Yellen’s Mission in China: Containing Industrial Overproduction

As global concerns over China’s oversupply of low-cost products intensify, the U.S. and China have agreed to hold official talks to discuss this issue. This agreement reflects the strong will of the U.S., while China expressed serious concerns about U.S. export control policies.

Janet Yellen, the U.S. Treasury Secretary visiting China, emphasized the need to curb overproduction in Chinese industries during a meeting with Chinese Premier Li Keqiang, the second-in-command in China, on the 7th (local time). In a statement released immediately after she met with He Lifeng, the vice premier of the State Council of China, she stated, “The U.S. and China have agreed to launch extensive exchanges on balanced growth in domestic and global economies,” and added, “I intend to use this opportunity to advocate for a level playing field for American workers and firms.”

In response to journalists’ questions about whether China’s agreement is a concession or an attempt to delay U.S. retaliation, Secretary Yellen said, “I think the Chinese realize how concerned we are about the implications of their industrial strategy for the United States.”

Secretary Yellen focused on China’s oversupply issue during her visit. She said, “I visited Suniva—a solar company in Georgia that was once forced to close down, like other companies across several industries, because it could not compete against large quantities of goods that China was exporting at artificially depressed prices,” and emphasized, “It’s important that this doesn’t happen again.” Concerns are growing worldwide about the so-called China Shock, where the global industrial ecosystem is collapsing as China faces disruption as China, grappling with a significant domestic slowdown, proliferates ultra-low-cost products like solar panels and electric vehicles overseas.

On the other hand, China’s Xinhua News Agency retorted that Yellen’s claim is nothing more than an ‘excuse for U.S. protectionism.’ It further pointed out, “Instead of resorting to fear-mongering and protectionism, Washington should focus on fostering innovation and competitiveness within its borders.” Xinhua also reported that China strongly protested against U.S. economic and trade sanctions on China during this meeting.