Biden's Treasury pick takes stand against China trade abuses
The comments reflect an unusual area of common ground with outgoing president Donald Trump, who during his term unleashed on China an aggressive and costly trade war that imposed billions of dollars in punitive tariffs.
But Janet Yellen drew a line under key areas of difference, especially the Biden administration's commitment to work with US allies rather than going it alone, and to promote investments to make American firms and workers more competitive against Beijing.
Responding to questions from the Senate Finance Committee at her Tuesday confirmation hearing, Yellen called China "our most important strategic competitor."
She accused Beijing of "undercutting American companies" with a series of policies, including illegal subsidies, dumping of products, theft of intellectual property and barriers to US goods.
"We need to take on China's abusive unfair and illegal practices," she said, adding "we're prepared to use the full array of tools" to address those issues.
Speaking the day before Biden is due to take office, she also vowed to be watchful of the national security concerns over China's theft of "trade secrets" and "illegal efforts to acquire critical technology."
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However, unlike Trump, who pulled back from multilateral organizations and attacked the trade policies of US partners and adversaries alike, Yellen stressed that it will be important "to work with our allies" to combat the challenge posed by China.
Democrats have for years complained bitterly about the exodus of jobs and manufacturing to the Asian country. Trump, a Republican, doubled down on those complaints and won many workers' support.
Biden, a Democrat, similarly pledged to defend American workers and manufacturing, and Yellen said that would help fend off Beijing's economic challenge.
The United States needs to "make investments that allow us to compete with China... by investing in our infrastructure, investing in our people and creating a more competitive economy," she said.
Biden, whose campaign slogan was "Build Bank Better," is expected to soon propose a stimulus plan that includes massive infrastructure investments.
Trump, like other administrations before him, also accused China of keeping its currency artificially low as a way to make its products cheaper and gain a trade advantage, and Yellen repeated the opposition to that practice.
The US dollar "should be determined by markets," Yellen said, and "if confirmed, I will work to implement the President-elect's promise to oppose any and all attempts by foreign countries to artificially manipulate currency values to gain an unfair advantage in trade."
She also told senators that global digital tax negotiations under the auspices of the Organisation for Economic Cooperation and Development (OECD) are important for Washington to levy taxes on corporations that have moved their headquarters overseas.
"It would enable us to collect a fair share from corporations, while maintaining the competitiveness of our businesses and diminish the incentives that American companies now have to offshore activities," Yellen said.