A "hostile" US policy toward China could lead to a two-block world split, Nobel laureate economist Joseph Stiglitz said, urging the West to offer developing countries investments rather than "lectures," according to AFP on Friday.

"It would be a good idea... for the other G7 countries to try to put pressure on the United States to say, 'what you're doing is forming the world into two blocs, and that will be hard,'" the professor said on the sidelines of Group of Seven ministerial talks in Japan.

"We may be in some sort of strategic competition, but that doesn't mean we have to be so hostile," Stiglitz said.

Stiglitz warned that competition between US Democrats and Republicans for tough treatment of China could undermine international action to combat climate change and other global crises.

The West is investing "very little" in emerging economies compared to countries like China, said Stiglitz.

People familiar with the matter have told the media that G7 member states will announce joint actions to respond to economic coercion so as to send a message to China. 

"If any country should be criticized for economic coercion, it should be the United States. The US has been overstretching the concept of national security, abusing export control and taking discriminatory and unfair measures against foreign companies. This seriously violates the principles of market economy and fair competition," said Chinese foreign ministry spokesperson Wang Wenbin at a regular press conference on Friday.

"Instead of a perpetrator, China is a victim of US economic coercion. We have been firmly opposed to economic coercion by any country in the world and urge the G7 to embrace the trend of openness and inclusiveness in the world, stop forming exclusive blocs and not become complicit in any economic coercion," Wang noted.