U.S, Treasury Secretary Janet Yellen struck a positive but pragmatic tone after completing a high-stakes trip to China, even as she pressed officials in Beijing on a range of “unfair” economic practices.
Yellen’s comments were delivered at a news conference capping a four-day visit to Beijing that she’d described as a mission to revive engagement between the two largest economies. Frictions between Washington and Beijing have soared in recent years over issues ranging from Taiwan to technology access.
While in China, Yellen held 10 hours of talks that she described as “direct, substantive” and had brought U.S.-China ties closer to a “surer footing.” Half of that time was spent with her counterpart Vice Premier He Lifeng, the first extensive exchange between the two policy chiefs since China’s new economic team was appointed. During a shorter meeting with Premier Li Qiang, she had a broader exchange on the U.S.-China relationship.
Yellen’s task in Beijing was tricky one. She sought to air concerns about Chinese economic policies, while calling for greater cooperation and engagement between the two nations, especially on global challenges such as climate change and debt distress in poorer nations.
It was first major test of a policy she outlined in April that’s geared toward defending and securing US national security without trying to hold China back economically. During her trip, she raised contentious issues such as China’s “non-market” practices and an uptick in “coercive actions” against American companies. She also warned Chinese companies against providing material support for Russia’s war in Ukraine.
Despite those points of contention, her overall message in China was two countries aren’t in a “winner-take-all” competition and both sides should manage their rivalry with a fair set of rules.
“President Biden and I do not see the relationship between the U.S. and China through the frame of great power conflict,” she said on Sunday. “We believe that the world is big enough for both of our countries to thrive.”
Yellen’s visit was part of a broader push by President Joe Biden’s administration to mend relations with America’s main geopolitical rival, while also sending clear messages about U.S. policy.
She’s the second member of Biden’s Cabinet to visit China in three weeks, after Secretary of State Antony Blinken’s visit in June. U.S. Climate Envoy John Kerry is expected to visit later this month for talks on global warming.
Treasury officials said Yellen’s primary objective in Beijing was to build communication channels with the Chinese government’s new economic team. She reiterated that goal to China’s economic czar He, saying “where we have concerns about specific economic practices, we should and will communicate them directly.”
The vice premier agreed to strengthen communication and cooperation on global challenges on Saturday, while expressing concern to Yellen about U.S. sanctions and other restrictive measures against China, according to a government statement.
He warned the U.S. that “generalizing national security” was not conducive to economic exchanges, and pressed Yellen on U.S. sanctions and other “restrictive” measures, according to a readout published by the official Xinhua News Agency.
Yellen’s trip began on Friday with key members of the old guard of China’s economic policy during her trip, including Liu He — a fluent English-speaking veteran of the international stage who had studied at Harvard University and with whom Yellen had established a rapport.
She also met Friday with Pan Gongsheng, who is expected to take over as governor of the People’s Bank of China. Yellen on Saturday sat down with Chinese climate experts, a team of female economists and U.S. businesses operating in the country.
The Treasury chief reiterated concerns about “punitive actions” China had taken against American firms in recent months. The Chinese government in May banned U.S. chipmaker Micron Technology Inc.’s products from some of its critical sectors, and has raided the offices of U.S. consultancy Bain & Company and New York-based due diligence business Mintz Group earlier this year.
Days before her arrival, China announced restrictions on exporting two metals that are crucial to key technology industries.
That was the latest escalation in a trade war that ramped up last year with U.S. export controls on semiconductors and chipmaking equipment. Those tensions could escalate as Biden’s team prepares an executive order curbing U.S. outbound investment in China
While Yellen said the U.S. would continue to take “targeted actions” to protect our national security, she said such steps would not be used to “gain economic advantage.”
