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Janet Yellen Voices Concern About EV Overproduction to China’s Vice Premier

U.S. Treasury Secretary Janet Yellen told China’s Vice Premier He Lifeng on Friday that the two countries should closely communicate on industrial overcapacity and economic actions related to national security as among issues of concern.

Yellen’s remark at the opening of the meeting with He, China’s economic policy chief, in Guangzhou, southern China, comes as she has expressed concerns about overproduction of Chinese electric vehicles that are flooding the global market, amid intensifying rivalry between the two nations.

“It also remains crucial for the two largest economies to seek progress on global challenges like climate change…and to closely communicate on issues of concern such as (industrial) overcapacity and national security-related economic actions,” Yellen said. “It is what the world and our citizens expect of us.

Chinese Vice Premier He Lifeng (R) shakes hands with U.S. Treasury Secretary Janet Yellen in Guangzhou, China, on April 5, 2024.

The treasury secretary also said the United States is seeking “healthy economic” relations, emphasizing that such ties “must provide a level playing field for firms and workers in both countries.”

The Chinese government’s support for domestic EV makers has helped them to become dominant in the world electric car market. China has reportedly admitted having excessive EV production capacity.

He said at the meeting that both sides need to properly respond to key concerns in bilateral economic relationship. The vice premier also expressed hope that an investment environment that will benefit companies of the two countries will be created, according to Hong Kong media.

Chinese Vice Premier He Lifeng (far R) holds talks with U.S. Treasury Secretary Janet Yellen (far L) in Guangzhou, China, on April 5, 2024.

Prior to Yellen’s China visit, Foreign Ministry spokesman Wang Wenbin said at a press conference Wednesday the recent increase in China’s EV, lithium batteries and photovoltaic products exports is “a result of international division of labor and market demand” and has “contributed to the green development of the world.”

Yellen, who arrived in Guangzhou on Thursday on a six-day visit to the country, will hold a second round of talks with He on Saturday and meet Chinese Premier Li Qiang in Beijing on Sunday, according to the Treasury Department. She is slated to meet People’s Bank of China Governor Pan Gongsheng on Monday.

Yellen and He previously held talks in San Francisco last November. Yellen visited China in July last year for the first time after assuming the treasury secretary post in 2021.