Chinese subsidies endanger world economic system, says US’ Yellen – DW – 04/05/2024 | EUROtoday

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US Treasury chief Janet Yellen on Friday warned that China’s large subsidies for its business may pose a threat to the worldwide economic system, and known as for a “level playing field” above all for American companies.

Yellen was talking to a gathering of the American enterprise neighborhood within the metropolis of Guangzhou, the place she is going to maintain a number of days of talks with Chinese officers throughout what’s her second go to to China in lower than a 12 months.

What did Yellen say?

In her speech on the American Chamber of Commerce, on Friday, Yellen accused China of disadvantaging overseas companies in favor of its personal.

“I’ve heard from many American business executives that operating in China can be challenging,” she mentioned.

She mentioned that the US has noticed China pursuing “unfair economic practices, including imposing barriers to access for foreign firms and taking coercive actions against American companies.”

“I strongly believe that this doesn’t only hurt these American firms: ending these unfair practices would benefit China by improving the business climate here. I intend to raise these issues in meetings this week,” she mentioned.

  A robot arm produces solar photovoltaic modules at a smart workshop in Nantong, Jiangsu province,
China has massively sponsored its photo voltaic panel business, amongst others, probably disadvantaging overseas opponentsImage: Costfoto/NurPhoto/image alliance

On the query of China’s subsidies for its business, Yellen mentioned they risked undermining world financial resilience.

“Direct and indirect government support is currently leading to production capacity that significantly exceeds China’s domestic demand, as well as what the global market can bear,” she mentioned.

“Overcapacity can lead to large volumes of exports at depressed prices, and it can lead to overconcentration of supply chains, posing a risk to global economic resilience,” she added.

Earlier, she advised the governor of Guangong that the “healthy economic relationship” desired by the US required “a level playing field for American workers and firms.”

During her five-day journey, Yellen plans to satisfy with Chinese Premier Li Qiang and Vice Premier He Lifeng, in addition to central financial institution governor Pan Gongsheng and Finance Minister Lan Fo’an.

Beijing immune to criticism

Beijing has mentioned that such issues over its huge state assist for business is unfounded, accusing the West of “protectionism.”

However, Washington is especially anxious concerning the impact China’s extra capability may have on US manufacturing within the clear power sector, which has been boosted by President Joe Biden.

In specific, China has given large monetary help to EV makers and photo voltaic panel producers, fueling Western fears that low-priced Chinese exports will threaten American and European jobs.

Light-blue SU7 car from Xiaomi is displayed during the Mobile World Congress (MWC) in Barcelona
China is a market chief with electrical automobilesImage: Gao Jing/Xinhua/image alliance

Relations significantly between the US and China have usually been strained in recent times, with points resembling know-how, commerce, human rights and Beijing’s aggressive stance on Taiwan all bones of competition.

However, a gathering between Biden and Chinese President Xi Jinping in San Francisco in November has contributed to a warming of bilateral ties.

US Secretary of State Antony Blinken can also be anticipated to quickly go to China once more in an indication that the 2 sides are striving to return to extra settled relations.

tj/lo (Reuters, AFP)