G7 finance heads face tricky trade-off in debating steps to counter China

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Finance leaders of the Group of Seven (G7) advanced economies will debate this week the idea of implementing targeted controls on investments to China, which analysts see as a double-edged sword that could make little headway.

China is much on the minds of G7 finance leaders gathering in the Japanese city of Niigata, with current chair Japan leading fresh efforts to diversify supply chains and reduce their heavy reliance on Beijing.

Germany is increasingly wary of China as a strategic rival and has considered steps to reassess bilateral ties, but is cautious of being seen as forging a G7 front against China.showed Germany's direct investment in China continues to rise even as its government wants to "derisk" their relationship with Beijing.

"Restricting outbound investment would be quite difficult," said one of the officials, who spoke on condition of anonymity due to the sensitivity of the matter.

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