Visiting Treasury Secretary Janet Yellen’s rhetoric about seeking to further stabilize economic and trade relations between the US and China has not gone over well with Chinese media. Small wonder, since the overtures came heavily doused in a new spin on the "China threat" narrative.
"Chinese overcapacity" is the new bogeyman peddled by Washington. Yellen mouthed this mantra repeatedly as she began her six-day visit to China on Thursday with a visit to Guangzhou, capital of southern China’s Guangdong province.
China’s "excess" production and export of energy technology, ranging from electric vehicles and semiconductors to solar panels are allegedly undermining the development of this very same sector in the US, Yellen claimed.
The remarks were ripped in the local press as aimed at undermining the domestic growth of the People's Republic of China (PRC). Instead of "fearmongering," Washington should focus better on promoting its own innovation and competitiveness, state news agency Xinhua stated.
Chinese editorials and the public on social media pointed to how the US was yet again "abusing the national security pretext to elbow aside leading Chinese high-tech and clean energy companies."
“Talking up ‘Chinese overcapacity’ in the clean energy sector also smacks of creating a pretext for rolling out more protectionist policies to shield US companies... After all, it is now known by the world that Washington will not hesitate to show its protectionist teeth under the guise of national security in areas where its supremacy is challenged,” the authors of a Xinhua report remarked.
A host of Chinese experts cited by local media outlets pointed out that the country's productive capacity is "determined by the global demand and the efficiency and market size of China." They added that Washington was trying "to contain China’s productive capacity to protect its backward capacity."
On social media, netizens mocked the US Treasury secretary's comments, noting that it was not China's excess capacity, but rather "US under capacity, or to be more precise, incapacity," that was the problem.
In an election year, the Biden administration is dealing with a multitude of problems at home, ranging from an outstanding national debt problem to declining manufacturing growth. Of late, the US has been is ramping up subsidies for domestic clean energy industries.
As Yellen met with Vice Premier He Lifeng and Guangdong province Governor Wang Weizhong in Guangzhou, she stated that, “Overcapacity isn’t a new problem, but it has intensified, and we’re seeing emerging risks in new sectors." At the same time, the Treasury secretary claimed the US was not adopting an “anti-China” policy.
“During her engagements in China, Secretary Yellen will advocate for American workers and businesses to ensure they are treated fairly, including by pressing Chinese counterparts on unfair trade practices and underscoring the global economic consequences of Chinese industrial overcapacity,” the website of US Department of the Treasury stated.
Ahead of her visit, Yellen delivered a message to Beijing while strolling around the Suniva solar energy plant in the US state of Georgia. Once closed, this manufacturer is among those being rejuvenated thanks to the US Inflation Reduction Act. The latter provides incentives for green energy manufacturers. It was there that Yellen warned China against flooding the global market with cheap green energy exports, because it “hurts American firms and workers, as well as firms and workers around the world.”
US Commerce Secretary Gina Raimondo added fuel to the fire during a speech at a national defense forum in December 2023, calling China "the biggest threat we've ever had." She threatened to "tighten" export controls against China "every day." Raimondo has already imposed restrictions on the sale of advanced chips and chipmaking tools to China, slamming US chip firms that try to continue to do business with China within the limits of the US government's bans.
In recent years, the US has taken many steps to crack down on China in critical technological fields, including semiconductors. The US-imposed restrictions on exports of semiconductors to China have been slammed by Beijing as "economic bullying" that violates market rules, disrupts trade order and deals "a blow to the stability of international production and supply chains."