FX.co ★ Janet Yellen: China distorts global economy

US Treasury Secretary Janet Yellen is planning a visit to Beijing in the coming weeks. It will be her second visit since July 2023. The new high-level talks will take place at the peak of the presidential race in the US and are aimed at “frank and substantive discussions”. The Treasury did not share details of her travel itinerary and meeting agenda but she intends to negotiate face-to-face with the senior leadership. The interaction with China is high on the agenda of the White House. Therefore, Janet Yellen sustains Washington’s efforts to “responsibly manage” economic relationships, including fair trade, greater transparency on Beijing’s “foreign exchange practices,” industrial espionage, and other thorny issues.

Biden’s administration is concerned that Beijing’s efforts to jumpstart its limping economy will trigger a flood of low-priced exports that could destabilize global markets, Treasury’s Under Secretary of International Affairs Jay Shambaugh said recently.

Janet Yellen also warned about China’s ramped-up production of electric vehicles, solar panels, and lithium-ion batteries. No doubt, Beijing is eager to grab the lion’s share in these new industries on a global scale. She calls it unfair competition that “distorts global prices” and “hurts American firms and workers, as well as firms and workers around the world.”