Treasury Secretary Janet L. Yellen said on Tuesday that the United States was making a mistake in trying to “disconnect” from China and called for deepening economic ties between the world’s two largest economies.
The comments come as the Biden administration seeks to improve relations with China, which has faced difficulties after Chinese surveillance balloons were spotted flying across the United States this year. . Secretary of State Antony J. Brinken is scheduled to visit Beijing next week, and Yellen hopes to visit Beijing soon.
speak in House Financial Services Committee Hearings Yellen said Tuesday that she believes economic ties with China are important.
“We would benefit from trade and investment being as open as possible, and I think China would benefit, too. Any attempt to separate from China would be disastrous for us,” Yellen said.
The U.S. maintains tariffs imposed by the Trump administration on billions of dollars worth of Chinese imports, and the Biden administration is formulating new restrictions on how U.S. companies can invest in China. But Yellen said the US only intended to “de-risk” the relationship and not cause economic harm to China.
“I never think it’s in our interest to impede the economic development of the Chinese people,” Yellen said. “China has successfully lifted hundreds of millions of people out of poverty, and I think it should be celebrated.”
Yellen spoke conciliatoryly, but also outlined concerns that a meeting with the Chinese side would likely raise.
He said the administration is considering restricting investments by U.S. private equity firms in Chinese companies with ties to the Chinese military because of national security concerns. He also said the Ministry of Finance is considering additional sanctions against China in response to human rights abuses against Uyghurs in Xinjiang.
In recent months, the United States has gradually increased pressure on China to relieve the debt of Zambia and other developing countries. Yellen lamented that despite signs of willingness to work together and help poorer countries avoid defaults, China is not doing enough. He stressed the growing need for international financial institutions such as the World Bank and the International Monetary Fund to support the most vulnerable economies.
“These institutions reflect American values,” Yellen said. “This serves as an important countermeasure against opaque and unsustainable lending from other countries like China.”
Asked about Yellen’s comments on Tuesday, China’s foreign ministry spokeswoman Wang Wenbin dismissed the notion that the IMF and World Bank were aimed at promoting US interests.
“The IMF is not the US IMF, or even the World Bank,” he said.
