US-China economic rivalry not ‘winner-take-all’, US Treasury Secretary Janet Yellen says
- Yellen meets Premier Li Qiang, central bank governor Yi Gang and former economic tsar Liu He on Friday
- Treasury secretary also addresses representatives of American businesses in Beijing on second day of trip
Competition between the United States and China is not a “winner-take-all” scenario, US Treasury Secretary Janet Yellen said on Friday as the world’s two largest economies signalled that further talks may be in the pipeline amid a growing rift over a range of issues, including trade, technology and Taiwan.
“We seek healthy economic competition that is not winner-take-all, but that, with a fair set of rules, can benefit both countries over time,” Yellen said during a meeting with Premier Li Qiang on Friday. “The United States will, in certain circumstances, need to pursue targeted actions to protect its national security, and we may disagree [with China] in these instances.
“However, we should not allow any disagreement to lead to misunderstandings that unnecessarily worsen our bilateral economic and financial relationship.”
Yellen added that she hoped her visit to China could “spur more regular channels of communication” between the two countries, despite their disagreements.
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Li told Yellen in Beijing that whether China and the US have the “right” relations is relevant to the future of mankind, party mouthpiece CCTV said on Friday evening.
“It is hoped that the US side will take a practical and sensible approach and work with China to get China-US relations back on the right track,” Li was quoted by CCTV as saying. “Strengthening cooperation is a real need and the right choice.
“Both sides should have candid communication on important economic and related issues and seek a consensus, injecting positive energy and stability into China-US economic relations.”
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China’s Ministry of Finance (MOF) on Friday also called Yellen’s visit a “concrete measure to implement the important consensus” after the presidents’ November meeting in Indonesia.
The ministry added that her visit would also “strengthen communication and exchanges between the two countries in the financial field”.
China hopes the US will take “concrete action” to create a favourable environment for the healthy development of bilateral economic and trade ties, according to the MOF statement.
Economic and trade relations are mutually beneficial and win-win, and there is no winner in a trade war and “decoupling”, the ministry said.
I have been particularly troubled by punitive actions that have been taken against US firms in recent months
Earlier on Friday, Yellen met with American businesses in Beijing and told the American Chamber of Commerce in China that a “stable and constructive relationship between the US and China is in the interests of American workers and businesses”.
“I have been particularly troubled by punitive actions that have been taken against US firms in recent months,” Yellen said.
“I am also concerned about new export controls recently announced by China on two critical minerals used in technologies like semiconductors, we are still evaluating the impact of these actions. It reminds us of the importance of building resilient and diversified supply chains.
“I have made clear that the US does not seek a wholesale separation in our economies. We seek to diversify and not to decouple. A decoupling of the world’s two largest economies would be destabilising for the global economy, and it will be virtually impossible to undertake.”
Yellen also called for a shift to market reforms in China, and highlighted US concerns over China’s use of “non-market” tools that include subsidies for state-owned enterprises and domestic firms, along with barriers to market access for foreign firms.
US restrictions on China’s access to chip technology are designed to be “narrowly targeted”, are based on “straightforward national security considerations”, and are not intended to gain an economic advantage over China, Yellen added.
Yellen also met with central bank governor Yi Gang and former economic tsar Liu He on Friday, according to a report by Reuters, citing an unnamed US Treasury official.
Yellen is the most senior US official to visit Beijing following Secretary of State Antony Blinken’s fence-mending trip in June, when he met Xi and senior diplomats, including Foreign Minister Qin Gang and Wang Yi, director of the Office of the Central Commission for Foreign Affairs.
It has also been reported that US climate change envoy John Kerry will visit China next week, while expectations are high for US Secretary of Commerce Gina Raimondo to meet her counterparts in Beijing.
The primary objective of Yellen’s four-day visit to China, which started on Thursday, is to ease tensions between the two sides, although expectations are low that it will result in the resolution of many differences.
Ahead of Yellen’s trip, China stepped up its response to US chip curbs by launching new export controls on two metals key to semiconductor manufacturing.
What to expect from US Treasury Secretary Janet Yellen’s trip to China
In May, China also banned US chip giant Micron Technology from selling its chips to key infrastructure projects, citing national security risks.
And in March, Chinese authorities raided the office of US corporate due diligence firm Mintz Group in Beijing and detained five local staff.
Xi and Biden had agreed to hold further discussions to stabilise China-US relations during their meeting at the G20 summit in Bali.
But relations soured again in February after Washington accused Beijing of operating a spy balloon over sensitive locations housing nuclear weapons in Montana.
China denied the allegations, saying that it was a “civilian airship” that had deviated from its planned route.
The balloon was later shot down by a US fighter jet, but the dispute caused Blinken to postpone his visit to China until last month.
