US Treasury Secretary Janet Yellen reiterated during the G20 finance ministers and central bank governors meeting in the capital of Brazil on Thursday (July 25) her call for the Chinese authorities to address overcapacity issues, in order to create a fair competitive environment for global businesses and workers.
Yellen also mentioned that amidst the challenges posed by the COVID-19 pandemic and other obstacles, the US economy has demonstrated remarkable resilience, which has in turn led to the development of the global economy. She attributed this to the economic policies of the Biden administration.
At a press conference, Yellen stated that despite pessimistic predictions two years ago due to the COVID-19 pandemic, the Russo-Ukrainian conflict, and other challenges, the global economy has maintained its resilience, largely due to the outstanding economic performance of the United States.
“In 2023, the US Gross Domestic Product (GDP) not only did not decline, but rather grew strongly by 3.1%. The latest data released this morning shows a growth rate of 2.8% in the second quarter of this year, confirming that we are on the path of stable growth and decreasing inflation,” Yellen said.
She mentioned that the International Monetary Fund (IMF) predicts that by the end of 2024, the US economy will be over 10% larger than their forecast in October 2019 (pre-pandemic).
Yellen attributed the performance of the US economy to the economic policies of the Biden administration.
However, she also pointed out that there are still risks to the global economic outlook, and that some countries remain vulnerable. She emphasized the need for the US to take a leadership role, including strengthening supply chain resilience to address global challenges.
She said that the US will continue to focus on multilateralism, including robust cooperation with emerging economies and developing countries, while also calling on Beijing to change its economic growth model to allow US and global businesses and workers to compete in a fair environment.
“This means that I will continue to urge China (the Chinese Communist Party) to address its macroeconomic model that funnels excessive funds and subsidies into manufacturing, leading to industrial overcapacity,” Yellen added.
“This poses a threat to businesses and workers worldwide, and I know that many of those attending these meetings share the same concerns as I do,” Yellen said.
Previously, Yellen has repeatedly urged the Chinese authorities to address overcapacity issues in areas such as electric vehicles, lithium batteries, and solar panels.
In June of this year, she warned Wall Street and corporate executives that China’s “overly concentrated supply chains” pose a threat to US employment and investments in establishing the US green energy sector.
She also stated that China’s trade policies “could seriously disrupt our efforts to build healthy economic relationships.”
Other Western allied countries have also criticized Beijing for overproducing electric vehicles and other goods through substantial subsidies, leading to significant trade imbalances. The US and the EU have imposed tariffs on Chinese electric vehicles, and some developing countries have also increased tariffs on certain Chinese products.
Yellen also mentioned that the US is working with partners to collectively address geopolitical challenges.
As part of a strong global alliance, she said the US has taken unprecedented actions to counter Russia’s war on Ukraine, with the US Treasury Department continuing to utilize all tools to support Ukraine and weaken Russia’s ability to sustain the conflict.
She pledged that the US will continue to combat Russia’s evasion of sanctions and will sanction foreign financial institutions that assist Russia’s war machine.
She stated that the US will also take action to address the ongoing conflicts in the Middle East, focusing on combating the Iran regime’s sponsorship of terrorism, including joint sanction measures with the Group of Seven (G7) to ensure humanitarian aid reaches Gaza and stabilize the economy in the West Bank of the Jordan River.
Recently, President Biden announced his withdrawal from the presidential race and endorsed Vice President Harris as the Democratic Party’s presidential candidate. During the press conference, Yellen was asked how Harris’ economic policies would differ from Biden’s if she were elected president.
Yellen stated that on global and economic issues, Harris shares the same core values as Biden, and if elected president, she would maintain America’s international leadership position.
“I think the core values that have been embodied in this administration’s policies are deeply advocated for by Vice President Harris,” she said.