Yellen hails China visit as ‘productive’

Senior officials on both sides agree the trip has paved the way for improved communication.
Chris Taylor for RFA
2023.07.10
Yellen hails China visit as ‘productive’ U.S. Treasury Secretary Janet Yellen shakes hands with China's Vice Premier He Lifeng during their meeting at the Diaoyutai State Guesthouse in Beijing on July 8, 2023.
Pedro Pardo/Pool via Reuters

U.S. Treasury Secretary Janet Yellen has left Beijing after what she described as a “direct” and “productive” 10 hours of bilateral meetings with senior Chinese officials.

Yellen left Sunday amid signs that China’s senior officials were receptive to her overtures. Referring to a rainbow Yellen saw when she arrived in Beijing on Thursday, Chinese Premier Li Qiang said to Yellen on Saturday that China-US relations can also see “more rainbows” after a round of “wind and rain,” nationalist tabloid, the Global Times reported.

Yellen told a press conference at the U.S. Embassy in Beijing on Sunday morning that she was confident her four-day visit had advanced U.S. efforts to “put the U.S.-China relationship on a surer footing.”

Yellen said, “President 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. Both nations have an obligation to responsibly manage this relationship, to find a way to live with each other and share in global prosperity.”

She described her meetings with Chinese senior officials as “direct, substantive and productive,” adding that the meetings had put the U.S.-China relationship on a “surer footing.”

Yellen also said she had made it clear that the United States does not seek to decouple from China.

“There is an important distinction between decoupling on the one hand and, on the other hand, diversifying critical supply chains or taking targeted national security actions.”

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U.S. Treasury Secretary Janet Yellen prepares to hold a news conference at the U.S. embassy in Beijing, China, July 9, 2023. Credit: Reuters/Thomas Peter

Earlier this month, China implemented a new foreign relations law, which some critics contend broadens China’s definition of espionage to the point it could be used to interfere with the operations of foreign businesses and the daily work of foreign journalists.

In March and April, raids were undertaken on U.S. management consultancy Bain & Co.’s office and U.S. due diligence firm Mintz in Beijing, detaining five Chinese nationals in the process

Yellen called for fair treatment so that American companies can compete in the Chinese market on a level playing field. She said she raised the issue of “the recent uptick in coercive actions against American firms.”

“Senior level engagement is particularly vital during moments of tension,” she said.  

She also raised the issue of China’s support for Russia’s “illegal invasion of Ukraine” and said she hoped that Chinese firms would not provide Russia with material support.

The Treasury Secretary added, “We discussed areas where we can work together on global challenges, from tackling the climate crisis to addressing sovereign debt.

In the press conference Q&A session in Beijing, Yellen repeatedly circled back to national security concerns.

“I do believe that it’s possible for the two countries to be attentive to and take actions to protect their national security interests,” she said. 

“That’s what the U.S has done and will continue to do. But I do think it’s important that we be transparent about the actions we’re taking.”

Climate crisis

The U.S. treasury chief noted that the U.S.-Sino partnership had yielded significant breakthroughs such as the 2015 Paris Agreement, urging China to support multilateral climate institutions such as the Green Climate Fund. 

“Both our economies seek to support partners in emerging markets and developing countries as they strive to meet their climate goals,” she said.

China has long maintained it is the responsibility of developed nations to help poor countries pay to address climate change. The United Nations still describes China as a “developing nation.”

John Kerry, the U.S. special envoy for climate change, will travel to Beijing this month for talks with Chinese officials on global warming.

The visit is tentatively scheduled for the week starting July 16, an official at the State Department told Radio Free Asia on condition of anonymity because the travel plans have not yet been officially announced. 

Kerry is expected to meet with Xie Zhenhua, China’s special envoy for climate change. Kerry and Xie have not met publicly for talks since then-House Speaker Nancy Pelosi’s August 2022 trip to Taiwan soured relations between Beijing and Washington.

“China and the United States are the two largest economies in the world and we’re also the two largest emitters,” Kerry told the New York Times in an interview. “It’s clear that we have a special responsibility to find common ground.”

Business first

Yellen described her visit as “an opportunity for a new team, a new economic team in Beijing to meet with us and for us to establish a desire and willingness to work together, to discuss issues where we have agreements and to seek deeper engagement on the part of our staffs.”

She expressed confidence that there will be more frequent and regular communication.

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U.S. Treasury Secretary Janet Yellen, center, speaks during a lunch meeting with women economists in Beijing, China, Saturday, July 8, 2023. Credit: Mark Schiefelbein/Pool via Reuters

In the Beijing press conference Q&A session on Sunday, Yellen said she had heard her counterparts express skepticism about decoupling, remarking, “They have expressed concern that de-risking amounts to decoupling.”

She said she had assured her Chinese counterparts that these are “by no means the same thing, that de-risking involves attention to carefully articulated and narrowly targeted security concerns as well as with a broader concern about diversifying our supply chain.”

Both the U.S. and China are facing economic headwinds. According to a recent survey, most Americans think that a full blown recession is imminent.

China has its own problems – a disappointing consumer rebound from the COVID lockdown period, youth unemployment, a property sector in crisis and vast piles of local government debt.

If Fed hikes tip the U.S. into recession, economists warn, a simultaneous slump in the world’s two economic powerhouses is a possibility.

Bloomberg News notes, “President Xi Jinping’s government doesn’t have great options to fix things.”

Beijing’s old playbook of using “large-scale stimulus to boost demand has led to massive oversupply in property and industry, and surging debt levels among local governments, sparking speculation that China is headed into “Japan-style malaise after 30 years of unprecedented economic growth.”

Speaking at the Diaoyutai State Guest House in Beijing at the opening of her meeting with her counterpart He Lifeng on Saturday, Yellen said there were many opportunities for U.S. and Chinese companies to do more business with each other.

“The fact that despite recent tensions we set a record for bilateral trade in 2022 suggests there is ample room for our firms to engage in trade and investment,” Yellen said.

Edited by Mike Firn.

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