Yellen's warning to China over industrial overcapacity: increasing global economic tensions

The US Treasury Secretary, Janet Yellen, issued a warning to China regarding the excess industrial capacity that is distorting the global economy. During a visit to Georgia, Yellen pointed out that excess capacity in sectors such as steel, aluminum, solar energy, electric vehicles, and lithium-ion batteries is affecting companies and workers not only in the United States but worldwide. China, which has dominated the global solar energy industry thanks to supportive policies for its domestic companies, has been criticized by the United States and the European Union. Both blocs have expressed concern about the alleged illegal financial support that Beijing may be providing to its industries, leading to the imposition of additional tariffs on Chinese products. While Yellen warns about China's industrial practices, President Xi Jinping has sought to court American companies in an attempt to restore confidence in the Chinese economy and maintain stable relations with the United States. In a meeting with American business leaders in Beijing, Xi emphasized the importance of finding common ground on important issues and setting aside differences on minor matters. However, tensions persist between the two powers, with China filing a complaint with the World Trade Organization over US subsidies for electric vehicles, and accusations of state-backed cyberattacks against politicians and businesses by Chinese hackers. Despite China's attempts to show openness to foreign companies, economic uncertainty and measures favoring local competitors have generated caution among global investors. The meeting between Xi and executives of major companies such as FedEx, Qualcomm, and Blackstone focused on maintaining commercial and investment ties despite geopolitical tensions. The relationship between the United States and China, crucial for the global economy, remains a topic of debate and negotiation amid economic and political challenges. The stability of this relationship is crucial for global growth and addressing the issues of excess industrial capacity affecting multiple sectors worldwide.