Prof. ST Hsieh
Director, US-China Energy Industry Forum
626-376-7460
December 15, 2023
Global diplomacy needs a coherent policy backed up with deeds: Action Speaks Louder than Words. Fundamentally, the two major parties in the US have very different approaches, domestically as well as globally. Then the separation of powers central to the US political system design creates more difficult challenges for the administration to execute its policy. The very recent controversy of funding the proxy war in Ukraine is a typical case that confuses the world on US pledges.
US-China relation is critical to global peace and economic development. A challenge of managing the relation is that the US and China have different MODUS OPERANDI on almost every issue. For the Chinese, it is puzzling why any US Treasury Secretary would cover “human rights” when she/he discusses economic with her/his Chinese counterparts: their Portillo does not include human rights.
It is also challenging for her/his Chinese counter parts to discuss trade issues, US Trade Representative Kathrine Tai should be the interlocutor on trade, is she? Then US Commerce Secretary Gina Raimondo said a few days ago ‘we have a long way to go’ on U.S.-China business relations. There is a US law maker advocating that Chinese garlic poses national security threat…But President Biden’s Chinese policy is vague and in-consistent in many ways.
“The Strategy of compartmentalization” along with traditional good cop vs bad cop can be viewed as a negotiation technique, rather than a strategy. Often the Good Cop yields and makes promises, then the Bad Cop challenges or reverses the promises. The net result would be Good Cop “talk the talks” but the Bad Cop does not “walk the walks!” Then diplomacy becomes a futile blame game or grandstanding at best.
President Biden has very low approval ratings, it is public information. His China policy does not have bipartisan support. Biden should focus on developing a China policy, including trade, that is supported by the majority of the US voters first before his staff engages her/his Chinese counterparts. The US general election is less than one-year away and Biden is behind in public opinion poll, how effective would Secretary Yellen be in China “next year?” Because it is entirely possible that Trump will take charge again after the voting on November 8th, 2024.
Yellen urges China to shift from ‘unfair’ state-driven economic policy
Beiyi SEOW
Fri, December 15, 2023 at 1:11 AM PST
US Treasury Secretary Janet Yellen called Thursday for China to shift from a state-driven approach in economic policy, saying the model can discourage investors.
“Too strong a role for state-owned enterprises can choke growth, and an excessive role for the security apparatus can dissuade investment,” she added, speaking at the US-China Business Council’s 50th anniversary dinner in Washington.
US companies have long complained about what they see as an unfair business environment in China, with limited protection for intellectual property and preferential treatment afforded to domestic competitors.
The fears were worsened this year by a crackdown on consulting firms operating in China, and changes to an anti-espionage law that gives Beijing more power than ever to punish what it deems threats to national security.
Citing a recent US-China Business Council member survey, Yellen noted that firms were reconsidering investment plans and said that should be concerning for Beijing.
The trends point to potential benefits in China “pursuing structural reforms,” Yellen said.
“For too long, American workers and firms have not been able to compete on a level playing field with those in China,” she added.
“The PRC deploys unfair economic practices, from non-market tools, to barriers to access for foreign firms, to coercive actions against American companies,” Yellen said, referring to the People’s Republic of China.
– Managing ‘shocks’ –
At Thursday’s dinner, the two countries’ ambassadors read letters from US President Biden and Chinese leader Xi Jinping — with Xi laying out a competing view to Yellen’s, saying there was “great potential” for “strengthening China-US trade cooperation.”
He added that Beijing would “unswervingly promote high-level opening up to the outside world, and create a market-oriented, rule of law-based, internationalized business environment.”
“Chinese modernization will bring more opportunities to global enterprises including American ones,” the letter continued.
Yellen also laid out priorities for US-China economic ties next year, noting that relations between the world’s two biggest economies would continue to face challenges.
“We seek not to resolve all our disagreements nor avoid all shocks. This is in no way realistic,” she said.
But Yellen added that Washington aims to “make our communication resilient.”
Officials have sought to put a floor under relations as tensions soared in recent years — with both countries clashing on issues such as human rights and export controls.
– Seeking clarity –
Yellen said that her next trip to China as Treasury chief will include discussing “difficult areas of concern.”
She added that the United States will hold firm its commitment to clear communication on topics like outbound investment restrictions, and keep pushing China on national security issues.
Other priority areas include “pressing for clarity on China’s economic policies and policymaking to better inform our own decision-making.”
“Understanding China’s plans, especially how China intends to respond to challenges with local government debt and the real estate market or how it might react if unexpected weaknesses in its economy should arise, is crucial,” she added.
The United States will also seek more transparency on China’s non-market practices, Yellen said, and boost exchanges between financial regulators and in climate cooperation.
One US Reader’s Comment
She is saying the Chinese system is winning, therefore unfair to the US.
Yellen to visit China again in 2024, focusing on ‘difficult’ topics
Christopher Condon and Viktoria Dendrinou
Updated Fri, December 15, 2023 at 4:25 AM PST
(Bloomberg) — Treasury Secretary Janet Yellen said she plans to visit China again in 2024, seeking to deepen areas of cooperation and improve communication even as she vowed to continue confronting Beijing over national security concerns and human rights.
“A significant portion of the agenda will focus on discussing difficult areas of concern with my counterpart,” Yellen said of her plans for a second trip to China as Treasury secretary. The remarks came in a speech Thursday evening in Washington to the US-China Business Council.
Yellen made clear the US would continue to pursue export controls and investment restrictions that have angered Beijing, but she also stressed it’s crucial to engage with China in ways that could prevent a wide range of potential crises — from diplomatic to financial.
“We seek not to resolve all our disagreements nor avoid all shocks,” Yellen said. “But we aim to make our communication resilient so that when we disagree, when shocks occur, we prevent misunderstanding from leading to escalation and causing harm.”
Yellen has emerged as something of a “good cop” in the Biden administration’s handling of China relations, gradually building ties with the country’s economic leadership.
Along the way she’s employed a strategy of compartmentalization, confronting China in certain areas while simultaneously pursuing areas of collaboration.
Yellen also emphasized the importance of using her exchanges with China to gather information about the world’s second-largest economy.
Injecting an election campaign flavor to her remarks, the Treasury chief said the Biden administration has “course corrected” its broader policy toward China following the administration of former President Donald Trump.
Yellen also reiterated criticism of Chinese policies that she said had harmed American workers and firms by creating an uneven playing field.
Shifting away from its state-driven economic approach in industry and finance would benefit China too, Yellen added. “Too strong a role for state-owned enterprises can choke growth and an excessive role for the security apparatus can dissuade investment.”
One US Reader’s Comment:
With 2024 election, she may not have much time putting her agenda to China. Try she must, but most law makers will not be on her side.