Thu. Sep 21st, 2023

Prof. ST Hsieh

Director, US-China Energy Industry Forum


[email protected]

April 20, 2023

It is good to hear from the US Treasury Secretary, Janet Yellen spoke in clear language about her positions on US-China Relation: National Security before Economy makes sense. But lately, US National Security could mean anything for anyone including Chinese owning US lands. The unilateral decree of national security without elaboration or consultation is going to impact global trade and may lead to full economic decoupling.

Beijing’s initial reaction to Secretary Yellen’s speech was not positive: US ‘saying one thing but doing another.’

Secretary Yellen is well respected, but she is not the US Secretary of State so does her positions on China represent the President Biden’s Administration. It would be essential for President Biden and/or Secretary Blinken formally and fully endorse Secretary Yellen’s position including” a full separation of our economies would be disastrous for both countries.”

In fact, a full decoupling of the US and China economies would be a disastrous for the global economy.

US and China are the world two largest economies, both nations face difficult but different challenges. So, both the US and China each has limited bandwidth to managing the bilateral relations. For example, the US governance is unique and noisy. The anti-China or anti-CCP voices from the US are loud and clear but they are close to outright regime change.

It is fundamentally important for President Biden to speak clearly on his China policy. But with his low public approval rating one has to balance any Biden’s

Policy statements with that coming from the Congress. The next general election is heating up, there will be even more harsh statements about China. It will be very challenging for the Chinese to respond.

Janet Yellen Says Security Comes Before Economy in U.S.-China Relationship

U.S. curbing some ties, but ‘a full separation of our economies would be disastrous for both countries’

By Andrew Duehren

WASHINGTON—Treasury Secretary Janet Yellen said protecting national security would be the U.S. priority in its relationship with China even if it slows economic growth, taking a hawkish stance as she pushed for more collaboration with Beijing. 

In a speech Thursday, Ms. Yellen laid out the Biden administration’s vision for its economic relationship with China. The U.S. will remain the world’s dominant economic power, Ms. Yellen said, curbing its ties with China in certain areas. But she said the U.S. isn’t trying to prevent China’s economic advancement, adding that many trading and scientific links should remain.

“The United States will assert ourselves when our vital interests are at stake. But we do not seek to decouple our economy from China’s,” Ms. Yellen said at the School of Advanced International Studies at Johns Hopkins University. “A full separation of our economies would be disastrous for both countries.”

Finding the balance with China between defending national security and encouraging economic growth is a central task for Ms. Yellen and the Biden administration. China is the world’s second largest economy, behind only the U.S., and the globe’s largest exporter. Trade between the two countries reached a record last year. 

But ties between the two countries have been deteriorating for years. Tensions escalated earlier this year when a Chinese surveillance balloon flew over the U.S. and was shot down, complicating a push to restore regular communications.

Beijing has ignored attempts to restart discussions on global-security issues and refused to engage with U.S. defense officials. Ms. Yellen, whose plans to travel to China earlier this year were delayed by the balloon incident, said during her speech she would visit “at the appropriate time.”

A spokesman for the Chinese embassy in Washington said “a healthy and stable China-US relationship is in the fundamental interest of both peoples.” 

As Washington tries to steady the relationship, the U.S. also is rallying close allies to reorient their economies away from China, warning that Beijing is a risky economic partner that could cut the world off from key exports. In a new step, the U.S. is preparing to restrict some investments into advanced technology in China after last year banning the export of advanced semiconductors and chip-making equipment there. 

“Even though these policies may have economic impacts, they are driven by straightforward national-security considerations,” Ms. Yellen said. “We will not compromise on these concerns, even when they force trade-offs with our economic interests.”

Chinese leader Xi Jinping asked President Biden in November to remove the wide-ranging U.S. export controls designed to keep Beijing from acquiring or producing advanced semiconductors, people briefed on the discussion said. The restrictions remain in place. 

While Ms. Yellen routinely criticizes China in public remarks, she was more forthright on Thursday about the U.S.’s willingness to make economic sacrifices for the sake of national security. 

She had previously sounded more open to working with China on economic issues than others in the Biden administration, such as calling for lifting some tariffs on Chinese imports as other officials sought to keep them. 

And she has worried that China could retaliate against the U.S. if Beijing views the Biden administration’s policies as too punitive, people familiar with her thinking said. 

Ms. Yellen discussed China with close allies last week on the sidelines of meetings of the International Monetary Fund and World Bank in Washington. 

They discussed how depending on China, particularly for minerals used in electric-vehicle batteries, could make Western countries vulnerable if those supplies were cut off. 

U.S. officials are particularly worried about the possibility of a conflict over Taiwan, a self-governing island that Beijing regards as part of China and aims to take control of. U.S. policy toward Taiwan has historically been ambiguous, but Mr. Biden has said repeatedly that the U.S. would defend it from a Chinese attack. Economic ties between the U.S. and China would likely suffer deeply in a conflict. 

The Biden administration’s approach to pull much of the Western world away from China has fueled concerns from some foreign officials that the world economy might split into competing blocs, one led by the U.S. and the other by China, slowing trade and investment around the world. 

The IMF has repeatedly warned against such fragmentation. European Central Bank President Christine Lagarde recently said policy makers need to take steps to ensure geopolitical tensions don’t contribute to increasing inflation. 

Ms. Yellen said the U.S. could still compete with China economically. 

She called for close communication between the U.S. and China even as the relationship remains adversarial. She said the two countries needed to collaborate on issues such as climate change and debt restructurings in low-income countries. 

Some lower-level economic officials at the Treasury and Commerce departments have traveled to Beijing recently for talks. China has been interested in a visit by Ms. Yellen and Commerce Secretary Gina Raimondo, and the White House has said it is in talks with Beijing about potential trips.

Yellen’s remarks on China-US economic relations show US ‘saying one thing but doing another’: experts

By GT staff reporters Published: Apr 21, 2023 09:54 PM

Chinese experts said that China welcomes and agrees to build a healthy, constructive and fair trade relationship with the US, but the US is being deceptive by “saying one thing but doing another,” aiming to benefit from the economic cooperation with China while still catering to domestic politicians, commenting on remarks on the China-US economic relationship made by US Treasury Secretary Janet Yellen.

By user

Leave a Reply

Your email address will not be published.