Yellen says China slowdown risks spillovers but no U.S. recession

Treasury Secretary Janet Yellen said that China’s economic slowdown risks causing ripple effects across the global economy, though she doesn’t expect a recession in the U.S.

“Many countries do depend on strong Chinese growth to promote growth in their own economies, particularly countries in Asia, and slow growth in China can have some negative spillovers for the United States,” Yellen said . “Growth has slowed, but our labor market continues to be quite strong. I don’t expect a recession.”

The U.S. is on a “good path” to bring inflation down without a major weakening in the labor market.

Yellen was speaking on the sidelines of meetings with counterparts from Group of 20 economies in Gandhinagar, India. On Sunday, she said that building on the “groundwork” of her recent visit to China was among her objectives.

She’s also seeking progress on debt relief for poorer nations and reforms to multilateral development banks.

Yellen also said in the interview that China has failed to address the unfair trade practices that triggered U.S. tariff hikes.

While a four-year review of those tariffs is underway, the “underlying concerns” have not been dealt with, she said.

The Treasury chief also said that any moves to curb outbound U.S. investment to China would be narrowly targeted and based solely on national-security considerations.

“There is a good chance that we will” go ahead with controls on outbound investments, she said.

Along with attending meetings of the G-20 and a Sunday session with finance ministers from the Group of Seven advanced economies, Yellen has used the Gandhinagar visit to hold a number of bilateral meetings, including with counterparts from India, Turkey and the European Union.