Yellen says China needs to slow down production, tackle money laundering in drug trade

April 8 (UPI) -- Treasury Secretary Janet Yellen on Monday gave a recap of her days-long trip to China which included comments on the influx of Chinese-made goods into American and global markets.

"President Biden and I are clear-eyed about the complexities of this relationship," Yellen said Monday at a press conference in Beijing on her second visit in nine months to the Asian country.

The treasury secretary said how China "is now simply too large for the rest of the world to absorb this enormous capacity," she said about the increase of cheaper, Chinese-made products into the global economy.

"When the global market is flooded by artificially cheap Chinese products, the viability of American and other foreign firms is put into question," she said about such things as electric vehicles, solar panels and lithium-ion batteries.

It comes amid ongoing and escalating diplomatic tensions between the two world powers.

But Yellen -- who leaves China Tuesday -- added that it is "undeniable" how "the U.S.-China relationship is on stronger footing today than this time last year," saying it "was not preordained."

"Our priorities include protecting our national security and that of our allies, advancing an objective of a healthy economic relationship with a level playing field for American workers and firms, and cooperating with China where both countries can and must," she said.

Yellen also said she "wouldn't rule out" future tariffs on green energy product exports, saying "we need to keep everything on the table."

"We want to work with the Chinese to see if we can find a solution," Yellen told CNBC. "I'm not thinking so much of export restrictions, as some shifts in their macroeconomic policy, and a reduction in the amount of, particularly local government subsidies, to firms."

The treasury secretary said the United States wants to "make sure that we're not driven out of business, and that our firms and workers have opportunities in these industries which will be important ones in our future."

Yellen spoke of some of the ways China financially props up its own economy.

"But some of the techniques that they use -- subsidizing their firms very heavily and then supporting them even when they're losing money...this is something that's unacceptable from the U.S. point of view," Yellen said while adding how "many" U.S. allies "feel the same way."

On Sunday, China's Premier Li Qiang said the United States should "view issues of industrial capacity objectively" and how China will "contribute significantly to the green and low-carbon transition worldwide."

In a government statement, Li said it is China's wish that the United States "uphold the basic norms of fair competition" and not "politicize or impose security concerns on trade."

On Saturday, the United States and China reached an agreement to combat money laundering and address economic imbalances after Yellen's in-person meetings with Chinese Vice Premier He Lifeng.

The news comes after Yellen had two days of "frank and productive discussions" with Chinese officials in Guangzhou, a city of 15.3 million northwest of Hong Kong on China's Pearl River.

In Beijing on Monday, Yellen said the Biden administration has "taken major steps to prevent illicit actors from exploiting the U.S. financial system and to hold them accountable when they do. But the United States cannot do it alone."

"Weaknesses in financial regulatory regimes abroad -- in China and other countries around the world -- also provide an avenue for financing for criminal organizations, human traffickers, drug traffickers, fraudsters, and other malicious actors that can harm Americans and our national security," she said.

The treasury's new joint cooperation and exchange on anti-money laundering -- with meetings set to begin "very soon" -- which was established during Yellen's trip, "will enable our countries to share best practices and information to clamp down on loopholes in our respective financial systems."

"Exchanging information on money laundering as it relates to trafficking of fentanyl and other illicit synthetic drugs can help us disrupt the flow of illicit narcotics, precursor chemicals, and equipment," Yellen said while noting the opioid crisis in the United States kills more than 150 Americans every day.

"Treasury is committed to using all of our tools, including international cooperation, to counter this threat," Yellen commented.