This week, finance leaders of the Group of Seven (G7) major economies will discuss targeting Chinese investment controls, which analysts regard as a double-edged sword that may fail.

G7 finance leaders meeting in Niigata, Japan, are focused on diversifying supply chains and reducing their dependence on China.

The group disagrees on how far it should go to fight China, as damaging trade with the world’s second-largest economy may hurt export-reliant countries like Germany and Japan.

The U.S. leads China’s toughening efforts. On Thursday, Treasury Secretary Janet Yellen said several G7 nations shared U.S. concerns about China’s “economic coercion” and were studying ways to resist it.

“We have been engaging in discussions with our G7 colleagues, and I would expect that that would continue these meetings, at least in some informal way,” Yellen said of the U.S. push for such limitations.

Germany is increasingly apprehensive of China as a geopolitical threat and has considered reassessing bilateral ties; it is leery of forming a G7 front against China.

Germany led appeals for caution against targeting China under new European Union sanctions over Russia’s invasion of Ukraine, five diplomatic sources told Reuters, indicating the matter’s sensitivity.

On Thursday, a German government source said any screening of investments to China would target strategically critical areas at the G7 leaders’ summit next week.

Finance leaders will prepare for the Hiroshima summit.

Japan is wary of outbound investment bans against China due to their potential impact on global trade and its economy.

“Restricting outbound investment would be quite difficult,” said one official, speaking anonymously owing to the topic’s sensitivity.

“The United States, for one, is making a lot of money investing in China, which makes you wonder if you can really impose restrictions,” the official said.

On Thursday, British Finance Minister Jeremy Hunt told Nikkei that the G7 must oppose China’s economic coercion without mentioning investment bans.

G7 support for collaborations with low- and middle-income states to diversify supply chains away from China is less problematic.

On Friday, Japan will discuss supply chain collaborations with six non-G7 nations, including Brazil, India, and Indonesia.

Analysts doubt such China countermeasures would work.

“It’s very difficult to leave China out given its economic might,” said Dai-ichi Life Research Institute’s top emerging market economist Toru Nishihama. “Doing so could divide world trade, damage global growth, and hurt G7 economies themselves.”

By isolating China, the world’s largest sovereign creditor, the G7-rich democracies would struggle to aid emerging economies with debt.

Last month’s sovereign debt roundtable at the IMF-World Bank spring meetings failed to advance China’s debt restructuring requests, and U.S. officials have expressed their growing anger.

After their three-day summit on Saturday, the G7 finance leaders will release a joint statement.