Premier urges US not to politicise economic issues
Washington should view industrial capacity objectively, Li says during talks with Yellen
Premier Li Qiang urged Washington not to politicise economic issues but to take an objective view on industrial capacity, during talks with US Treasury Secretary Janet Yellen in Beijing yesterday.
“The United States should look at the capacity issue objectively and dialectically from the point of view of the market economy and from a global perspective, and on the basis of economic laws,” Li said, according to official news agency Xinhua.
Li’s comments came after Yellen, who is on a five-day visit to China, expressed concerns about the country’s industrial “overcapacity”, saying excessive Chinese exports, especially new energy vehicles and solar modules, could undercut American interests and lead to “global spillovers”.
“The development of China’s new energy industry will make an important contribution to the global green and low-carbon transformation,” Li said.
“We hope the US could work with China to adhere to the basic market economy norms of fair competition and open cooperation, while refraining from politicising economic and trade issues or overstretching the concept of national security,” Li said.
Yellen said ahead of the meeting that the countries should not avoid “tough conversations” in managing their differences, according to the US Treasury Department, which described the talks as “frank and productive”.
“The secretary provided her views on the shared objective of a healthy economic relationship that provides a level playing field for workers and businesses in both the US and China,” it said.
Yellen raised concerns about industrial overcapacity in China while emphasising the importance of working together on global challenges, such as debt relief in less developed countries, the department said.
“As the world’s two largest economies, we have a duty to our own countries and to the world to responsibly manage our complex relationship and to cooperate and show leadership on addressing pressing global challenges,” Yellen said ahead of the meeting with Li, according to the department.
“While we have more to do, I believe that, over the past year, we have put our bilateral relationship on more stable footing. This has not meant ignoring our differences or avoiding tough conversations. It has meant understanding that we can only make progress if we directly and openly communicate with one another,” she added.
Yellen’s trip came days after a phone call between President Xi Jinping and his US counterpart Joe Biden as the two sides worked to stabilise relations amid frictions over economic and tech issues. During the call, Xi warned that the “endless stream of measures” imposed on China created “risks”.
Li told Yellen that strengthening economic and trade cooperation was of great significance to both countries as well as global economic growth.
He said he hoped the two sides could strengthen communication and find ways to manage and resolve differences so that China-US economic and trade cooperation could be “stable, smooth and efficient”.
China was ready to step up policy coordination with the US on issues such as climate change, Li said. “China hopes the two countries can be partners, not adversaries,” he added.
The meeting followed two days of talks between Yellen and Vice-Premier He Lifeng in Guangzhou, where they discussed issues related to overcapacity and agreed to hold “intensive exchanges” to address economic and financial challenges.
Yellen said in Guangzhou that excessive Chinese exports could harm US interests, while Beijing said it had responded fully “to the production capacity issue”.
Beijing warned about the risks of overcapacity in some sectors as a potential drag on the country’s recovery during a key economic conference in December.
The issue, highlighted by blockbuster exports of new energy products last year, has triggered concerns in the EU and US that China’s dominance might crowd out their domestic industries.
The European Union has launched an anti-subsidy probe into Chinese electric vehicles and is likely to impose punitive tariffs.
Economists and analysts have warned about the risks of an alliance to put pressure on Beijing.
“The Western countries, to a large extent, have reached consensus to impose increasingly stringent restrictions on Chinese green energy technology and products, and they have gradually unveiled specific measures,” said Shi Yinhong, a Beijing-based expert on US-China relations.
“It marks a substantial addition to the [American] ‘small yard, high fence’ tech and trade curbs, which is unlikely to be reversed. Meanwhile, China is also unlikely to change its priorities on economic and technological advancement,” Shi said.