A day after Chinese President Xi Jinping met US CEOs assuring them that China was still the place to invest and that the regulatory framework would be eased further for foreign direct investment, US Treasury secretary Janet Yellen warned China not to flood the world with cheap clean energy exports.
The comment comes days before her second trip to China as treasury secretary. Yellen’s comments also reflect concern in the Biden administration about China’s trade practices, which is expected to be a sticking point during her visit.
“It is important to the president and me that American firms and workers can compete on a level playing field. We have raised overcapacity in previous discussions with China and I plan to make it a key issue in discussions during my next trip there,” Yellen said.
Yellen called out China’s ramped-up production in solar energy, electric vehicles and lithium-ion batteries, calling it unfair competition that “distorts global prices” and “hurts American firms and workers, as well as firms and workers around the world.”
Yellen’s remarks came at a solar cell manufacturing facility in Georgia, which was closed in 2017 due to cheap imports flooding the market. This comes at a time when the Biden administration tries to up investment in the green energy sector by offering tax breaks and subsidies to developers to build green energy manufacturing facilities.
The issue of trade is likely to be a major factor in the upcoming elections which is likely to pit Joe Biden against Donald Trump. Biden after becoming president has continued with a lot of tariffs imposed by his predecessor and is likely to impose steeper levies on Chinese products if he wins a second term.
China is the dominant player in batteries for electric vehicles and has a rapidly expanding auto industry that could challenge the world’s established carmakers as it goes global. The International Energy Agency, a Paris-based intergovernmental group, notes that in 2023 China accounted for around 60% of global electric car sales.
With inputs from AP
