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US-China relations
EconomyGlobal Economy

China’s EV sector a live wire for US, with war of words over excess capacity casting shadow over Janet Yellen visit

  • China’s industrial overcapacity, particularly in electric vehicles, is likely to be top of mind for US Treasury Secretary Janet Yellen on coming visit
  • Recent policy moves suggest further US action to limit Chinese imports as two countries hit out at one another for perceived discrimination

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US Treasury Secretary Janet Yellen is likely to bring up China’s excess capacity in industries like electric vehicles and lithium batteries during her upcoming visit. Photo: Reuters
Kandy Wong

United States Treasury Secretary Janet Yellen is expected to consult American companies on China’s industrial overcapacity, particularly in solar power and electric vehicles (EVs), at a planned meeting during her trip to China next week – a discussion that is likely to inform the tone of subsequent talks with her counterparts in Beijing, as both sides have deployed heated rhetoric on the issue.

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The town hall-style meeting will last for one and a half hours in the early afternoon of April 5 according to information obtained by the Post, twice as long as the 45 minutes previously reported. The gathering is tentatively set to take place in the southern metropolis of Guangzhou, at the Art Institute of the Orient on the city’s Shamian Island.
Yellen’s trip comes months ahead of November’s US presidential election, when bilateral tensions are on the rise. Overcapacity appears to be a new battleground in the broader conflict – Washington has taken action to curb Chinese EV imports, and Beijing recently lodged a complaint to the World Trade Organization against what it termed “discriminatory” subsidies designed to exclude its manufacturers.

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Yellen hails ‘step forward’ in US-China ties despite national security concerns

Yellen hails ‘step forward’ in US-China ties despite national security concerns

On Wednesday, Yellen addressed the issue at a solar cell factory in Norcross, Georgia. “I will convey my belief that excess capacity poses risks not only to American workers and firms and to the global economy, but also to productivity and growth in the Chinese economy.”

She pledged to “press my Chinese counterparts to take necessary steps to address this issue” and create a “level playing field” for American companies and workers.

After her Guangzhou sojourn, Yellen will head to Beijing to meet with high-ranking economic officials, most likely Vice-Premier He Lifeng, commerce minister Wang Wentao and central bank governor Pan Gongsheng.

China’s overcapacity has already wrecked too many industries in America over the past two decades
Scott Paul

Yellen, a former chair of the Federal Reserve, has many years of experience dealing with Chinese officials over her tenure in public office, including rounds of dialogue with former vice-premier Liu He on macroeconomic and financial issues.

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