US Treasury Secretary Yellen Criticizes Chinese Curbs on US Firms, Calls for Improved Communication

US Treasury Secretary Janet Yellen expressed her concerns over China’s restrictive measures against American companies during her diplomatic visit to Beijing, aimed at fostering better bilateral relations. On Friday, Yellen declared that the United States and its allies would push back against Beijing’s “unfair economic practices.”

While highlighting the need to address grievances, Yellen also emphasized that the US aims to diversify its economic ties with China rather than completely decoupling. Her visit follows Secretary of State Antony Blinken’s recent trip, as both nations engage in talks to ease tensions.

Despite expectations of limited immediate outcomes from the four-day visit, the fact that the visit is taking place at all carries significance. Sino-American relations have rapidly deteriorated in recent years due to numerous contentious issues, including human rights concerns in Xinjiang and Hong Kong, territorial disputes involving Taiwan and the South China Sea, and China’s increasing dominance in various industries such as graphite, silicon production, rare earths, lithium batteries, and solar panels.

Yellen expressed particular dismay over China’s recent punitive actions, including the crackdown on US consulting firms and the introduction of export controls on critical minerals necessary for computer chip manufacturing. These measures came in response to US restrictions preventing Chinese companies from accessing advanced chips, while pressuring allied nations to adopt similar policies.

In a separate meeting with Chinese officials, Yellen clarified that the US restrictions on advanced technology exports were driven by national security concerns, rather than an attempt to gain economic advantages. However, Beijing remains skeptical, perceiving the US as determined to impede China’s full potential. Moreover, China sees a network of US military alliances and bases across the region, stretching from Australia to Seoul, as containment strategies aimed at countering its rise.

Conversely, Washington believes that China restricts fair market access for leading US companies. Both sides acknowledge that the current circumstances are unlikely to change in the near term. The era when the US shepherded China’s entry into the World Trade Organization is long gone.

China’s finance ministry urged the US to take “concrete action” to improve bilateral ties, emphasizing the mutually beneficial nature of their economic and trade relations. They stressed that a trade war or “decoupling and breaking chains” would yield no winners.

Secretary Yellen also underlined that severing the extensive economic ties between the world’s two largest economies would be detrimental and virtually impossible. She highlighted the potential destabilization of the global economy resulting from such a decoupling.

In addition, Yellen emphasized the importance of clear and direct lines of communication between the United States and China. She called for the management of the relationship and stressed that a war between Beijing and Washington over Taiwan should be unthinkable.

The US-China relationship has long suffered from a lack of effective communication, and both sides are now actively working to re-establish it as a crucial step towards finding common ground and addressing mutual concerns.