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US Treasury Secretary Janet Yellen warned China’s leaders that the nation’s manufacturing power is a threat to global economic stability. Next week Washington has a chance to rally more countries to its cause.
Fresh off her return from Beijing, Yellen pivots to the spring meetings of the International Monetary Fund and the World Bank, when Washington hosts finance ministers and central bankers from around the world. That includes economic chiefs from the Group of Seven rich nations and the Group of 20, which includes big economies from the Global South.
With its dominant voice in all of those forums, the US is expected to try to align other countries across Europe, Asia and Latin America to voice concerns over China’s output and exports.
“The fact that Yellen has signaled this is an issue that the US is watching tells the Chinese there’s going to be something coming down the line” such as trade restrictions, said Inu Manak, a fellow for trade policy at the Council on Foreign Relations. “I would be surprised if this wasn’t brought up again next week.”
A US official, who asked not to be identified discussing internal deliberations, said the issue of overcapacity is a concern for many of China’s major trading partners and the department expects the issue to be discussed next week.
China’s