US Treasury Secretary Janet Yellen set to call for a ‘constructive and just’ economy China-US relationsas Washington seeks to salvage the frayed ties between the two nations.
In a speech on Thursday, Yellen is expected to warn Beijing that the United States will continue to resist its “unjust” economic policies, but will add that Washington is not trying to “stifle” the Chinese economy with national security measures.
His comments come as ties between the powers are mired in their worst state in decades, having derailed two months ago when a suspected chinese spy balloon flew over the United States.
Yet while Yellen will call for a “healthy economic relationship” with China and outline the need to cooperate on issues ranging from macroeconomics to climate change, his speech will place a heavy emphasis on areas of concern to Washington.
She will say that the United States will continue to safeguard its national security interests and those of its allies and protect human rights, and push back against the People’s Republic of China if necessary.
“We will clearly communicate our concerns to the PRC,” Yellen plans to say, adding, “Our targeted actions may have economic impacts [but] they are driven solely by our concerns about our safety and our values. Our goal is not to use these tools to gain competitive economic advantage.
In reference to export controls related to semiconductors and other measures taken by the Biden administration, Yellen will say that safeguarding certain Chinese military technology is of “vital national interest.”
“[But] let me be clear, these national security actions are not designed. . . to stifle China’s economic and technological modernization,” she said.
US and Chinese officials agree the relationship has deteriorated to its lowest point since normalizing in 1979, with tensions rising sharply over Taiwan as the US grows more concerned about China’s asserted military activity in the country.
More recently, the United States has become concerned about apparent Chinese attempts to target companies including Micronthe Idaho-based memory chip maker.
Beijing believes Washington is trying to contain its rise by limiting its ability to develop a high-end semiconductor industry, and says the United States is helping Taiwan resist its long-term plan to rein it in.
Chinese officials are also privately frustrated that their American counterparts are weaving critical language into speeches that are ostensibly aimed at improving relations. In his remarks, however, Yellen will say that the two countries “need to be able to frankly discuss difficult issues.”
When Joe Biden and Xi Jinping met at the G20 in November, the presidents agreed to work to set a “floor” on the relationship. They discussed a series of high-level exchanges that would begin with Secretary of State Antony Blinken visiting Beijing in February.
But that plan was hijacked when the spy balloon appeared over the United States and Blinken abruptly canceled what would have been the first visit to China by a Biden administration cabinet official in several years.
Beijing has resisted the postponement of the visit for fear that the FBI will soon release a report in the balloon. But in a rare positive sign, two senior Commerce Department officials, including China expert Elizabeth Economy, traveled to Beijing this month for talks on a possible visit later this year by Commerce Secretary Gina Raimondo. .
In his speech, Yellen will also dismiss suggestions that the United States is in decline, in an apparent indirect reference to statements by officials in China that “the east is rising, while the west is declining.”
“Statements of US decline have been around for decades. But they were always wrong,” Yellen should say.
The former Federal Reserve Chairman will also emphasize that countries must work together on critical global issues despite their differences.
“That’s what the world needs from its two largest economies.”
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