The G7 is accusing China of 'economic coercion.' Here's why.

• The US has accused China of "economic coercion" and plans to take steps to counteract Beijing.
• White House Security advisor Jake Sullivan said the West would work together against China.

A group of some of the world's biggest economies have come together in an increasingly familiar combative mood.

But while Russia's invasion of Ukraine is likely to continue dominating discussions at this year's G7 meeting being held this weekend in Hiroshima, Japan, Western leaders are also paying close attention to their biggest economic threat: China.

Speaking in Hiroshima Friday, President Biden's national security adviser Jake Sullivan said the G7 would unite with a collection of measures to combat "economic coercion," laying blame squarely at China's door.

Western leaders also criticized China for its militarization of the South China Sea and their statement represented the "strongest criticism of Beijing by the G7," according to the Financial Times.

So what exactly is "economic coercion" – and what can the G7 do about it?

What 'economic coercion' is the West referring to?

For years the West has been at odds with economic and geopolitical moves by China as its technology capabilities continue to expand.

This has led to issues concerning industrial might, like China's fast-growing EV know how, to existential threats such as the use of US semiconductor chips in Beijing's military push. The latter sparked a curb on exports to China.

China's also sought to gain more influence in the developing world through its the Belt and Road Initiative that has lent large sums to emerging economies for infrastructure projects such as ports.

However, the policy has been labeled "debt trap diplomacy" by some US officials, who argue it's a tool to give China more political control abroad.

Indeed, analysis by The Associated Press suggests countries such as Pakistan, Kenya, and Mongolia are beginning to buckle under the strain of making loan repayments worth billions of dollars and testing their ability to keep schools open and maintain food supplies.

The US and wider G7's concern is increasingly linked to rising geopolitical tensions, with fears that rising economic separation could give way to increased use of military might.

The status of Taiwan, which China claims as its own, is gradually intensifying into more than mere saber-rattling between the US and China. And the presence of Taiwan Semiconductor Manufacturing Company — a major chip exporter to the US — in the region has accelerated responses from the west to bring more production back to America.

Elon Musk told CNBC last week that rising tensions between China and the US over Taiwan "should be a concern for everyone."

What does the West plan to do?

In his press briefing, Sullivan said the West was "looking to de-risk, not decouple, from China."

According to Sullivan, this will involve measures that could enhance economic security for G7 nations. He said they may include developing resilience for supply chains, as well as more export controls such as the US's past chips action, and "outbound investment measures."

The risk of stoking tensions, though, may inhibit the extent to which the G7 can attempt to wrestle back any lost control from China – now the world's second-biggest economy.

The West needs to work with Beijing on a range of issues that likely go beyond the countries' desire for economic security. The war in Ukraine, climate change, and global supply chain logjams all require co-operation between the G7 and China.