During a visit to a solar panel company in Georgia, US Treasury Secretary Janet Yellen expressed concern about “the excess capacity we’re seeing in China” and its impact on US industry. According to Yellen, the Chinese government has historically supported significant over-investment in sectors such as steel and aluminum, leading to low-cost exports by Chinese companies. She has now seen these trends spread to emerging industries such as solar panels and electric vehicles. Yellen made it clear that these issues would be at the heart of discussions during her forthcoming trip to China.
Sectors affected by overproduction
The Secretary of the Treasury listed several sectors now affected by Chinese excess production, including solar panels, electric vehicles and lithium batteries. This excess, she believes, disrupts global prices and production chains, negatively impacting American companies and workers as well as those in other countries. Yellen plans to discuss this topic with her Chinese counterparts, highlighting the risks to China’s own competitiveness and economic growth.
Implications for Sino-American discussions
Yellen announced her intention to make overproduction a central topic at her forthcoming talks in China, the date of which has yet to be set. She stressed the importance of this problem, not only for the global economy but also for China, and plans to press Beijing to take the necessary measures. This topic has already been addressed at the G20 Finance meeting in Brazil and in bilateral meetings, demonstrating the urgency and continuity of American efforts on this issue.
Yellen reiterated the United States’ commitment to addressing these crucial issues with China to protect American industry and maintain global economic stability. The Treasury Secretary expressed the hope that these efforts would lead to adjustments on China’s part to correct the current imbalances.
