Japan to host G7 finance leaders39; meeting May 1113
Heightening risk of U.S. debt default may put Yellen under heat
G7 to seek deal for diversifying supply chains away from China
Outreach meeting to debate emerging nations39; debt woes
Stubbornly high inflation, slowing growth among topics of debate

TOKYO, May 10 Reuters China will be the elephant in the room at this week39;s meeting of Group of Seven G7 finance leaders, who will seek to diversify supply chains away from the country but also try to get Beijing39;s cooperation in solving global debt problems.

The conflicting goals come on top of vulnerabilities the G7 rich democracies face due to their heavily reliance on China, which is the world39;s secondlargest economy and the second biggest external holder of U.S. debt.

The heightening risk of a U.S. debt default, which could jolt financial markets already jittery after recent bank failures, will overshadow the threeday meeting kicking off on Thursday in the Japanese city of Niigata.

While Treasury Secretary Janet Yellen will join the G7 finance leaders39; talks, U.S. President Joe Biden on Tuesday signalled the chance of cancelling his trip to Hiroshima for next week39;s summit if the debt issue is not resolved.

The dollar is regarded and Treasury securities as the bedrock safe asset in the entire global financial system, Yellen said on Monday, in a warning of the damage a default could inflict on the U.S. economy and financial markets.

It39;s trusted,…