Treasury Secretary Janet Yellen concluded her Beijing trip with remarks suggesting the world can accommodate both the US and China, despite ongoing disputes regarding technology and security.
Details about the visit: Yellen met with China’s No. 2 leader, Premier Li Qiang, during her two-day visit, though there were no plans for a meeting with Chinese leader Xi Jinping.
* The Treasury Secretary defended “targeted measures” on trade that China’s leaders argue are intended to harm its emerging tech industries.
* Despite the strained relations, Yellen received a warm welcome and significant coverage from the state press.
Disagreements and concerns: Technology and security disputes have brought relations between the world’s two largest economies to a decades-low level.
* A key complaint by China involves restrictions on its access to processor chips and other U.S. technology on security grounds, seen as obstacles to the development of smartphones, artificial intelligence, and other industries.
Future communications: Despite announcing no major agreements or future activity plans, Yellen noted her department and Chinese officials would maintain “more frequent and regular” communication.
* Yellen also attempted to reassure officials that the US didn’t want to decouple its economy from China’s while seeking to mitigate risks in trade.
Economic Impacts: Political tensions between the US and China are contributing to economic uncertainty, which is suppressing consumer and business spending.
* Although China’s economic growth recovered to 4.5% in Q1 2023 from last year’s 3% after restrictions were lifted, factory activity and consumer spending decelerated in Q2.
Aiming for cooperation: Yellen encouraged “healthy economic competition” and expressed concern about “coercive activities” against US companies during her visit.
* She called for cooperation on issues like climate change and the debt burdens of developing countries and suggested that disagreements about trade and security should not hamper economic and financial relations.
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