US Deputy Treasury Secretary Wally Adeyou said on Thursday that economic weakness in China could cause problems for some developing economies and regions that depend on China for growth, but added that the US economy is well positioned to weather the headwinds this creates.
The Treasury Department is closely watching economic developments in China, where growth is faltering due to a worsening real estate slump, weak consumer spending and sluggish credit growth, Adeymo told Reuters during a visit to the Chicahomene tribe in southeastern Virginia.
“You can see that the Chinese economy is showing weakness that has global ramifications. And because of the decisions we’ve made, we may be better prepared to face the headwinds that this has created,” Adeyou said, referring to the United States.
He added, “I worry about other countries that depend on the Chinese economy, in the developing world and Asia, but also on the European economy.”
He said the situation in China is partly due to the policy choices Beijing has made to deal with COVID-19. While China introduced a coronavirus eradication policy and imposed strict lockdowns that were only lifted this year, the United States has tried to ensure that its citizens have access to effective mRNA vaccines and enough federal resources to get through the pandemic.
U.S. economic momentum has been boosted by continued investment through the 2021 U.S. Rescue Plan (ARP) — including funding for governments of Indigenous peoples and other disadvantaged communities — as well as legislation to boost infrastructure, semiconductor manufacturing, and clean energy incentives in the Inflation Reduction Act, Adeyimo said. . (era).
“We’re most encouraged by the fact that our economy is in good shape, and I think that’s because of the investments we’ve made through the country’s reconstruction programme, through the IRA, through the bipartisan Infrastructure Bill” and in providing resources to the communities and regions that been overlooked in the past.
He added that these investments will help the US economy overcome headwinds from slowing growth and demand in China, the world’s second largest economy.
“We will continue to monitor what happens there, but our goal is to make sure that we take steps here to make sure that the US economy can grow despite the headwinds,” Adeyou said.
