In confrontational message to Beijing, Liz Truss warns of economic retaliation if China fails to ‘play by rules’

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The G7 group of leading global powers should act as “an economic Nato”, with all members ready to come to one another’s defence if their economies are targeted by an aggressive regime like Russia or China, foreign secretary Liz Truss has said.

In a highly confrontational message to Beijing, the foreign secretary warned that China’s could face Russia-style sanctions form an “assertive” G7 if it threatens others’ security, adding: “They will not continue to rise if they do not play by the rules.”

And she raised the prospect of a “global Nato” able and willing to project influence deep into China’s Indo-Pacific backyard, and ensuring that “the Pacific is protected (and) democracies like Taiwan are able to defend themselves”.

Her comments came in a high-profile speech to the Lord Mayor of London’s Easter Banquet, at which she called for a reshaping of the global security order in the wake of Russia’s invasion of Ukraine.

Declaring that “geopolitics is back”, Ms Truss called for a hike in military spending by Western powers.

And she said the G7 – the US, UK, France, Germany, Italy, Canada, Japan and the EU – should take a stronger role, rather than the UN Security Council, where Moscow holds a veto.

Just a year after her government completed the process of withdrawing the UK from its partnership with close allies in the EU, Ms Truss said she wanted to build stronger alliances with like-minded states in what she called a “network of liberty”.

“My vision is a world where free nations are assertive and in the ascendant,” said Ms Truss.

“Where freedom and democracy are strengthened through a network of economic and security partnerships.

“Where aggressors are contained and forced to take a better path.”

Economic and security structures established after the Second World War have been so “bent out of shape” as to offer no block to Russian aggression in Ukraine, with Vladimir Putin regarding his Security Council veto as “a green light to barbarism”, she said.

Hopes that opening up trade with autocracies like Russia and China would usher in democratic change had also proved unfounded.

As well as strengthening the collective defence of Nato members and extending the trans-Atlantic alliance into a “global” body able to intervene in the Indo-Pacific, the “new approach” must involve using economic levers in “a much more assertive way”, she said.

“For too long many have been naive about the geopolitical power of economics,” said Ms Truss. “Aggressors treat it as a tool of foreign policy – using patronage, investment and debt as a means to exert control and coerce.

“They are ruthless in their approach. Our response won’t mirror their malign tactics, but it must more than match them in its resolve.”

Access to the global economy must depend on “playing by the rules”, with the sanctions on Russia showing how world powers can cut a rule-breaking regime out of the system, she said.

And she issued a stark warning that China could face similar treatment if it used its economic muscle to bully smaller states.

She cited Beijing’s failure to condemn Russian war crimes and its increased imports of Russian goods since the start of the conflict, its rapid military build-up, its trade embargo on Lithuania and its efforts to exert influence on applications for Nato membership.

But she declared: “Their rise is not inevitable. They will not continue to rise if they do not play by the rules.

“China needs trade with the G7. We represent around half of the global economy. And we have choices. We have shown with Russia the kind of choices that we’re prepared to make when international rules are violated.

“We’ve shown that we’re prepared to prioritise security and respect for sovereignty over short-term economic gain, not least because we know that the cost of not acting is higher.”

The G7 “should act as an economic Nato, collectively defending our prosperity”, she said.

“If the economy of a partner is being targeted by an aggressive regime we should act to support them. All for one and one for all.”