Yellen: It’s ‘neither practical nor desirable’ to cut off economic relations with China

U.S. Treasury Secretary Janet Yellen began a five-day trip to China walking a geopolitical tightrope, affirming economic ties between the two countries while raising concerns about unfair business practices and overproduction of cheap goods.

“Complete economic separation is neither realistic nor desirable,” Yellen said Friday in a speech at a U.S. Chamber of Commerce event in Guangzhou. “President Biden and I categorically reject the idea that the United States should decouple from China.”

But she also expressed “concerns about China’s business environment and the ability of American companies to compete on a level playing field.”

Yellen cited a recent survey by the Chamber of Commerce, a China-based organization that represents U.S. companies in the region, stating that one-third of U.S. companies in China are facing “barriers to access to foreign companies.” It said it had reported unfair treatment, including “…coercive actions against U.S. companies.” ”

“I strongly believe that this will not only harm these American companies. Eliminating these unfair practices will benefit China by improving its business environment,” Yellen said. said.

The Treasury secretary also spoke of the risk of “overcapacity” in China’s manufacturing industry, which he said could result in large volumes of goods being pumped into the global economy at below-market prices.

“This could hurt business not only for U.S. companies and workers, but also for companies around the world, including in India and Mexico. And it could lead to supply chain concentration, risking the resilience of the global economy. “It has the potential to bring about an impact,” Yellen said.

The Hill has reached out to the Chinese embassy in Washington, D.C., for a response.

China is suffering from weak domestic demand and economic growth due to the pandemic, with domestic businesses closed and millions of workers locked down until 2022, after other major countries restart economic activity. It was done. The Chinese government is increasingly focusing on and subsidizing clean energy industries, including the production of electric cars and solar panels.

Officials say China doesn’t have enough demand to absorb all the products, which would push them into the global economy and make it harder for the U.S. and its allies to compete.

“Direct and indirect government support has currently led to production capacity that significantly exceeds what domestic demand and global markets can sustain,” Yellen said, adding that China is “on the path to rapid growth.” It’s too big to export.”