China has responded to the Group of Seven (G-7) nations’ criticism of its trade practices, accusing them of exaggerating the issue of overcapacity.

What Happened: The G-7 finance ministers and central bankers claimed on Saturday that China’s non-market policies harm global economies, Bloomberg reported on Monday.

During a regular press briefing in Beijing on Monday, Chinese Foreign Ministry spokeswoman Mao Ning dismissed these allegations.

She stated, “The G-7 hypes up the so-called overcapacity of China and attempts to set obstacles and limitations to China's progress.”

Mao further described the G-7’s stance as “essentially protectionism” and not beneficial to any party.

The dispute highlights the escalating tensions between China and industrialized nations. On Friday, the Biden administration announced the reimposition of tariffs on hundreds of Chinese imports and increased duties on Chinese electric vehicles. Additionally, the European Union has been investigating China’s EV industry and is close to deciding on raising levies.

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Why It Matters: The ongoing trade tensions between China and the G-7 nations are part of a broader conflict affecting various sectors. Recently, China launched a $47.5 billion state fund to boost its semiconductor industry, a move seen as a response to the global chip war.

U.S. Treasury Secretary Janet Yellen called for fair trade with China and urged central banks to limit currency interventions.

China’s response to the Biden administration’s tariffs included launching an investigation into U.S. plastics imports, affecting companies like Basf (OTC:BASFY) and Asahi Kasei ( AHKSF ) .

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari