**Treasury Secretary Janet Yellen Criticizes Chinese Treatment of U.S. Companies and New Export Controls on Metals Used in Semiconductors**
Treasury Secretary Janet Yellen recently visited Beijing in an effort to revive strained relations between the United States and China. During her visit, Yellen criticized Chinese treatment of U.S. companies and new export controls on metals used in semiconductors. She defended U.S. controls on technology exports, stating that they are necessary for national security. Yellen also rejected the notion that the United States is trying to separate its economy from China’s, instead emphasizing the importance of healthy economic competition. She expressed concerns from the U.S. business community regarding China’s use of non-market tools and barriers to foreign firms’ market access.
**U.S.-Chinese Relations at a Low Point**
Relations between the United States and China have deteriorated in recent years, resulting in the lowest level of bilateral ties in decades. Disputes over technology, security, Beijing’s military expansion, and other issues have contributed to this strained relationship. Yellen’s visit aimed to address these issues and find ways to improve relations.
**Meetings with Chinese Officials**
During her visit, Yellen met with the outgoing governor of China’s central bank, Yi Gang, and former Vice Premier Liu He. These engagements were part of Yellen’s efforts to engage with Chinese officials and discuss the challenges faced by both countries. However, Yellen did not meet with Chinese leader Xi Jinping, and no breakthroughs on major disputes were expected.
**China’s Call for a Favorable Environment for Economic and Trade Relations**
The Chinese finance ministry viewed Yellen’s visit as a “concrete measure” to improve relations, in line with an agreement reached between Xi and President Joe Biden in November. The ministry called for the United States to take concrete actions to create a favorable environment for the healthy development of economic and trade relations.
**Unease among Foreign Companies in China**
Foreign companies, including those from the United States, have expressed unease about their status in China. Incidents such as raids on consulting firms, the expansion of a national security law, and calls for greater self-sufficiency have raised concerns among businesses operating in China. Yellen reiterated her concerns over punitive actions taken against U.S. firms in recent months.
**Chinese Government Frustrated by U.S. Curbs on Access to Advanced Processor Chips**
China’s government has been frustrated by U.S. curbs on access to advanced processor chips due to security concerns. These restrictions pose a threat to China’s efforts to develop crucial technologies such as telecoms and artificial intelligence. Chinese leader Xi Jinping has accused Washington of trying to hamper China’s development.
**Potential for Separate Markets and the Negative Impact on Economic Growth and Innovation**
There are concerns that the trade controls implemented by Beijing and Washington may lead to the two largest economies in the world splitting into separate markets with incompatible products. Such a scenario would have a detrimental impact on economic growth and innovation. Yellen made it clear that the United States does not seek a wholesale separation of economies and emphasized that decoupling the two largest economies would be destabilizing and virtually impossible.
**Yellen Defends U.S. Export Curbs and Rejects Chinese Accusations**
Yellen defended U.S. export curbs and rejected Chinese accusations that these measures are used for economic advantage. She emphasized that actions taken to protect national security are narrowly targeted and based on straightforward national security considerations, rather than economic advantage over China.
**Continued Efforts to Stabilize Relations**
Yellen’s visit follows Secretary of State Antony Blinken’s meeting with Xi Jinping last month, which aimed to stabilize bilateral relations. While progress was made in this regard, no agreement was reached on improving communications between the two countries’ militaries. Efforts to stabilize the global economy and address Chinese support of Russia during the invasion of Ukraine were also emphasized during Yellen’s visit.
**Further Diplomatic Engagements to Address Climate Change**
In addition to Yellen’s visit, John Kerry, the U.S. climate envoy, is scheduled to travel to China next week. China and the United States are the world’s two largest emitters of carbon, highlighting the importance of their cooperation in addressing climate change. This visit will be Kerry’s first to China since climate discussions were suspended in retaliation for a visit by then-House Speaker Nancy Pelosi to Taiwan in August.
In conclusion, Treasury Secretary Janet Yellen’s visit to Beijing aimed to address concerns and improve strained relations between the United States and China. The meetings with Chinese officials and discussions on various issues highlighted the need for healthy economic competition and the avoidance of a complete decoupling of the two economies. Efforts to stabilize relations and address climate change were also emphasized during Yellen’s visit.