US Treasury Secretary Janet Yellen to press China on green energy spending, subsidies that distort global market
American concerns over China's green energy spending binge will likely dominate the high-level talks between the two global powers in Beijing early next month.
Citing excess capacity in industries like solar, electric vehicles and lithium-ion batteries because of huge government subsidies, the problem will be "a key issue" in discussions with senior Chinese officials during her second trip to China in a year, US Treasury Secretary Janet Yellen will say in a speech on Wednesday afternoon.
"I will convey my belief that excess capacity poses risks not only to American workers and firms and to the global economy, but also to productivity and growth in the Chinese economy," she will say at a solar-cell factory in Georgia, according to prepared remarks released by the Treasury Department.
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She will pledge to "press my Chinese counterparts to take necessary steps to address this issue" to create a "level playing field" for American firms and workers.
Yellen will speak at a Suniva manufacturing facility in Norcross, Georgia. The plant was shut down in 2017, in part because of cheap imports into the US market.
But as a result of green investments under the Inflation Reduction Act, the factory is scheduled to reopen this year.
Signed into law by US President Joe Biden in 2022, the legislation directs nearly US$400 billion in federal funding and tax credits to clean energy over the next decade. Green vehicles with components from China, Russia or Iran are not eligible for the benefits.
China invested an estimated US$890 billion in clean-energy sectors in 2023, up 40 per cent year-on-year from 2022. It has also sought intervention from the World Trade Organization against what it calls Biden's "discriminatory" electric vehicle subsidy policies.
Amid growing tensions over competing industrial policy, efforts have been made to better communicate differences. Yellen's visit to Beijing last July led to the formation of new economic and financial working groups for "frank and substantive discussions" on major flashpoints.
Several other senior Biden administration officials travelled to China after Yellen, culminating with Biden's summit with President Xi Jinping in northern California in November.
In her first trip to China after Xi's meeting with Biden, Yellen will travel to Guangzhou and Beijing. She is expected to hold a 45-minute question and answer session to hear about the issues facing US firms in China.
Meanwhile, in order to woo back American investors amid a sluggish economy, Xi met with more than a dozen US CEOs and academics in Beijing on Wednesday.
Calling for the "better future" between the US and China, Xi said both sides "should help boost each other's developments".
This article originally appeared on the South China Morning Post (SCMP).
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