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Avoid a new “Chinese syndrome”. Or rather, a new, serious shock coming from Beijing: which could be caused today at advanced levels of the economy, American and beyond, by unprecedented floods on global markets of low-cost technologies made in China for the energy transition. From electric cars to batteries and solar panels.
This is the main mission of Treasury Secretary Janet Yellen during her new Asian trip, five days between Guangzhou and Beijing for busy meetings with her counterparts. A hard-nosed Yellen, in short, on the occasion of her second visit to the country in nine months. Already during the flight that took her to China, she offered her new introduction: Washington, she said, intends to consider a range of actions to protect US industries seen as threatened by China, including barriers tariffs.
Protect the clean energy industry
«We are trying to grow industries for example in solar panels, batteries, electric vehicles. I do not exclude other ways to protect them” in the face of Chinese “enormous investments” in some of these sectors which create overproduction without adequate demand. “We fear the repercussions of Chinese subsidies to these industries in the United States and other countries.” Again: “We don’t want to be too dependent,” Yellen said, speaking to the Wall Street Journal and referring to the bet on new industrial policies pursued by the Biden administration. «They want to dominate the market. We won’t let them.”
Dove with claws
Yellen’s tone is noteworthy because she is considered among the doves, on trade and China, within the US government, usually among Beijing’s own favorite interlocutors. Now she lets a new skepticism and coldness shine through: «I grew up with the idea that if people send us cheap goods we should be grateful, a standard precept among economists. I would never say send thank you notes again.”
Again, protecting America’s vital interests has become crucial: “It’s a problem that needs to be remedied.” Yellen specified that she wants stability in relations with Beijing and that “we have deep economic relations with China and I don’t want to sacrifice them because they are advantageous for everyone”. No economic “decoupling”, no drastic separation, therefore. But she added that “we have real concerns about some of the things they do.”