US draws red line for China, notes Chinese disinflation export surge
Solar Panels being installed in Pakistan (Image credit X @AmbXieFeng)
Janet Yellen draws red line for China
By Manish Anand
New Delhi, April 9: The US Treasury Secretary Janet Yellen told her Chinese hosts that the decoupling is a theme of the past. Yet, she has drawn a red line to China as Beijing beefs up ties with Russia.
Yellen visit to China was set in the backdrop of Washington recalibrating relations with Beijing. Also, China’s export of disinflation set the backdrop to Yellen’s visit to Beijing.
She has been learnt to have told her hosts that there exists a red line in the bilateral relations. Russian Foreign Minister Sergei Lavrov too was in China.
Yellen underlined that enhanced Chinese military support to Russia could invite sanctions. She reportedly hinted that the US can impose sanctions against Chinese banks if the red line is breached.
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The US Treasury Secretary was warmly received by the Chinese deputy premier He Lifeng. She told He that the US is not seeking to decouple with China.
“During conversations this week, I underscored again that the United States does not seek to decouple from China. Our two economies are deeply integrated, and a wholesale separation would be disastrous for both of our economies,” Yellen said in a statement after her meeting with Ha.
Yellen’s visit had invited a closer global scrutiny. The US is seen sending mixed signals in its relations with China. The US, Japan, Australia, and the Philippines held a joint naval exercise in the South China Sea.
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“Secretary Yellen is headed to Beijing with a warning about its efforts to dump subsidized overcapacity on the workers of the world — a new twist on an old communist battle cry,” wrote the US ambassador to Japan, Rahm Emanuel, in a post on X, formerly Twitter.
He underlined that “from India to Brazil, EU to Vietnam, countries are all taking note and action to protect their economies”. Emanuel set the backdrop to Yellen’s visit to China.
“No one is trying to contain China. But they are taking lessons from COVID about the need to protect themselves from China’s number one export of late — its own domestic challenges,” added Emanuel.
The Chinese ambassador Xie Feng has countered the claims of China exporting disinflation. “The issue (industrial capacity of China) should be viewed within the context of economic globalization, upholding the principles of market economy and the law of value,” said Xie in a posy on X.
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The Chinese ambassador stressed: “The so-called overcapacity is the manifestation of the market mechanism that plays its role. The supply-demand balance is relative, with imbalance often being the norm. Solving these issues primarily relies on market adjustments according to the law of value.”
He also argued that the issue should be “analyzed in light of both the global division of labor and the real situation of the global market”. “The current production capacity is far from meeting the market demand, especially the potential demand for new energy products in many developing countries,” added Xie.
Yellen in the statement noted that the US “priorities include protecting our national security, advancing a healthy economic relationship with a level playing field for American workers and firms, and cooperating on global challenges”.
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“This progress matters. Given the size of our economies, the U.S.-China economic relationship is among the most important bilateral economic relationships in the world. And it matters deeply for American workers and firms,” she added.
Xie on the other hand maintained the dismissive stance of China on the apprehensions of Beijing flooding the global markets with cheap goods. “Over the decades, Chinese enterprises have reduced production costs through technological innovation and improved the affordability of new energy products. So apart from meeting its own carbon emission goals, China has also made positive contributions to the global response to climate change and green development, which should be objectively evaluated,” added Xie.
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