Yellen Warns China on Exports and Russia Support

Treasury Secretary Janet L. Yellen confronted her Chinese counterpart about China’s surging exports of inexpensive electric vehicles and other green energy goods, saying that they were a threat to American jobs and urging Beijing to scale back its industrial strategy, the U.S. government has said.

Ms. Yellen also warned her counterpart, Vice Premier He Lifeng, that Chinese companies could face “significant consequences” if they provided material support for Russia’s war on Ukraine, according to a Treasury Department summary released on Saturday of two days of talks in the southern city of Guangzhou.

The meetings on Friday and Saturday were an effort by the world’s two largest economies to address trade and geopolitical disputes as the countries try to steady a relationship that hit a low last year.

The U.S. and China agreed to hold additional talks in the future about curbing international money laundering and fostering “balanced growth.” The latter is aimed partly at addressing concerns that China’s focus on factory production to bolster its sputtering economy has resulted in a glut of exports that is distorting global markets.

The surge of heavily subsidized green technology exports from China has been a focus of Ms. Yellen’s second trip as Treasury secretary to the country. Cheap Chinese electric vehicles, batteries and solar panels are of particular concern to the Biden administration, which has been investing in those sectors at home.

“I think the Chinese realize how concerned we are about the implications of their industrial strategy for the United States, for the potential to flood our markets with exports that make it difficult for American firms to compete,” Ms. Yellen told reporters after the meetings.

Before her talks with the Chinese officials, Ms. Yellen met with American and European executives whose businesses are operating in China. She listened to their concerns about China’s treatment of foreign firms and discussed how the Chinese export push was playing out across the global economy.

Ms. Yellen received a warm welcome in Guangzhou, but China has been pushing back against the idea that its economic strategy poses a threat.

In a social media post on Saturday, Liu Pengyu, a spokesman for the Chinese Embassy in Washington, argued that Chinese exports were a public good.

“Globally, high-quality industrial capacity and new-quality productive forces are not excessive, but in dire scarcity,” Mr. Liu wrote. “How to ensure the world, especially developing countries, benefits from such capacity is a constant test for human conscience and ingenuity.”

After the conclusion of the talks on Saturday, the Chinese state-run news agency Xinhua reported that Chinese officials had expressed their own frustrations to Ms. Yellen about American economic strategy.

“China has expressed serious concern over the U.S. economic and trade restrictive measures against China, and responded fully on the issue of production capacity,” Xinhua said.

Ms. Yellen acknowledged that the issue was complicated for China. “It’s not going to be solved in an afternoon or a month,” she said.

Beyond economic issues, Ms. Yellen and Mr. He discussed Russia’s war in Ukraine and growing concern in the United States that Chinese companies were helping to support Moscow’s military. The Biden administration has already been imposing trade restrictions on Chinese companies that it has accused of violating U.S. sanctions.

“We have been clear with China that we see Russia as gaining support from goods that Chinese firms are supplying to Russia,” Ms. Yellen said.

She added that Mr. He had told her that China has a policy of not providing Russia with military support. She expressed optimism that the two sides could cooperate on the issue.

Ms. Yellen was traveling on Saturday afternoon from Guangzhou to Beijing, where she was scheduled to meet on Sunday with Premier Li Qiang and Yin Yong, Beijing’s mayor.

Siyi Zhao contributed reporting from Seoul.