Yellen will visit China again in 2024, focusing on ‘difficult’ topics

WASHINGTON - US Treasury Secretary Janet Yellen said she plans to visit China again in 2024, seeking to deepen areas of cooperation and improve communication, even as she vowed to continue confronting Beijing over national security concerns and human rights.

“A significant portion of the agenda will focus on discussing difficult areas of concern with my counterpart,” Dr Yellen said of her plans for a second trip to China.

The remarks came in a speech on Dec 14 in Washington to the US-China Business Council.

She made clear the United States would continue to pursue export controls and investment restrictions that have angered Beijing, but said it is crucial to engage with China in ways that could prevent a wide range of potential crises – from diplomatic to financial.

“We seek not to resolve all our disagreements nor avoid all shocks,” she said. “But we aim to make communication resilient so that when we disagree, when shocks occur, we prevent misunderstanding from leading to escalation and causing harm.”

Each country’s ambassador read a letter from their president thanking the council for its work to support relations between the nations over the years and expressing optimism over US-China ties.

Responding to Dr Yellen’s comments on Dec 15, Chinese Foreign Ministry spokeswoman Mao Ning said Beijing hopes “the US will be consistent with its words and actions”.

“It should not reiterate its intention to cooperate with the Chinese side... while at the same time constantly wielding the stick of sanctions against Chinese enterprises.”

Dr Yellen has emerged as something of a “good cop” in the Biden administration’s handling of China relations, gradually building ties with the country’s economic leadership.

She

visited Beijing in July

and held extensive talks with Vice-Premier He Lifeng in November in San Francisco, before taking part in a meeting there between US President Joe Biden and Chinese President Xi Jinping.

She has employed a strategy of compartmentalisation, confronting China in certain areas while simultaneously pursuing areas of collaboration.

She emphasised the importance of using her exchanges with China to gather information about the world’s second-largest economy.

“Understanding China’s plans, especially how China intends to respond to challenges with local government debt and the real estate market, or how it might react if unexpected weaknesses in its economy should arise, is crucial for those of us charged with policymaking in the United States,” she said. 

She said she aims to increase exchanges between financial regulators in the US and China. For example, the countries are facilitating discussions on how each side might handle the failure of a global systemically important bank.

Injecting an election campaign flavour to her remarks, she said the Biden administration has “course corrected” its broader policy toward China following the administration of former US president Donald Trump.

“The Trump administration had failed to make investments at home in critical areas like infrastructure and advanced technology, while also neglecting relationships with our partners and allies that had been forged and strengthened over decades,” Dr Yellen said.

“The Biden administration strategy towards China begins with investing at home and rebuilding alliances abroad.”

She reiterated criticism of Chinese policies that she said harmed American workers and firms by creating an uneven playing field. 

“The PRC (People’s Republic of China) deploys unfair economic practices, from non-market tools, to barriers to access for foreign firms, to coercive actions against American companies,” she said.

Shifting away from its state-driven economic approach in industry and finance would benefit China too, she added. “Too strong a role for state-owned enterprises can choke growth and an excessive role for the security apparatus can dissuade investment.” BLOOMBERG, AFP