Beijing, China (diplomat.so) - U.S. Treasury Secretary Janet Yellen concluded her four-day visit to Beijing on Monday with a stark warning to China, asserting that Washington will not stand idly by as new industries face destruction due to Chinese imports.
Yellen, addressing a press conference, emphasized that President Joe Biden's administration is adamant about preventing a repeat of the economic upheaval experienced in the early 2000s, attributed to a surge in Chinese imports which resulted in the loss of approximately 2 million American manufacturing jobs.
While refraining from immediate tariff threats or trade actions, Yellen pointedly criticized Beijing's extensive state support for electric vehicles (EVs), batteries, solar panels, and other green energy products, cautioning against the detrimental impact of such policies on global markets.
Highlighting concerns over China's surplus industrial capacity, Yellen stressed the necessity for bilateral discussions to address the issue effectively. She underscored parallels with previous instances, such as the adverse effects felt in the U.S. steel sector due to Chinese overproduction.
Yellen asserted, "President Biden and I will not accept that reality again," referring to the potential consequences of unchecked industrial overcapacity in China.
China's response to Yellen's remarks has been characterized by pushback. Vice Finance Minister Liao Min expressed dissatisfaction with U.S. trade restrictions and defended China's competitive advantages, emphasizing the importance of its market size and industrial prowess.
While China has pledged measures to curb overcapacity, its officials argue against the emphasis placed by the U.S. and Europe on the risks posed by China's industrial policies. They contend that accusations of excessive state support overlook the role of innovation and competition in driving Chinese economic growth.
Notably, the Chinese Ministry of Industry and Information Technology cited World Trade Organization rules in its defense against potential trade curbs on Chinese EVs, reaffirming its commitment to support the industry's global expansion through innovation and compliance with international standards.
During her visit, Yellen engaged in extensive discussions with high-ranking Chinese officials, including Premier Li Qiang and Finance Minister Lan Foan, focusing on avenues to address economic concerns without resorting to immediate trade sanctions.
In a post-meeting interview, Yellen hinted at a preference for addressing China's macroeconomic shifts over immediate trade measures, while reiterating the administration's readiness to consider tariffs if necessary.
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