Treasury Secretary Janet L. Yellen said on Tuesday it would be a mistake for the US to try to break away from China and called for deepening economic ties between the world’s two largest economies.
The comments come as the Biden administration seeks to mend ties with China, which suffered a setback this year when a Chinese surveillance balloon was found flying over the United States. Secretary of State Antony J. Blinken plans to travel to Beijing next week, and Ms. Yellen is expected to travel there soon.
speaking in a House Financial Services Committee Hearing Ms Yellen made clear on Tuesday that she believes economic ties with China are important.
Ms. Yellen said, “I think that as much open trade and investment as possible benefits us and benefits China, and it would be disastrous for us to try to disengage from China.”
The United States maintains tariffs that the Trump administration imposed on billions of dollars of Chinese imports, and the Biden administration is imposing new restrictions on how American companies can invest in China. But Ms Yellen said the United States only intended to “de-threat” the relationship and had no intention of harming China economically.
Ms. Yellen said, “I certainly don’t think it’s in our best interest to stop the economic progress of the Chinese people.” “China has been successful in lifting millions of people out of poverty, and I think we should applaud that.”
Though she spoke in a friendly tone, Ms. Yellen also laid out potential concerns that could arise in meetings with her Chinese counterparts.
Due to national security concerns, he said, the administration is considering a ban on investment by US private equity firms in Chinese companies that have ties to China’s military. He also said the Treasury Department was examining additional sanctions on China in response to human rights abuses against Uighurs in Xinjiang.
In recent months, the United States has been increasing pressure on China to provide debt relief to Zambia and other developing countries. Ms Yellen said that despite some signs of willingness to cooperate and help poorer countries avoid defaults, China had not done enough. He stressed the growing need for international financial institutions such as the World Bank and the International Monetary Fund to help the most vulnerable economies.
“These institutions reflect American values,” Ms. Yellen said. “It serves as an important counterweight to non-transparent, volatile lending from others such as China.”
Asked about Ms Yellen’s comments on Tuesday, Wang Wenbin, a spokesman for China’s foreign ministry, rejected the idea that the IMF or World Bank is there to advance US interests.
“The IMF is not the IMF of the United States, nor is the World Bank for that matter,” he said.