U.S. Treasury Secretary Janet Yellen on Friday called on China to address manufacturing overcapacity that could cause global economic disruption and level the playing field for U.S. businesses and workers. .
The prime minister, who began a five-day visit to China in one of China’s major industrial and export hubs, said he expected tough talks with senior Chinese officials, citing industrial overcapacity and unfair treatment by the United States. He said that he would raise questions about China’s trade practices.
“There are extensive economic exchanges between the United States and China that should remain undisputed,” he said at an event hosted by the American Chamber of Commerce in China in Guangzhou.
But there are “Chinese practices that move the playing field away” from U.S. companies, she said.
Yellen, who was the first Cabinet-level official to visit China since President Joe Biden met with Chinese President Xi Jinping in November last year, previously told the governor of Guangdong province that the US and China have differences of opinion. He said it was important to communicate openly and directly about the field.
“This includes the issue of industrial overcapacity in China, which the United States and other countries are concerned about could cause global ramifications,” he said.
After meeting with the governor, Yellen met with American business leaders and took questions at an American Chamber of Commerce event in the auditorium of the Marble Convention Center in Baiyun District, Guangzhou.
“We’re hearing from many American executives that doing business in China can be difficult,” Yellen said Friday afternoon at an event hosted by the American Chamber of Commerce in China.
Yellen cited a recent study by the Chamber of Commerce that found one-third of U.S. companies in China said they were treated unfairly compared to local competitors. He said the United States sees China “pursuing unfair economic practices, including imposing barriers to access to foreign companies.” They are taking coercive actions against American companies. ”
“I strongly believe that this will not only harm these American companies; eliminating these unfair practices will benefit China by improving China’s business environment. “I will raise these issues at this week’s meeting,” she said in her speech.
Earlier in the day, she also met with business representatives from the United States, Europe, and Japan to hear their concerns.
Guangzhou is the capital of Guangdong province and China’s manufacturing and export hub, home to telecommunications giant Huawei and China’s largest EV maker BYD.
Huawei has been hit hard by U.S. restrictions on semiconductor exports to China and is at the forefront of China’s efforts to become self-sufficient and a technology leader.
Government subsidies and other policy support have encouraged Chinese solar panel makers and EV makers to invest in factories and build far more production capacity than the domestic market can absorb.
Large-scale production has reduced costs and sparked a price war on green technologies that benefits consumers and efforts to reduce global dependence on fossil fuels.
But Western governments worry that their production capacity could flood the market with low-cost exports, threatening jobs in the United States and Europe.
Yellen will head to Beijing next.
Eswar Prasad, a trade professor at Cornell University, said Yellen has urged the Chinese government to increase domestic consumption and ensure fair competition in new technology areas, particularly in green energy and electric vehicles. We expect that the United States will work to ensure appropriate market access for U.S. companies.
“Concerns that China is looking to export excess capacity and at the same time make major inroads into these areas will be a top concern for the U.S. delegation,” he said.
China is pushing back against concerns about overcapacity expressed by both the United States and Europe.
Foreign Ministry spokesperson Wang Wenbin said earlier this week that the growth in China’s EV and solar power exports is contributing to global green development and is the result of the international division of labor and market demand.
He accused the United States of obstructing free trade by restricting technology exports to China.
“The facts are out in the open as to who is doing the non-market manipulation,” he said.
“The United States has not stopped its measures to contain Chinese trade and technology. This is not ‘reducing risk’ but rather creating risk.”
“Overcapacity is a concern shared by many countries, both developed and developing, and it’s not new,” Yellen said at a Chamber of America event.
“This is not an anti-China policy,” she said. “This is an effort to reduce the risk of global economic disruption that is inevitable unless China adjusts its policies.”
Scott Paul, president of the American Manufacturing Alliance, a coalition of companies and the United Steelworkers union, told The Associated Press ahead of Yellen’s visit. One of the things that Ms. Yellen could and should say is that the United States is using every tool at its disposal through policy to ensure that China’s industrial overcapacity does not negatively impact our economic and national security interests. It means they are ready to take advantage of it. ”
alliance Report released in February The magazine said the introduction of cheap Chinese cars to the U.S. market “could ultimately become an extinction-level event for the U.S. auto sector.”
According to the report, the US auto sector accounts for 3% of the US GDP.
Yellen told reporters Wednesday during a refueling stop in Alaska en route to Asia that the United States “will eliminate tariffs” to counter China’s heavily subsidized manufacturing of green energy products. No,” he said.
