Home Economy News China pushes back on Yellen’s excess capacity stance as meetings run long

China pushes back on Yellen’s excess capacity stance as meetings run long


By David Lawder

GUANGZHOU, China (Reuters) -China pushed back on U.S. Treasury Secretary Janet Yellen’s call to rein in excess production capacity for clean energy goods, calling it a “pretext” for protectionist U.S. policies, as her meetings with Chinese officials continued on Saturday.

Such comments seek to undermine China’s domestic growth and international cooperation, and Washington should focus on fostering innovation and competitiveness within its own borders instead of resorting to “fear-mongering,” state news agency Xinhua said in an editorial late on Friday.

Yellen, Chinese Vice Premier He Lifeng and their teams resumed meetings on a range of economic topics on Saturday, with U.S. concerns about China’s growing exports of electric vehicles, solar panels and other goods the biggest priority for the Treasury chief.

A group bilateral meeting ran well past its scheduled two and a half hours, delaying a more intimate meeting with just Yellen, He and one other official from each side. Yellen is expected to speak with reporters after the meetings.

Yellen told U.S. businesspeople in China’s southern export hub of Guangzhou on Friday that concerns are growing over the global economic fallout from China’s excess manufacturing capacity, making the issue the focus of her four days of meetings with Chinese officials.

Citing China’s overproduction of electric vehicles, solar panels, semiconductors and other goods that are flooding into global markets in the face of a demand slump in China’s domestic market, Yellen said this was not healthy for China and was hurting producers in other countries.

“Talking up ‘Chinese overcapacity’ in the clean energy sector also smacks of creating a pretext for rolling out more protectionist policies to shield U.S. companies,” Xinhua said.

“After all, it is now known by the world that Washington will not hesitate to show its protectionist teeth under the guise of national security in areas where its supremacy is challenged.”

Yellen met with Vice Premier He Lifeng and Guangdong Province Governor Wang Weizhong in Guangzhou after arriving in China late on Thursday.

She is to travel later on Saturday to Beijing, where she will meet officials including Premier Li Qiang, Finance Minister Lan Foan and People’s Bank of China Governor Pan Gongsheng through Monday, according to a Treasury press advisory.

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