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Despite security tensions, Janet Yellen says there is “tremendous room” for U.S. and Chinese companies to increase trade and investment during a visit to Beijing aimed at easing friction between the two powers.
Speaking at the start of his meeting with Chinese Economic Czar He Lifeng at the Daoyudai State Guest House in Beijing, the US Treasury Secretary said a “broad part” of the two countries’ economies should be linked in ways. Uncontroversial to both governments.
“Despite recent tensions, the fact that we have set a record for two-way trade in 2022 means our companies have ample room to engage in trade and investment,” Yellen said.
As she addressed herself and her economic team in a cavernous room at the guesthouse, Yellen reiterated calls for Beijing and Washington to improve communication, including on macroeconomics and financial stability.
“Amid a complex global economic outlook, there is a compelling need for the two largest economies to interact closely and exchange views on . . . diverse challenges,” Yellen said.
After their nearly five-hour meeting, Yellen and her team dined with him and other senior Chinese officials on Saturday evening.
Yellen’s visit to Beijing comes weeks after Secretary of State Anthony Blinken became the first Biden administration cabinet official to travel to China. The trips are part of an effort to stabilize ties that have hit their lowest levels in decades. An earlier attempt was derailed after China flew a spy balloon over North America.
Yellen tried to tread a fine line, calling for improved communication while urging Beijing not to overreact to security measures the Biden administration has taken to prevent US technology from being used to help the Chinese military.
“The United States will take targeted actions to protect our national security. Although we disagree on these actions, that disagreement can lead to misunderstandings, especially those stemming from lack of communication, which will unnecessarily worsen our bilateral economic and financial relationship,” he said.
Earlier on Saturday, Yellen met with Chinese climate finance experts. In his meeting, the US and China – the world’s two biggest emitters of greenhouse gases and biggest investors in renewable energy – “have a shared responsibility . . . to lead the way”.
“If China supported multilateral climate institutions like the Green Climate Fund and Climate Investment Funds with us and other donor governments, we could have a bigger impact than we do today,” Yellen said.
John Kerry, President Joe Biden’s special envoy for climate change, is expected to be the next senior US official to visit China.
Yellen’s meeting with him is widely considered the most consequential of her four-day visit.
In addition to being the longest meeting, it gave his team a chance to learn about He, a protégé of President Xi Jinping who is relatively unknown outside China. He has kept a low profile in Chinese state media since assuming the role in March.
Appointed Vice Premier, he succeeded Liu He as China’s economic king. While Liu is respected abroad for overseeing technocrats at the central bank and finance ministry, he has experience in charge of state planning at the National Development and Reform Commission.
He has advocated greater openness to foreign investment, but there are concerns that as a Xi loyalist he is unlikely to push back against Beijing’s tendency to consolidate more control in the hands of state-owned enterprises.
The meeting was also attended by Ban Gongsheng, Governor of the Central Bank of China.