G7 members and the EU want to address their problems, they should spend less time scrutinizing China's trade statistics and more time examining the sources of their vulnerabilities.

This highlights the larger problem: the G7 increasingly appears less interested in discussing economics than in framing economics through the lens of geopolitics. The world's major challenges today include anemic economic growth, debt distress, climate financing, technological disruption and supply-chain resilience. These are global concerns requiring global solutions. The greatest threat to the international trading system stems from the resurgence of unilateralism and protectionism in some major developed economies.

If the G7 wants a productive conversation with China, it should focus on the real questions, including whether the world's advanced economies are prepared to defend the principles of openness and globalization that helped create their own prosperity in the first place.