US Treasury Secretary Janet Yellen held five hours of talks with Chinese Vice Premier He Lifeng in Beijing, the first in-depth exchange between the nations’ top economic policymakers as they seek to dial back strains in the relationship.
(Bloomberg) — US Treasury Secretary Janet Yellen held five hours of talks with Chinese Vice Premier He Lifeng in Beijing, the first in-depth exchange between the nations’ top economic policymakers as they seek to dial back strains in the relationship.
The meeting on Saturday capped Yellen’s engagements on her first visit to China as Treasury chief, a trip she described as a mission to revive engagement between the two largest economies that’s deteriorated in recent years while friction has soared over issues from Taiwan to technology access.
The meeting was “candid, constructive, and comprehensive,” the Treasury Department said in a statement. While Yellen raised “issues of concern,” she also discussed the Biden administration’s “approach to seek healthy economic competition with China, with a level playing field for American workers and businesses.”
Yellen began by telling He that there’s “ample room for our firms to engage in trade and investment” despite recent tensions and that the US and China should communicate “directly” on specific economic concerns, according to her prepared remarks.
Yellen’s visit is part of a broader push by President Joe Biden’s administration to mend relations with America’s main geopolitical rival while also sending clear messages about US policy. Her trip follows Secretary of State Antony Blinken’s visit in June. Yellen and He met for five hours, a Treasury official said.
China agreed during the meeting to strengthen communication and cooperation on addressing global challenges, though He expressed concern to Yellen about US sanctions and other restrictive measures against China, according to a government statement.
Yellen has been seeking to explain a US strategy she outlined in April that’s geared toward defending and securing national security without trying to hold China back economically.
“The United States will take targeted actions to protect our national security,” Yellen said at the start of her meeting with He.
“While we may disagree on these actions, we should not allow that disagreement to lead to misunderstandings, particularly those stemming from a lack of communication, which can unnecessarily worsen our bilateral economic and financial relationship,” she said.
Presidents Biden and Xi Jinping appeared to smooth the path to better ties in November, only to have their meeting followed by disputes over Taiwan, spying allegations, technology security and Russia’s invasion of Ukraine.
China’s He expressed willingness to continue the work set out by Xi and Biden “and have dialog and communication” on economic and trade topics. In the statement after the talks, China appeared to make it clear for the first time that He is now the “leading point of contact” in economic and trade talks with the US.
New Team
The relationship’s next test may come soon as Biden’s team prepares an executive order curbing US outbound investment in China, which may come as soon as July and cover certain investments in sensitive technologies including semiconductors, artificial intelligence and quantum computing.
Yellen’s message to Chinese officials is that the two countries aren’t in a “winner-take-all” competition and both sides should manage their rivalry with a fair set of rules — something she told Chinese Premier Li Qiang on Friday. Yellen also met on Friday with Pan Gongsheng, who is expected to take over as governor of the People’s Bank of China.
She reiterated those comments to He, saying “where we have concerns about specific economic practices, we should and will communicate them directly.”
He, a longtime confidant of Xi, has succeeded Liu He — a fluent English-speaking veteran of the international stage who had studied at Harvard University. When Yellen and Liu met in January in Zurich, their rapport was such that they at one point left their aides behind as they kept talking.
Treasury officials have downplayed expectations of a major breakthrough during the trip, saying it’s aimed at building communication channels with the Chinese government’s new economic team.
Climate, Women
Earlier Saturday, Yellen held a roundtable on climate finance where she called on China and the US to join forces to tackle climate change. She has often argued that the two nations have a duty to cooperate on global challenges, including environmental issues and debt distress in poorer nations. She also had lunch with Chinese women economists.
“Climate change is at the top of the list of global challenges, and the United States and China must work together to address this existential threat,” Yellen said at the gathering attended by Chinese and international climate experts.
–With assistance from Yujing Liu and Jacob Gu.
(Updates with Chinese statement in sixth and 11th paragraphs.)
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