The United States Treasury Secretary, Janet Yellen, stated on Tuesday (October 22) that she has not yet seen any announced policies from the Chinese authorities to address the issue of low consumer spending as a proportion of the economy.
According to Reuters, Yellen made these remarks during a press conference at the annual meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) in Washington, saying, “Our view is that increasing the share of Chinese consumer spending in the GDP (Gross Domestic Product) is very important, and measures should also be taken to address issues in the real estate sector.”
She emphasized, “So far, I have not heard of any policies from China (Chinese Communist Party) addressing this issue.”
In a statement released by the US Treasury Department, Yellen stated, “Our continued focus is not only on taking decisive action to address conflicts, but also on addressing challenges that could hinder global growth, such as serious debt vulnerabilities faced by emerging markets and developing countries, as well as the urgent need for investments in infrastructure and clean energy.”
In early October, US Deputy Treasury Secretary Jay Shambaugh criticized China’s economic model for posing challenges to the global economy, especially for emerging markets and developing countries.
He mentioned, “Despite China’s share of global manufacturing exceeding 30%, China (Chinese Communist Party) still allocates a large amount of funds to manufacturing and appears to lack economic growth driven by domestic demand, which could lead to growth dependence on exports.”
Shambaugh pointed out that China’s support for its manufacturing industry through non-market mechanisms and government subsidies, in the absence of domestic demand, is “unlikely to succeed,” and negatively impacts the economic growth of other countries. China’s excess capacity surpassing global market demand further exacerbates spillover effects, especially harming some developing countries.
From October 21 to 26, the Group of Twenty (G20) members, including China, gathered in Washington to discuss current global economic issues. China’s sluggish economic growth, risks arising from escalating tensions in the Middle East, and the global economic impact of Russia’s aggressive war in Ukraine have become significant topics of discussion.