Yellen refrains from threatening tariffs if Beijing continues state support for EVs, batteries, and green energy goods
\n BEIJING
\nUS Treasury Secretary Janet Yellen warned China on Monday that Washington will not accept new industries being decimated by Chinese imports, as she wrapped up four days of meetings to press her case for Beijing to rein in excess industrial capacity.
\nYellen told a press conference that US President Joe Biden would not allow a repeat of the \u201cChina shock\u201d of the early 2000s, when a flood of Chinese imports destroyed about 2 million American manufacturing jobs.
\nShe did not, however, threaten new tariffs or other trade actions should Beijing continue its massive state support for electric vehicles (EVs), batteries, solar panels and other green energy goods.
\nYellen used her second trip to China in nine months to complain that Beijing\u2019s overinvestment has built factory capacity far exceeding domestic demand, while fast-growing exports of these products threaten companies in the US and other countries.
\nShe said a newly created exchange forum to discuss the excess capacity issue would need time to reach solutions.
\nYellen drew parallels to the pain felt in the US steel sector in the past.
\n\u201cWe\u2019ve seen this story before,\u201d she told reporters. \u201cOver a decade ago, massive PRC (People\u2019s Republic of China) government support led to below-cost Chinese steel that flooded the global market and decimated industries across the world and in the United States.\u201d
\nYellen added: \u201cI\u2019ve made it clear that President Biden and I will not accept that reality again.\u201d
\nWhen the global market is flooded with artificially cheap Chinese products, she said, \u201cthe viability of American and other foreign firms is put into question.\u201d
\nYellen said her exchanges with Chinese officials had advanced American interests and that US concerns over excess industrial capacity were shared by Washington\u2019s European allies, Japan, Mexico, the Philippines and other emerging markets.
\nPushback
\nChina\u2019s vice finance minister, Liao Min, told Chinese media that Beijing \u201chas fully responded\u201d to US questions on overcapacity and expressed \u201cgrave concern\u201d over restrictions Washington imposes on trade and investment.
\nLiao said China\u2019s \u201ccurrent competitive advantages are rooted in China\u2019s large-scale market, complete industrial system and abundant human resources,\u201d decrying the \u201cescalation of green protectionist measures by some developed economies.\u201d
\n\u201cChina will not sit idly and ignore it,\u201d Liao said in remarks published on the ministry\u2019s website.
\nChina\u2019s parliament, the National People\u2019s Congress, said in March the government would take steps to curb industrial overcapacity.
\nBut Beijing says the recent focus by the US and Europe on the risks from China\u2019s excess capacity is misguided.
\nChinese officials say the criticism understates innovation by companies in China and overstates the importance of state support in driving their growth. They also say tariffs or other trade curbs will deprive global consumers of green energy alternatives key to meeting global climate goals.
\nWTO RULES Trade curbs on Chinese EVs would contravene World Trade Organisation rules, the industry and information technology ministry said in a statement carried by state media CCTV and China Daily.
\nUS Treasury Secretary Janet Yellen attends a dialogue with students of National School of Development at the Peking University in Beijing, China April 7, 2024. PHOTO: REUTERS
\nThe Chinese ministry added that it was committed to support EV exports and would help \u201caccelerate the overseas development\u201d of the industry including planning for shipping and logistics and support for firms to innovate and meet global standards.
\nChinese Commerce Minister Wang Wentao voiced more pointed objections during a roundtable meeting with Chinese EV makers in Paris, saying US and European assertions of Chinese excess EV capacity were groundless.
\nRather than subsidies, China\u2019s EV companies rely on continuous technological innovation, perfect production and supply chain systems and full market competition, Wang said on his trip to discuss a European Union anti-subsidy inquiry.
\nYellen suggested a possible short-term solution was for China to take steps to bolster consumer demand with support for households and shift its growth model away from supply-side investments.
\nYellen spoke about the issue at length with Premier Li Qiang and also met Finance Minister Lan Foan on Sunday. She met People\u2019s Bank of China (PBOC) Governor Pan Gongsheng and former Vice Premier Liu He on Monday.
\nIn a CNBC interview after the meetings, Yellen said she was \u201cnot thinking so much\u201d about trade curbs on China, as much as shifts in its macroeconomic environment. But she reiterated she would not rule out tariffs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Yellen refrains from threatening tariffs if Beijing continues state support for EVs, batteries, and green energy goods BEIJING US Treasury Secretary Janet Yellen warned China on Monday that Washington will not accept new industries being decimated by Chinese imports, as she wrapped up four days of meetings to press her case for Beijing to rein […]<\/p>\n","protected":false},"author":2,"featured_media":399489,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":{"0":"post-399479","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world"},"yoast_head":"\n