US treasury official voices concerns over China's excess capacity, assures dollar dominance
U.S. Deputy Treasury Secretary Wally Adeyemo speaks during a joint news conference
Concerns about China's excess industrial capacity and its possible effects on the world economy were voiced by US Deputy Treasury Secretary Wally Adeyemo on Friday.
Despite this, Adeyemo reassured that China's current economic challenges are unlikely to impede US growth in the foreseeable future.
Adeyemo highlighted the issue of excess capacity originating from China, particularly in sectors like electric vehicles and solar panels, posing a threat to global markets.
He emphasised the need for fair competition and expressed confidence in US tariffs and tax incentives to maintain a level playing field for American firms.
According to Adeyemo, addressing the issue of excess capacity will be crucial for fostering fair competition globally.
He noted ongoing discussions with Chinese counterparts to ensure fair trade practices not only between the US and China but also with other nations worldwide.
US Treasury Secretary Janet Yellen is anticipated to address concerns regarding Chinese excess capacity during discussions at the Group of 20 finance ministers meeting in Sao Paulo, Brazil, next week.
In addition to discussing China's economic challenges, Adeyemo addressed the impact of US sanctions on the dollar's status as the world's reserve currency.
He noted that the importance of multilateral and targeted sanctions to maximise effectiveness while downplaying concerns over potential damage to the dollar's dominance.
Adeyemo also highlighted the significance of Biden administration policies, including investments in infrastructure, semiconductors, and clean energy technologies, in strengthening the attractiveness of the US as an investment destination.
He expressed confidence that as long as these policies are sustained, the dollar and America's financial system will continue to play a dominant role globally.
(With inputs from Reuters)