GUANGZHOU, China: US Treasury Secretary Janet Yellen said on Friday (Apr 5) that China is too large to try to export its way to rapid growth and would benefit by reducing excess industrial capacity that is pressuring other economies.
Yellen said in remarks to an American Chamber of Commerce during a visit to China that she understands that Beijing’s direct and indirect government support for manufacturing is linked to domestic development objectives.
But she said this “is currently leading to production capacity that significantly exceeds China’s domestic demand, as well as what the global market can bear”.
Yellen’s comments underscored her main objective in talks later on Friday with Chinese Vice Premier He Lifeng – to point out the problems that China’s excess factory capacity and growing exports are causing abroad, fueling potential trade tensions.
Premier Li Qiang in March set an ambitious growth target of 5 per cent for 2024, fuelled in part by more investment in new high-technology sectors as China struggles to overcome a property crisis and weak consumer demand.
The International Monetary Fund currently forecasts China’s 2024 real GDP growth at 4.6 per cent, falling to 4.1 per cent in 2025.
Source: CNA
