Rebecca Heinrichs, a senior fellow at the Hudson Institute, appeared on “Berney & Co.” to weigh in on Secretary Yellen’s controversial visit to China.
Treasury Secretary Janet Yellen He said Sunday during a visit to Beijing that the United States and China have an “obligation” to responsibly manage the complex relationship between the two countries, and raised concerns about the impact of Chinese companies’ overcapacity in several key industries. expressed.
Yellen met with China’s No. 2 Premier Li Qiang. Communist Party of China Li spoke for 80 minutes in Beijing on Sunday behind General Secretary Xi Jinping, with Li saying the US and China should be partners, not adversaries, and highlighting the “constructive progress” made during the visit. did. This is Yellen’s second visit to China in the past nine months.
“We still have work to do, but I believe the past year has put our relationship on a more stable footing,” Yellen said. “This doesn’t mean ignoring our differences or avoiding tough conversations. It means understanding that we can only move forward if we communicate directly and openly. .”
Among the issues Yellen said the two countries need to have “tough” conversations about is China’s overproduction of electric vehicles (EVS), solar panels and other clean energy components, which the United States and It’s hurting producers and jobs in other countries, Yellen said. .
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Treasury Secretary Janet Yellen (left) shakes hands with Chinese Premier Li Qiang at the Great Hall of the People in Beijing on April 7, 2024. (Photo credit: TATAN SYUFLANA/POOL/AFP via Getty Images/Getty Images)
Chinese electric car subsidies This has helped Chinese automakers such as BYD and Geely gain market share in the world’s largest car market, and turned China into the world’s largest exporter of cars, with production exceeding domestic demand.
The Economist Intelligence Unit is China’s battery manufacturing As the EV industry continues to grow, production capacity is expected to exceed demand by a factor of four by 2027. This rapid growth could result in excess manufacturing capacity of 5 million to 10 million EVs per year, according to consulting firm Automobility.
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U.S. Treasury Secretary Janet Yellen (left) and Chinese Vice Premier He Lifeng attend a meeting at the Guangdong Takeshima Guest House in Guangzhou, southern China, on April 5, 2024. (Photo credit: PEDRO PARDO/AFP, Getty Images/Getty Images)
A senior Treasury official later said that China’s excess industrial capacity Government support for these industries was also discussed in detail during the meeting, and Li said the US and Chinese economic teams had shown some willingness to further consider the issue.
There were some disagreements, but “there was no ideological or inflammatory backlash,” the official said, Reuters reported. “It was a more legitimate conversation among policymakers.”
On Sunday, Chinese state media Xinhua News Agency quoted Li as saying the US should “refrain from turning economic and trade issues into political and security issues” and look at production capacity from a market-oriented and global perspective. .
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During her visit, Treasury Secretary Janet Yellen expressed concern about China’s overcapacity in several industrial sectors. (Photo credit: PEDRO PARDO/AFP, Getty Images/Getty Images)
The paper said Li said China’s clean energy sector, where concerns over overcapacity are most acute, will support the global energy transition.
“Overcapacity is not a new problem, but it’s getting worse and it’s creating new risks in new areas,” Yellen said Friday at a meeting in Guangzhou, an export hub in southern China. Stated.
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China is doubling down on President Xi’s mantra of unlocking “new productive power” through investment in cutting-edge technologies such as electric vehicles. commercial spaceflight and life sciences – an area where many U.S. companies hold a competitive advantage.
Reuters contributed to this report.
