US Will Not Accept Another "China Shock", Yellen Says
By Dorothy Li of The Epoch Times
China commonly floods global markets with cheap products, and the United States will not allow this to threaten U.S. jobs, Treasury Secretary Janet Yellen said on April 8 as she concluded a return visit to China.
After Bejing’s acceptance into the World Trade Organization, massive quantities of low-priced products exported from China killed about 2 million jobs in the United States and led to the hollowing out of industrial production in many parts of the country, Ms. Yellen told reporters in Beijing, calling it the “first China shock.”
“I simply would say, [the situation] would not be acceptable to the United States,” she said.
On her second trip to China as treasury secretary, Ms. Yellen repeatedly expressed Washington’s concerns about Beijing’s burgeoning production in green-energy sectors, including electric vehicles, their batteries, and solar panels, as household consumption remains weak in the country.
She criticized China for flooding the global market with cheap products, as Beijing shifted its policy focus by investing in manufacturing factors to boost the country’s stagnant economy.
The message recurred through the four days of talks with senior Chinese officials, including Premier Li Qiang and Vice Premier He Lifeng, who oversees China’s economic and financial systems.
Following the April 8 meeting with the Bank of China Governor Pan Gongsheng, Ms. Yellen raised the issue again.
“I am particularly worried about how China’s enduring macroeconomic imbalances—namely, its weak household consumption and business overinvestment, aggravated by large-scale government support in specific industrial sectors—will lead to significant risk to workers and businesses in the United States and the rest of the world,” she told reporters at the U.S. ambassador’s residence in Beijing.
“China is now simply too large for the rest of the world to absorb this enormous capacity. And when the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question.”
The treasury secretary acknowledged that addressing the issue takes time. “Our concerns will not be resolved in a week or a month,” she said....
There are signs that Beijing is reluctant to change its economic strategy.
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But she emphasized that the Biden administration would push Beijing to change its course.
Over a decade ago, China’s massive state subsidies “led to below-cost Chinese steel that flooded the global market and decimated industries across the world and in the United States,” she said.
“I’ve made clear that President Biden and I will not accept that reality again.”
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