Yellen advocates “healthy competition” between China and US in Beijing – 07/07/2023 at 17:50

US Treasury Secretary Janet Yellen on Friday advocated “healthy competition” between China and the US in Beijing, despite trade tensions between the two world powers.

“We want healthy economic competition, not meritocracy, with fair rules that benefit both countries,” Yellen said during a meeting with Premier Li Qiang.

The Treasury Secretary, who will make his first trip to China since taking office in 2021, called for “differences” not to “unnecessarily worsen” relations between the two countries.

The reports come amid rising geopolitical tensions as some US politicians have been arguing for months for Washington to reduce its dependence on Asian corporations.

Ms. Yellen urged caution on the matter. “Cutting out the world’s two largest economies would destabilize the global economy,” he warned of American business leaders.

Chinese Premier Li Keqiang has signaled an improvement in relations between Beijing and Washington.

“Yesterday, when you got off the plane, we saw a rainbow over Beijing,” he told his host. “I think this also applies to relations between China and the United States (…) we can see a rainbow.”

– “Little Step” –

The visit comes just weeks after Secretary of State Anthony Blinken announced a bid by the Biden administration to renew physical ties with Beijing, after three years of almost total isolation from China due to the health crisis.

“In the Biden administration, Ms. Yellen seems more pragmatic than others,” Tao Wenzhao, a member of the Chinese Academy of Social Sciences, told AFP.

Through his visit, he said, “we are engaged in the process of reshaping and rebuilding Sino-US relations.”

Chen Dingting, head of the Canton-based think tank The Intelicia Institute, shares the same belief, judging that the visit could have “positive effects” on the bilateral relationship.

“A small step toward better China-US relations is a giant step for the world and the global economy,” said Liu Xiang, an expert at the Chinese Academy of Social Sciences.

In the morning, the US Treasury secretary was able to have a “genuine conversation” with his former vice-premier Liu He and China’s central bank governor Yi Gang, an official said. Treasury.

“They discussed the global economic outlook and the US and China respectively,” the source added.

Ms. Yellen pleaded Thursday that if no immediate major progress is expected by the Treasury, “this trip is an opportunity to avoid communication errors or misunderstandings.”

– Restrictions –

The main sticking point is in semiconductors, where restrictions have been imposed in recent months to cut off US technology supplies, including chips from Chinese companies.

China, which seeks autonomy in the region, believes these measures are aimed at hindering its development and perpetuating US hegemony.

On Monday, Beijing announced restrictions on exports of two metals essential to semiconductors and of which it is a major producer. The move is widely seen as a response to US pressure.

“I am concerned about the new export restrictions recently announced by China (…) and we are in the process of assessing the impact of these measures,” Ms Yellen responded to US corporate officials on Friday.

The latter are concerned about the country’s business climate after searches and investigations were launched against some of them in recent months.

“After this visit (by Ms. Yellen), the hope is that there will be other important visits between the two countries,” Michael Hart, president of the American Chamber of Commerce in China, told AFP.

Since health restrictions were lifted earlier this year, several major US employers have visited China, including Apple CEO Tim Cook, Microsoft founder Bill Gates and Tesla boss Elon Musk.

On Saturday, Janet Yellen will meet and dine with Vice Premier He Lifeng, who is in charge of economic affairs, a US Treasury source said.

She has to interview sustainable finance and meet female economists.