Janet Yellen visits China to advocate against “unfair” practices

The US Secretary of the Treasury, Janet Yellenarrived in China on Thursday, on his second visit to the country in less than a year, to address Beijing’s industrial subsidy policy that Washington considers “disloyal”.

The economic head of Joe Biden’s administration arrived in the city of Canton, a metropolis in southern China, a symbol of the Asian giant’s industrial power.

Her plane landed at 6:00 p.m. local time (10:00 GMT) at the Canton airport, where she was received by the American ambassador in Beijing, Nicholas Burns, and Chinese authorities.

With hours of bilateral meetings, working lunches and even a boat trip through Canton, the goal of Yellen is to bring Washington’s message to Chinese President Xi Jinping’s inner circle, a Treasury official said.

In Canton, the secretary has scheduled meetings with American businessmen living in the country, local officials and with Vice Prime Minister He Lifeng.

He will then travel to Beijing where he has scheduled meetings with his counterpart Lan Fo’an, Prime Minister Li Qiang and the governor of the Central Bank Pan Gongsheng.

His previous trip, eight months ago, helped stabilize a troubled relationship between the world’s two largest economies, particularly through the creation of bilateral working groups.

On this occasion, Yellen wants to raise American concerns about the competitive impact of Chinese subsidies to industries such as solar energy or electric vehicles, in which the United States is trying to develop production with the help of subsidies.

In the past, Beijing’s state support for industries such as aluminum led to “a significant overinvestment and excess capacity that Chinese firms tried to export at a low price”he explained Yellen The last week.

“We now see excess capacity in new industries such as solar energy, electric vehicles or lithium-ion batteries”, in which the United States warned.

On the possibility of imposing tariffs to pressure China, Janet Yellen said “I didn’t want to rule out any media” to protect these industries.

“We know who to call”

But if trade measures must be taken, it is important for Beijing to understand that it is not about “a series of anti-Chinese measures”, insisted the US Undersecretary of the Treasury for International Affairs, Jay Shambaugh.

At the end of 2023, Yellen He assured that Washington would continue to demand more clarity in Chinese economic policy. And the difficulties in the real estate market and the debt of municipal authorities raise fears of global repercussions.

Economic relations and cooperation between both countries are “undoubtedly stronger now than two years ago“said a Treasury official.

According to Brent Neiman, an advisor to Yellen, the central banks of both countries have notably compared their climate risk models.

“We know our counterparts, we know their system, they know ours and, frankly, if something goes wrong, we know who to call”, he explained to AFP.

Semiconductors

According to Bill Bishop, who publishes the Sinocism digital newsletter, “the deterioration” of Sino-American relations came to an end last year.

“But there is nothing that indicates a more sustainable change” to reverse the trend, he added.

Beijing remains irritated with efforts to restrict China’s access to high-tech semiconductors. But with the US elections approaching, “neither party plans to launch bilateral negotiations or initiatives”says Patricia Kim, a researcher at the Brookings Institution.

“Beijing, like many other capitals, is probably in wait-and-see mode” in the November elections: if Democrat Joe Biden or Republican Donald Trump wins, whose mandate was marked by a sharp increase in trade tensions, he emphasizes.