From overcapacity to TikTok, the topics discussed during Janet Yellen’s trip to China
BEIJING — US Treasury Secretary Janet Yellen and her team are leaving China and returning to Washington after trying to address the key issues of the day between the countries. Here’s a look at what she tried to accomplish, what was achieved, and where things stand for the world’s two largest economies:
Yellen said she wanted to enter the U.S.-China talks to address a key complaint by the Biden administration that Beijing’s economic model and business practices put U.S. companies and workers at an unfair competitive disadvantage through highly subsidized solar products, electric vehicles and lithium-ion batteries. at a loss and dominates the global market.
Chinese government subsidies and other policy support have pushed solar panel and electric car makers in China to invest in factories, building far more production capacity than the domestic market can absorb. She calls this overcapacity.
During the week of meetings, she spoke about the risks posed by one country maintaining almost all the production capacity in these industries, the threat this poses to other countries’ industries and how a huge rapid increase in exports from one country can have major consequences for the economy. the world economy.
Ultimately, the two sides agreed to hold “intensive exchanges” on more balanced economic growth, according to a US statement issued after Yellen and Chinese Vice Premier He Lifeng held extensive meetings over two days in the southern city of Guangzhou. It was not immediately clear when and where the talks would take place.
“It’s not going to be solved in an afternoon or a month, but I think they’ve heard that this is an important issue for us,” she said.
After several meetings, the US Treasury Department and the Chinese central bank agreed to work together to stop money laundering in their respective financial systems.
Nearly all the precursor chemicals needed to make the deadly substance fentanyl come to the US from China. The US says exchanging money laundering information related to fentanyl trafficking could help disrupt the flow of the precursor chemicals to Mexico and the US
“The Treasury Department is committed to using all our tools, including international cooperation, to counter this threat,” Yellen said in a speech announcing the group’s creation.
The new US-China cooperation will be part of the two countries’ economic working groups launched last September, with the first exchange taking place in the coming weeks.
Efforts in the US to ban social media app TikTok, owned by Chinese parent company ByteDance, were initially raised by the Chinese during US-China talks, a senior Treasury Department official told The Associated Press. The company has in the past promoted a data security restructuring plan called “Project Texas,” which it says provides adequate protection against national security concerns.
However, US lawmakers have made efforts to ban the app or force the Chinese company to divest its stake in the company, which the White House has supported. In China this week it was clear that there was little movement on this issue.
Yellen said at a news conference Monday that she supports the administration’s efforts to address national security issues related to sensitive personal data. “This is a legitimate concern,” she said.
“Many American social apps are not allowed to operate in China,” Yellen said. “We would like to find a way forward.”
On the second day of Yellen’s trip to China, the US and China announced an agreement to cooperate closely on issues related to financial stability, in that the US and Chinese financial regulators agreed to conduct a series of exercises that would simulate the failure of a major bank in both countries. of the two countries.
The goal is to determine how to coordinate if a bank failure occurs, with the aim of preventing catastrophic stress on the global financial system.
Yellen said several exercises have already taken place.
“I am pleased that we will hold upcoming discussions on operational resilience in the financial sector and on the financial stability implications of the insurance sector’s exposure to climate risks.
“Just as military leaders need a hotline in a crisis,” Yellen said, “US and Chinese financial regulators must be able to communicate to prevent financial tensions from spiraling into crises with enormous consequences for our citizens and the international community.”
Yellen has become something of a foodie celebrity in China since she ate mushrooms that can have psychedelic effects in Beijing last July. This trip was no different.
High-ranking Chinese officials brought up her celebrity before important meetings. Prime Minister Li Qiang noted in his opening speech that Yellen’s visit “indeed attracted a lot of attention in society,” with the media reporting on her trip and her eating habits. And social media was abuzz after her latest moves in Guangzhou and Beijing.
This time in Beijing, Yellen ate at Lao Chuan Ban, a popular restaurant in Sichuan. She also had lunch with Beijing Mayor Yin Yong at the Beijing International Hotel. On Monday evening, her last evening in China, Yellen visited Jing-A Brewing Co. in Beijing – co-founded by an American – where she ordered a Flying Fist IPA, a beer made with American hops.