Yellen Sees ‘Progress’ in Rocky U.S.-China Ties, Expects More Communication

Reuters

12:25 JST, July 9, 2023

BEIJING (Reuters) – U.S. Treasury Secretary Janet Yellen said 10 hours of bilateral meetings with senior Chinese officials in recent days were “direct” and “productive” and helped stabilize the often rocky relationship as her four-day Beijing trip ended.

Yellen, who departs Beijing on Sunday, told a press conference the United States and China remained at odds on a number of issues but she expressed confidence that her visit had advanced U.S. efforts to “put the U.S.-China relationship on surer footing.”

“The U.S. and China have significant disagreements,” Yellen told reporters at the U.S. embassy in Beijing, citing Washington’s concerns about what she called “unfair economic practices” and recent punitive actions against U.S. firms.

“But President (Joe) Biden and I do not see the relationship between the U.S. and China through the frame of great power conflict. We believe that the world is big enough for both of our countries to thrive.”

Yellen’s visit is Washington’s latest attempt to repair ties between the world’s two biggest economies, battered over issues from Taiwan to technology that have drawn their allies into their rivalry, having an impact on companies and trade ties.

Secretary of State Antony Blinken visited Beijing last month, the first visit by the top U.S. diplomat of the Biden presidency, while climate envoy John Kerry is expected to visit China this month.

The U.S. diplomatic push comes ahead of a possible meeting between President Biden and Xi as soon as September’s Group of 20 summit in New Delhi or the Asia-Pacific Economic Cooperation gathering scheduled for November in San Francisco.

Yellen said the objective of her visit was to establish and deepen ties to China’s new economic team, reduce the risk of misunderstanding and pave the way for cooperation in areas such as climate change and debt distress.

“I do think we’ve made some progress and I think we can have a healthy economic relationship that benefits both of us and the world,” she said, adding that she expected increased and more regular communications at the staff level.

She said Chinese officials raised concerns about an expected executive order restricting outbound investment, but she assured them that any such measure would be narrow in scope and would be enacted in a transparent way, through a rule-making process that would allow public input.

Yellen said she told Chinese officials they could raise concerns about U.S. actions, so that Washington could explain, and “possibly in some situations, respond to unintended consequences of our actions if they’re not carefully targeted.”

DECOUPLING WOULD BE ‘DISASTROUS’

She reiterated that Washington was not seeking to decouple from China’s economy, as doing so would be “disastrous for both countries and destabilizing for the world.”

But she said the United States wanted to see an “open, free and fair economy,” not one that forces countries to take sides.

Asked about plans by the so-called BRICS countries – Brazil, India, Russia and China – to unveil a new currency, Yellen said she expected the dollar to remain the dominant currency in international transactions.

“All of the data of which I’m aware shows that the dollar is overwhelmingly – close to 90% – used in international transactions, and I don’t think that there is an alternative that could possibly displace that in the foreseeable future.”

Yellen met with senior Chinese officials during her visit, including Premier Li Qiang, as well as U.S. companies doing business in China, climate finance experts and women economists.

In her meetings, she urged more cooperation between the sides on economic and climate issues while criticizing what she called “punitive actions” against U.S. companies in China.

On Sunday, she reiterated she had raised “serious concerns” about what she called China’s “unfair economic practices” and a recent uptick in coercive actions against U.S. firms.

“Healthy economic competition is only sustainable if it benefits both sides,” she said.

Yellen also discussed Russia’s war in Ukraine with her Chinese interlocutors, and said it was “essential” that Chinese firms avoid providing Russia with material support for the war, or in evading sanctions.

Both sides have downplayed expectations for breakthroughs during the talks while hailing the opportunity for face-to-face diplomacy.

“No one visit will solve our challenges overnight. But I expect that this trip will help build a resilient and productive channel of communication,” Yellen said.