As she kicked off two days of discussions with her Chinese counterpart on Thursday, Treasury Secretary Janet Yellen stated that the United States has no intention of severing economic relations with China. The heads of finance are trying to move forward on a number of economic issues at a time when their nations’ competition has significantly increased.
The goal of Yellen’s discussions with Vice Premier He Lifeng is to help set the stage for President Joe Biden and Chinese President Xi Jinping to meet next week in San Francisco on the fringes of the Asia-Pacific Economic Cooperation summit. This would be the first time the two have met in almost a year.
According to a person familiar with the plans, the White House expects to see some progress but does not anticipate significant changes to the two countries’ relationship as a consequence of Biden and Xi’s meeting.
According to her prepared remarks, Yellen stated, “We seek a healthy economic relationship with China that benefits both countries over time.” “We will communicate our concerns directly when we have concerns about specific economic practises, such as those that prohibit American firms and workers from competing on an even playing field.”
Because the relationship between the two nations is competitive, analysts advise that expectations should be maintained low.
“It seems difficult for the United States to credibly emphasise themes such as inclusivity and interconnectedness — the themes of this year’s APEC summit — when the primary driver for U.S. economic strategy in the Indo-Pacific is not economic cooperation, necessarily, but rather economic competition,” stated Nicholas Szechenyi, deputy director for Asia at the Centre for Strategic and International Studies, during an APEC summit preview event.
He stated that “economic competition with China is very much at the centre of U.S. strategy.”
Beijing’s main worries were outlined by China’s official media, and they included taxes on Chinese goods, supply chain constraints, limitations on high-tech items like cutting-edge processors, and the Biden administration’s China policy.
According to China Central Television, a state broadcaster, the United States is limiting Chinese enterprises’ opportunities to borrow capital and conduct business in the country. This was said on one of the platforms. The United States has sanctioned over 1,300 Chinese businesses. The United States must “slim down” this list if it hopes to work with China.
“The United States needs to act decisively. China and the US can only work together to overcome obstacles if that is provided, the statement stated. “China and the U.S. can only stabilise market expectations, foster favourable investment conditions, and send positive signals to the outside world with this.”
In August, Biden issued an executive order aimed at controlling and preventing high-tech American investments headed to China. The Democratic administration justified this action by citing national security concerns. Also, the United States took action to stop exporting cutting-edge computer chips to China last year.
The CEO of TikTok, Shou Zi Chew, testified before US senators earlier this year regarding data security and hazardous material. The politicians were debating whether or not to outright ban the immensely popular app because to its ties to China.
Furthermore, earlier this year, a Chinese surveillance balloon was seen crossing strategic U.S. airspace, which increased tensions between the two nations. After the balloon passed through military installations across North America, the US military shot it down off the coast of Carolina.
Towards the end of last month, when Beijing’s top diplomat visited Washington for meetings with Secretary of State Antony Blinken and White House national security advisor Jake Sullivan, Biden had an hour-long conversation with Chinese Foreign Minister Wang Yi at the White House.
In June, when the secretary of state visited Beijing to hold meetings with Wang, Xi also had a meeting with Blinken.
Throughout the year, Yellen has met with several Chinese officials. She saw former Vice Premier Liu He in person for the first time in January in Zurich. She encouraged Chinese government officials to collaborate on climate change and other global concerns and not let acrimonious debates over trade and other irritants ruin ties. She travelled to China in July to discuss economic strategies between the two countries.
“I look forward to discussing our collaboration on global challenges, from climate change to debt distress in low-income countries and emerging markets,” Yellen stated on Thursday, going beyond their bilateral economic ties.
We have a duty to take the lead on these and other issues as the two biggest economies in the world, for the benefit of people both at home and abroad.
To reduce tensions and strengthen relations between the two countries, the Treasury Department and China’s Ministry of Finance established two economic working groups in September.