GUANGZHOU — US Treasury Secretary Janet Yellen claimed on Friday in China “equal conditions” for firms from both countries and warned that industrial subsidies from Beijing threatened this balance.
The U.S. official called on China to address its manufacturing overcapacity, saying it threatens to cause global economic disruption, and create a level playing field for American companies and workers.
Beginning a five-day visit to one of China’s largest industrial and export zones, Yellen raised what the United States considers unfair trade practices in her meetings with Chinese officials.
“The United States seeks a healthy economic relationship with China that benefits both sides,” Yellen declared before meeting with Chinese Vice Premier He Lifeng, the central bank governor and other officials in the southern city of Guangzhou. “But a healthy relationship must provide a level playing field for companies and workers in both countries.”
Shortly before, at an event sponsored by the US-China Chamber of Commerce, he said that “Chinese practices … are tilting the playing field to the detriment of American workers and companies.”
The Chinese vice premier, in statements to the press, did not speak about specific aspects, but stated that both sides “should appropriately respond to the other party’s concerns.”
High on Yellen’s agenda is Chinese manufacturing overcapacity. Subsidies and other credits have led solar panel and electric vehicle manufacturers in China to invest in factories, creating manufacturing capacity far greater than the domestic market can absorb.
Price war
The massive scale of production has depressed costs and sparked a price war in the world of green technologies, benefiting consumers and efforts to reduce dependence on fossil fuels. But Western governments fear that excess will flood their markets with cheap exports, threatening jobs in the United States and Europe.
Yellen, the first Cabinet member to visit China since President Joe Biden and Chinese leader Xi Jinping met in November, said it is important for China and the United States to have open and direct communication in areas where they disagree.
Yellen insisted that the United States wants “a healthy economic relationship” with China.
Equal footing
But he warned that this requires “a level playing field for American companies” and “open and direct communication about areas of disagreement.”
“This includes the issue of industrial overcapacity of China“The United States and other countries are concerned about its possible global spread,” said the head of finance for the Joe Biden administration.
Despite these discrepancies, both powers seem committed to continuing to stabilize their relations after years of multiple points of commercial, geopolitical and technological friction.
Secretary of State, Antony Blinken, also plans to travel to China in the coming weeks, in another sign of the recovery of relations between both countries.
Source: With information from AFP and AP
