In a press briefing at the G-20 summit, Treasury Secretary Janet Yellen reassured Americans that China’s economic challenges will not have a significant impact on the United States. Yellen acknowledged that China is currently facing both short-term and long-term economic issues, including low consumer spending and problems in the property sector. She also pointed out that China’s population growth is turning negative and its labor force is shrinking, indicating a slowdown in growth over time. However, Yellen remains optimistic about China’s ability to address these challenges and believes that the direct impact on the US will be limited.
While China’s economy has not recovered significantly since ending its zero-COVID policy and consumer spending remains stagnant, Yellen believes that the slowdown will primarily affect countries in East Asia. Nevertheless, the US is closely monitoring the situation. One major concern is China’s massive debt, which poses a significant threat to economic stability. The country’s extensive infrastructure development projects, funded by expensive loans, have led to a debt bubble that Beijing is struggling to manage. Economists warn that these challenges could have repercussions beyond China, particularly for emerging countries.
Yellen Says US ‘Monitoring Carefully’ China’s Economic Woes but Sees No Significant Impact on US Economyhttps://t.co/xRAHMAmD9v
— Emel Akan (@mlakan) September 8, 2023
The article also highlights the upcoming G-20 summit in New Delhi, where world leaders, including President Joe Biden, will gather to discuss various issues, including economic security and climate change. Biden plans to address China’s “coercive and unsustainable lending” practices, while Chinese leader Xi Jinping will not be attending the summit. Instead, Premier Li Qiang will represent China. The US is advocating for high non-coercive lending options for low- and middle-income countries and is seeking additional funding for multilateral development banks like the World Bank. Yellen expects this funding to leverage around $25 billion in financing for low-income countries and is hopeful that other G-20 partners will join in this initiative.