(March 27): US Treasury Secretary Janet Yellen said she plans to press China in an upcoming visit to the country on a ramp-up in its industrial capacity that’s distorting the global economy.

“China’s overcapacity distorts global prices and production patterns and hurts American firms and workers, as well as firms and workers around the world,” Yellen said in excerpts of remarks she’s set to deliver Wednesday on a visit to Georgia. “We have raised overcapacity in previous discussions with China and I plan to make it a key issue in discussions during my next trip there.”

Yellen is visiting Norcross, Georgia, to showcase the reopening of a US solar-cell manufacturing facility that shut in 2017 under the pressure of “cheap imports flooding the market.” China today dominates the global solar energy industry after years of policy support for its domestic companies.

China’s industrial-policy legacy “led to substantial overinvestment” in products including steel and aluminum, which aided that country’s production and employment “but forced industry in the rest of the world to contract,” Yellen said.

“Now, we see excess capacity building in ‘new’ industries like solar, EVs, and lithium-ion batteries,” Yellen said in the excerpts released by the Treasury.

The US Treasury chief is expected to head to China for a second trip since Washington and Beijing re-engaged in high-level diplomacy.

Faced with a powerful drag on growth from a crisis in China’s real estate sector, President Xi Jinping and his lieutenants have been prioritising the manufacturing sector. The “new three” growth drivers of electric vehicles, batteries and renewable energy have been a particular focus, along with advanced technology semiconductor production.

Beijing’s moves haven’t only unsettled US policymakers. The European Union this month moved toward imposing additional tariffs on Chinese EVs entering the bloc, citing new proof that the government in Beijing is providing illegal financial support for the industry.

Yellen in her visit to Georgia will be highlighting Biden administration policies to help build up the US’ own renewable-energy industry. The Suniva Inc solar-cell manufacturing plant she’s set to visit is slated to reopen this spring. Suniva’s revived fortunes are due in part to incentives from the Inflation Reduction Act and its measures to “onshore clean energy manufacturing,” Yellen said.