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Opinion | Amid titanic US-China clash, Europe must make its own plans quickly
- While the US and China settle in for a drawn-out economic war, Europe and its industries are unlikely to be able to afford the luxury of toughing it out
- Simply put, China makes the goods and America makes the dollars – where does that leave Europe?
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US Treasury Secretary Janet Yellen recently visited China, her second trip in less than a year, amid US complaints about China’s overcapacity. This latest narrative is neither unusual nor surprising given the gathered pace of Washington’s bipartisan China bashing, which began under the previous Trump administration.
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Last month, Admiral John Aquilino, the outgoing commander of US forces in the Indo-Pacific, told the House Armed Services Committee that China was part of a group of countries that he warned was a nascent “axis of evil”.
Yellen, a long-time advocate of free and open trade, has changed her mind about Chinese exports, according to a Wall Street Journal article published on the same day she arrived in Guangzhou to kick off her China visit.
She is quoted as saying she “grew up with the view: If people send you cheap goods, you should send a thank-you note” and “that’s what standard economics basically says”. But now, she says, “I would never ever again say, ‘Send a thank-you note’”.
She sees in China’s “cheap goods” as “a problem we have to remedy” and, in an earlier interview, warned that “China’s overcapacity distorts global prices and production”.
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Beijing begs to differ, viewing this as yet another demonstration of America’s determination to keep China down when the country is making breakthroughs in chip-making – despite a US embargo on national security grounds – and solidifying its dominance in the production and export of solar panels, lithium batteries and electric vehicles (EVs).
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