US Government Warns of Economic Risks from China's Industrial Overcapacity

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The Biden administration expressed grave concerns about China’s industrial manufacturing overcapacity on Wednesday, pointing to its significant global spillovers. They warned that addressing these challenges might require taking defensive measures to protect American businesses and workers.

Under Secretary for International Affairs Jay Shambaugh highlighted that China’s macroeconomic imbalances and non-market policies pose risks to global economic resilience and the supply chain. The US, along with its allies, seeks to collectively address these issues.

Shambaugh noted that defensive actions against overcapacity or dumping are not anti-trade but necessary to safeguard economic interests. He urged China to take internal measures to mitigate these issues, emphasizing that the US would prefer cooperative solutions but is prepared to act unilaterally if needed.

(Disclaimer: With inputs from agencies.)