Yellen keeps an eye on China’s economic troubles, but no major impact on US economy.
NEW DELHI, India—Treasury Secretary Janet Yellen reassured the public on Friday that the United States is closely monitoring the economic situation in China. However, she emphasized that there is no need to panic as it is unlikely to have a significant impact on the United States.
Speaking at a press briefing during the G-20 summit in India, Ms. Yellen acknowledged that China is facing various economic challenges in the short and long term. She specifically highlighted the low consumer spending and persistent issues in the Chinese property sector.
“We’ve been monitoring carefully, including the less of a pickup in consumer spending than had been anticipated in the aftermath of the COVID restrictions, as well as long-standing issues with respect to the property sector and debt related to that,” Ms. Yellen said.
“And in the long term, we are also seeing negative population growth and a shrinking labor force in China. Therefore, we anticipate a slowdown in China’s growth over time,” Ms. Yellen explained.
Nevertheless, Ms. Yellen remains optimistic about China’s ability to address these challenges effectively. She believes that the direct impact on the United States will not be significant.
“While countries in East Asia may be more affected by the slowdown, we are closely monitoring the situation,” she added.
The world’s second-largest economy has struggled to recover since the end of its zero-COVID policy, with consumer spending showing no signs of improvement. This has left economists puzzled and raised concerns about the true state of China’s economy.
One major concern is the excessive debt accumulated by local governments to fund infrastructure projects. These projects, although impressive, have been deemed wasteful and have contributed to the current debt crisis. China is now faced with the challenge of managing this debt bubble, which is on the verge of bursting, posing a significant threat to economic stability.
Economists believe that these challenges in China could have ripple effects beyond its borders, particularly in emerging countries.
G-20 Summit to Begin Tomorrow
Leaders from the world’s richest and most powerful countries will gather in India’s capital, New Delhi, on Sept. 9–10 for the summit of the Group of 20. They will engage in discussions covering a wide range of issues, including climate change and economic security.
President Joe Biden will also be attending the summit and plans to address the Chinese regime’s ”coercive and unsustainable lending” practices.
However, Chinese leader Xi Jinping will not be present at the summit. Premier Li Qiang will represent Beijing instead.
While China has become the world’s largest creditor in recent years, its lending strategy under the Belt and Road Initiative has faced criticism for its lack of transparency.
“We believe that low- and middle-income countries should have access to high-standard, non-coercive lending options,” stated White House National Security Adviser Jake Sullivan during a press briefing on Sept. 5.
That’s why the United States is advocating for “fund
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