As military communications remain halted and Beijing’s new export curbs on some metals generate new concerns, U.S. Treasury Secretary Janet Yellen will focus on recalibrating relations between the two largest economies in the world during her maiden trip to China.
Yellen’s Visit to China: After Beijing’s abrupt announcement on Monday of controls on exports of some gallium and germanium products widely used in semiconductors, as well as a new counterespionage law, both of which are seen as potentially harmful to U.S. firms, U.S. officials say they expect “candid” discussions during Yellen’s July 6–9 trip.
According to U.S. officials, Yellen will actively work to establish new channels of communication and coordination on economic issues, even though they do not anticipate significant progress. Additionally, she will emphasize the negative effects of providing Russia with lethal assistance.
Chinese government representatives express concern about the Biden administration’s plans to restrict American businesses’ involvement in China and interpret them as efforts to separate the two economies. The labour market in China is competitive, and the country’s economy is rebounding from COVID lockdowns more slowly than anticipated.
Amidst a halt in military communications between the two countries and weeks after Secretary of State Antony Blinken’s visit to Beijing, where he and Chinese President Xi Jinping agreed that their rivalry should not escalate into conflict, Yellen’s eagerly anticipated trip comes.
Diplomacy cannot be replaced, according to a senior government official. “A telephone call is just not the same.”
Yellen’s Visit to China: Prospects for Tariffs and Sanctions Discussions Amid Lingering Concerns
China believes that Yellen’s visit will “improve the mood” for any future discussions with Commerce Secretary Gina Raimondo on tariffs and sanctions on Chinese tech companies, according to Wu Xinbo, a professor at China’s Fudan University, who described Yellen as a “voice of reason” inside the Biden administration.
However, several critics claimed that the discussions were avoiding crucial issues.
Given China’s reticence to discuss potentially dangerous military matters, Derek Scissors, a senior fellow at the American Enterprise Institute, claimed that Yellen was going on “an empty trip.”
They appear to be supplicants. Since the Chinese won’t engage with us on the security front, it appears that the economic front is being substituted, he said. It’s unpleasant and strange, but it’s not unimportant.
ADVANCEMENT OF COMMUNICATION
One senior administration official stated that Yellen would not only concentrate on economic matters during her discussions but also convey a message to her Chinese colleagues. The message would highlight that any actions violating sanctions against Russia, due to its involvement in the Ukraine War by providing lethal assistance to the country, might result in the imposition of sanctions on Chinese firms.
“We frequently hear Chinese promises that they won’t provide lethal support. The official stated, “We are holding them accountable for that and we’ll keep an eye on them.
According to the official, the U.S. believes that China expresses alarm over the mutiny of the Wagner mercenary group last month and considers the Russian military to be frail. However, Beijing relies on a stable Russia for food and gasoline.
The American military’s shooting down of a Chinese spy balloon over their country and the upcoming potential meeting between President Joe Biden and Xi at the Asia-Pacific Economic Cooperation summit in San Francisco in November have made both Blinken and Yellen’s visits crucial for enhancing communication.
“Secretary Yellen’s travel is more than just a means of getting ready for a potential Biden-Xi encounter at APEC. The international economy is at risk because the two greatest economies in the world’s top economic positions haven’t spoken to one another much in more than three years, according to Scott Kennedy of the Centre for Strategic and International Studies.
TRADE TARIFFS STILL EXIST
The trip, according to Jake Colvin, president of the National Foreign Trade Council, might help build a “new normal” and a foundation for the two countries’ relationship. However, it won’t remove the $360 billion in tariffs imposed by the previous administration of Donald Trump or the export controls that have gained traction under Biden.
Data from the U.S. Commerce Department reveal that despite the thawing of relations, trade between the two countries increased in 2022 for the third straight year.
According to Colvin, there are still opportunities for American firms, farmers, and workers in China. “We can’t just consider this from the perspective of reducing risk,”
According to a senior Treasury official, Yellen will underline the importance of cooperating with Beijing on climate change, pandemic preparedness, and debt distress even as Washington continues to take targeted actions due to human rights or security concerns.
She will explain to her Chinese counterparts that Washington does not wish to separate the two economies, which together produce 40% of the world’s economic output, while reserving the right to defend human rights and U.S. national security interests through targeted measures, the official continued.