NEW DELHI, India—The United States is “carefully” monitoring China’s challenges, US Treasury Secretary Janet Yellen said Friday, as the slowdown in the world’s second largest economy raises concerns for global growth.
Many are worried about the Asian giant’s struggles, with the threat of recession in Europe and high inflation in many major economies contributing to a plunge in demand for Chinese goods.
“China faces a variety of both short and longer term global challenges, economic challenges that we’ve been monitoring carefully,” Yellen told reporters in New Delhi, ahead of a two-day G20 summit.
“That said, China has quite a bit of policy space to address these challenges,” she added.
China’s President Xi Jinping will miss the leaders’ meeting at a time of heightened trade and geopolitical tensions with the United States and India, with which it shares a long and disputed border.
China’s challenges included “less of a pick up in consumer spending that had been anticipated in the aftermath of the Covid restrictions, as well as long standing issues with respect to the property sector and… debt related to that”, she said.
G20 host India overtook its northern neighbor as the world’s most populous country earlier this year, and Yellen added that China’s “labor force is beginning to shrink”.
Xi’s absence will impact Washington’s bid to keep the G20 the main forum of global economic cooperation and its efforts towards a financing push for developing countries.
That includes a plan to increase World Bank and International Monetary Fund lending power for emerging nations by some $200 billion as a better alternative to Beijing’s “coercive” Belt and Road Initiative.
While “aware of the risks to global growth”, Yellen said she had “been surprised by the strength of global growth and how resilient the global economy has proven to be”.
“While there are risks and some countries that have certainly been affected, overall, the global economy has been resilient,” she added.
Yellen added that the “most important negative influence is Russia’s war on Ukraine”.
