Treasury Secretary Janet Yellen Holds High-level Meetings in 4-Day Visit to China

The Lede: U.S. Secretary of the Treasury Janet Yellen returned from a four-day trip to Beijing where she met with top Chinese officials with the message that the two countries were on steadier footing after her constructive meetings and that they would pursue more frequent communication, the visit produced no new announcements or breakthroughs that change current U.S. or Chinese policies.

What We Know:

• Yellen met with Liu He, China’s former vice premier; Yi Gang, the departing governor of the People’s Bank of China (PBOC);  Li Qiang, China’s second-highest-ranking official; He Lifeng, China’s Vice Premier; Liu Kun, the Chinese finance minister; and the new chief of the PBOC, Pan Gongsheng. After meeting with Chinese experts on climate finance and having lunch with a group of Chinese women economists and entrepreneurs, she commented that the U.S. and China still have many areas in common and where the two countries can find agreement.
• Topics of discussion on Yellen’s visit included the importance of maintaining dialogue and communication, the deteriorating business environment for foreign firms in China, new U.S. measures restricting outbound investments, the increasingly tense tech war between the two superpowers involving semiconductors, and the Russian War in Ukraine.

The Background: Yellen’s visit comes just a few weeks after Secretary of State Antony Blinken met with top Chinese officials, including President Xi Jinping in Beijing. Other high-level meetings have been held between Chinese and U.S. officials. These include meetings between Chinese Commerce Minister Wang Wentao with U.S. Secretary of Commerce Gina Raimondo and U.S. Trade Representative Katherine Tai, a secret visit to Beijing by CIA director Wiliam Burns, a meeting between U.S. national security adviser Jake Sullivan with senior Chinese diplomat Wang Yi in Vienna, and a visit to Beijing by U.S. Assistant Secretary of State for East Asian and Pacific Affairs Daniel Kritenbrink. John Kerry, the special presidential envoy for climate change is expected to visit China later this month to restart global warming discussions.

Likely Outcomes:

• The meetings between Yellen and Chinese officials struck a tepidly hopeful tone with the desire to find areas of mutual benefit, but recognizing the need to manage the heightened tensions between the superpowers without an end in sight. The two countries now find themselves in an environment without the help of structural guardrails that have anchored their economic relationship in the past. As they navigate this environment, each side will continue to test the boundaries of the other. Escalations and retaliations will necessitate increased and robust communication and dialogue. Both sides may find that these types of high-level visits and meetings will be vital forums to better gauge each side’s positions.

Quotables:

"We seek healthy economic competition that is not winner-take-all but that, with a fair set of rules, can benefit both countries over time." - Janet Yellen, U.S. Secretary of the Treasury

No one visit will solve our challenges overnight. But I expect that this trip will help build a resilient and productive channel of communication…Broadly speaking, I believe that my bilateral meetings — which totaled about 10 hours over two days — served as a step forward in our effort to put the US-China relationship on surer footing…We believe that the world is big enough for both of our countries to thrive. Both nations have an obligation to responsibly manage this relationship: to find a way to live together and share in global prosperity” - Janet Yellen, U.S. Secretary of the Treasury

"Yesterday, the moment you arrived at our airport and left the plane, we saw a rainbow. I think it can apply to the US-China relationship too: after experiencing a round of winds and rains, we surely can see a rainbow…China hopes the US will uphold a rational and pragmatic attitude, meet China halfway, and push China-US relations back on track soon.” - Li Qiang, Premier of China

“We’ve been trying, regardless of what’s happened at the political level, to find common cause with our Chinese counterparts by employing, manufacturing, producing, buying, selling, paying our taxes and doing it all in a manner that reflects our values.” Michael Hart, president of the Chamber of Commerce in China

“Unfortunately, these relationships that have been mutually beneficial have now become politicized, securitized and even demonized — treated as having an impact on national security. But I personally think that while there is so-called strategic competition between China and the United States, they still have many common interests.” - Wang Yong, director of the Center for American Studies at Peking University

“Yellen’s trip will likely turn down the temperature on the economic relationship for a bit and remind the U.S. and China that they share some commercial interests, even if waning, and they need to talk through thick and thin — perhaps business conditions will improve at the margins.” - Mark Sobel, former U.S. Treasury official

Good Reads:

The world is big enough for US and China, Yellen says as she concludes Beijing trip (CNN Business)

China and the U.S., Still Adversaries, Are Talking. That’s a Start. (NYT)

US Treasury Secretary Janet Yellen says US not seeking 'winner-take-all' competition with China (ABC Australia)

Yellen, in Beijing, Criticizes China’s Treatment of U.S. Companies (NYT)