Chinese Vice Finance Minister Liao Min (2nd R) and U.S. Ambassador to China Nicholas Burns (R) receive U.S. Treasury Secretary Janet Yellen (R) upon her arrival in Guangzhou on April 4, 2024.
Pedro Pardo | Afp | Getty Images
BEIJING — U.S. Treasury Secretary Janet Yellen kicked off her first full day of official meetings in China with discussion about overcapacity concerns and encouragement to pursue market-oriented reforms.
Yellen arrived in the southern Chinese city of Guangzhou late on Thursday and is set to travel to Beijing on Saturday, where she will stay until Tuesday. It is her second trip to China as Treasury secretary.
It “remains crucial” to “closely communicate on issues of concern such as overcapacity and national security-related economic actions. It is what the world and our citizens expect of us,” Yellen said in prepared remarks for her meeting with Vice Premier He Lifeng on Friday. He is also director of the office of the Central Commission for Financial and Economic Affairs.
“A healthy economic relationship must provide a level playing field for firms and workers in both countries,” she said, adding the two countries need to collaborate on climate change and debt distress in emerging markets.
Yellen and He Lifeng are expected to have several discussions through Saturday morning. When she travels to Beijing, Yellen is scheduled to meet with Premier Li Qiang, Finance Minister Lan Fo’an, and Beijing mayor Yin Yong.
Ahead of the meeting with He, Yellen met with Wang Weizhong, governor of Guangdong province, of which Guangzhou is the capital.
“Throughout my engagements with my counterparts, I will stress that a healthy economic relationship can bring significant benefits for both our economies,” Yellen said in prepared remarks for her meeting with Wang.
“I’ve also emphasized that building a healthy economic relationship requires a level playing field for American workers and firms, as well as open and direct communication on areas where we disagree,” Yellen said. “This includes the issue of China’s industrial overcapacity, which the United States and other countries are concerned can cause global spillovers.”
Meeting with U.S. businesses
Yellen on Friday also met with representatives from American, European and Japanese businesses.
“Overcapacity isn’t a new problem, but it has intensified, and we’re seeing emerging risks in new sectors,” Yellen said in prepared remarks at an American Chamber of Commerce in China event in Guangzhou.
“Overcapacity also poses challenges for Chinese firms and industries and can impact China’s productivity and growth,” she said. “I believe addressing overcapacity — and more generally considering market-based reforms — is in China’s interest.”
Analysts at U.S.-based consulting firm Rhodium Group said in a report in late March that Chinese government support for manufacturing in recent years has resulted in a build-up of production capacity that exceeds domestic demand.
“Many Chinese firms are still using overseas markets to make up for lower prices,