US Treasury Secretary to visit China in bid to steady economic ties

US Treasury Secretary Janet Yellen will travel to Beijing on July 6 as part of an ongoing Biden administration effort to thaw US-China relations.

Yellen, who has called the notion of an economic decoupling from China “disastrous,” has frequently said in the past year that she would like to visit China, Associate Press reports

She says the two nations “can and need to find a way to live together” in spite of their strained relations over geopolitics and economic development. Yellen will meet this week with Chinese officials, US companies doing business in China and with Chinese people and will stay through July 9, said the official, who spoke on condition of anonymity to discuss details of the trip.

The goal of her visit is to deepen and increase the frequency of communication between the US and China, the official said. While there are clear areas of common interest where Yellen can make progress, the official said, there are also significant disagreements that will not be resolved through a single trip.

The most recent flareup came after President Joe Biden referred to Chinese President Xi Jinping as a “dictator" during a campaign fundraiser earlier in June.

The Chinese protested loudly, but Biden later said his blunt statements regarding China are “just not something I’m going to change very much.”

The US president’s statements have come after tensions over a Chinese surveillance balloon that the US government shot down, US-led restrictions on China’s access to advanced computer chips and ongoing tensions about the status and security of Taiwan.

Yet in Biden’s dictator comments during a California fundraiser, the president told his audience “don’t worry” about China as the US has taken steps to compete with its financial and technological ambitions.

Yellen’s trip would follow Secretary of State Antony Blinken’s two-day stop in Beijing in June, the highest-level meetings in China in the past five years. Blinken met with Xi and the two agreed to stabilize deteriorated US-China ties.

However, better communications between their militaries could not be agreed upon. Treasury officials didn’t specify which officials she’d meet with but said it would not be Xi.

The treasury secretary’s visit will be more focused on stabilizing the global economy and challenging China’s support of Russia in its ongoing land invasion of Ukraine. China has developed an uncomfortable closeness with the Kremlin — claiming neutrality in the war, but holding joint military drills and frequent state visits with Russian officials.

Still, US officials hold out hope that US-China relations will not further deteriorate.

Yellen met with her previous Chinese counterpart, Vice Premier Liu He, in January in Switzerland and made a big speech at Johns Hopkins University in April calling for “cooperation on the urgent global challenges of our day” between the two countries for the sake of maintaining global stability, while supporting economic restrictions on China to advance U.S national security interests.

New developments show glimmers of what could spark a renewed relationship.

At a Paris summit on global finance last week, a deal was brokered that restructured Zambia’s debt with its creditors, which include China — Zambia’s biggest creditor holding $4.1 billion of a total $6.3 billion debt load. The deal may provide a roadmap for how China will handle restructuring deals with other nations in debt distress, and shows the Asian superpower is willing to cooperate in negotiations with other Group of 20 nations.

“I am pleased that the international community has come together to support Zambia in its time of need,” Yellen said in a statement last week.

However, there are plenty of other tensions impacting the superpowers’ relationship. The discovery of a Chinese surveillance balloon traversing over sensitive areas of the US in February put a damper on her previous travel plans, and further strained relations.

US lawmakers earlier this year grilled TikTok CEO Shou Zi Chew about data security and the social media firm’s ties to China, with some pushing a ban on the app, popular among American youths.

And last October, the Biden administration imposed export controls to limit China’s ability to access advanced chips, which it says can be used to make weapons, commit human rights abuses and improve the speed and accuracy of China’s military logistics.

Yellen’s trip also comes as Biden considers issuing an executive order that would tighten rules on some overseas investments by US companies in an effort to limit China’s ability to acquire technologies that could improve its military prowess.

Still, trade entwines the US and Chinese economies. And despite strong speeches about the need to rethink the relationship, Yellen said in her Johns Hopkins address that “a full separation of our economies would be disastrous for both countries. It would be destabilising for the rest of the world. Rather, we know that the health of the Chinese and US economies is closely linked.”

China shipped more than $536 billion worth of goods to the US in 2022. By contrast, the US exported $154 billion in goods to China, according to the Census Bureau.