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U.S. Treasury Secretary\u00a0Janet Yellen<\/a>\u00a0said Saturday that upcoming U.S.-China talks will tackle a top Biden administration complaint that\u00a0Beijing\u2019s economic model<\/a>\u00a0and\u00a0trade practices<\/a>\u00a0put American companies and workers at an unfair competitive disadvantage.<\/p>\n \u201cI think the Chinese realize how concerned we are about the implications of their industrial strategy for the United States, for the potential to flood our markets with exports that make it difficult for American firms to compete,\u201d Yellen told reporters after\u00a0the announcement<\/a>\u00a0during her trip to China.<\/p>\n \u201cIt\u2019s not going to be solved in an afternoon or a month, but I think they have heard that this is an important issue to us,\u201d she said.<\/p>\n The two sides will hold \u201cintensive exchanges\u201d on more balanced economic growth, according to a U.S. statement issued after Yellen and Chinese Vice Premier He Lifeng held extended meetings over two days in the southern city of Guangzhou. They also agreed to start exchanges on combating money laundering. It was not immediately clear when and where the talks would take place.<\/p>\n Yellen, who arrived later in Beijing after starting her five-day visit in one of China\u2019s major industrial and export hubs, said the talks would create a structure to hear each other\u2019s views and try to address\u00a0American concerns<\/a>\u00a0about manufacturing overcapacity in China.<\/p>\n China\u2019s official Xinhua News Agency said the two sides had agreed to discuss a range of issues including balanced growth of the United States, China and the global economy as well as financial stability, sustainable finance and cooperation in countering money laundering.<\/p>\n Xinhua said China had responded fully on the issue of production capacity, but the report did not provide details. China also expressed grave concern over American trade and economic measures that restrict China, according to the agency.<\/p>\n Chinese government subsidies and other policy support have encouraged solar panel and\u00a0EV makers<\/a>\u00a0in China to invest in factories, building far more production capacity than the domestic market can absorb.<\/p>\n The massive scale of production has driven down costs and ignited price wars for green technologies, a boon for consumers and efforts to reduce global dependence on fossil fuels. But\u00a0Western governments<\/a>\u00a0fear that that capacity will flood their markets with low-priced exports, threatening American and European jobs.<\/p>\n \u201cIt\u2019s going to be critical to our bilateral relationship going forward and to China\u2019s relationship with other countries that are important, and this provides a structured way in which we can continue to listen to one another and see if we can find a way forward that will avoid conflict,\u201d Yellen told reporters.<\/p>\n The exchanges on balanced growth and money laundering will be held under the framework of existing economic and financial working groups that were set up after Yellen met He in July.<\/p>\n Yellen struck a positive note on joint efforts to address U.S. concerns about Chinese companies selling goods to Russia following its invasion of Ukraine.<\/p>\n \u201cWe think there\u2019s more to do, but I do see it as an area where we\u2019ve agreed to cooperate and we\u2019ve already seen some meaningful progress,\u201d she said.<\/p>\n Earlier state media coverage of her trip had characterized U.S. concerns about overcapacity as a possible pretext for tariffs. In a commentary published Friday night, Xinhua wrote that while Yellen\u2019s trip is a good sign that the world\u2019s two largest economies are maintaining communication, \u201ctalking up \u2018Chinese overcapacity\u2019 in the clean energy sector also smacks of creating a pretext for rolling out more protectionist policies to shield U.S. companies.\u201d<\/p>\n Yellen told reporters during an Alaska refueling stop en route to China that the U.S. \u201cwon\u2019t rule out\u201d tariffs to respond to China\u2019s heavily subsidized manufacturing of green energy products.<\/p>\n The U.S. has made efforts through legislation and executive orders to wean itself off certain Chinese technologies in order to build out its domestic manufacturing capabilities. Many members of the White House and Congress view the actions as important to maintaining national security.<\/p>\n The $280 billion\u00a0CHIPS and Science Act<\/a>\u00a0passed in 2022 aims to boost the semiconductor industry and scientific research in a bid to create more high-tech jobs in the United States and help it better compete with China. Additionally, last August, U.S. President Joe Biden\u00a0signed an executive order<\/a>\u00a0to block and regulate high-tech U.S.-based investments going toward China.<\/p>\n Yellen will hold meetings in Beijing with more senior officials and economists on Sunday and Monday.<\/p>\n ___<\/p>\n Moritsugu reported from Beijing.<\/p>\n<\/div>\n\nSubscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up<\/a> for free.<\/div>\n