Yellen Urges Emerging Markets to Address China's Excess Industrial Capacity

U.S. Treasury Secretary Janet Yellen has called on emerging markets, including some G20 nations, to press China to amend its economic policies. Yellen highlighted concerns over China's overinvestment in manufacturing, which floods global markets with cheap goods, and urged China to boost consumer spending instead.

U.S. Treasury Secretary Janet Yellen on Friday urged emerging markets, including certain G20 nations, to push China to change its economic strategies. Yellen expressed concerns about China's overcapacity in industrial production impacting global markets with cheap goods.

In an interview with Reuters, Yellen stated that apprehensions regarding China's overinvestment in factories extend beyond the affluent G7 democracies, affecting nations like G20 host Brazil, which has responded by raising tariffs on Chinese steel and electric vehicles.

Yellen criticized China for ignoring international advice to stimulate its economy through consumer spending and demand for services. She argued that China's approach of heavily investing its GDP in advanced manufacturing, which results in a surplus of inexpensive goods, is unsustainable given the size of its economy.

(With inputs from agencies.)