US Treasury Secretary Janet Yellen is wrapping up her second trip to China, where she raised American concerns about Chinese overproduction, warned against support for Russia and, unexpectedly, caused a stir on Chinese social media over her travel style and chopstick-wielding skills.
Over the span of four days, Yellen had wide-ranging meetings with Chinese leaders, local officials, academics, students and American executives both in the southern metropolis of Guangzhou as well as the capital Beijing.
The visit, her second to China in nine months as treasury chief, is aimed at addressing escalating trade disputes between the world's largest economies as the two sides try to stabilize relations following a summit between US President Joe Biden and Chinese leader Xi Jinping last November.
Despite the overall positive tone of Chinese state media coverage, Yellen had a tough message for Beijing: China's surging exports of state-subsidized electronic vehicles (EVs), solar panels and batteries are threatening American jobs and businesses, and must be reined in.
At a news conference on Monday, Yellen said she expressed concerns to senior Chinese officials that there are features of the Chinese economy that have "growing negative spillovers" on the US and the world.
"I am particularly worried about how China's enduring macroeconomic imbalances —namely its weak household consumption and business overinvestment, aggravated by large-scale government support in specific industrial sectors — will lead to significant risk to workers and businesses in the United States and the rest of the world," she told reporters.
The issue of Chinese overcapacity in key industries such as EVs and solar panels has emerged as a major area of contention globally and in the run-up to November's US presidential election.
It was also a major focus of Yellen's trip. She has repeatedly relayed the message to Chinese officials from Vice-Premier He Lifeng, known as the country's economic tsar, to Premier Li Qiang.
"China is now simply too large for the rest of the world to absorb this enormous capacity," Yellen told reporters Monday. "Actions taken by the PRC today can shift world prices. And when the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question."
But there's little sign that Beijing is willing to budge on its economic policies.
In his meeting with Yellen on Sunday, Li, the Chinese premier, urged Washington not to "politicize" economic and trade issues or "overstretch the concept of national security," but to adhere to "the basic market economy norms of fair competition and open cooperation."
"The United States should look at the capacity issue objectively and dialectically from the perspective of market economy and a global vision" Li told Yellen, according to a readout from China's Foreign Ministry.
Beijing is aware of the country's overcapacity problem, having acknowledged it as a key challenge at an annual economic work conference in December.
But last month, several Chinese state media outlets published editorials challenging the notion that China's supply glut poses a threat to other economies. "What China exports is advanced production capacity that meets the needs of foreign customers," the Xinhua news agency wrote.
At the news conference, Yellen conceded that concerns over Chinese oversupply will not be resolved in a week or a month, but "the exchanges that we announced during this trip will provide a dedicated structure for us to raise our concerns about China's imbalances and overcapacity — among a wide range of other topics — in a detailed and targeted manner."
Keeping reading about the closely watched visit.
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