Yellen spoke about the issue at length with Premier Li Qiang and also met Finance Minister Lan Foan on Sunday. She met People’s Bank of China (PBOC) governor Pan Gongsheng and former vice premier Liu He on Monday.
Treasury officials said the US and China were deepening co-operation on financial stability issues, with two more simulations of financial shocks scheduled after a recent exercise on dealing with the failure of a large bank.
The exercises have been developed by a US-China financial working group formed last year when Yellen first visited China to try to rebuild economic ties. Led by representatives of the US Treasury and the PBOC, it last met in Beijing in January.
PUSHBACK
China’s parliament, the National People’s Congress, said in March the government would take steps to curb industrial overcapacity.
But Beijing argues the recent focus by the United States and Europe on the risks to other economies from China’s excess capacity is misguided.
Chinese officials say the criticism understates innovation by their companies in key industries and overstates the importance of state support in driving their growth.
They also argue that tariffs or other trade curbs will deprive global consumers of green energy alternatives key to meeting global climate goals.
State news agency Xinhua quoted Li as saying the US should “refrain from turning economic and trade issues into political or security issues” and view the topic of production capacity from a “market-oriented and global perspective”.
Chinese Commerce Minister Wang Wentao voiced more pointed objections during a roundtable meeting with Chinese EV makers in Paris, saying US and European assertions of Chinese excess EV capacity were groundless.
“China’s electric vehicle companies rely on continuous technological innovation, perfect production and supply chain system and full market competition for rapid development, not relying on subsidies to gain competitive advantage,” Wang said during his trip to discuss a European Union anti-subsidy investigation.
Source: CNA
