Treasury Secretary Janet L. Yellen has come amid hopes of resuming relations with the United States, which have deteriorated over the years and have recently been off the rails over key tension points, including the war in Ukraine and the arrival of Chinese spy balloons. visited. It was shot down by the US military over US territory, and trade restrictions between the two countries escalated.
After two days of 10-hour talks in Beijing, Yellen told a press conference on Sunday that she believed the United States and China were in a more stable position despite “significant differences”. Stated.
“I believe the world is big enough for both of us to thrive,” Yellen said.
Yellen announced that the two countries would seek more frequent communication at the highest levels, and that improved dialogue would prevent a build-up of mistrust and a deterioration in what she called “one of the greatest problems of our time.” I explained how. Her visit followed that of Secretary of State Anthony J. Brinken weeks later. And later this month, the president’s special envoy for climate change, John Kerry, is scheduled to visit China to resume negotiations on global warming.
However, a significant easing of economic tensions may be unlikely. Yellen returned to Washington on Sunday without announcing any breakthroughs or agreements to mend deep rifts between the two countries. And Yellen made it clear that the Biden administration has serious concerns about many of China’s commercial practices, including its treatment of foreign companies, and policies that the United States considers economic repression.
During her first visit by a U.S. Treasury secretary in four years, Yellen met with four of China’s most powerful leaders involved in economic policymaking under President Xi Jinping, who is beginning his third term in office. Zhang Zhang, China’s number two official. Deputy Prime Minister He Lifeng, Yellen’s counterpart. Finance Minister Liu Kun. Pan Gongsheng, the new leader of the People’s Bank of China.
Hours before Yellen’s press conference, China’s state-run Xinhua news agency released a report on Yellen’s visit, saying the talks were constructive but reiterating what China sees as the main points of contention. Stated. The report said China continues to oppose the Biden administration’s focus on preserving US national security through trade restrictions.
“China believes that generalizing national security is not conducive to normal economic and trade exchanges,” the Xinhua News Agency reported. “The Chinese side expressed concern about the US sanctions and restrictions on China.”
The US-China relationship has a huge impact. The world’s two largest economies, together accounting for 40 percent of global output, remain vital partners in many ways. They buy and sell important products to each other, fund each other’s businesses, and produce apps and movies for audiences in both countries.
Chinese officials expressed concern over Mr. Yellen. The Treasury secretary said he had discussed the tariffs the Trump administration imposed on imports from China that are still in place. Yellen has criticized the tariffs as ineffective, but reiterated the administration’s stance since Biden’s inauguration, suggesting that the administration will not make any decisions on tariffs until an ongoing internal review of the tariffs is completed.
He also acknowledged China’s concerns about looming restrictions on U.S. investment in China, saying such measures would be limited to specific sectors and were not intended to have a broader impact on the Chinese economy. He said he tried to explain. Chinese officials and experts also fear the regime’s efforts to limit China’s access to certain technologies could undermine the development of high-potential industries such as artificial intelligence and quantum computing. are doing.
Since 2016, China has had its own broad restrictions on foreign investment, which have encouraged Chinese companies and households to avoid overseas real estate speculation, instead focusing on areas such as aircraft production, heavy industry and cybersecurity. This is because it encourages foreign investment in areas of strategic value. .
Wu Xinbo, dean of international affairs at Fudan University in Shanghai, warned that Yellen’s visit would not lead to a real improvement in relations unless it was accompanied by a change in the Biden administration’s China policy.
“So far, there are no signs that Biden will reassess his economic policy toward China,” he said.
Some analysts took the call for more dialogue as an important development, taking the two countries to at least discuss their differences after months of silence.
He Weiwen, a former official at China’s Ministry of Commerce and now a senior fellow at the China and Globalization Center in Beijing, welcomed Yellen’s comments that both China and the United States can grow. “Continuous and direct exchanges are not only constructive, but also very important, because there are big differences between China and the United States,” he said.
China’s economic policymakers have a long history of working more closely with the Treasury, which has historically seen China as a large investor in U.S. Treasuries and as a potential source of U.S. financial services. evaluated as a market. The Department of Commerce and the Office of the U.S. Trade Representative tend to have more strained relations with China because of their emphasis on job promotion and industrial independence.
This was especially true during the Trump administration. Liu He, who was deputy prime minister overseeing international economic policy until He Lifeng succeeded him four months ago, has been working closely with Steven Mnuchin, who served as Treasury secretary under former President Donald J. Trump, on trade and economic issues. I have tried to compromise many times. But Mnuchin was unable to persuade Mr. Trump, who ended up imposing tariffs on a wide range of Chinese exports in retaliation for what he said were unfair business practices.
Many U.S. companies with Chinese ties, along with Chinese officials, hoped that ties would deepen under Mr. Biden. Rather, tensions between the United States and China have deepened over the past two years, and have cooled down quite a bit since the spy balloon incident in February.
Yellen’s visit is seen as a positive step, but many experts in China and the United States warn against expecting much change.
“Ms Yellen’s visit is likely to cool the temperature of economic relations a bit and will serve as a reminder that the United States and China share commercial interests, even if they have faded, and need to be discussed thoroughly. Perhaps business conditions in the U.S. and China will improve, and there is room to spare,” said Mark Sobel, a longtime former Treasury Department official.
But given the national security concerns of both countries, the perception within China that the United States is trying to curb economic development, and the hawkish political rhetoric of both countries, “Ms Yellen’s visit is fundamental to the economic relationship. “It doesn’t change much of the dynamics or trajectory.”
Despite the differences between the United States and China, Yellen was warmly received during her first visit to Beijing as Treasury secretary.
In a meeting with China’s second-highest-ranking official, Premier Li Qiang, he referred to a rainbow appearing overhead upon arrival, suggesting it was a symbol of hope that relations between the two countries could be repaired. .
After Yellen was spotted eating at a restaurant serving Yunnan cuisine on Thursday night, Chinese state media reported on her impressive use of chopsticks After she was seen eating a mushroom dish on social media, she reported being inundated with restaurant reservations.
Yellen also met with Chinese experts on climate finance and had lunch with a group of Chinese women who are economists and entrepreneurs. He suggested that there are many areas where the United States and China can agree.
“Our people have a lot in common, far more than they differ,” Yellen said at the luncheon.
Anna Swanson contributed to the report.
