BEIJING (Reuters) – U.S. Treasury Secretary Janet Yellen on Monday concluded four days of meetings to make the case for Beijing to rein in excess industrial capacity, calling for new industries to be destroyed by Chinese imports. The US government has warned China that it will not accept it. .
Yellen told a news conference that US President Joe Biden will not allow a repeat of the “China Shock” of the early 2000s, when massive imports from China destroyed about 2 million US manufacturing jobs.
However, the Chinese government did not threaten new tariffs or other trade measures if it continues its massive state aid for electric vehicles (EVs), batteries, solar panels and other green energy products.
Yellen used her second visit to China in nine months to explain that the Chinese government’s overinvestment has built up factory production capacity that far exceeds domestic demand, while exports of these products are rapidly growing in the United States and other countries. complained that it was threatening businesses.
He said the newly established exchange forum to discuss the overcapacity issue would take time to reach a solution.
Yellen drew parallels to the pain felt by the U.S. steel sector in the past.
“We’ve seen this story before,” she told reporters. “More than a decade ago, with massive support from the Chinese government, low-cost Chinese steel flooded the world market, crippling industries around the world and in the United States.”
“President Biden and I have once again made it clear that we will not accept that reality,” Yellen added.
Flooding the world market with artificially cheap Chinese products “calls into question the viability of American and other foreign companies,” he said.
Yellen said interactions with Chinese officials advance U.S. interests and that U.S. concerns about excess industrial capacity are shared by America’s European allies, Japan, Mexico, the Philippines and other emerging market countries. He said there was.
push back
China’s Vice Minister of Finance Liao Min told Chinese media that China had “fully answered” US questions about overcapacity and expressed “serious concerns” about the restrictions the US is imposing on trade and investment. said.
Item 1 of 8 U.S. Treasury Secretary Janet Yellen attends a press conference in Beijing, China, on April 8, 2024. Reuters/Florence Loh
(1/8) U.S. Treasury Secretary Janet Yellen attends press conference in Beijing, China, April 8, 2024 Reuters/Florence Lo purchases license rights, opens in new tab
Liao said that China’s “current competitive advantage is rooted in China’s large market, perfect industrial system, and abundant human resources,” adding, “Environmentalist measures by some developed countries denounced the escalation of the situation.
“China will not sit back and ignore it,” Liao said in remarks posted on the ministry’s website.
In March, China’s parliament, the National People’s Congress, announced that the government would take measures to curb excess industrial capacity.
But Beijing says the recent focus by the United States and Europe on the risks from China’s overcapacity is misplaced.
Chinese officials argue that this criticism underestimates the innovation of Chinese companies and exaggerates the importance of state aid in promoting growth. They also say tariffs and other trade restrictions will deprive global consumers of green energy alternatives that are key to meeting global climate goals.
WTO rules China’s trade restrictions on EVs violate World Trade Organization rules, the Ministry of Industry and Information Technology said in a statement published in state media CCTV and China Daily.
The ministry is committed to supporting the export of EVs, adding that it will contribute to the industry’s “acceleration of overseas expansion”, including transportation and logistics planning and helping companies innovate and meet global standards.
Chinese Commerce Minister Wang Wentou issued a sharper dissent during a roundtable discussion with Chinese EV manufacturers in Paris, saying that claims by the United States and Europe that China has excess EV production capacity are unfounded.
During his visit to discuss the European Union’s anti-subsidy investigation, Wang said that Chinese EV companies rely more on continuous innovation, perfect production and supply chain systems, and perfect market competition than on subsidies. He said he is doing so.
Yellen suggested that a short-term solution is for China to take steps to stimulate consumer demand with household support and shift its growth model away from supply-side investment. Yellen discussed the issue at length with Premier Li Qiang and also met with the Finance Minister. Lan Huong on Sunday. Yellen met with People’s Bank of China Governor Ban Gongsheng and former Vice Premier Liu He on Monday. In an interview with CNBC after the meeting, Yellen said she was “not really thinking about” trade restrictions with China. its macroeconomic environment; However, he reiterated that he would not rule out the possibility of tariffs.
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Written by David Lowder and Marius Zaharia. Editing: Clarence Fernandez and Paul Simao
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