During a pivotal meeting in Beijing with Chinese Premier Li Qiang, U.S. Treasury Secretary Janet Yellen emphasized the importance of addressing China’s excess industrial capacity, asserting that such discussions are vital for the stability of bilateral relations.
Li, underscoring the necessity for mutual respect and cooperation between the two nations, noted the “constructive progress” achieved during Yellen’s visit.
Yellen highlighted the progress in responsibly managing the complex U.S.-China relationship, stressing that direct and open communication is essential for addressing differences and advancing bilateral relations.
Yellen’s focus during her second visit to China in nine months was on the implications of China’s overproduction in sectors like electric vehicles (EVs) and solar panels, which poses threats to U.S. producers and jobs.
A senior U.S. Treasury official reported that the meeting with Li included a thorough discussion on China’s industrial overcapacity and its government support, with Li showing openness to further exploration of the issue by U.S. and Chinese economic teams.
Despite some differences, the dialogue was constructive and devoid of ideological resistance.
China’s stance, as reported by the state news agency Xinhua, urges the U.S. to avoid politicizing economic and trade issues and to consider global and market-oriented perspectives on production capacity.
Li also emphasized that the development of China’s clean energy sector is integral to the global energy transition.
Yellen’s visit also included engagements with Beijing mayor Yin Yong and a visit to Peking University, where she received a standing ovation from students.
Her trip, marked by a mix of social and cultural events, signifies a warm welcome and a stark contrast to her purely business-focused visit in July 2023 aimed at normalizing economic relations amidst tensions.
In the context of stabilizing ties, recent interactions between U.S. President Joe Biden and Chinese President Xi Jinping, as well as meetings between military officials, indicate efforts to manage disputes.
Moreover, discussions with Vice Premier He Lifeng in Guangzhou on launching a dialogue for “balanced growth” highlight Yellen’s commitment to ensuring fair competition to protect U.S. interests.
Despite concerns over China’s manufacturing overcapacity, particularly in the EV sector, the country continues to invest in advanced technologies, including EVs, commercial spaceflight, and life sciences, signaling its ambition to lead in these areas while posing challenges for U.S. industries.