The United States and China have agreed to launch talks on "balanced growth" in their domestic economies as well as globally that will address U.S. concerns over China's excess manufacturing capacity of electric vehicles and other items, Treasury Secretary Janet Yellen said Saturday.
The world's two largest economies also decided to expand their cooperation against financial crimes, announcing the start of exchanges aimed at clamping down on the laundering of money, she said during her visit to the Asian country.
The agreements were reached following two days of talks through Saturday between Yellen and Chinese Vice Premier He Lifeng in Guangzhou, southern China, according to the U.S. Treasury Department.
Yellen reaffirmed with He the "important foundations" of the U.S.-China economic relationship, which the two sides agreed to in November, including the need to intensify communication and the shared objective of a healthy economic relationship that provides a level playing field, the department said in a press release.
On the launch of talks on balanced growth, Yellen said in a statement that they will facilitate a discussion around macroeconomic imbalances, citing her particular concerns about the impact of Chinese industrial overcapacity in sectors such as EVs and solar panels as a result of government support.
Criticizing China for exporting large quantities of goods at "artificially depressed prices," Yellen said, "I firmly believe a shift away from policies that drive overcapacity would benefit the American, Chinese, and global economies."
The issue of overcapacity in some Chinese manufacturing sectors has come to light as domestic demand remains sluggish in the Asian powerhouse with its economy slowing amid the prolonged property sector crisis.
China's official Xinhua News Agency said Saturday that He and Yellen had "candid, pragmatic and constructive discussions" on the macroeconomic situations of the two countries and the world. The report confirmed the launch of the two new talks on balanced growth and efforts to counter money laundering.
The Chinese side "expressed grave concern over U.S. economic and trade measures restricting China and responded fully to the issue of production capacity," Xinhua said without elaborating.
In a commentary Saturday, Xinhua said Washington has "grown increasingly agitated" over China's booming green industries and criticized the United States for "rehashing the old 'overcapacity' rhetoric and threatening to impose higher tariffs."
"Suppressing China's EV-related industries won't help America grow its own. Only cooperation can," the news agency said. In another commentary Friday, Xinhua also lashed out at Washington's "double standard" as Western nations have "embraced for centuries" a basic economic principle that surplus products find markets abroad.
"Instead of resorting to fear-mongering and protectionism, Washington should focus on fostering innovation and competitiveness within its own borders," the commentary said.
Among other topics, Yellen emphasized during her talks with He that Chinese companies must not provide material support for Moscow's war against Ukraine, including assistance to the Russian defense industrial base. She warned the firms will face significant consequences if they do so, according to the Treasury Department.
Yellen also underscored that the United States is not seeking to economically decouple from China, the department added.
Yellen and He previously held talks in San Francisco last November. Yellen visited China in July last year for the first time after assuming the treasury secretary post in 2021.
She is scheduled to hold talks with Chinese Premier Li Qiang, Finance Minister Lan Foan and People's Bank of China Governor Pan Gongsheng in Beijing before concluding her six-day visit on Tuesday.
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