Protective tariffs, subsidies and import bans: Washington and Beijing are almost waging a trade war. Initial talks by US Treasury Secretary Yellen in China give hope for a little relaxation.
During her visit to China, US Treasury Secretary Janet Yellen gave a positive interim assessment of the negotiations to resolve trade disputes.
She called the talks with Chinese Deputy Prime Minister He Lifeng in Guangzhou “open and productive.” A further exchange on balanced economic growth in both countries was agreed.
“Aware of how worried we are”
“I think the Chinese are aware of how concerned we are about the impact of their industrial strategy on the United States, about the potential to flood our markets with exports that make it difficult for American companies to compete,” Yellen said.
She was primarily alluding to fears in the USA and Europe that China is subsidizing the construction of electric cars and solar modules and then flooding foreign markets with the excess capacity that has arisen. “I think you heard that this is an important issue for us. It will be crucial for our future bilateral relations and for China’s relations with other important countries.”
Chinese media reactions different
Chinese media rejected Yellen’s criticism of the overcapacity, describing it as a pretext for a protectionist US policy. Comments from the state-controlled media claimed that the US wanted to stifle economic growth in China.
Despite the differences, China’s Xinhua news agency reported that the talks were “open, pragmatic and constructive.” Chinese media also discussed the hope of reducing trade barriers. Experts, on the other hand, fear that, on the contrary, the US government’s increasing criticism of the Chinese economic model could lead to an increase in US tariffs on certain Chinese products.
Further talks planned in Beijing
Yellen will continue her trip to Beijing on Sunday and Monday. There she wants to hold talks with Prime Minister Li Qiang, Finance Minister Lan Foan and Central Bank President Pan Gongsheng. It is her second visit to China. There are a range of disagreements between Beijing and Washington, from trade and chip production to the state of human rights to Beijing’s territorial claims in the South China Sea.
Taiwan is also a source of conflict between the two states. Beijing views Taiwan as a breakaway province that should be reunited with the mainland, if necessary by military force. The US rejects forceful integration by China.