Following her visit to China last July, U.S. Treasury Secretary Janet Yellen will begin her second visit to China.
According to foreign media on March 23, two US government sources said that Yellen plans to visit China in April. At the moment, Chinese officials have not made this announcement.
So what is Yellen's purpose for this visit to China?
Judging from Yellen's recent developments, she herself has hinted at related issues on many occasions, and we can find a lot of clues.
On March 27, local time, Yellen was interviewed by an American broadcasting company, during which she talked about the China issue and said that this visit to China would "warn" China, which attracted the attention of all sectors of society.
What exactly did Yellen say, and what will Yellen discuss with China during her second visit?
To summarize this interview, Yellen's argument can be roughly divided into three steps:
The first step is to point to China's industrial policy and hype that "China's overcapacity distorts the global economy";
The second step is to promote the help of the Inflation Reduction Act for local businesses;
The third step is to emphasize that the United States does not want to "decouple" from China economically.
Yellen said strongly in the interview: "There is no country in the world that subsidizes its primary or priority industries as heavily as China......"
In particular, Yellen singled out China's "new three": electric vehicles, batteries and solar energy.
The United States believes that China's move is aimed at global dominance – a major threat to American interests.
In this regard, Yellen claimed that she would issue a "warning" to China about the negative impact of this issue.
Among them, when referring to solar energy, Yellen gave the example of a solar cell manufacturing plant. On the day of the interview, Yellen visited the factory, during which she gave an aggressive speech.
She blamed China's new energy industry for "overcapacity" that would "disrupt global prices and hurt U.S. businesses and workers," which the United States feared.
Interestingly, as soon as this remark was reported, it was choked by netizens.
"It's like a weightlifter who doesn't train and complains that another lifter can lift more. ”
"At first it was said that China was not doing enough in terms of green energy, and now it is suddenly accusing them of doing too much. ”
"When the U.S. has a competitive advantage, it talks about a free market, and if it doesn't, it engages in protectionism. That's the rule. ”
It is worth mentioning that the factory Yellen visited earlier ended in bankruptcy because it could not compete with Chinese products.
Yellen said in an interview that the plant, which had been a successful U.S. manufacturer of solar products, had lost its competitiveness in the past because of China's excess capacity, and "we don't plan to let that happen again."
So, how can the United States prevent this from happening? It can be seen that in 2022, the Biden administration introduced the "Inflation Reduction Act" in the name of "responding to climate change" and "low-carbon environmental protection".
It is worth noting that the above-mentioned bankrupt American factory reopened this spring with the help of measures such as the Inflation Reduction Act.
In response, Yellen touted the success of the Inflation Reduction Act, saying that it would not only effectively address the United States' "concerns" about China's overcapacity, but also play a huge role in helping to build America's own renewable energy industry.
Frankly, this shows Yellen's two purposes:
First, further encircle China's new energy industry chain.
The Inflation Reduction Act (IRA) has strong protectionist overtones, including high subsidies for related industries such as electric vehicles, and measures to exclude products from WTO members such as China.
It is reported that the tax incentives for new energy vehicles in the United States this year are about five times that of last year, as high as 451 million US dollars.
In this regard, on March 26, the mainland filed a complaint with the WTO, arguing that the United States has discriminated against the "Inflation Reduction Act" on subsidies for new energy vehicles and other measures, undermining market order.
Frankly speaking, this is not only a blow to China's new energy industry chain, but also a heavy blow to US allies.
It can be seen that with the increasing impact of the bill on the market order, a subsidy war has started around the world.
France, Italy, Canada and other countries have also introduced similar preferential tax policies. For example, France introduced an incentive policy of 5,000 to 7,000 euros for the purchase of electric vehicles last year, and Italy introduced a subsidy policy of 390 million euros.
To some extent, the U.S. Inflation Reduction Act (IRA) has made countries more competitive in the clean energy vehicle industry chain.
Second, to get votes for Biden.
As we all know, the US presidential election in November is approaching, and Trump is very likely to win the election.
At this time, Yellen's promotion of the "Inflation Reduction Act" can help local companies undoubtedly wants to bring a positive impact on Biden's election results, which is also the convenience of Biden's election as the incumbent president.
It's just that, judging from the reactions of American netizens, Yellen's move may backfire. Of course, the Biden administration may also understand that so-called "decoupling" is neither realistic nor in its own interests.
Therefore, at the end of the interview, Yellen changed her tone and began to talk about it again, saying that the United States has no intention of "decoupling" from China.
When asked if she would retaliate against China, Yellen declined to say, saying only that "we want to see what can be done constructively."
Judging from the strong statements made before the visit, the threat is strong, and the two sides are likely to hold in-depth consultations on this issue this time, and we will wait and see what the outcome will be and whether Yellen's goal can be achieved.