U.S. Deputy Treasury Secretary Wally Adeyemo said on Friday that China faces a number of economic challenges, including the property sector and an aging population, but he does not see major spillovers to the U.S. economy outside of China’s excess manufacturing capacity.
“I am not concerned about the headwinds from China having a large impact on the US economy,” Adeyemo told a Council on Foreign Relations event in New York. “The thing that I am fundamentally concerned about from China is excess capacity coming from China and hitting the global economy.”
Adeyemo said that China’s heavily subsidized manufacturing capacity for electric vehicles, solar panels and other goods has followed industries such as steel and aluminum in production that exceeds domestic demand.
“Fundamentally that overcapacity is going to go somewhere,” he said, adding that U.S. tariffs and tax credits for EVs and their batteries will help keep Chinese EVs out…
