Yellen calls on US, European allies to confront China together

US Treasury Secretary Janet Yellen stepped up her criticism of China's economic and trade practices on Tuesday, calling on the United States and its allies in Europe to band together to challenge Beijing and diversify supply chains.

"We have a common interest in incentivizing China to refrain from economic practices that have disadvantaged us all," Yellen said in a speech to the Brussels Economic Forum.

She referred to China's practices on trade and investment, development and climate policies and lending practices that have left some countries facing unsustainable debt burdens.

"We should all aspire to encouraging China to drop objectionable practices," Yellen said. "If we can do so, we will stand a better chance of competing with China on a level playing field, which will benefit our businesses and consumers."

Yellen warned that Western countries are too dependent on China for rare earth minerals and that Beijing is building strong market shares in certain technology products and seeks to dominate production of semiconductors.

She said these developments could make democratic, market-based economies more vulnerable to China's geopolitical leverage, but they could lessen such risks with more "friend-shoring" of supply chains, including those for critical minerals.

The US Treasury chief also called on US allies to step up financial support for Ukraine, saying that funds announced so far would not be sufficient for the country's short-term needs as it battles Russia's invasion.