US Treasury Secretary Janet Yellen urges China to address industrial overcapacity

Beijing: US Treasury Secretary Janet Yellen, who is on five-day visit to China, has urged Chinese officials to address its industrial overcapacity, reform its trade practices and create a “healthy economic relationship” with the United States, VOA News reported.

Yellen, who is on a five-day visit to China, has raised concern with Chinese officials regarding state subsidies that fuel manufacturing overcapacity in industries like electric vehicles, solar panels and semiconductors.

In her remarks in China’s Guangzhou, Yellen said, “The United States seeks a healthy economic relationship with China that benefits both sides.” She added, “But a healthy relationship must provide a level playing field for firms and workers in both countries.”

She also held a meeting with Chinese Vice Premier He Lifeng and other high-level central bank officials on Friday. During the meeting, Yellen told Chinese officials that their industrial overcapacity, especially in green energy sectors, threatens American production of electric vehicles and solar panel parts, VOA News reported. China has backed its solar panel and EV makers through subsidies, building production capacity far beyond the domestic market’s demand and exporting its products across the world. The production has cheapened prices for these green products. The US and European governments have expressed worry that Chinese products will flood the market and put their own domestic production at risk.

During a meeting with Guangdong province Governor Wang Weizhong, Yellen said the US and China must hold talks on areas of disagreement, including green industrial policy. She said, “This includes the issue of China’s industrial overcapacity, which the United States and other countries are concerned can cause global spillovers.”

China has tried to downplay these concerns, with Chinese Foreign Ministry spokesperson Wang Wenbin earlier this week saying that China’s green production is a positive in global efforts to reduce carbon emissions. Wang said US reluctance to export technology to China meddles with global supply and demand.

Wang Wenbin said, “As for who is doing nonmarket manipulation, the fact is for everyone to see.” He said, “The US has not stopped taking measures to contain China’s trade and technology. This is not ‘de-risking,’ rather, it is creating risks,” VOA News reported.

During her visit to China, Yellen also expressed concerns about Chinese trade practices. She said that China has been using “unfair economic practices, including imposing barriers to access for foreign firms and taking coercive actions against American companies.” She called on Chinese officials to reform these policies.

In her address at an event hosted by the American Chamber of Commerce in Guangzhou, Yellen said, “I strongly believe that this doesn’t only hurt these American firms.” She further said, “Ending these unfair practices would benefit China by improving the business climate here.”

Yellen’s visit to China marks the first visit by a senior US official to China since November meetings between US President Joe Biden and Chinese counterpart Xi Jinping.

Jenet Yellen said, “It also remains crucial for the two largest economies to seek progress on global challenges like climate change and debt distress in emerging markets in developing countries and to closely communicate on issues of concern such as overcapacity and national security-related economic actions.” (ANI)

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