Treasury Secretary Janet Yellen has raised concerns about China's increased production in solar energy, electric vehicles, and lithium-ion batteries, labeling it as unfair competition that distorts global prices and negatively impacts American firms and workers. Yellen plans to address these issues during her upcoming trip to China, emphasizing the risks posed to productivity and growth in the Chinese economy.
China's dominance in electric vehicle batteries and its rapidly expanding auto industry, which accounted for around 60% of global electric car sales in 2023, have drawn attention from international organizations and governments. Yellen's remarks come as the U.S. government aims to revive the domestic green energy manufacturing sector, exemplified by the reopening of a solar cell manufacturing facility in Georgia.
The strained economic relations between the U.S. and China have been further complicated by recent trade disputes, with China filing a complaint against the U.S. at the World Trade Organization over alleged discriminatory requirements for electric vehicle subsidies. The European Union has also initiated an investigation into Chinese subsidies for electric vehicles.
Yellen highlighted the historical impact of Chinese government support on industries like steel and aluminum, leading to overinvestment and excess capacity that affected global markets. These concerns have resonated with government officials and the business community worldwide, reflecting broader apprehensions about China's economic practices.
Despite these tensions, Chinese leader Xi Jinping has expressed a desire for closer trade ties with the U.S., emphasizing the mutually beneficial economic relationship between the two countries. The ongoing dialogue between the U.S. and China seeks to address trade imbalances, intellectual property issues, and other contentious matters to foster a more stable economic environment.
