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Janet Yellen Sounds the Alarm: China’s Green Energy Surge Could Destabilize Global Economy

Treasury Secretary Janet Yellen has voiced strong concerns over China’s aggressive industrial strategy in the green energy sector, cautioning that it could have destabilizing effects on the global economy. Scheduled to address these issues at the Suniva solar cell factory in Georgia, Yellen’s prepared remarks hint at a deep unease with China’s current trajectory in clean energy exports.

Yellen’s warnings, as per a New York Times report, center around China’s capacity to disrupt global markets with an inundation of cheap green energy products. This strategy, while propelling China’s own economic recovery and dominance in clean energy, risks sidelining American and global firms, leading to over-concentrated supply chains and undermining global economic resilience.

Echoing past industrial overextensions in sectors like steel and aluminum, China’s clean energy push is seen as a double-edged sword. While it contributes significantly to the nation’s GDP—accounting for 40% of its economic growth last year—it poses a threat to the competitive landscape of global markets.

The solar panel industry, for instance, has already felt the pinch, with prices halving due to an oversupply largely attributed to Chinese production. Europe, facing an influx of Chinese imports, has witnessed the closure of significant solar module production sites, forecasting a future where China might hold an 85% share in the expansion of solar-module manufacturing capacity by 2028.

Yellen’s remarks underscore a call for equitable competition, stressing the importance of a level playing field for American firms and workers. She plans to make overcapacity a focal point in future discussions with China, signaling a potential shift in how the U.S. addresses trade and economic policy with its largest competitor on the green energy front. This move not only aims to protect domestic industries but also to ensure the long-term sustainability and stability of global economic systems amidst a green transition.

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