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US Treasury secretary Janet Yellen has warned China not to flood the world with cheap clean energy exports, saying they would distort global markets and harm workers.
Yellen delivered her message to Beijing from a solar energy manufacturer in Georgia on Wednesday, just days before her second trip to China as Treasury secretary.
The comments reflect continued concern in the Biden administration about China’s trade practices, which are likely to be a source of friction during Yellen’s visit despite recent efforts by both countries to stabilise relations.
“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 said China’s previous excess production of metals such as steel and aluminium had damaged the global economy — and warned that similar oversupply of clean energy products, including solar, electric vehicles and lithium-ion batteries, could also distort markets.
“China’s overcapacity distorts global prices and production patterns and hurts American firms and workers,” she said, adding that she had heard similar warnings “from government counterparts in industrialised countries and emerging markets, as well as from the business community globally”.
Yellen pressed Chinese officials to take the “necessary steps to address this issue”.
Senior US Treasury officials had already raised concerns with Chinese officials about overcapacity in clean energy products, including in talks with He Lifeng, the vice-premier responsible for China’s economy.
The warnings from Yellen come as the Biden administration tries to drive investment into its own domestic cleantech sector, offering huge tax breaks and subsidies to developers to build green energy manufacturing facilities in the US and break dependence on Chinese supply chains.
The subsidies included in President Joe Biden’s landmark Inflation Reduction Act have been criticised as protectionist by US allies. Clean energy groups have also warned that moves to restrict Chinese clean energy imports into the US will slow efforts to reduce emissions and make renewable technology more expensive.
Trade with China is poised to become a prominent issue in the 2024 presidential campaign pitting Biden against Donald Trump, his Republican predecessor.
Biden has kept many of the tariffs on Chinese imports that Trump imposed, but the former president has vowed to impose steeper levies on Chinese products if he wins a second term. This is expected to put pressure on Biden to take a tougher stance against Beijing on trade heading into the November vote.
Yellen said in her speech that Biden’s policies were already producing results, including in Georgia — a crucial swing state in the election.
She highlighted companies’ announcements of more than $675bn in clean energy and manufacturing investments since the start of the administration, saying that solar accounted for more than half of new power generation capacity added to the US grid last year.
Source: Economy - ft.com
