China: Janet Yellen warns of the risk of overproduction linked to Chinese subsidies
US Treasury Secretary Janet Yellen returned to China this Friday. Nine months after her first visit, Janet Yellen was again concerned about Chinese subsidies which, she said, constitute “a risk for the global economy”.
Jnaet Yellen, American Secretary of the Treasury, is making a new visit to China, after that of July 2023. In the photo, the preparation of the snack planned in Guangdong, the workshop-province-of-the-world, in the presence of the Vice Prime Minister Premier He Lifeng, April 5, 2024. REUTERS - Tingshu Wang
By: Stéphane Lagarde Follow
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with our correspondent in Beijing
There is education in diplomacy and you often have to repeat the same message to hope that it will one day be heard. This is what
Janet Yellen
did again this Friday in Canton. A full day meeting decision-makers from the large Guangdong province in southeast China. The former workshop of the world was not chosen at random: it was there, noted the American Secretary of the Treasury, that in 1992, Deng Xiaoping “renewed China's commitment to a policy of reform and opening to markets.
Industrial overcapacity
Like nine months ago, Janet Yellen advocated this Friday for “
healthy competition
” and “
fair competition conditions
” between the world’s two largest economies. With Chinese industrial overcapacity in the sights.
“
Overcapacity is not a new problem, but it is intensifying and we see risks emerging in new sectors,”
declared the American Secretary of the Treasury.
In particular, direct and indirect government support currently leads to production capacity that far exceeds Chinese domestic demand as well as what the global market can absorb.
»
Like the
Europeans
, the United States is concerned about the industrial overcapacity of the second largest economy in the world and the weakness of
domestic consumption
which leads to an externalization of demand.
The US Treasury Secretary suggested recently that China's booming exports of electric vehicles, solar power and batteries were a problem at a time when the US is also investing in reviving its own manufacturing sector. She should further address this issue of Chinese oversupply, particularly in the sectors of electric vehicles and solar panels, with her Chinese interlocutors.
“
New productive forces
”
A four-day visit which comes after a phone call between the American and Chinese presidents, while Beijing, which hopes for a return of foreign investors, invited the big American bosses to the People's Palace at the end of March. Chinese media likes the US Treasury Secretary. They noted this Friday that she “
wielded chopsticks without difficulty
” during a lunch that we assume was Cantonese. In her speech to the American Chamber of Commerce in Canton, Janet Yellen recalled that American policy since Joe Biden took office was not decoupling, but rather to defuse risks through “open and active communication” . After the concept of "
dual circulation
" which envisaged emphasizing both export growth and the expansion of domestic demand, Xi Jinping launched the new mantra of "
new productive forces
" last year.
, emphasizing the need for a new model of economic growth based on technological innovation, in sectors such as sustainable energy vehicles or artificial intelligence in particular.
Read alsoIn Beijing, Janet Yellen advocates “healthy competition” between China and the United States (July 2023)
If the communist government and Chinese state media contest Western criticism of Chinese subsidies in these sectors, the authorities are aware of both the problem of sluggish consumption which is weighing down the economy and that of overproduction which is considered a challenge. major during a conference on economic work in December, notes CNN. “
What China exports are advanced production capacities that meet the needs of foreign customers
,” wrote the Chine Nouvelle agency cited by the American channel.
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