US Treasury’s Yellen to return to China, emphasize excess capacity threat By Reuters


WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen will return to China this week for further economic talks with Chinese officials while stressing the global threat posed by the rise of Asian industrialization, the Treasury Department said on Tuesday.

The April 3-9 visit, which will be Yellen’s second visit to China since July 2023, will include a stop at the southern Guangzhou factory before Beijing.

US President Joe Biden and Chinese President Xi Jinping are set on Tuesday to hold their first talks since November, as the US leader seeks to resolve tensions over the inauguration of Taiwan’s president in May.

Biden administration officials say Biden and Yellen will emphasize China’s need to create a “good environment” for US workers and companies.

In Guangzhou, Yellen will meet with Chinese Vice Premier He Lifeng, Guangdong Province Governor Wang Weizhong and executives of US companies in China, the Treasury Department said. He has heard firsthand about the business problems that are causing US businesses to reduce their investment in China.

Yellen last met with He, China’s top economic partner, in November 2023, ahead of the Asia-Pacific Economic Cooperation Summit in San Francisco, where Biden also met with Xi.

Since Yellen’s first visit to Beijing last July, she and He have launched economic and financial working groups that meet virtually. The discussions so far have focused on discussing the major economic issues that each country is facing and their policy solutions, such as the problems in the stock market in China that have undermined consumer confidence, or the failure of the two largest banks in the United States last year.

US Treasury officials have also used the talks to explain that US national security restrictions on semiconductors and US investment in China will be narrowed.

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The U.S.’s growing interest in China’s exports represents a turning point in the negotiations at a time when Chinese goods are increasingly under pressure due to a lack of leverage at home. Xi also promised to unleash “new manufacturing power” in China by investing in technology industries including electric vehicles (EVs), new materials, commercial spaceflight and life sciences.

Yellen said last week at the Suniva solar module factory near Atlanta that China’s government subsidies have led to “increasing investment” in steel, aluminum and other industries, opening the way for cheaper exports that will force manufacturing in other, market-driven countries to comply. . .

“Right now, we’re seeing a lot of energy in ‘new’ industries like solar batteries, EVs, and lithium-ion,” Yellen said during her visit last week, adding that this is affecting prices and production processes and hurting workers in the US, European. Union is another economy.

Asked if she would raise new trade barriers during her next visit to China, Yellen said she did not want “retaliation,” adding: “We want to see what we can do to make it more positive.”

The EU is investigating whether China’s EV industry is benefiting from unfair subsidies, an investigation that could lead to protective tariffs on European carmakers. The US Commerce Department has opened an investigation into whether Chinese automakers pose a national security threat because of their exports, and the Biden administration is facing growing calls from lawmakers to raise tariffs on Chinese EVs.

A US Treasury official told reporters that Yellen during her upcoming visit to China “will make clear the global economic consequences of China’s industrial overhang that is hampering US manufacturers and companies around the world.”

The official, speaking on condition of anonymity, said U.S. and Chinese officials would discuss currency issues as part of their economic talks, but declined to comment on recent currency weakness.

The official added that Yellen will seek more cooperation in areas that will help both countries, including the fight against climate change, combating illegal money and drug trafficking and providing relief to developing countries that are in debt.

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