Janet Yellen travels to China to talk to authorities about “unfair trade practices”

Janet Yellen travels to China to talk to authorities about “unfair trade practices”


The Secretary of the Treasury of the United States, Yanet Yellen, will arrive in China this Thursday, on her second trip to the country since the summer, to maintain a four-day agenda full of meetings with senior officials of the country, both in the southern city of Guangzhou and in Beijing. The Treasury reported that the objective of these meetings is to discuss “unfair trade practices and will highlight the consequences of China’s excess industrial capacity.”

This issue is upsetting both Washington and Brussels. Both believe China is experiencing a surge in overcapacity that could put an end to foreign industries.

Yanet Yellen assured that China’s excess capacity “distorts global prices and production patterns.” The former president of the Federal Reserve referred, above all, to the solar panels, electric vehicles and batteries. The president of the European Commission, Úrsula Von der Leyen, stated along this same line, assuring that this excess capacity is a reason to open an anti-subsidy investigation of electric vehicles.

Before her trip to China, Yanet Yellen assured the press that her expectation is that “at the highest levels, and increasingly at all levels, we will continue to maintain a deeper dialogue. We spent too long with very little communication and misunderstandings arose “.

According to the official agenda published on the Treasury website, the secretary will hold a meeting this Friday (April 5) with Vice Premier He Lifeng, Guangdong Governor Wang Weizhong, economic experts and business representatives from AmCham China.

On Saturday (April 6) he will continue his dispatches with He Lifeng. Looking ahead to Sunday (April 7) he has an appointment with the Chinese Prime Minister, Li Qiang; Finance Minister Lan Fo’an; the mayor of Beijing, Ying Yong and will conclude with a meeting with economists and professors from Peking University.

Fentanyl

During this time in which the Secretary of the Treasury will spend on Chinese soil, she will also work “to expand bilateral cooperation in the fight against illicit financing, which can drive important advances in shared efforts against criminal activities such as drug trafficking and fraud “, reported from the Treasury.

In this sense, the United States is fighting against rising rates of fentanyl addictiona drug that already kills more than 150 people a day in the American country. Washington considers China to be the main supplier of the substances used to synthesize this drug. The triangle is completed with Mexico, where the drug cartels are the ones that manage all drug trafficking in their neighboring country. This has further accentuated tensions between both powers.

China seeks to revive its growth with a green economy

The Prime Minister of China, Li Qiang, recently presented, after the ‘two sessions’, the country’s economic plan. A very ambitious path to follow that aims to conclude with a growth for this year of 5% and redirect your industry to fill the gap left by the deep crisis in the real estate sector, in the long term, towards the ‘green economy’.

The hard core of the Communist Party declared that “it is imperative to promote efforts to modernize the industrial system and accelerate the development of new productive forces.” What they mean by those “new forces” It is to sectors such as electric vehicles, artificial intelligence, renewables, advanced infrastructures or cutting-edge semiconductors.

This implies that Beijing will invest a lot of money in stimulating the manufacturing sector by focusing on these new industries. Thus, its trading partners, concerned that their economies are filled with low-cost products and jobs are eliminated, they are acting as a buttress and, on many occasions, applying protectionism to Chinese products.

But the Undersecretary of the Treasury for International Affairs, Jay Shambaugh, tried to calm the situation by ensuring that if trade measures have to be taken “it is important for Beijing to understand that this is not a series of anti-Chinese measures.”

By the end of 2023, Yellen said Washington would demand more political and economic transparency from China as the real estate crisis and huge amount of hidden debt that local entities accumulate can have repercussions at a global level, since they can bring a financial collapse.

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