US Treasury Secretary Janet Yellen has met with China to discuss limiting surplus industrial capacity and addressing concerns about excessive spending.

She compared the situation to the American steel industry’s past suffering, where massive government support led to below-cost Chinese steel.

Yellen stated that finding answers to the excess capacity problem will take time in a recently established exchange forum.

She compared it to the suffering endured by the American steel industry in the past.

Yellen stated that Washington’s European allies, Japan, Mexico, the Philippines, and other emerging economies shared American concerns about excess industrial capacity.

China’s vice minister of finance, Liao Min, expressed “grave concern” over trade and investment restrictions imposed by Washington.

China’s ministry of industry and information technology claimed that trade restrictions on Chinese electric vehicles would be illegal under WTO regulations.

Yellen proposed that China change its growth model away from supply-side investments and take action to support households and increase consumer demand as a potential short-term fix.

She met with Finance Minister Lan Foan, Premier Li Qiang, former vice premier Liu He, and governor Pan Gongsheng of the People’s Bank of China.