US says will not accept Chinese imports battering new industries

ANKARA

US Treasury Secretary Janet Yellen wrapped up her crucial six-day visit to China on Monday with a warning that Washington will not accept a situation where underpriced Chinese goods flood the global market, decimating industries elsewhere.

Addressing a press conference in Beijing after her meetings with the governor of China’s central bank, Pan Gongsheng, and former Vice Premier Liu He, she warned about the risks of China’s "excess" industrial capacity, contending that Chinese government support creates more production capacity than global markets can absorb.

According to her, a surge of cheap exports in sectors, mainly solar and electric vehicles, could bung up the growth of these industries elsewhere.

Beijing's support, she contended, had led to a flood of below-cost steel into the global market over a decade ago, which “decimated industries across the world and in the United States.”

“I have made clear that President Biden and I will not accept that reality again,” she said.

Yellen also met He Lifeng, a key economic official, and Prime Minister Li Qiang.

Consequences of supporting Russia’s military procurement

Yallen declined to threaten new tariffs or other trade actions, even if Beijing continues its huge state support for electric vehicles, batteries, solar panels and other green energy goods.

Pitching a “possible short-term solution,” she said Beijing should take steps to boost consumer demand with support for households and retirement, and shift its growth model away from supply-side investments.

Yallen also warned Beijing of the consequences of supporting Russia’s military procurement and using economic tools over national security concerns, acknowledging that she had “difficult conversations about national security.”

Overcapacity accusations are “groundless”

Beijing has dismissed Washington’s concerns that a surge of low-cost Chinese exports posed a risk to global markets as "groundless," state news agency Xinhua reported.

Commerce Minister Wang Wentao said on Sunday that Chinese electric vehicle manufacturers' rapid development is a result of “constant tech innovations, well-established supply chain system and full market competition, not subsidies.”

The accusations of "overcapacity" by the US and Europe, he added, are groundless.

The development of China's electric vehicle industry, according to him, has made an important contribution to the global response to climate change as well as green and low-carbon transformation.

Wang said the Chinese government will “actively” support enterprises in safeguarding their legitimate rights and interests in the face of external challenges and uncertainties.