The US treasury secretary, Janet Yellen, has arrived in Beijing on a four-day trip that aims to tame spiralling tensions between the world’s two largest economies, particularly over trade and the hi-tech chip industry.
She will meet senior Chinese officials including the premier, Li Qiang, and former vice-premier and economics tsar Liu He, who is seen as close to China’s president, Xi Jinping, in her first day of talks on Friday.
It is the second visit by a US cabinet official this year and is expected to highlight both the interdependence and the mistrust that characterise the relationship between the two superpowers.
It takes place against a backdrop of hostilities from both sides, with the biggest focus at present the clash over chips vital for advanced technology including military equipment and artificial intelligence. Other areas of dispute include Taiwan, China’s support for Russia as it wages war in Ukraine, and human rights.
A treasury official told journalists Yellen would address “unfair practices” by China, including recent punitive actions against US firms and barriers to market access, and a member of her delegation tried to downplay expectations, Reuters reported.
“Especially if there are things that we may disagree about, it’s even more important that we are talking,” the official said on arrival in Beijing. “I don’t think it’s fruitless, I will say that definitively.”
The welcome delegation was low-key, with a Chinese finance ministry official and the US ambassador waiting for Yellen.
But there are also strong incentives for both sides to try to patch up the relationship where possible. Cooperation between Washington and Beijing is vital to make progress on global threats including the climate crisis and debt relief for poorer countries.
Their economies are so closely entwined that escalating trade controls risk causing serious damage to both. And without good channels of communication, there is a greater risk that flashpoints such as military patrols near Taiwanese airspace and territorial waters could escalate.
Yellen plans to discuss the need “to responsibly manage our relationship, communicate directly about areas of concern, and work together to address global challenges”, the US treasury said before her trip.
She arrives less than three weeks after a visit by the secretary of state, Antony Blinken, the highest-ranking US official to travel to Beijing in half a decade. He spoke with Xi for 35 minutes, in a meeting that had not been guaranteed when he left Washington, and which both sides presented as progress in a strained relationship.
His trip and Yellen’s come before a possible meeting between Biden and Xi at the Asia-Pacific Economic Cooperation summit in San Francisco in November.
However, Chinese anger about US sanctions may limit room for real improvement. “I wouldn’t regard it as ‘Janet Yellen is not welcome’, but China cannot just swallow all the poison pills and continue to show a smile,” Wang Huiyao, the president of the Center for China and Globalization thinktank, told Reuters.
Washington, with its allies, controls the most advanced technology in the world. Lawmakers from both sides of the political divide are concerned that China might overtake the US in terms of overall military power, and that it could do so by exploiting US advances.
Last October, driven by these concerns, the Biden administration imposed controls on the sale of semiconductors and chip-making equipment to China and is reportedly preparing to toughen restrictions in this area.
China has some leverage, too. On Monday it placed new controls on exports of two metals used in chip manufacturing, gallium and germanium.
A state-controlled tabloid, the Global Times, framed the regulations as a direct response to the US move: “There’s no reason for China to continue exhausting its own mineral resources, only to be blocked from pursuing technological development.”
In an April speech, Yellen laid out three priorities for the US in its ties with China. The first was protecting national security interests and human rights through targeted actions that were “not intended to gain economic advantage”.
The second was seeking a “healthy economic relationship with China that fosters mutually beneficial growth and innovation”. The final priority was cooperation on “urgent global challenges” such as the climate crisis.
