U.S. Treasury Secretary Janet Yellen attends a press briefing at the Guangdong Zhudao Guest House, in Guangzhou, Guangdong province, China, April 6, 2024. REUTERS/Tingshu Wang
U.S. Treasury Secretary Janet Yellen announced on Saturday that she and Chinese Vice Premier He Lifeng have mutually agreed to initiate discussions concerning “balanced” economic growth. This initiative aims to address U.S. apprehensions regarding China’s surplus manufacturing capacity. Following two days of economic deliberations in Guangzhou, a major export center in southern China, Yellen disclosed that she and He have also committed to establishing a platform for collaboration to combat money laundering within their respective financial systems.
Yellen affirmed that these exchanges will facilitate dialogue on macroeconomic imbalances, particularly in relation to excess production capacity. She emphasized her intention to advocate for equitable opportunities for American workers and businesses during these discussions. Describing her four and a half hours of talks with He as productive and candid, Yellen reiterated her priority of urging Chinese authorities to address surplus production capacity, particularly in electric vehicles (EVs), solar panels, and other clean energy technologies.
While the Biden administration faces mounting pressure from U.S. legislators to impose tariffs on Chinese EVs to safeguard domestic producers, Yellen refrained from issuing tariff threats or trade barriers during the discussions. She underscored the concerns shared by the United States and other nations regarding the potential repercussions of China’s industrial strategies on global markets.
Yellen highlighted the significance of the proposed forum as a structured platform to address complex issues, acknowledging that resolution may require time. She noted Chinese officials’ confidence in their economy following policy interventions in the property sector and local government debt management.
According to China’s Xinhua news agency, discussions between He and Yellen were characterized as candid, pragmatic, and constructive. Beijing expressed apprehensions about U.S. economic and trade restrictions while affirming a commitment to addressing production capacity issues. The U.S. Treasury official disclosed that the concept of a balanced growth forum was initially proposed in February during an economic working group meeting.
Yellen also conveyed warnings regarding potential consequences for Chinese firms providing support to Russia’s actions in Ukraine, although Chinese officials underscored their policy of non-interference. Xinhua criticized Yellen’s emphasis on Chinese overcapacity, labeling it a pretext for protectionist policies detrimental to both nations.
Despite not anticipating a significant shift in Chinese policy post-Yellen’s visit, U.S. officials view the discussions as crucial for articulating economic risks associated with overinvestment and weak consumer demand. Yellen emphasized the aim of fortifying U.S.-China relations to withstand adversities. She is scheduled to continue discussions in Beijing on Monday with officials including Premier Li Qiang, Finance Minister Lan Foan, and People’s Bank of China Governor Pan Gongsheng.
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