Yellen: Emerging markets share concerns on China’s excess factory capacity
2024.07.26 19:55
By David Lawder
RIO DE JANEIRO (Reuters) – U.S. Treasury Secretary Janet Yellen said on Friday that emerging markets, including some G20 countries, share her concerns about China’s excess industrial capacity and should press Beijing to change its economic model.
THE TAKE:
Yellen told Reuters in an interview that the concerns about China overinvesting in factories and flooding the world with cheap goods extends well beyond the wealthy G7 democracies to countries including G20 host Brazil, which has raised tariffs on Chinese steel and electric vehicles.
Yellen said that China is not taking advice from other countries and the International Monetary Fund to revive its economy with measures to increase consumer spending and demand for services.
Instead, Beijing was channeling too much of its GDP into investment in advanced manufacturing that is flooding the world with cheap Chinese goods, adding that China’s economy was now too large to grow through that model.
KEY QUOTE:
“There are a lot of countries around the world that are not willing to say, “Well, China, you want to dominate manufacturing, so all of our manufacturing sectors can just go out of business because you want to be the world’s factory. We’re not willing to do that,'” Yellen said. “And that’s the fundamental thing that unites us, and that should be a message that we’re sending.”
