On January 10, 2025, U.S. Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng engaged in a virtual meeting that highlighted the intensifying economic war between the two nations. During this discussion, Yellen warned China of 'significant consequences' for its support of Russia amid the ongoing conflict in Ukraine. She accused China of employing 'non-market policies' that contribute to excess industrial capacity, which she claims harms American businesses [52c2a2ac].
Yellen's comments come in the wake of accusations that China was involved in a cyber attack on the U.S. Treasury system in December, a claim that has been met with skepticism by analysts who question the evidence presented. China has categorically denied these allegations, labeling them as 'groundless' [52c2a2ac].
The meeting also addressed concerns regarding China's surplus in electric vehicles and clean energy products, which Yellen argued undermines U.S. competitiveness in these emerging markets. In response, the U.S. is investigating potential national security threats posed by Chinese smart cars, further complicating the economic landscape [52c2a2ac].
Yellen's previous visit to China in April aimed to tackle issues related to industrial policy and to encourage China to reduce its production capacities. She expressed particular concern about the potential flooding of the U.S. market with low-cost Chinese goods, which could exacerbate existing trade imbalances [52c2a2ac].
In a broader context, the economic conflict between the U.S. and China continues to escalate, with both sides exchanging criticisms. Chinese Foreign Ministry spokesperson Mao Ning has condemned U.S. attacks on China-Russia relations, indicating that geopolitical tensions are intertwined with economic disputes [52c2a2ac].
This ongoing dialogue between Yellen and He Lifeng reflects a critical moment in U.S.-China relations, as both nations navigate the complexities of trade, security, and international diplomacy amidst a politically charged environment [5f0700c1].
