Yellen meets with China’s central bank chief, presses case on excess capacity

BEIJING – US Treasury Secretary Janet Yellen is set to wrap up four days of meetings in China with a visit to the central bank as she presses her case for Chinese leaders to rein in excess industrial capacity and boost domestic demand.

Ms. Yellen, who is on her second trip to China in nine months to further ease strained ties between the world’s two largest economies, has voiced concerns about China’s fast-growing exports of electric vehicles, batteries, solar panels and other green-energy goods.

She has argued that Chinese state support has led to production capacity that far exceeds domestic demand, and the exports will threaten jobs in the US and other countries.

Ms. Yellen spoke about the issue at length with Chinese Premier Li Qiang and also met with Finance Minister Lan Foan on Sunday. She also was meeting with former vice premier Liu He on Monday.

In a readout of the finance meeting, the Treasury said Yellen and Lan discussed the macroeconomic outlook and financial developments in the United States and China.

“They also discussed the important role that Treasury and the Ministry of Finance can play in maintaining a durable communication channel between the US and China,” the Treasury said.

Li pushed back on Ms. Yellen’s assertion, according to state news agency Xinhua, which quoted him as saying the US should “refrain from turning economic and trade issues into political or security issues” and view the issue of production capacity from a “market-oriented and global perspective”.

Chinese Commerce Minister Wang Wentao voiced more pointed objections during a roundtable meeting with Chinese EV makers Paris, saying that US and European assertions of Chinese excess EV capacity were groundless.

“China’s electric vehicle companies rely on continuous technological innovation, perfect production and supply chain system and full market competition for rapid development, not relying on subsidies to gain competitive advantage,” Wang said during his trip to discuss a European Union anti-subsidy probe.

Yellen will wrap up her trip to Guangzhou and Beijing with a news conference later on Monday. – Reuters