US Treasury Secretary Janet Yellen visited China and called on the country to address manufacturing overcapacity, unfair trade practices, and create a level playing field for American companies and workers. She met with the governor of Guangdong province and American business leaders to discuss these issues. Yellen mentioned concerns about China’s industrial overcapacity and the need for open and direct communication between the US and China to address areas of disagreement.
Yellen spoke to American business leaders in Guangzhou and highlighted the challenges faced by firms operating in China, including unfair treatment compared to local competitors. She emphasized the importance of ending unfair economic practices in China, which would benefit both American firms and the business climate in the country. Yellen also met with American, European, and Japanese business representatives to listen to their concerns about the Chinese market.
Guangzhou, the capital of Guangdong province, is a major manufacturing and export hub in China, home to companies like Huawei and BYD. The subsidies and policy support provided by the Chinese government have led to a massive scale of production, driving down costs and triggering price wars in green technology sectors. However, there are concerns about this excess capacity flooding international markets and threatening American and European jobs.
Yellen is set to head to Beijing next, where she is expected to push China to bolster domestic consumption, ensure fair competition in new technology sectors, and provide market access for US companies. China has defended its policies, stating that the growth in Chinese exports benefits global green development and is a result of market demand. Yellen emphasized that excess capacity is a global concern shared by many countries and not specifically targeted at China, as addressing this issue is crucial to avoiding economic dislocation.
Scott Paul, president of the Alliance for American Manufacturing, warned about the negative impact of inexpensive Chinese autos entering the American market on the US auto sector. The alliance released a report highlighting the potential harm to the US economy if China’s industrial overcapacity is not addressed. Yellen stated that the US is prepared to use all available tools, including tariffs, to respond to China’s manufacturing practices. Overall, the focus of Yellen’s visit to China is on addressing issues of overcapacity, unfair trade practices, and ensuring a fair competitive environment for American companies.
