Financial Services Association, April 8. According to the Treasury Press Office, on the afternoon of April 8, Vice Treasury Secretary Liao Min briefed the media and answered questions about US Treasury Secretary Yellen's visit to China. The transcript of the briefing is as follows:

I. Situation introduction

Good afternoon everyone. Everyone is welcome to today's briefing. In order to implement the important agreement reached during the meeting and call between President Xi Jinping and President Biden, as agreed between China and the US, US Treasury Secretary Yellen visited China from April 4 to 9. Treasury Secretary Yellen was the first US cabinet member to visit China this year. During this period, China and Finance Minister Yellen held talks and exchanges at multiple levels and in various fields. Next, I'll introduce you to the relevant situation.

On April 7, Li Qiang, member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, met with Finance Minister Yellen in Beijing to have an in-depth exchange of views on topics such as Sino-US relations, Sino-US economic relations, and dealing with global challenges. From April 5 to 6, Chinese and US economic and trade leaders, He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, and Minister of Finance Yellen held multiple rounds of talks in Guangzhou to have in-depth, honest, pragmatic and constructive communication on the macroeconomic situation between the two countries and the world, dealing with global challenges, and economic concerns between the two sides. From April 7 to 8, Chinese Finance Minister Lan Foan and People's Bank of China Governor Pan Gongsheng held separate talks with Finance Minister Yellen in Beijing to exchange views on the macroeconomic situation and financial affairs between the two countries. While in China, Yellen also met with some Chinese politicians and academics. Here, I would like to focus on the talks between Vice Premier He Lifeng, the two leaders, and Finance Minister Yellen. The details are as follows:

During the talks, the Chinese side emphasized that the “San Francisco Vision” should be transformed into a “reality” through hard work in accordance with the three principles of “peace as the value, stability first, and faith as the foundation” proposed by President Xi Jinping. The two sides agreed to jointly implement the important consensus of the heads of state of the two countries, continue to strengthen communication and cooperation in the economic and financial fields, strive to create a favorable environment for two-way trade and investment activities of enterprises of the two countries, and promote the healthy and stable development of Sino-US economic relations.

On the macroeconomic situation. The Chinese side focused on briefing the US on China's economic situation and policies. The Chinese side notes that the Chinese economy has maintained healthy and sustainable growth. Last year, China's economy generally continued to pick up and improve. The main expected goals were successfully completed. The economic growth rate ranked among the world's major economies, and is still the biggest engine of global economic growth. These achievements were achieved on the basis of preventing and mitigating hidden risks and promoting economic transformation and upgrading. China's economy has continued to improve this year, and we are confident that it will achieve its annual growth target. The Chinese side emphasizes that reform and opening-up is China's national policy. China's reforms will not stop, and it is planning and implementing a series of major comprehensive and deepening reform measures, vigorously breaking the blockages that hinder the construction of a new development pattern, insisting on deepening supply-side structural reforms and focusing on expanding effective demand to work together to accelerate the construction of a unified domestic market, and continue to build a market-based, rule-of-law, and internationalized first-class business environment, which will provide enterprises from various countries, including American enterprises, with a wider development space. During the talks, the US side explained the macroeconomic situation in the US, including the labor market, inflation, financial system, and fiscal and monetary policies.

On dealing with global challenges. The two sides had an in-depth exchange of views on global challenges such as debt treatment for developing countries, World Bank reform, International Monetary Fund governance reform, anti-money laundering, and anti-terrorist financing, and agreed to continue to maintain communication and cooperation on related issues through multilateral channels.

Regarding the concerns of both parties. Both sides believe that every country has a reasonable need to maintain national security, but China emphasizes that the concept of “national security” should not be generalized to impact normal trade and investment exchanges between the two countries and the world and the stability of the production and supply chain on the grounds of so-called “diversification.” The Chinese side clearly expressed its serious concerns about measures such as US sanctions and restrictions on Chinese enterprises, imposing tariffs on China, and restrictions on investment in China, pointing out that these measures damage the legitimate rights and interests of Chinese enterprises and citizens, and are not conducive to the welfare of American companies and people. The Chinese side welcomes the US side's statement that it has no intention of seeking decoupling from China, and hopes that the US side will take concrete action to stop sanctions and restrictions on Chinese companies. In response to issues raised by the US side such as overcapacity, the Chinese side has fully responded.

On the outcome of the consensus. The two sides reaffirmed the three-point agreement on “strengthening communication,” “preventing decoupling,” and “addressing common challenges” reached at the San Francisco talks in November, and reached the following new consensus results: First, the two countries' ministries of finance took the lead to exchanges on balanced economic growth issues between the two countries and the global economy under the framework of the Sino-US Economic Working Group. Second, the People's Bank of China and the US Treasury Department take the lead in continuing exchanges on topics such as financial stability, sustainable finance, and anti-money laundering within the framework of the Financial Task Force.

Regarding the next steps. In accordance with the instructions of the leaders of the two sides, the working levels of the two sides will continue to push forward the implementation of the above agreement under the Economic and Financial Working Group. The fourth meetings of the two working groups are scheduled to be held separately during the World Bank/International Monetary Fund spring meeting in Washington, USA, in mid-April.

These are the main things I would like to report on today. Here, I would like to answer your questions.

