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Yellen calls for level playing field

GUANGZHOU, China - U.S. Treasury Secretary Janet Yellen called on China on Friday to address manufacturing overcapacity that she said risks causing global economic dislocation, and to create a level playing field for American companies and workers.

Starting a five-day visit in one of China’s major industrial and export hubs, she raised what the U.S. considers to be unfair Chinese trade practices in talks with senior Chinese officials.

“The United States seeks a healthy economic relationship with China that benefits both sides,” she said ahead of a meeting with Chinese Vice Premier He Lifeng in the southern city of Guangzhou. “But a healthy relationship must provide a level playing field for firms and workers in both countries.”

Earlier, she said at an event hosted by the American Chamber of Commerce in China that there are “Chinese practices that are tilting the playing field away from American workers and firms.”

Lifeng didn’t get into specifics in his remarks before the media but said that both sides “need to properly respond to key concerns of the other side.”

High on Yellen’s list is the overcapacity issue. Chinese government subsidies and other policy support have encouraged solar panel and EV makers in China to invest in factories, building far more production capacity than the domestic market can absorb.

The massive scale of production has driven down costs and ignited price wars for green technologies, a boon for consumers and efforts to reduce global dependence on fossil fuels. But Western governments fear that that capacity will flood their markets with low-priced exports, threatening American and European jobs.

Yellen, the first Cabinet-level official to visit China since President Joe Biden met Chinese leader Xi Jinping last November, told the vice premier and the governor of Guangdong province in separate meetings that it is important for the U.S. and China to have open and direct communication on areas of disagreement.

“This includes the issue of China’s industrial overcapacity, which the United States and other countries are concerned can cause global spillovers,” she said during her meeting with the governor.

U.S. Treasury Secretary Janet Yellen, left, shakes hands with Wang Weizhong, deputy party secretary and governor of Guangdong prior to a meeting at the Baiyun International Conference Center (BICC) in southern China's Guangdong province, Friday, April 5, 2024. Yellen has arrived in China for five days of meetings in a country that's determined to avoid open conflict with the United States. (AP Photo/Andy Wong, Pool)
U.S. Treasury Secretary Janet Yellen, left meets with Wang Weizhong, deputy party secretary and governor of Guangdong, center at the Baiyun International Conference Center (BICC) in southern China's Guangdong province, Friday, April 5, 2024. Yellen has arrived in China for five days of meetings in a country that's determined to avoid open conflict with the United States. (AP Photo/Andy Wong, Pool)
U.S. Treasury Secretary Janet Yellen smiles at the Business Leaders Roundtable meeting at Baiyun International Conference Center (BICC) in southern China's Guangdong province, Friday, April 5, 2024. Yellen has arrived in China for five days of meetings in a country that's determined to avoid open conflict with the United States. (AP Photo/Andy Wong, Pool)
Treasury Secretary Janet Yellen, left, shakes hands with Jens Eskelund, president of the European Union Chamber of Commerce in China, as she arrives at the Business Leaders Roundtable meeting at Baiyun International Conference Center (BICC) in southern China's Guangdong province, Friday, April 5, 2024. Yellen has arrived in China for five days of meetings in a country that's determined to avoid open conflict with the United States. (AP Photo/Andy Wong, Pool)
U.S. Treasury Secretary Janet Yellen arrives at the Business Leaders Roundtable meeting at Baiyun International Conference Center (BICC) in southern China's Guangdong province, Friday, April 5, 2024. Yellen has arrived in China for five days of meetings in a country that's determined to avoid open conflict with the United States. (AP Photo/Andy Wong, Pool)
U.S. Treasury Secretary Janet Yellen, left meets with Wang Weizhong, deputy party secretary and governor of Guangdong, center, during a meeting at Baiyun International Conference Center (BICC) in southern China's Guangdong province, Friday, April 5, 2024. Yellen has arrived in China for five days of meetings in a country that's determined to avoid open conflict with the United States. (AP Photo/Andy Wong, Pool)
U.S. Treasury Secretary Janet Yellen, left meets with Wang Weizhong, deputy party secretary and governor of Guangdong, center at the Baiyun International Conference Center (BICC) in southern China's Guangdong province, Friday, April 5, 2024. Yellen has arrived in China for five days of meetings in a country that's determined to avoid open conflict with the United States. (AP Photo/Andy Wong, Pool)