US president Joe Biden has challenged leaders of G7 countries to use their financial muscle to counter China’s rising global influence as he declared that western democracies were “in a contest with autocrats”.

Biden said he was “satisfied” with the outcome of the G7 summit in Cornwall on Sunday, but pushed European leaders to be more ambitious in backing an alternative to China’s Belt and Road Initiative by offering a broad package of infrastructure funding to poor countries.

European leaders at the summit, a gathering of the world’s largest advanced economies, were more cautious about antagonising Beijing. UK prime minister Boris Johnson, the summit host, declined to mention China by name at his closing press conference.

Several leaders including Mario Draghi, Italy’s prime minister, said the west had to work with China in important areas, particularly climate change.

French president Emmanuel Macron said the G7 was “not hostile to China”, while a British official said: “The point of the summit is to show what we are about, not who we are against.”

German chancellor Angela Merkel backed the creation of a task force to explore ways for G7 governments to work with the private sector on infrastructure projects in the developing world.

Speaking after the meeting, held at Carbis Bay on England’s Cornish coast, Biden praised the summit communiqué for its references to China, stating he was “satisfied” with its contents and that there was “plenty of action” on measures to counter Beijing.

The US president noted that the last time the G7 convened, there had been no reference to China. “The G7 explicitly agreed to call out human rights abuses in Xinjiang and Hong Kong,” he said, adding there was also a strategy to pressure China on its use of forced labour. 

“We’re in a contest, not with China per se, but with autocrats and autocratic governments around the world as to whether democracies can compete with them in a rapidly changing 21st century,” Biden said.

On the final day of the three-day gathering, the G7 leaders launched a new initiative called the “Build Back Better for the World”, or B3W, but failed to agree on the details of how it should be funded or what it would entail.

Biden said a committee would craft the plan, with a focus on climate change, health, digital technology and gender equity, to challenge the billions of dollars spent by China on infrastructure in poorer countries.

“China has this Belt and Road Initiative, and we think that there is a much more equitable way to provide for the needs of developing countries around the world,” he said. The new fund would “represent values that our democracies represent, and not autocratic lack-of-values”.

However, climate change experts noted the G7 meeting had failed to make any collective financial commitment to help developing nations lower greenhouse gas emissions or deal with climate disasters.

It also watered down a commitment G7 environment ministers made last month on the timeframe for phasing out coal-powered plants. The target of “an overwhelmingly decarbonised power system in the 2030s” was dropped in the latest communiqué.

The G7 leaders were also criticised over the ambition of their plan to share Covid-19 vaccines with poorer countries. The communiqué said the group would share “at least 870m doses directly over the next year”.

Oxfam responded that “a billion doses would have been a drop in the bucket, but they didn’t even manage that”. The communiqué said the G7 had provided for over 2bn vaccine doses for the developing world since the start of the pandemic.

Biden depicted the gathering as a break with the Trump era, saying “America is back at the table. America is back at leading the world.”

One European diplomat noted: “Everyone’s delighted that the US is back, but American leadership means they will want something from us.”

Johnson said the summit had been marked by “fantastic harmony”, although the issue of Brexit and new trade rules for Northern Ireland soured talks with European leaders.

The British prime minister insisted he would do “whatever it takes” to ensure that the post-Brexit deal did not impose unreasonable burdens on trade between Great Britain and Northern Ireland.

China criticised the US and other G7 members, arguing that “genuine multilateralism” was based on the UN. “The days when global decisions were dictated by a small group of countries are long gone,” a spokesperson at the Chinese embassy in London said.

Additional reporting by Erika Solomon in Berlin