BEIJING — The Biden administration will push China to change industrial policies that threaten American jobs, Treasury Secretary Janet Yellen said Monday after four days of talks with Chinese officials.
She also said they had “difficult conversations” in Beijing about national security, including U.S. concerns that Chinese companies are supporting Russia in its war in Ukraine.
But the focus of her trip was on industrial policy and what the US and Europe describe as overcapacity in Chinese manufacturing. Rich countries fear a wave of low-priced Chinese exports will overwhelm factories at home. Yellen cited the production of electric vehicles and their batteries, as well as solar energy equipment – sectors that the US government is trying to promote domestically – as areas where Chinese government subsidies have driven a rapid expansion of production.
“China is now simply too big for the rest of the world to absorb this enormous capacity. Actions taken by the People’s Republic of China today could change global prices,” she said, using the abbreviation for China’s official name, the People’s Republic of China. “And when the global market is flooded with artificially cheap Chinese products, the viability of American and other foreign companies will be called into question.”
It is unclear how China will respond to such calls. European officials have repeatedly raised the issue during visits to China, with no sign of any change on the Chinese side. Moreover, one of leader Xi Jinping’s main goals is to build the nation into a great power so that it does not feel forced to bow to outside pressure.
But the overcapacity is also impacting China – price wars in the electric vehicle sector are expected to drive some manufacturers out of business – and experts have called for better coordination of policies to promote new technologies. The administration agreed during Yellen’s visit to start talks on what the two sides called “balanced growth.”
“We intend to use these talks to underscore the need for policy change by China,” Yellen said at an outdoor news conference on a balmy spring day at the U.S. ambassador’s residence in Beijing.
On Saturday, the official
More than a decade ago, the Treasury Secretary said, a tidal wave of “below-cost Chinese steel decimated industries around the world and in the United States. I have made it clear that President Biden and I will not accept that reality again.”
On the war in Ukraine, Yellen warned that banks that facilitate the sale of military or dual-use goods to Russia could face US sanctions.
“I emphasized that companies, including those in the People’s Republic of China, should not provide material support to Russia’s war and will face significant consequences if they do,” she said.
Yellen, the former chairman of the US Federal Reserve, met with Chinese central bank Governor Pan Gongsheng earlier Monday.
