Beijing's briefing on Janet Yellen's visit
Beijing's briefing on Janet Yellen's visit
Vice Finance Minister Liao Min elaborates on new consensus and outcomes, elaborates China's stance on industrial overcapacity where he cites two Bloomberg stories
The following is my English translation of the transcript of Vice Finance Minister Liao Min’s Monday, April 8 press briefing on U.S. Treasury Secretary Janet Yellen’s recent visit to China, sourced from the ministry’s website.
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April 8, 2024
Source: Ministry of Finance Press Office
On the afternoon of April 8, Vice Minister of Finance Liao Min briefed the media and answered questions regarding the visit of U.S. Treasury Secretary Janet Yellen to China.
Briefing
Good afternoon, everyone. Welcome to today's press briefing. To implement the important consensus reached during the meeting and calls between President Xi Jinping and President Biden, and as agreed upon by both China and the U.S., U.S. Treasury Secretary Janet Yellen visited China from April 4 to 9. Secretary Yellen is the first U.S. Cabinet member to visit China this year. During her visit, multilevel and multidisciplinary talks were held between the Chinese side and Secretary Yellen. I will now provide details on this matter.
On April 7, a member of the Standing Committee of the Political Bureau of the Communist Party of China (CPC) Central Committee and Premier of the State Council Li Qiang met with Secretary Yellen in Beijing. They exchanged in-depth views on China-U.S. relations, economic ties, and global challenges. From April 5 to 6, the co-leaders of the China-U.S. economic and trade talks, a member of the Political Bureau of the CPC Central Committee and Vice Premier He Lifeng, held several rounds of discussions with Secretary Yellen in Guangzhou. They engaged in in-depth, candid, pragmatic, and constructive communication regarding the macroeconomic situations of both countries and the world, addressing global challenges and concerns in the economic field. On April 7 and 8, China's Finance Minister Lan Fo'an and the Governor of the People's Bank of China, Pan Gongsheng, held separate talks with Secretary Yellen in Beijing to discuss the macroeconomic situations of both countries and financial and fiscal matters. During her stay, Yellen also met with Chinese political and academic figures. Here, I would like to focus on the discussions between Vice Premier He Lifeng and Secretary Yellen.
In the talks, the Chinese side emphasized the need to adhere to the three principles for China-U.S. relations proposed by President Xi Jinping: valuing peace, stability, and credibility. Efforts should be made to transform the "San Francisco Vision" into reality. Both sides agreed to implement the important consensus of the two heads of state, continuously strengthen communication and cooperation in economic and financial fields, strive to create a favorable environment for bilateral trade and investment activities of enterprises from both countries, and promote the healthy and stable development of China-U.S. economic relations.
Regarding the macroeconomic situation, the Chinese side provided an overview of China's economic situation and policies. China's economy has maintained healthy and sustainable growth. Last year, China's economy continued to recover well, achieving its main expected goals and leading major economies in growth rate, remaining the primary engine for global economic growth. These achievements were made while mitigating risks, promoting economic transformation, and upgrading. China is confident in maintaining a positive trend and achieving its annual growth target this year. China emphasized that reform and opening up are its national policies, with no pause in reforms and no stop in opening up. China is planning and implementing a series of major initiatives to deepen reforms comprehensively, actively resolving bottlenecks hindering the development of a new growth model. China insists on deepening supply-side structural reform and expanding effective demand in coordination, accelerating the construction of a unified domestic market, and continuously creating a market-oriented, law-based, and internationalized first-class business environment, providing broader development opportunities for enterprises from all countries, including the United States. The U.S. side introduced its macroeconomic situation, including the labor market, inflation, the financial system, and fiscal and monetary policies.
Regarding global challenges, both sides exchanged in-depth views on debt issues in developing countries, World Bank reform, governance reform of the International Monetary Fund, anti-money laundering, and counter-terrorism financing, agreeing to continue communication and cooperation on related issues in multilateral channels.
Concerning mutual concerns, both parties acknowledge that every country has legitimate needs to safeguard national security. However, the Chinese side stressed that the concept of "national security" should not be generalized or used as a pretext to disrupt normal trade and investment exchanges and supply chain stability between the two countries and globally. China expressed serious concerns about U.S. sanctions and restrictions on Chinese enterprises, additional tariffs on China, and investment restrictions, noting that these measures harm the legitimate rights and interests of Chinese businesses and people, and are also detrimental to the welfare of U.S. businesses and people. China welcomed the U.S. statement of not seeking decoupling from China and hoped the U.S. would take concrete actions to stop sanctioning and restricting Chinese enterprises. Regarding issues including overcapacity raised by the U.S. side, China provided a full response.
Regarding consensus and outcomes, both sides reaffirmed the three-point consensus reached during the San Francisco talks in November on "enhancing communication," "preventing decoupling," and "addressing common challenges." They also reached the following new consensus and outcomes:
Firstly, led by the finance ministries of both countries, to exchange views on balanced economic growth in China, the U.S., and globally within the framework of the China-U.S. Economic Working Group.
Secondly, led by the People's Bank of China and the U.S. Treasury, to continue exchanges on financial stability, sustainable finance, anti-money laundering, and other topics within the Financial Working Group framework.
Regarding the next steps, following the instructions of the co-leaders, the working-level teams of both sides will continue to implement the above consensus under the economic and financial working groups. The fourth meeting of both working groups is scheduled to be held in Washington, D.C., during the World Bank/International Monetary Fund Spring Meetings in mid-April.
