US Treasury Secretary calls on China to reduce overcapacity in the clean energy industry.
On Tuesday, April 16, US Treasury Secretary Janet Yellen stated during an interview at the IMF and World Bank Spring Meetings that China’s massive investments in advanced manufacturing have created an unfair competitive environment, putting American workers and businesses at risk.
Yellen pointed out that China’s overproduction of electric vehicles, lithium batteries, solar panels, and other goods has led to bankruptcies of companies not only in the US but also in other countries, with Beijing continuing to support these Chinese companies.
“This is not a fair competitive environment,” she said.
Yellen emphasized that from a supply chain perspective, this poses risks to American businesses and workers, and the Biden administration is seeking to mitigate these risks.
On Tuesday, Yellen met with Chinese Vice Finance Minister Liao Min and Deputy Governor of the People’s Bank of China Pan Gongsheng at the US Treasury for meetings of the US-China Financial Working Group and Economic Working Group. Yellen revealed at a press conference that she would once again address Beijing’s overcapacity policies in the upcoming round of discussions.
This marks a resumption of dialogue between the two sides as they attempt to alleviate the strained US-China relationship.
Earlier this month, Yellen visited China and raised concerns about overcapacity, as well as issues related to combating money laundering and addressing climate change.
Some officials in the Biden administration have privately acknowledged that Yellen’s visit to China is unlikely to lead to a change in Beijing’s overall economic policies.
Forbes senior columnist Kenneth Rapoza wrote in the Daily Caller that Yellen faced a harsh reality regarding trade issues with China, acknowledging the need for tariffs to protect the US electric vehicle industry.
During her visit to China, Yellen stressed that US concerns are not driven by “anti-China sentiment” or a desire to “decouple,” but rather to prevent global economic imbalance and establish a “healthy economic relationship” with China.
While Liao Min characterized the discussions with Yellen as “systematic, in-depth, and constructive” during her visit, he later, in an official Chinese media briefing, shifted the blame. He denied the existence of overcapacity issues in China’s emerging industries and urged countries to view China’s production capacity in the context of globalization and the international market, again using market value theory to refute Western trade protection measures against Chinese exports.