U.S. Deputy Treasury Secretary Wally Adeyemo stated that weak economic growth in China could pose challenges for some developing economies and regions that depend on Beijing for growth. However, he added that the U.S. economy is in a good position to handle the difficulties that may arise from this situation.
In an interview with Reuters in Virginia, Adeyemo noted that the Treasury Department is closely monitoring economic developments in China, which is suffering from a deteriorating real estate market, weak consumer spending, and diminishing credit growth. He remarked, "You are witnessing the signs of weakness in the Chinese economy having global repercussions. Because of the decisions we've made, we may be better prepared to deal with the headwinds arising from this."
He expressed concern about "other countries in the developing world and Asia that rely on the Chinese economy, as well as the European economy." Adeyemo explained that the situation in China is partly due to the political decisions made by Beijing in response to COVID-19. China adopted a zero-COVID policy and implemented strict lockdowns that were only lifted this year, while the United States focused on ensuring its citizens received effective vaccines and providing ample federal resources to navigate the pandemic.
He added, "What encourages us the most is that our economy is in good shape, and I believe the reason for this strong performance is our investments in the American Rescue Plan and the Inflation Reduction Act, leading up to the bipartisan infrastructure law." Adeyemo stated that these investments will help the U.S. economy overcome the challenges posed by slowing growth and demand in China, the world's second-largest economy. He emphasized the importance of continuing to monitor what is happening in China, with the goal of ensuring that steps are taken to guarantee the U.S. economy can grow despite the headwinds.
