The United States will not accept that China floods the global market with artificially cheap Chinese exports and thereby undermines other countries' export businesses. This is the warning from US Treasury Secretary Janet Yellen, who visits the Chinese capital, Beijing, on Monday.
- We have seen this before. More than a decade ago, massive Chinese state subsidies led to cheap Chinese steel flooding the global market and decimating industries around the world and in the United States, says Janet Yellen.
She refers to the fact that companies outside of China - including in the United States - lost revenue because they could not compete with Chinese prices.
- I have made it clear that President Biden and I will not accept that situation again, says Yellen at a press conference.
Wants to end state subsidies
When goods are described as "artificially cheap", it is referred to that they are sold at prices so low that it is not really possible for producers to make a living. In other words, the selling price is so low in relation to production costs that there is no real profit from production without external support.
Janet Yellen has been visiting China for the past four days. This is the second time in nine months that the US Treasury Secretary has been to China, the world's second-largest economy. The US is the world's largest.
Officials from the US Treasury Department say that Yellen has not threatened to impose new tariffs on Chinese goods or other concrete measures that could curb imports of Chinese products.
According to Yellen, a short-term solution for both China and the US could be for China to ensure that Chinese consumers' demand for Chinese goods increases. This would reduce the Chinese losses that could result if China cuts state subsidies on export goods and exports then fall.
The US Treasury Secretary has discussed the issue of cheap Chinese goods with China's Premier, Li Qiang. She has also met with the country's Finance Minister, Lan Foan.
In addition, Yellen has met with the leadership of China's central bank and former Vice Premier Liu He.
/ritzau/Reuters
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