New US-China talks will address a top American complaint about Beijing’s economic model, Yellen says
GUANGZHOU, China — U.S. Treasury Secretary Janet Yellen said Saturday that upcoming U.S.-China talks will tackle a top Biden administration complaint that Beijing’s economic model and trade practices put American companies and workers at an unfair competitive disadvantage.
“I think the Chinese realize how concerned we are about the implications of their industrial strategy for the United States, for the potential to flood our markets with exports that make it difficult for American firms to compete,” Yellen told reporters after the announcement during her trip to China.
“It’s not going to be solved in an afternoon or a month, but I think they have heard that this is an important issue to us,” she said.
The two sides will hold “intensive exchanges” on more balanced economic growth, according to a U.S. statement issued after Yellen and Chinese Vice Premier He Lifeng held extended meetings over two days in the southern city of Guangzhou.
They also agreed to start exchanges on combating money laundering. It was not immediately clear when and where the talks would take place.
Yellen, who arrived later in Beijing after starting her five-day visit in one of China’s major industrial and export hubs, said the talks would create a structure to hear each other’s views and try to address American concerns about manufacturing overcapacity in China.
China’s official Xinhua News Agency said the two sides had agreed to discuss a range of issues including balanced growth of the United States, China and the global economy as well as financial stability, sustainable finance and cooperation in countering money laundering.
Xinhua said China had responded fully on the issue of production capacity, but the report did not provide details. China also expressed grave concern over American trade and economic measures that restrict China, according to the agency.
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.
“It’s going to be critical to our bilateral relationship going forward and to China’s relationship with other countries that are important, and this provides a structured way in which we can continue to listen to one another and see if we can find a way forward that will avoid conflict,” Yellen told reporters.
The exchanges on balanced growth and money laundering will be held under the framework of existing economic and financial working groups that were set up after Yellen met He in July.
Yellen struck a positive note on joint efforts to address U.S. concerns about Chinese companies selling goods to Russia following its invasion of Ukraine.
“We think there’s more to do, but I do see it as an area where we’ve agreed to cooperate and we’ve already seen some meaningful progress,” she said.
Earlier state media coverage of her trip had characterized U.S. concerns about overcapacity as a possible pretext for tariffs.