New Delhi

US Treasury Secretary Janet Yellen concluded her four-day visit to China with a pivotal meeting at the central bank, voicing the need for Chinese leaders to address excess industrial capacity and stimulate domestic demand.

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Yellen's discussions highlighted concerns regarding China's rapidly increasing exports in green-energy sectors like electric vehicles (EVs), batteries, and solar panels, assisted by considerable state support.

These exports, she argued, risk destabilising international markets and jeopardising employment in the US and elsewhere.

During her stay, Yellen engaged in extensive dialogues with key Chinese officials, including Premier Li Qiang and Finance Minister Lan Foan, aiming to foster mutual understanding and alleviate tensions between the world's two largest economies.

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In these meetings, Yellen advocated for a market-oriented approach towards addressing production capacity issues, noting that sustained communication channels between the US and China would be necessary.

Despite Yellen's assertions, Chinese officials pushed back against allegations of excess capacity, advocating for a market-oriented perspective.

Premier Li said that it was important to refrain from politicising economic and trade matters, urging a global outlook on production capacity.

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Along with Yellen's diplomatic efforts, Chinese Commerce Minister Wang Wentao said that China was committed to innovation and market competition during discussions with Chinese EV manufacturers in Paris.

He dismissed claims of overcapacity in the EV sector, saying that the role of technological advancement and strong supply chains in driving China's rapid development would be vital.

(With inputs from Reuters)