The deep chill between the US and China has eased somewhat in recent days as Treasury Secretary Janet L. Yellen held a marathon meeting with a new group of top economic policymakers in Beijing.
Yellen used soft language about the US’ economic strategy toward China, dismissing a term that had become widespread in Washington but angered the Chinese government. But even though Ms Yellen’s visit to China likely sparked further talks, neither Ms Yellen nor Chinese officials retreated from their policy positions. This has left the two countries facing the possibility of further clashes over trade, investment and technology.
She has forged ties with China’s economic leaders.
Last fall’s Congress of the Communist Party of China paved the way for President Xi Jinping to install a new team of followers at the top of the business community. Officials, including Ms. Yellen’s counterpart, Deputy Premier He Lifeng, generally have less international experience than their predecessors and are less familiar with Western policymakers. China, too, has gradually curtailed the release of economic information and ceased many reports, making it difficult to know what is really happening in the Chinese economy.
One of Yellen’s biggest goals was to play against a new Chinese team. She also wanted to understand what was happening in China’s economy, which had a slower-than-expected recovery this year after the country lifted nearly three years of tough pandemic control measures.
At least on those narrow goals, Yellen appears to have met with some success in 10-hour talks with four of China’s top economic policymakers, most notably He. The Biden administration has held several high-level diplomatic talks with China, but such economic talks are the first under the administration.
U.S. Ambassador to China R. Nicholas Burns said the resumption of economic talks would “send a direct and harsh message on issues on which we disagree and engage with the world’s second-largest economy when our interests align.” It is in our best interest to do so,” he said. “
She used the new D-word “diversity” to describe the supply chain.
For the past several years, Chinese officials, sensitive to diplomatic language, have vehemently opposed Washington’s calls to separate, or “disconnect,” the U.S. economy from China’s. They worry about multinationals moving their extensive supply chains and tens of millions of jobs out of China.
In March, European Commission President Ursula von der Leyen proposed a softer, neutral term for ‘risk aversion’. Chinese officials and state media initially had little opposition to risk aversion, but a month later, after U.S. National Security Advisor Jake Sullivan capitalized on it in his speech. started blaming.
During her visit, Yellen repeatedly asked to allay China’s concerns that the United States was seeking decoupling in the first place, and avoided even mentioning risk aversion.She said instead that the United States wants diverse Supply chains — This also happens to be a longstanding public policy goal in China.
“There is an important difference between decoupling and implementing actions that target critical supply chain diversification and national security,” she said.
The Biden administration has argued that recent restrictions on high-tech exports to China, particularly cutting-edge semiconductors, are focused on U.S. military security. The regime seeks to characterize its action as building a tall fence around a tiny piece of technology grounds.
But even after Yellen’s visit, there are many skeptics in China. The question is how big the national security garden is, because the US presents its policies “only for national security,” said Wu Xingbo, dean of the international department at Shanghai’s Fudan University.
She did not propose new policies. So did China.
Yellen’s press conference on Sunday and another statement by Chinese state news agency Xinhua were conspicuously absent from any indication that even one of the many trade, investment and technology issues between the two countries had been resolved.
China last Monday imposed export restrictions on gallium and germanium, two key metals used in computer chips. China produces nearly all of the world’s supply of both materials. The export restrictions were widely seen as retaliation for the US curbs on semiconductor exports to China, but Beijing did not explicitly say the measures were retaliation. Speaking on CBS’s “Face the Nation” on Sunday, Yellen said the measures were “potentially” retaliatory.
The Chinese government is also preparing for the long-discussed possibility that a Biden administration could restrict U.S. investment in certain high-tech sectors of the Chinese economy. China imposed its own restrictions on foreign investment in 2015. The Chinese government has urged Chinese businesses and households to steer away from speculating in U.S. real estate and European football clubs and instead buy overseas companies in aircraft manufacturing, heavy industry, artificial intelligence and cybersecurity. strategic sector.
Nonetheless, Yellen tried to be optimistic about her visit on Sunday, trying to refute speculation that conflict might be inevitable.
“Determining the contours of U.S.-China relations is no easy task, but despite the difficulties, we must never forget that our path is not predetermined,” she said.
Allan Lapeport Contributed to the report.