II. Media Questions

Xinhua News Agency Reporter: We have noticed that both China and the US have achieved important results in the economic and financial fields this time. I would like to ask what specific considerations the parties have?

A: Thank you for your question. China and the US are the top two economies in the world. Deepening economic and financial policy communication, coordination and mutually beneficial cooperation is of great significance in maintaining economic and financial stability between the two countries and the global economy and promoting economic recovery and development after the epidemic. China has always maintained an open and positive attitude in this regard. Through in-depth discussions between China and the US, we finally reached an important consensus in the economic and financial fields.

In the economic field, under bilateral channels, the two sides agreed to conduct in-depth discussions on balanced growth between the two countries and the global economy, which is also in line with the policy goals and practices of China's economic transformation and high-quality development. The economies of China and the US are highly complementary. The essence of economic and trade relations is mutual benefit and win-win. Both sides are willing to further strengthen exchanges and cooperation in the economic field. This is of great significance in stabilizing bilateral economic relations and improving the welfare of enterprises and people of the two countries. Under multilateral channels: The current global economy continues to have high debt, high inflation, high interest rates, and low growth, and emerging markets and developing countries are greatly affected by spillover effects. As the top two economies in the world, China and the US agreed to continue to maintain communication under multilateral channels such as G20 on matters such as debt treatment for developing countries and reform of international financial institutions, and strengthen cooperation to jointly address global challenges.

In the financial sector, the two sides agreed to continue exchanges and cooperation on topics such as financial stability, sustainable finance, anti-money laundering, and anti-terrorist financing. In-depth exchanges and cooperation between China and the US on the above topics under multilateral and bilateral channels such as the Financial Working Group and the G20 are conducive to sending a positive signal of Sino-US cooperation to address global challenges, and will have important practical significance in maintaining global financial stability and promoting green transformation and development.

In the next step, China is ready to work with the US side to turn this consensus into practical cooperation results under the Economic and Financial Working Group, and continue to contribute positive energy to the development of Sino-US economic relations.

China Central Radio and Television Reporter: We noticed that Finance Minister Yellen pointed out during an event at the American Chamber of Commerce in China in Guangzhou that he is particularly concerned about overcapacity issues, including signs of overcapacity in emerging fields. I would like to ask what specific responses the Chinese side made to this issue during the meetings and talks?

A: Thank you for your question. The Chinese side attaches great importance to the issue of production capacity, and has responded fully and rationally to this during meetings and talks with Finance Minister Yellen at all levels. In fact, there are differences and disputes on this issue. For example, the latest Bloomberg article on April 3 argues that relevant data analysis does not support the claim that there is so-called “overcapacity” in emerging industries. The Chinese side believes that, in the context of economic globalization, production capacity issues should be viewed by adhering to market economy principles and value laws. The so-called “overcapacity” is a sign that the market mechanism works. The balance between supply and demand is relative. Imbalances are often the norm. They can occur in any economy with a market economy system. They have also occurred many times in the history of Western countries such as the US. The solution to these problems mainly depends on the market adjusting according to value laws.

Second, production capacity issues should be analyzed in the light of the global division of labor and international market conditions. Take new energy vehicles as an example. According to International Energy Agency estimates, global demand for new energy vehicles will reach 45 million units in 2030, 4.5 times that of 2022; global demand for new PV installations will reach 820 gigawatts, about 4 times that of 2022. Current production capacity is far from meeting market demand. In particular, many developing countries have huge potential demand for new energy products. China's new energy industry has experienced rapid development for decades. The competitive advantage it currently has is rooted in China's hyperscale market advantage, complete industrial system, and abundant human resources. It is also inseparable from the huge investment of enterprises in R&D and innovation and the unremitting spirit of entrepreneurs. Through technological innovation, enterprises have reduced production costs and improved the economic accessibility of new energy products. On the basis of meeting domestic needs and promoting the achievement of the dual-carbon target, China is also making positive contributions to the global response to climate change and achieving green development. This should be objectively evaluated.

Third, protectionist trade measures are not helpful in solving the production capacity problem. In response to the situation where some regions are highly motivated to develop emerging industries, China will further improve overall guidance at the national level on the premise of fully respecting the laws of the market economy. The relevant policy guidelines are open and clear. It should be emphasized that we are resolutely opposed to “pan-security” and upgrading green protectionist measures in some developed economies. This is harmful and unhelpful to them. Furthermore, it will seriously infringe on the legitimate development rights and interests of Chinese enterprises. China will not sit idly by and ignore it. In fact, protectionist trade measures have been common throughout history, but they have not helped resolve substantive issues. As another Bloomberg article on April 3 points out, the US has adopted protectionist steel measures in the past ten years, which have not stopped the decline in jobs in the US metal manufacturing industry. They have also increased costs in other areas of the US economy and reduced the competitiveness of the industry. If this policy is applied to the new energy industry, it will further weaken America's ability to cope with climate change.

The Chinese side believes that in the context of technological progress in the new energy industry driving deep adjustment of global production and supply chains, many countries, including China, will face the challenges of industrial transformation and labor restructuring. We should objectively view this phenomenon and make pragmatic and rational policy choices. China has taken note of the concerns of the United States and other parties concerned, and is willing to strengthen communication and coordination with all parties to rationally view and properly handle differences on the basis of adhering to the principle of marketization. The two sides will continue to maintain communication on this issue at the working group level.

editor/tolk