During her recent visit to China, United States Treasury Secretary Janet Yellen raised concerns about the significant subsidies provided by Beijing to its industries. The subsidies could result in excess production capacity, leading to potential economic instability globally.

Yellen emphasized that the direct and indirect aid from the Chinese government may cause domestic production levels to exceed demand, thereby flooding international markets with goods. This situation poses a threat to the resilience of the global economy by concentrating supply chains and enabling excessive exports at low prices.

The worries expressed by Yellen align with concerns within the Biden administration regarding China's dominance in critical sectors like electric vehicles and green energies. The administration aims to promote domestic production in these areas, turning it into a key reelection campaign point for President Biden.

Experts suggest that the Biden administration could take proactive steps to prevent future issues arising from Chinese overcapacity. However, such actions might provoke a negative response from Beijing, leading to further tensions between the two countries.

Despite existing tensions, both China and the US show willingness to engage in dialogue, as evidenced by Yellen's visit to China for the second time in less than a year. Discussions between high-level officials from both sides are expected to address various contentious topics, including American restrictions on China and Beijing's economic support to Moscow.

In conclusion, the subsidies provided by China to its industries pose a significant challenge to the global economy. To safeguard the competitiveness of American companies and maintain stability in international markets, the US must strike a balance between a firm stance and constructive dialogue with Beijing. However, the persistence of Chinese subsidy practices raises concerns about the potential for economic conflicts in Sino-American relations.