Yellen Express Concerns About ‘Predatory Practices’ During Visit to China
US Treasury Secretary Janet Yellen is on a six-day official visit in China as from 5 April 2024. First of all, the length of the visit is exceptionally long as officially visits rarely exceeds three days. In fact, US State Secretary Antony Blinken recently made a flash visit which lasted under 24 hours.
Prior to the visit, not much transpired on both sides with regards to expected outcome or even topics of discussion. Observers were fed the same song that the USA must ‘responsibly manage’ its relationship with China.
Upon her arrival in Guangzhou, the industrial and export hub of China, Yellen started to make her concerns heard at a meeting with the local chapter of AmCham. Yellen warned against ‘predatory practices’ which distorts the world market.
On the other hand, China has a clear strategy to dominate certain key future sectors which happen to be essential for the #EnergyTransition and for the world to achieve #NetZero. Indeed, China has set itself the goal to be the top player in #PV and #EV. But the aggressive approach of the Chinese appears not to be to the liking of some countries which are seeing their domestic industries in these fields being outdone by the Chinese competitors.
Yellen alluded to overcapacity, state subsidies and other distortive measures that are disrupting the world market in certain sectors. Yellen stopped short of imposing new trade barriers but underlined that the US has not ruled out taking robust actions at an appropriate time as and when necessary.
She also called out to the ‘harassment’ that certain US firms in China are experiencing in an ‘alleged offensive’ as part trade war between the US and China. The official position of the Chinese authorities is that the Chinese government is making much effort for opening up by providing a favorable environment for foreign investors and companies.
Immediately, Chinese media pushed back against Yellen’s criticisms. “While it is just basic economics that surplus products naturally seek out markets elsewhere once domestic demand is met, and Western nations have been doing that for centuries, when it comes to China, it becomes an ‘overcapacity problem’ threatening the world,” the China Daily reported.