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Yellen says US seeks 'healthy' competition with China

July 7, 2023

The US treasury secretary is in China on a trip aimed at calming tensions between the world’s largest economies.

Janet Yellen (l), US Treasury Secretary, speaks, alongside Nicholas Burns, US Ambassador to China, during a roundtable discussion with members of the US business community.
Yellen stressed that a decoupling of US, Chinese economies would destabilize the global economyImage: Mark Schiefelbein/AP Photo/picture alliance/dpa/

US Treasury Secretary Janet Yellen stressed on Friday that the United States was not after a "winner-take-all" approach with China.

She made the remarks at a meeting with Chinese Prime Minister Li Qiang in Beijing.

"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," she said. 

What did Yellen say in China?

During the meeting with Prime Minister Li, Yellen expressed hopes for more regular channels of communication between Washington and Beijing. Both countries had a duty to "show leadership" on global challenges such as climate change.

The US treasury secretary also tried to clarify that the US's approach stemmed from the need to "protect" its national security rather than slow down China. She said such actions should not risk the two countries' relationship.

"We may disagree in these instances. However, we should not allow any disagreement to lead to misunderstandings that unnecessarily worsen our bilateral economic and financial relationship," she said.

Who else did Yellen meet?

Yellen also met on Friday with China's former Vice Premier Liu He, who still enjoys strong ties with President Xi Jinping, and with China's outgoing Central Bank Governor Yi Gang.

"They discussed the global economic outlook as well as the respective economic outlooks for the United States and China," a US official said.

Her trip aims to engage in talks with China, following months of tension regarding technological production, the Taiwan strait and Beijing's Moscow ties.

It comes after a trip to the Chinese capital by US State Secretary Antony Blinken.

John Kerry, President Joe Biden's climate envoy, is also due for a visit soon.

The need for US-China cooperation

The US treasury secretary stressed that decoupling the economies of the US and China would be "virtually impossible" and destabilizing for the global markets.

"We seek to diversify, not to decouple. A decoupling of the world's two largest economies would be destabilizing for the global economy," Yellen told a meeting with representatives of US businesses at a session hosted by the American Chamber of Commerce in Beijing.

She urged China to return to more market-oriented economy.

"A market-based approach helped spur rapid growth in China and helped lift hundreds of millions of people out of poverty. This is a remarkable economic success story," she told the US business executives.

Taiwan, the semiconductor superpower

Yellen raised concerns regarding fresh Chinese export controls on metals used in manufacturing semiconductors.

The Chinese ban, which cites national security, comes after the US barred a group of Chinese companies from accessing the most advanced chips, amid a growing rivalry over this crucial technological production.

Yellen said she was "concerned" about the Beijing curbs.

"We are still evaluating the impact of these actions, but they remind us of the importance of building resilient and diversified supply chains," she added.

rmt/lo (AFP, Reuters)