Janet Yellen, the US Treasury Secretary, emphasized on Friday that the United States is closely monitoring the evolving economic situation in China. The deceleration in the world's second-largest economy has sparked concerns about the trajectory of global growth.
The apprehensions about the challenges faced by the Asian economic powerhouse have been amplified by the looming threat of a recession in Europe and surging inflation rates in several major economies. This has led to a substantial drop in the demand for Chinese exports.
Speaking to the press in New Delhi, just ahead of a two-day G20 summit, Yellen stated, "China confronts an array of global economic challenges, both immediate and long-term, which we have been vigilantly tracking." She further noted, "Nevertheless, China possesses a considerable policy leeway to tackle these obstacles."
China's President, Xi Jinping, will be conspicuously absent from the leaders' gathering during a time of escalating trade tensions and geopolitical frictions involving the United States and India, with whom it shares a protracted and contentious border.
Among the challenges faced by China, Yellen highlighted "a less pronounced surge in consumer spending post the Covid restrictions than initially projected, along with enduring concerns related to the property market and its associated debt."
India, the host of the G20 summit, surpassed its northern neighbor earlier this year to become the world's most populous nation. Yellen pointed out that China is experiencing a gradual reduction in its labor force.
Xi's nonattendance will have ramifications for Washington's endeavors to uphold the G20 as the paramount platform for global economic cooperation and for its drive to boost financial support to developing nations. This encompasses a proposal to augment the lending capacity of the World Bank and the International Monetary Fund for emerging economies by approximately $200 billion, positioning it as a more favorable alternative to Beijing's perceived "coercive" Belt and Road Initiative.
While expressing awareness of the potential risks to global growth, Yellen remarked that she has been "taken aback by the robustness of global economic expansion and the resilience exhibited by the worldwide economy." She added, "Despite the challenges and the impact on certain nations, overall, the global economy has demonstrated remarkable resilience."
Yellen also underscored that the "most significant adverse factor remains Russia's conflict with Ukraine."