This concludes my briefing for today. I am ready to answer your questions.
Q&A
Xinhua News Agency Reporter: We noticed that significant outcomes were achieved by both sides in the economic and financial fields during this exchange. Could you elaborate on the specific considerations of both parties?
Liao Min: Thank you for your question. As the world's two largest economies, deepening economic and financial policy communication, coordination, and mutually beneficial cooperation is of great importance for maintaining stability in both countries and the global economy and financial markets and promoting post-pandemic economic recovery and development. China has always adopted an open and active attitude towards this. After in-depth consultations and discussions between China and the U.S., important consensus was reached in the economic and financial fields.
In the economic field, bilaterally, both sides agreed to engage in in-depth discussions on topics related to balanced economic growth in both countries and globally, aligning with China's policy goals and practices for economic transformation and high-quality development. The economic and trade relations between China and the U.S. are complementary and fundamentally mutually beneficial, and both parties are willing to further strengthen exchanges and cooperation in the economic field, which is significant for stabilizing bilateral economic relations and enhancing the well-being of enterprises and people in both countries. Multilaterally, in the context of the global economy continuing to face high debt, high inflation, high interest rates, and low growth, with emerging markets and developing countries being significantly affected, as the world's two largest economies, China and the U.S. agreed to maintain communication in channels like G20 on issues such as debt treatment in developing countries and reform of international financial institutions, and to strengthen cooperation in addressing global challenges.
In the financial field, both sides agreed to continue exchanges and cooperation on financial stability, sustainable finance, anti-money laundering, and counter-terrorism financing. Deepening exchanges and cooperation between China and the U.S. in the financial working group and G20 on these topics sends a positive signal for collaboration in addressing global challenges and has significant practical implications for maintaining global financial stability and promoting green development.
Going forward, China is willing to work with the U.S. to transform the above consensus into practical cooperation outcomes under the economic and financial working groups, continuously contributing positive energy to the development of China-U.S. economic relations.
China Central Television Reporter: We noticed that Secretary Yellen expressed particular concern about overcapacity issues, including signs of overcapacity in emerging fields, during her participation in the American Chamber of Commerce event in Guangzhou. Could you elaborate on China's specific responses to this issue during the meetings and talks?
Liao Min: Thank you for your question. China attaches great importance to the issue of overcapacity and has provided comprehensive and rational responses during various meetings and talks with Secretary Yellen. In fact, there are divergences and disputes over this issue. For example, a Bloomberg article dated April 3 suggests that data analysis does not support the claim of overcapacity in emerging industries. China believes that:
Firstly, the issue of overcapacity should be viewed within the context of economic globalization, adhering to market economy principles and the laws of value. The so-called "overcapacity" is a manifestation of the market mechanism at work, and supply and demand balance is relative, with imbalance often being the norm. This can occur in any economy operating under a market economy system, including historical instances in the U.S. and other Western countries. Solutions to these issues primarily rely on market adjustments according to the law of value.
Secondly, the issue of overcapacity should be analyzed in conjunction with the global division of labor and international market conditions. Taking new energy vehicles as an example, according to the International Energy Agency's estimates, the global demand for new energy vehicles will reach 45 million units by 2030, 4.5 times that of 2022; the global demand for new photovoltaic installations will reach 820 gigawatts, approximately 4 times that of 2022. Current production capacities are far from meeting market demand, especially the potential demand from many developing countries for new energy products. China's new energy industry has experienced decades of rapid development, and its competitive advantages are rooted in China's vast market, complete industrial system, and abundant human resources, as well as significant investments in research and development and the relentless spirit of entrepreneurs. Companies have reduced production costs through technological innovation, making new energy products more economically accessible. China has made positive contributions to addressing climate change and achieving green development globally while meeting domestic demand and advancing dual carbon goals, and deserves objective evaluation.
Thirdly, trade protectionist measures do not help solve the problem of overcapacity. In response to the high enthusiasm for developing emerging industries in some regions, China will further coordinate and guide at the national level, fully respecting market economy laws, with clear policy directions. It is important to note that we firmly oppose certain developed economies' practice of "securitization" and escalating green protectionist measures, which are harmful to themselves and severely infringe upon the legitimate development rights and interests of Chinese enterprises. China will not stand idly by. In fact, trade protectionist measures have been common throughout history but do not help solve substantive issues. As another Bloomberg article dated April 3 pointed out, protectionist measures on U.S. steel industry over the past decade have not prevented job losses in the U.S. metal manufacturing industry, increased costs in other areas of the U.S. economy, and reduced industry competitiveness. Applying this policy to the new energy industry would further weaken the U.S.'s ability to address climate change.
China believes that, against the backdrop of technological advancements in the new energy industry driving deep adjustments in global production and supply chains, including China, many countries will face challenges in industrial transformation and labor force structure adjustment. We should view this phenomenon objectively and make pragmatic and rational policy choices. China is aware of the concerns of the U.S. and other relevant parties and is willing to strengthen communication and coordination with all parties. Based on adhering to market principles, we should rationally view and properly handle differences. The working groups will continue to maintain communication on this issue.
Secretary Janet Yellen went to the National School of Development, Peking University on Sunday, April 7, and engaged with some faculty members and students there.
Lu Feng, one of the professors Yellen met, had given a public talk on industrial overcapacity on March 13, made available yesterday in English in The East is Read, a sister newsletter.
Liao Min mentioned China is planning and implementing a series of major initiatives to deepen reforms comprehensively, something Chinese President Xi Jinping had said:
