U.S. Treasury Secretary Janet Yellen said Wednesday that Chinese subsidies for clean energy industries create unfair competition that “hurts American firms and workers, as well as firms and workers around the world.”
Yellen said that during a visit she has scheduled to China, she intends to warn China its national underwriting for energy and other companies is creating oversupply and market distortion, among other problems.
"I intend to talk to the Chinese when I visit about overcapacity in some of these industries, and make sure that they understand the undesirable impact that this is having — flooding the market with cheap goods — on the United States, but also in many of our closest allies," Yellen said in a speech in Norcross, Georgia.
Yellen said she believes those subsidies will enable China to flood the markets for solar panels, electric vehicle parts and lithium-ion batteries, thus distorting production in other economies and global prices.
"I will convey my belief that excess capacity poses risks not only to American workers and firms and to the global economy, but also productivity and growth in the Chinese economy, as China itself acknowledged in its National People's Congress this month," Yellen said. "And I will press my Chinese counterparts to take necessary steps to address this issue."
Yellen is set for meetings in China in April, according to Politico. The Treasury has not yet confirmed her itinerary.
The secretary visited Georgia to see a newly reopened solar cell manufacturing plant, which according to the Treasury closed in 2017 because of competition from factories in China. It is reopening now, though, after tax credits in the 2022 Inflation Reduction Act fueled increased anticipated demand for solar panels.
On Tuesday, China filed a complaint against the U.S. at the World Trade Organization, arguing the U.S.’s requirements for electric vehicle subsidies are discriminatory. Chinese officials did not comment on what prompted the decision.
Yellen said she hopes to have a “constructive” dialogue with Chinese officials about subsidies and oversupply issues. She said outreach to businesspeople and governments around the world had prompted her to issue this warning.
"These are concerns that I increasingly hear from government counterparts in industrialized countries and emerging markets, as well as from the business community globally," Yellen said.
Some information for this report came from Reuters and The Associated Press.
