Janet Yellen presses China for better communication to avoid economic risks
The visiting US Treasury Secretary tells Beijing it must remain in contact with Washington over global economic risks and efforts to fight climate change.
US Treasury Secretary Janet Yellen intensified calls for better communications with China to stave off global economic and financial risks, saying the US and China shouldn’t let disagreements over US national-security measures further damage ties.
Ms Yellen appeared to be trying to play down differences over US export restrictions on technology, which have been a particular source of recent friction between the US and China, during talks on Saturday with Chinese Vice Premier He Lifeng, a confidant of leader Xi Jinping.
At the start of talks, Ms Yellen pressed China to improve contacts with Washington. She made a case that doing so is in Beijing’s interests because it would help China make better decisions to strengthen its economy.
Leaning on China as the world’s second-biggest economy after the US, Ms Yellen said Washington and Beijing had a responsibility to remain in contact over issues including distressed debt in developing countries and efforts to fight climate change.
“Amid a complicated global economic outlook, there is a pressing need for the two largest economies to closely communicate and exchange views on our responses to various challenges,” Ms Yellen said.
When China’s vice premier spoke, he specifically referenced recent troubles in the US-China relations — including the US downing of a suspected Chinese spy balloon in February — before going on to quote President Xi as having said the world needs the US and China to have stable ties.
“President Xi Jinping has said on many occasions that the wide Pacific Ocean can fully accommodate the US and China’s separate developments and existing problems, so that to prosper together is to develop together,” he said.
Ms Yellen’s public message on Saturday hewed to what she told Chinese Premier Li Qiang on Friday. She repeated a phrase from a day earlier that the US isn’t seeking a “winner-take-all” battle with China.
“It is my belief that a wide swath of our economies can interact in ways that are uncontroversial to both governments,” she told China’s vice premier.
Despite recent tensions, the US and Chinese economies remain deeply intertwined, including as huge trading partners, a fact that Ms Yellen stressed to Mr He on Saturday.
In a meeting with business leaders of US firms in China on Friday, Ms Yellen said decoupling of the US and Chinese economies would not only be destabilising for the global economy but would also be virtually impossible.
He, who has broad responsibilities over China’s economy, will likely play a key role in managing US-China economic relations for years to come. His close ties to Mr Xi date to the 1980s and his appointment in the role appears, at least in part, aimed at solidifying Mr Xi’s campaign to make China’s economy more self-reliant.
US restrictions on tech exports to China — in particular of advanced semiconductors — only raise the urgency of that goal for Chinese leaders. Ms Yellen didn’t explicitly mention US export controls in her public remarks to Mr He. But Beijing has sharply criticised Washington’s moves, which it views as part an effort to contain its rise. The US denies it is seeking to contain China and says such national-security measures are narrowly targeted.
Treasury officials have played down expectations for a specific breakthrough on these and other disagreements during the visit. Rather, officials say Ms Yellen’s trip to Beijing aims to re-establish regular links to China’s leadership, most of which were severed by China’s Covid isolation and more recently by a sharp downturn in ties between the countries. Her visit follows a similar trip to China in June by US Secretary of State Antony Blinken.
During Ms Yellen’s meeting with Premier Li on Friday, for example, a senior Treasury official said a good chunk of that session was devoted to discussing how the US and China talk to one another to make sure the correct mechanisms were in place going forward.
China has so far said very little about what it has told Ms Yellen, although Chinese leaders have greeted her warmly and praised what they view as her pragmatism.
With China’s economy sagging due to a weaker-than-expected rebound from its reopening from the pandemic, Ms Yellen also seeks to get a better handle on the domestic situation in China, including through conversations with retired officials and businesspeople.
On Saturday, Ms Yellen ate lunch with a group of female economists and entrepreneurs in Beijing. A day earlier, she had dinner with a well-known former Chinese central bank governor as well as an earlier meeting with Vice Premier He’s predecessor. Treasury officials have provided few details of what insights those meetings gleaned about the economy in China.
Working with China to try to ensure global macroeconomic stability is one of the key areas where the Biden administration believes the US and China could find room to cooperate. Other potential areas of cooperation identified by the administration include joint counternarcotics work and efforts to fight against climate change.
Earlier in the day, Ms Yellen sat down in Beijing with local climate-finance leaders, where she said China should support existing multilateral channels alongside the US.
Clarence Leong contributed to this article.
The Wall Street Journal
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