Prof. ST Hsieh
Director, US-China Energy Industry Forum
June 30, 2023
The US and China both recognize that their bilateral relation is at a dangerously low point, and both are making efforts to avoid a direct confrontation which will be an unprecedent global disaster.
Unfortunately, the gulf between the US and China are so deep and so wide that it is not feasible to manage the bilateral relation with a piecemeal approach. For example, US Treasury Secretary “Yellen hopes to travel to China to ‘reestablish contact’ “won’t be very productive or could be disappointing.
- US and China relation needs some tangible improvements. It is too late to “reestablish contact.” Biden is running for reelection now facing challenges. The window opportunity for Biden Administration could be as short as six months.
- However, a more significant challenge for Biden is to organize a face-to-face summit with Xi asap with the goal of providing a clear and definite theme for Biden’s China policy. China’s official position has been that Biden lacks sincerity, or more bluntly Xi doubts Biden’s credibility.
- Unfortunately, Biden has not shown much leadership in defining and executing his China policy for the US. The US Congress has been acting independently from Biden’s White House on promulgating bills against China.
For example, the following quote is one US reader’s comments about Yellen’s hope.
The Biden administration is literally piling on the trade bans and ratcheting up the trade war while at the same time sending people over for “dialogue”. It’s the most schizophrenic and gaslighting behavior ever.
On the other hand, China has made their “requests” clear for Yellen’s trip to Beijing, see the attached news report. It is not clear whether Yellen could address any China’s requests if she were in Beijing anytime soon.
Wed, June 28, 2023 at 3:53 PM PDT
(Reuters) -U.S. Treasury Secretary Janet Yellen said she hopes to travel to China to reestablish contact with Beijing, acknowledging there were disagreements between the two countries, MSNBC on Wednesday reported her saying during an interview.
The are heightened tensions and pessimism in the U.S.-China relationship over national security issues, including Taiwan, Russia’s war in Ukraine, growing U.S. export bans on advanced technologies and China’s state-led industrial policies.
“My hope in traveling to China is to reestablish contact. There are a new group of leaders, we need to get to know one another,” Yellen was quoted as saying by MSNBC.
“And we need to discuss our disagreements with one another so that we don’t have misunderstandings, don’t misunderstand one another’s intentions.”
The U.S. is, and will, take actions to protect its national security interests even if it “imposes some economic costs on us,” she told MSNBC.
Yellen did not detail a specific timing for any visit to China. She plans to be there in early July for the first high-level economic talks with her new Chinese counterpart, Bloomberg reported earlier this week.
Withdraw ‘301 investigation,’ remove additional tariffs, review trade deal to be discussed if Yellen visits: former Chinese official
By Chen Qingqing and Zhao Juecheng Published: Jun 30, 2023 02:41 PM
There is a window of opportunity in China-US relations after US Secretary of State Blinken’s visit to China. If US Treasury Secretary Janet Yellen also visits China in the near future, then the key issues for both sides to discuss would be the cancellation of the US’ additional tariffs on China, the withdrawal of its “301 investigation” against China, and the review of the first phase of the China-US trade agreement, Zhu Min, former deputy governor of the People’s Bank of China and former deputy managing director of the IMF, told the Global Times late Thursday. Zhu believes trade is the cornerstone of China-US economic relations, with the cancellation of additional tariffs on Chinese goods exported to the US being the first issue that needs to be discussed between the two sides.
“Biden had once promised to cancel the additional tariffs on China, but this has not been realized, which is a blemish,” said Zhu. Currently, the tariff on Chinese imports of US goods is 7.1 percent while the tariff on exports to the US is 19.2 percent, which is unequal. In addition, the high tariffs are borne by American businesses and people, which also impact US inflation.
Three years have passed since the signing of the phase one trade agreement between China and the US, and bilateral trade continues to grow and both parties need to review this agreement to identify what can continue to be implemented and what is not suitable for continued implementation. However, the premise is to withdraw the “301 investigation,” he said. In addition, the US should also cancel unreasonable sanctions on Chinese companies, Zhu noted.
He believes that the Inflation Reduction Act passed by the US in 2022 is essentially an industrial policy aimed at China’s photovoltaic industry, which has raised new issues internationally.
During the dialogue on Thursday, representatives from China and the US also discussed the issue of generalizing the concept of national security. Some US representatives mentioned that if everything is about national security, then there is no national security.
In fact, in fields such as energy, healthcare, and public health, there is a lot of room for cooperation between China and the US, but generalizing the concept of national security blocks potential cooperation, Zhu noted.
He also believes that the new “Washington consensus” announced by US National Security Advisor Jake Sullivan is a new framework based on national security. If the US bases its policies on this, it will make the whole world increasingly divided.
In terms of Washington’s “de-risking” narrative, Zhu said the US came up with “de-risking” because it has realized that “decoupling” from China is hard to achieve.
“But ‘de-risking’ is a vague and dangerous concept, and its biggest problem is that it is unable to clarify where the boundaries are,” Zhu said, noting that “de-risking” means reducing dependency, which will eventually turn into “anti-globalization.”