US Treasury’s Yellen to return to China, stress threat of excess capacity By Reuters

Posted by

WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen will return to China this week to continue her economic talks with top Chinese officials amid a new emphasis on the global threat posed by the Asian superpower’s growing excess industrial capacity, the Treasury Department said on Tuesday.

The April 3-9 trip, which will be Yellen’s second personal visit to China since July 2023, will include a stop in the southern factory hub of Guangzhou before heading to Beijing.

US President Joe Biden and Chinese President Xi Jinping are set to hold their first direct talks since November on Tuesday, with the US leader seeking to ease tensions over Taiwan’s presidential inauguration in May.

Biden administration officials said both Biden and Yellen will emphasize the need for China to create a “fair and level playing field” for American workers and companies.

In Guangzhou, Yellen will meet with Chinese Vice Premier He Lifeng, Guangdong Province Governor Wang Weizhong and executives from U.S. companies in China, the Treasury Department said. She will hear firsthand about the challenges in the business environment that are prompting American companies to limit their investments in China.

Yellen last met her chief Chinese economic counterpart He ahead of the November 2023 Asia-Pacific Economic Cooperation summit in San Francisco, where Biden also met Xi.

Since Yellen’s first visit to Beijing last July, she and he have launched economic and financial working groups that meet virtually. The conversation so far has mainly focused on discussing the major economic issues facing each country and their respective policy responses, such as the property market problems in China that have undermined consumer confidence, or the two-year economic crisis in China. Failures of major US regional banks.

US Treasury officials have also used the dialogue to explain that US national security sanctions on semiconductors and US investments in China will be targeted in a limited manner.

capacity challenge

The US’s increased emphasis on Chinese spare capacity represents a change in the narrative at a time when China’s exports are rising amid weak demand domestically. Xi has also promised to unleash “new productive forces” in China by investing in the development of technology industries including electric vehicles (EVs), new materials, commercial space flight and life sciences.

Yellen said last week at a Suniva solar module factory near Atlanta that Chinese government support has led to “substantial over-investment” in steel, aluminum and other industries, paving the way for cheap exports that have helped other markets. Manufacturing in the operating countries has been forced to contract. ,

“Now, we are seeing additional capacity creation in ‘new’ industries like solar, EVs and lithium-ion batteries,” Yellen said during her visit last week. He said that this is distorting prices and production patterns and causing harm to workers in America and Europe. Union and other economies.

Asked whether she would risk new trade barriers on her next visit to China, Yellen said she “doesn’t want to get into retaliation”, adding: “We want to see what we can do that is constructive. “

The European Union is investigating whether China’s EV industry is benefiting from unfair subsidies, an investigation that could lead to tariffs to protect European carmakers. The US Commerce Department has launched an investigation into whether Chinese vehicles pose a national security threat because of the data they transmit, and the Biden administration faces growing calls from lawmakers to raise tariffs on Chinese EVs. Used to be.

A US Treasury official told reporters that Yellen would “make clear to manufacturers in the US and companies around the world the global economic consequences of over-cutting Chinese industrial capacity” during her upcoming visit to China.

The official, speaking on condition of anonymity, said U.S. and Chinese officials would discuss currency matters as a regular part of their economic talks, but declined to comment on recent weakness in the currency.

The official said Yellen would seek further cooperation in areas mutually beneficial to both countries, including fighting climate change, combating illicit financing and drug trafficking, and providing relief to debt-stressed developing countries.


#Treasurys #Yellen #return #China #stress #threat #excess #capacity #Reuters

Leave a Reply

Your email address will not be published. Required fields are marked *