Yellen to ‘intensify communication’ with China’s He, warns against Russia support
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Chinese Vice-Premier He Lifeng and US Treasury Secretary Janet Yellen had "candid, direct, and productive discussions", said Dr Yellen.
PHOTO: REUTERS
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SAN FRANCISCO – US Treasury Secretary Janet Yellen said on Friday that she and Chinese Vice-Premier He Lifeng agreed to “intensify communication” on economic issues, but warned him to crack down on Chinese companies that supply material support to Russia for its war in Ukraine.
The two “had candid, direct and productive discussions” on issues from US export controls to possible areas of cooperation, including climate change and debt relief for low-income countries, Dr Yellen told a press conference after two days of meetings in San Francisco.
The two held talks ahead of the Asia-Pacific Economic Cooperation (Apec) gathering of leaders in San Francisco from Wednesday to Friday, which will feature a planned meeting between US President Joe Biden and Chinese President Xi Jinping
Dr Yellen said she accepted an invitation from Mr He, referred to by China’s state media as the director of a powerful Communist Party economic body, to return to China in 2024 for a “regular cadence of contact” between the economic leaders.
She emphasised that the US has no desire to decouple its economy from China,
“During our discussions, we agreed that in-depth and frank discussions matter, particularly when we disagree,” Dr Yellen said.
“And I emphasised that the current uncertain global landscape makes it particularly crucial that we maintain resilient lines of communication going forward.”
Russia war aid
Dr Yellen said the Treasury has seen evidence that Chinese companies and banks may be aiding in the flow of equipment for use in Russia’s war in Ukraine despite Western sanctions, and warned Mr He that these firms “will face significant consequences” if they do.
“We would like to see China crack down on this, especially when we’re able to provide information,” Dr Yellen said.
She gave no further details on the companies involved or Mr He’s reaction.
The officials also discussed the Israel-Hamas war, and Dr Yellen spoke about the need “to prevent escalation and expansion of the conflict in the Middle East”, the Treasury said in a statement.
Regarding the US Treasury debt market, Dr Yellen said it would not be surprising to see China reducing its holdings of US Treasury debt to support its currency, but China does not publish information about its foreign exchange practices.
She said a ransomware attack on China’s largest lender
Common language
After nearly five years of fractured US-China relations that began with former president Donald Trump’s tariff war with Beijing and which has continued with growing US national security restrictions on US technologies, there had been very little contact between Washington and Beijing on economic issues until earlier in 2023.
A change in China’s economic leadership meant that the Treasury needed to build up new contacts in Beijing from scratch, starting with Dr Yellen’s trip to Beijing in July,
Dr Yellen and Mr He’s meetings on Thursday and Friday did not produce any specific actions, but the two sides did agree on some common language to describe the engagement, an unusual step in recent US-China interactions.
Under the jointly negotiated language, they agreed to “work towards common solutions, address disagreements where possible and avoid misperceptions contributing to unintended escalations”.
The two sides agreed to seek “a healthy economic relationship that provides a level playing field for companies and workers in both countries and benefits the two peoples”.
“Sino-US economic relations are rooted in the common interests of both countries in the economic field, which objectively benefits each other and their people,” said Chinese Vice-Finance Minister Liao Min.
“Mutually beneficial cooperation between China and the United States has strong momentum, a solid foundation and broad space, but the prerequisite is equality and mutual respect.”
Mr Liao said he hoped the two countries would work in the same direction and take practical actions to “create the necessary conditions for the maintenance and development of economic relations between the two countries”, according to a statement published on the Ministry of Finance’s website.
A senior Treasury official acknowledged that the US and China may perceive what constitutes a level playing field differently, but the US can now point out policies that are inconsistent with that.
The two sides also committed to strengthening the global financial architecture, including through a recently approved International Monetary Fund quota funding increase and plans to “increase the voice of under-represented members/regions”, a reference to a bigger shareholding for China. REUTERS
