Janet Yellen’s China trip: No breakthrough but 10 hours of talks

Janet Yellen's China trip: No breakthrough but 10 hours of talks

Treasury Secretary Janet L. Yellen came to China with hopes that the United States could restart a relationship that has been deteriorating for years and recently derailed at key points of tension – including the war in Ukraine, a Chinese spy balloon including flying over US territory and shot down by the US military, and the exchange of sanctions on trade between the two countries escalated.

After 10 hours of meetings over two days in Beijing, Ms Yellen told a news conference on Sunday that she believed the United States and China were in a stable position despite their “significant disagreements”.

“We believe the world is big enough for both of our countries to thrive,” Ms. Yellen said.

Ms. Yellen announced that the two sides would communicate more frequently at the highest level, citing better communication as a way to prevent mistrust from forming and deteriorating a relationship that she called “one of the most consequential relationships of our time.” His visit was accompanied by Secretary of State Antony J. Happened a few weeks after Blinken. And later this month, John Kerry, the special presidential envoy for climate change, will visit China to restart global warming talks.

Nevertheless, there is no possibility of a meaningful reduction in economic stress. Ms Yellen went back to Washington on Sunday without announcing any breakthroughs or a deal to mend the continuing rift between the two countries. And Ms. Yellen made clear that the Biden administration has serious concerns about a number of China’s commercial practices, including its treatment of foreign companies and policies that the United States sees as attempts at economic coercion.

On her visit, the first by a US Treasury secretary in four years, Ms. Yellen met with four of the most powerful Chinese leaders involved in economic policymaking under President Xi Jinping, who is beginning his third term in office: Premier Li Qiang , China’s No. 2 official; Ms. Yellen’s counterpart, Vice Premier He Lifeng; Finance Minister, Liu Kun; and the newly installed party chief of the People’s Bank of China, Pan Gongsheng.

Hours before Ms Yellen’s press conference, China’s official news agency Xinhua released a report on her visit, describing the talks as constructive but also reiterating what China sees as key areas of contention. The report expressed China’s continuing objections to the Biden administration’s emphasis on preserving US national security through trade sanctions.

“China believes that normalizing national security is not conducive to normal economic and trade exchanges,” Xinhua said. “The Chinese side expressed concern about the US sanctions and restrictive measures against China.”

US-China relations are highly consequential. Their economies, the world’s two largest, together represent 40 percent of global output and remain integral partners in many ways. They sell and buy important products from each other, finance each other’s businesses, and make apps and movies for audiences in both countries.

Chinese officials expressed their concerns to Ms. Yellen. The Treasury Secretary said they discussed tariffs imposed by the Trump administration on Chinese imports, which have been left in place. While Ms. Yellen has criticized the tariffs as ineffective, she suggested that the administration would not make a decision about the levy until after its ongoing internal review is over, the first since President Biden took office. Reiterating the position of

He also acknowledged Chinese concerns about US restrictions on investment in China and said he tried to explain that such measures would be narrowly targeted at certain sectors and not intended to have a broad impact on China’s economy. Chinese officials and experts also worry that the administration’s efforts to limit China’s access to certain technology could hinder their development of high-potential industries such as artificial intelligence and quantum computing.

China has imposed its own extensive restrictions on outbound investment since 2016, as it has encouraged Chinese companies and households to shy away from overseas real estate speculation and instead invest in investments of strategic value such as aircraft production, heavy manufacturing and cyber security. sectors have encouraged them to invest abroad. ,

Wu Xinbo, dean of international studies at Fudan University in Shanghai, cautioned that Ms Yellen’s visit would not lead to any substantial improvement in relations unless it was accompanied by a change in the Biden administration’s policies towards China.

“So far, we have seen no indication that Biden will reconsider his economic policy toward China,” he said.

The willingness for more dialogue struck some analysts as a significant development, with the two countries at least speaking about their disagreements after months of silence.

He Weiwen, a former Chinese Ministry of Commerce official who is now a senior fellow at the Center for China and Globalization in Beijing, welcomed Ms. Yellen’s comment that both China and the United States could move forward. “China and the US have deep differences, so continued, direct exchanges are not only constructive but also of critical importance,” he said.

Chinese economic policymakers have a long history of working more closely with the Treasury Department, which has historically valued China as a large investor in US bonds and a potential market for US financial services. The Department of Commerce and the Office of the United States Trade Representative have more strained relations with their Chinese counterparts, with greater emphasis on promoting employment and industrial self-reliance.

This was especially true during the Trump administration. Liu He, who was vice premier overseeing international economic policy until He was succeeded by Lifeng four months ago, has repeatedly tried to strike a deal on trade and economic matters with Steven Mnuchin, who has supported former President Donald J. Served as Treasury Secretary under Trump. But Mr Mnuchin has been unable to persuade Mr Trump, who has begun imposing tariffs on a wide range of Chinese exports in retaliation for unfair trade practices.

Chinese officials as well as many American businesses with ties to China had hoped for friendlier relations under Mr. Biden. Instead, tensions between the US and China have deepened over the past two years and have noticeably cooled following the spy balloon episode in February.

While Ms. Yellen’s visit was seen as a positive step, many experts in both China and the United States cautioned against expecting much to change.

“Yellen’s visit is expected to cool the temperature on economic relations somewhat and remind the US and China that they share some commercial interests, albeit diminishing ones, and that they need to talk on every issue.” is — maybe the trade margin will improve,” said Mark Sobel, a former longtime Treasury official.

But given national security concerns in both countries, a perception in China that the US wants to control its economic advancement and the sharp political language on both sides, he said, “Yellen’s visit hardly reflects the underlying dynamics and trajectory of the economic relationship.” will change.”

Despite differences between the US and China, Ms Yellen was warmly received during her first visit to Beijing as Treasury Secretary.

In a meeting with China’s second-highest official, Premier Li Qiang, he noted that a rainbow had appeared above his arrival and suggested it was a symbol of hope that relations between the two countries could be improved.

Ms. Yellen was seen on Thursday night dining at a restaurant serving cuisine from Yunnan Province, Chinese state media wrote about his impressive use of chopsticks And pointed out that the restaurant had seen an increase in bookings after they were seen on social media eating mushroom dishes.

Ms. Yellen also met with Chinese experts on climate finance and had lunch with a group of Chinese women who are economists and entrepreneurs. He suggested that there are many areas where the United States and China can reach agreement.

“Our people have many things in common – far more than our differences,” Ms. Yellen said at the luncheon.

anna swanson Contributed reporting.

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