Yellen asks China to stop over-manufacturing

Kicking off her four-day official visit to China yesterday, US Treasury Secretary Janet Yellen urged the country to address its overproduction and cautioned against bombarding other countries with lower-priced products, which she believes could cause global economic issues.

During her talks with Chinese officials, Yellen highlighted concerns about Chinese trade practices, particularly in industries like solar panels and EVs, where subsidies have led to excess production.

China’s overcapacity raises fears of flooding the global markets with cheap exports, potentially threatening jobs in the US and Europe, where authorities are already looking into claims that Chinese manufacturers are selling products at a loss to drive out competition.

The Alliance for American Manufacturing released a report in February about the “extinction-level” impact of inexpensive Chinese autos on the US market, which accounts for 3% of the American economy.

Chinese Foreign Ministry spokesperson Wang Wenbin defended the trade practices earlier this week, arguing it supports global green development. He further accused America of trade interference.

Yellen suggested potential tariffs on imports of subsidized Chinese manufacturing as a response.

She also met with business representatives, noting challenges faced by American firms in China.