Yellen calls for level playing field for U.S. workers and firms during China visit
GUANGZHOU, China — Treasury Secretary Janet Yellen called on China on Friday to address manufacturing overcapacity that she said risks causing global economic dislocation, and to create a level playing field for American companies and workers.
Starting a five-day visit in one of China’s major industrial and export hubs, she raised what the U.S. considers to be unfair Chinese trade practices in talks with senior Chinese officials.
“The United States seeks a healthy economic relationship with China that benefits both sides,” she said ahead of a meeting with Chinese Vice Premier He Lifeng and the central bank governor and other officials in the southern city of Guangzhou. “But a healthy relationship must provide a level playing field for firms and workers in both countries.”
Earlier, she said at an an event hosted by the American Chamber of Commerce in China that “Chinese practices ... are tilting the playing field away from American workers and firms.”
China’s Mr. He didn’t get into specifics in remarks before the media but said that both sides “need to properly respond to key concerns of the other side.”
High on Ms. Yellen’s list is the overcapacity issue. Chinese government subsidies and other policy support have encouraged solar panel and EV makers in China to invest in factories, building far more production capacity than the domestic market can absorb.
The massive scale of production has driven down costs and ignited price wars for green technologies, a boon for consumers and efforts to reduce global dependence on fossil fuels. But Western governments fear that that capacity will flood their markets with low-priced exports, threatening American and European jobs.
Ms. Yellen, the first Cabinet member to visit China since President Joe Biden and Chinese leader Xi Jinping met last November, said that it is important for the U.S. and China to have open and direct communication on areas of disagreement.
“This includes the issue of China’s industrial overcapacity, which the United States and other countries are concerned can cause global spillovers,” she said during a meeting with the governor of Guangdong province.
Guangzhou is the capital of Guangdong, a Chinese manufacturing center that is home to telecom giant Huawei and BYD, China’s largest EV maker. Huawei has been hit hard by U.S. restrictions on semiconductor exports to China and is at the vanguard of Chinese efforts to become self-sufficient and a leader in technology.
Ms. Yellen, who heads to Beijing from Guangzhou, met with U.S., European and Japanese business representatives before her talks with Mr. He.