U.S. Treasury Secretary Janet Yellen warned Friday that China's massive subsidies to its own industries could pose risks to the global economy, calling above all for a “level playing field” for American companies.
Yellen is speaking at a gathering of the U.S. business community in Guangzhou and will spend several days meeting with Chinese officials during her second trip to the country in less than a year.
What did Yellen say?
In a speech to the U.S. Chamber of Commerce on Friday, Yellen accused China of favoring domestic companies to the detriment of foreign companies.
“I've heard from many American business owners that doing business in China can be challenging,” she said.
He said the U.S. is observing China pursue “unfair economic practices, including imposing barriers to access to foreign companies and coercive actions against U.S. companies.” said.
“I strongly believe that this will not only harm these American companies; eliminating these unfair practices will benefit China by improving China's business environment. I will be raising these issues at this week's meeting,” she said.
China is heavily subsidizing industries such as the solar panel industry, which could put foreign competitors at a disadvantage Image: Costfoto/NurPhoto/picture Alliance
On the issue of China's subsidies for its own industries, Yellen said it risks undermining the resilience of the global economy.
“Direct and indirect government support has currently led to production capacity that is significantly higher than what China's domestic demand and global markets can sustain,” he said.
“Overcapacity could lead to large exports at low prices, leading to overconcentration of supply chains and posing risks to the resilience of the global economy,” she added.
Earlier, he told Governor Guangdong that the “healthy economic relationship” the United States wants requires “a level playing field for American workers and businesses.”
Over the course of five days, Yellen is scheduled to meet with Chinese Premier Li Qiang, Vice Premier He Lifeng, Central Bank Governor Ban Gongsheng, and Finance Minister Lan Fong-an.
Chinese government resists criticism
The Chinese government says such concerns about massive state support for industry are unfounded and accuses Western countries of “protectionism.”
But the U.S. government is particularly concerned about the impact China's excess capacity will have on U.S. manufacturing in the clean energy sector, which is being boosted by President Joe Biden.
In particular, China is providing huge amounts of financial support to electric vehicle and solar panel manufacturers, fueling concerns in the West that China's low-cost exports threaten jobs in the United States and Europe.
China is the leader in the electric vehicle marketImage: Gao Jing/Xinhua News Agency/picture Alliance
Relations between the United States and China, in particular, have often been strained in recent years, with issues such as technology, trade, human rights and Beijing's aggressive stance toward Taiwan all at issue.
However, a meeting between Biden and Chinese President Xi Jinping in San Francisco in November helped warm relations between the two countries.
US Secretary of State Antony Blinken is also expected to visit China again soon to demonstrate the two countries' efforts to return to more stable relations.
tj/lo (Reuters, AFP)
