United States : During high-level talks in China on Monday, US Treasury Secretary Janet Yellen emphasized that the United States will not accept flood of underpriced Chinese goods in both domestic and international markets, that will hamper growth of other industries.
During her four-day discussions with officials and business leaders in Guangzhou and Beijing, US Treasury Secretary Janet Yellen delivered a firm caution to China, highlighting the potential global market imbalances arising from the inundation of Chinese goods at cheap prices.
Cause of Concern
Washington’s concerned is that as Chinese industries continue to produce more goods than demanded in the global market, it could impede the growth of other sectors such as solar and electric vehicles industries.
On Monday, Janet Yellen remarked that Chinese industries inundated the international market with below-cost steel products over a decade ago, adversely affecting the growth trajectory of industries in both the US and abroad.
During a press briefing, she emphasized, “I have made it unequivocally clear that President Joe Biden and I will not tolerate such a scenario again, and our US allies and partners also express similar concerns.”
She brought up these concerns during an 11 hours of discussion with her counterpart Vice Premier He Lifeng. Furthermore, she reiterated them directly to Premier Li Qiang. Her intention was to prompt the Chinese government to consider adjustments in their policy-making approach.
Janet Yellen expressed particular concern over China’s fragile household consumption and excessive business investment, exacerbated by extensive government support in these specific sectors.
China’s point of view
However, China’s Commerce Minister Wang Wentao stated through state media that concerns regarding overcapacity are “groundless”.
Despite this, both nations express a desire to collaborate on debt restructuring, combating climate change, and addressing anti-money laundering efforts. Additionally, they have mutually agreed to establish channels for further discussions regarding excess capacity.
However, Li Qiang earlier conveyed to Janet Yellen that Washington should approach the issue of production overcapacity from a market-oriented perspective, as reported by the state-run Xinhua news agency.
Yellen also remarked that addressing concerns about excess capacity will not be a quick process, taking longer than a week or a month. However, she emphasized that tackling this issue will contribute to the Chinese government’s long-term goals of enhancing productivity and fostering sustainable growth.
Conclusion
During her remarks, Yellen conveyed that she engaged in a complex dialogue regarding the potential consequences associated with backing Russia’s military procurement and utilizing economic tools to address national security apprehensions.
She emphasized Washington’s commitment to ensuring transparency and predictability in the application of such measures, aiming to avoid unexpected outcomes that are dangerous for the global economy.
Yun Sun, a senior fellow at the Stimson Center, commented that the comprehensive discussion with US Treasury Secretary Janet Yellen concerning America’s unease regarding its excess capacity and the exploration of China’s response signifies a favourable advancement.
Additionally, both sides reached an agreement to collaborate on addressing climate change, anti-money laundering efforts, and debt restructuring.