A surge in cheap exports from China in industries like electric vehicles could bring "global spillovers," US Treasury Secretary Janet Yellen is due to warn in a speech on Wednesday.
She plans to raise the risks of excess capacity as a key issue in discussions during her next trip to China, and press Beijing to take "necessary steps to address this issue."
Yellen, who plans to take her second trip to China as Treasury chief this year, is expected to deliver these remarks in Georgia.
She will also tout the benefits of President Joe Biden's landmark Inflation Reduction Act and highlight major business investments that have been announced in response.
But excerpts of her speech indicated concerns as well about the impact that China's excess industrial capacity could have on other countries.
Chinese government support in sectors like steel and aluminum in the past "led to substantial overinvestment and excess capacity that Chinese firms looked to export abroad at depressed prices," according to Yellen's remarks.
While this helped production and employment in China, it "forced industry in the rest of the world to contract," she added.
"Now, we see excess capacity building in 'new' industries like solar, EVs, and lithium-ion batteries," Yellen is due to say.
The fear is that overcapacity could distort global prices and production, and impact companies and staff.
She notes that governments and businesses from other countries are also increasingly raising concerns.
"It is important to the president and me that American firms and workers can compete on a level playing field," said Yellen in the remarks.
In a speech last December, Yellen called for Beijing to shift away from a state-driven approach in economic policy.
US companies have long complained about what they see as an unfair business environment in China.
