U.S. Treasury Secretary Janet Yellen announced plans on Wednesday to address concerns with Chinese officials regarding their subsidies for clean energy sectors like solar panels and electric vehicles (EVs) during her forthcoming trip to China. Yellen aims to discuss the repercussions of China’s industrial strategies that contribute to market oversaturation with less expensive products, impacting both the U.S. and its allies adversely.
Yellen’s comments came during an MSNBC interview while she was in Georgia to tour a Suniva solar cell plant, which ceased operations in 2017 due to the influx of lower-cost, subsidized Chinese solar panels but is set to reopen, spurred by new demand from tax incentives for domestic clean energy production included in the 2022 Inflation Reduction Act.
In her prepared speech at the plant, Yellen intends to highlight the issue of China’s overproduction in the EV and lithium-ion battery sectors, mirroring past overcapacities in steel and aluminum production, which have skewed global markets and impacted employment in various economies.
While Politico mentioned Yellen’s expected travel to China in April, the Treasury Department has yet to confirm the details. During her visit, Yellen plans to emphasize the global and domestic risks posed by overcapacity, including potential impacts on productivity and growth within the Chinese economy itself, a concern China recognized during its National People’s Congress. She will urge her Chinese counterparts to adopt measures to mitigate these challenges.
