US Treasury Secretary Janet Yellen recently concluded a four-day summit with Chinese officials sternly warning that Washington will not allow Chinese imports to threaten US jobs in new industries. Yellen ended the visit by urging Beijing to temper excess industrial capacity.
Although the talks’ focus centered on new industries, such as solar panel production, renewable energy technology, and sustainable industrial production, the treasury secretary also expressed concerns over China’s support of Russia in their war against Ukraine. While no new sanctions were officially mandated against Chinese imports, the serious warning was expressed loud and clear.
“I Won’t Let “Artificially Cheap” Chinese Imports Threaten US Jobs”
As the US and other nations push towards the energy transition, clean energy jobs in new industries have skyrocketed in the last decade. In 2022, the DOE reported that clean energy jobs grew by more than 300,000 in the US alone. Naturally, these new industry jobs represent a massive portion of the US workforce, potential boons to the economy, and alternative energy capabilities for the United States. However, Treasury Secretary Yellen said President Biden views Chinese imports of new industry-related material as threatening US and other foreign firms.
Although imports May seem like an affordable solution to increasing demand for renewable energy technology, the cost goes beyond the price tag. Yellen dubbed these imports “artificially cheap” because of their greater impact and threat to American industrial jobs and production.
A significant portion of the talks was devoted to the production of electric vehicles, batteries, and solar equipment, an area the Biden Administration heavily emphasizes for domestic production. The Chinese government subsidizes the production of such materials, driving a dramatic increase in Chinese companies’ production facilities.
US Urges a Change in Chinese Production Policy
The Chinese policy of subsidized clean energy production created a boom in clean energy production facilities. Yellen claims this policy led to overinvestment, threatening the global fair market. Meanwhile, the overabundance of Chinese production facilities produces far more than the domestic demand, leading to an influx of Chinese imports.
Although Secretary Yellen did not threaten any new tariffs or sanctions against Chinese imports, she did warn them that President Biden would not allow “artificially cheap” Chinese imports to overflood the market and potentially threaten American jobs.
Yellen urged the Chinese government to alter its policy, allowing the United States and other nations to produce energy transition technology domestically. At the same time, she recognizes that the People’s Republic of China will need time to discuss the excess capacity issue and reach a solution.
She went on to say, “We’ve seen this story before. Over a decade ago, massive PRC (People’s Republic of China) government support led to below-cost Chinese steel that flooded the global market and decimated industries across the world and in the United States.”
President Biden and Treasury Secretary Yellen aim to avoid a repeat of the “China Shock” of the early 2000s, in which the surge of Chinese exports flooded the market, decimating the economies and production of other World Trade member nations.
During her second trip in nine months, Yellen claimed the talks prioritized advancing American interests and that other nations, such as European allies, Japan, Mexico, and the Philippines, shared US concerns.
Difficult Talks About Chinese Support of Russia
In addition to the capacity issue discussions, Yellen mentioned difficult talks over the Chinese support of Russia during the Russian-Ukrainian conflict. After the United States spearheaded multiple sanctions and price caps against Russian oil and other exports, China helped Putin subvert sanctions by becoming a major purchaser of Russian oil.
While the majority of the talks did not center on Chinese involvement with Russian interests, Yellen made a point of mentioning that it has been discussed.
Yellen Wants A Healthy Economic Relationship with China
At the end of her visit, Yellen noted that she and President Biden have no desire to untie the mutually beneficial trade between the United States and the Chinese government. However, she expressed a severe warning against overcapacity production. Yellen wants a “healthy economic relationship with China” moving forward.
Chinese officials pushed back, expressing “grave concerns” over the president’s restrictions on trade and investment. Chinese President Xi Jinping claimed that the Chinese production rate was in line with Chinese goals and concluded that he did not feel pressure to “bend to outside will.”
While the talks concluded peacefully, it remains to be seen how effective Yellen’s warnings against Chinese production will be.
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About the author: Jess Henley began his career in client relations for a large manufacturer in Huntsville, Alabama. With several years of leadership under his belt, Jess made the leap to brand communications with Bizwrite, LLC. As a senior copywriter, Jess crafts compelling marketing and PR content with a particular emphasis on global energy markets and professional services.
