In a final communique issued at a summit in Hiroshima, the nations laid out a raft of concerns about China's economic and military activities.
But they also sought to keep the door open to cooperation and avoid further inflaming tensions between the world's second largest economy and the grouping of major Western powers plus Japan.
"We stand prepared to build constructive and stable relations with China, recognising the importance of engaging candidly with and expressing our concerns directly to China," the group said.
"Our policy approaches are not designed to harm China nor do we seek to thwart China's economic progress and development," the statement continued, adding that the G7 countries are not "decoupling or turning inwards".
Still, the language made clear the bloc's wide-ranging concerns about Beijing's willingness to deploy trade measures in diplomatic disputes and G7 determination to untangle sensitive supply chains from Chinese influence.
"Economic resilience requires de-risking and diversifying," the communique said, pledging to "reduce excessive dependencies in our critical supply chains".
The bloc warned against China's "militarisation" in the South China Sea and repeated that "peace and stability" in the Taiwan Strait is "indispensable" to global security.
And it urged China to use its influence with Russia "to stop its military aggression, and immediately, completely and unconditionally withdraw its troops from Ukraine".
G7 vows economic coercion will 'face consequences'
Hiroshima, Japan (AFP) May 20, 2023 -
G7 leaders vowed Saturday that attempts to "weaponise" trade and supply chains would "fail and face consequences," in a thinly veiled warning to China over its economic practices.
Pushing back against Beijing's willingness to wield trade measures in diplomatic disputes has been a key theme of the bloc's meeting in Hiroshima though, in the end, its statement on economic security did not directly reference China.
Still, the target was clear, with the group warning of a "disturbing rise in incidents of economic coercion" that attempt to "undermine the foreign and domestic policies and positions of G7 members" and partners.
"Attempts to weaponise economic dependencies by forcing G7 members and our partners including small economies to comply and conform will fail and face consequences," it added.
The bloc is particularly concerned about its vulnerability in key sectors including critical minerals, semiconductors and batteries, all of which are vital to modern economies.
It pledged to strengthen supply chains and address disruptions, and ensure that technologies with national security applications are "appropriately controlled" -- also likely to be seen as a reference to keeping certain goods out of Beijing's hands.
- China language -
Earlier, US and EU officials previewed the group's position, including language that will come in a final communique at the end of the three-day summit.
"You will find the China language to be totally straightforward. It is not hostile or gratuitous," National Security Advisor Jake Sullivan said.
"There are key elements right from the top of that language that speak to the desire for stable relations with China and the desire to work together on issues of mutual interest," he added.
"It also spells out our concerns, but those concerns are well known to China."
Washington has led an aggressive push in recent months to restrict China's access to advanced chip-manufacturing tools, citing national security concerns while pressing Japan and the Netherlands to follow suit.
Sullivan said that past differences between the United States and the European Union countries on how to deal with China have largely faded.
The common strategy will emphasise the need to protect Western powers and their allies while avoiding outright confrontation with China.
"But it is not a cartoonish or one-dimensional policy. It is a multi-dimensional, complex policy for a complex relationship with a really important country," he said.
A European Union official also said the G7 was "ready to cooperate" and assess risks on strategic issues related to China.
"The aim of all G7 leaders is to say that China has followed a systematic policy of acquiring critical raw materials, controlling supply chains... and we are responding to this by diversifying," the official said.
A French diplomatic source added that cohesion on China among G7 members had "really progressed".
"We're not in a situation where the United States on one side are pushing for an ultra-aggressive policy towards China, while on the other, we're trying to counter that," the source told AFP.
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