G7 to Address Responses to China’s Excess Industrial Capacity : Yellen

STRESA, Italy – U.S. Treasury Secretary Janet Yellen announced on Thursday that G7 finance ministers will discuss their concerns regarding China’s excess industrial capacity and potential responses to it. She emphasized that without policy changes in Beijing, their economies could be inundated with cheap Chinese goods.

“This week will be a key opportunity to discuss how China’s macroeconomic imbalances and industrial overcapacity can affect our economies,” Yellen stated during a news conference ahead of a Group of Seven finance meeting in Stresa, Italy. “We’ll also discuss our responses and the approaches that we’re taking to raise these concerns directly with China.”

Yellen had previously called for a strategic and united response from the U.S. and Europe to China’s overinvestment in key sectors such as electric vehicles, solar products, semiconductors, and steel. She stressed the importance of maintaining viable manufacturing industries on both sides of the Atlantic.

The G7 discussions will likely focus on developing coordinated strategies to address the economic impacts of China’s industrial policies, aiming to protect domestic industries from being undercut by the influx of low-cost Chinese goods.