Yellen Urges China to Rekindle Discussions Amid Tech-Related Tensions

U.S. Treasury Secretary Janet Yellen has requested China’s Deputy Leader to prevent technological disputes from impeding economic collaboration amidst ongoing tension over U.S. restrictions on Chinese access to processor chips and other advanced technology. Yellen’s visit on Friday was geared toward mending the increasingly strained bilateral ties.

Yellen met with Chinese Premier Li Qiang and emphasized the necessity for Washington and Beijing to work together on globally significant issues. She called for maintaining constant lines of communication during a period of deteriorating relations, caused by disagreements on technology, security, and other contentious matters.

Yellen is part of a delegation of senior U.S. officials visiting Beijing, hoping to persuade Chinese leaders to rejuvenate governmental exchanges between the two largest global economies. It was clarified earlier that Yellen wouldn’t engage with Chinese leader Xi Jinping, and significant breakthroughs were not anticipated.

In her defense of the so-called “targeted actions,” Yellen justified restrictions on China’s access to critical tech resources as necessary steps for national security.

While acknowledging potential disagreements, Yellen stated, “We should not let any differences exacerbate misunderstandings that unnecessarily degrade our bilateral economic and financial relationships.”

Yellen promoted “healthy economic competition,” alluding to concerns that Beijing is increasingly leveraging subsidies and market barriers to shield its businesses.

Premier Li expressed cautious optimism for improving conditions but did not suggest any alterations in China’s policies, which have been a source of irritation for the U.S. and its trading partners.

China’s finance ministry labeled Yellen’s visit as a substantial step toward implementing the agreement to improve relations, as decided by Xi and U.S. President Joe Biden during their November meeting. However, it did not outline any initiatives and urged Washington to make the first move.

U.S. restrictions on Chinese tech access could potentially hamper or derail China’s efforts to advance its telecoms, artificial intelligence, and other sectors, a concern voiced by Xi in March.

On Friday, Yellen critiqued China’s treatment of U.S. companies during a meeting with business representatives. She expressed concerns about non-market tools like expanded subsidies and market barriers used by China that affect foreign companies. However, she reiterated that the U.S. is not seeking to decouple its economy from China’s, highlighting that such a move would be destabilizing and virtually impossible.

Additionally, Yellen met with Yi Gang, the outgoing governor of China’s central bank, and former Vice Premier Liu He. Meanwhile, President Biden’s blunt comments about Xi being a dictator and increased tensions after a Chinese surveillance balloon was shot down over the U.S. added to the strained relations.

John Kerry, Biden’s climate envoy, is scheduled to visit China next week. This visit is critical as both China and the U.S. are the leading emitters of climate-changing carbon.

This will be Kerry’s first visit to China since climate discussions were halted in August following then-House Speaker Nancy Pelosi’s controversial trip to Taiwan.

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