Global Courant
China has called on the United States to take concrete measures to create a conducive environment for both sides to achieve mutual benefit.
Beijing hopes US Treasury Secretary Janet Yellen, a mild-mannered US official who embarked on a four-day trip to China on Thursday, will take home a message for President Joe Biden: There will be no winners in trade wars and an economic ‘decoupling’ .
Following China’s revelation earlier this week of export controls on semiconductor raw materials gallium and germanium, Yellen met with the Chinese premier Liqiang Friday at the Great Hall of the People in Beijing.
She told Li that the US is aiming for healthy economic competition, rather than a “winner-take-all” battle, with China, which could benefit both countries over time. She also said that in certain circumstances the US should take targeted actions to protect its national security.
Yellen is the second senior US official to visit China after US Secretary of State Antony Blinken met Chinese President Xi Jinping in Beijing on June 19.
These talks took place against the background of an intensifying chip war in which Japan and the Netherlands will limit the export of their raw materials and equipment for making chips to China on July 23 and September 1, respectively.
Media reports said last week that Washington will soon announce its plan to ban Nvidia from shipping its A800 and H800 artificial intelligence chips to China, as well as ban US funds from investing in China’s high-tech sectors later this month. In retaliation, China said Monday it will require companies to apply for licenses to export gallium and germanium from August 1.
“See Rainbow”
When Yellen arrived in Beijing on Thursday, she said tweeted that she was “seeking healthy economic competition that would benefit American workers and businesses and to work together on global challenges.”
“We will take action to protect our national security when necessary, and this trip provides an opportunity to communicate and avoid miscommunication or misunderstanding,” she said in the tweet.
Chinese officials and state media have so far used a friendlier tone to describe Yellen’s China trip than they did with Blinken’s.
“I am very happy to meet you in Beijing,” Li told Yellen at the start of their meeting on Friday. “Not only China and the United States, but also people around the world pay close attention to your visit to Beijing.”
“Yesterday, the moment you arrived at our airport and exited the plane, we saw a rainbow,” he said. “I think it can also apply to the relationship between the US and China: After a round of wind and rain, we can definitely see a rainbow.”
“I also often tell Chinese entrepreneurs that we are always struggling,” he said. “If we say it’s bad this year, it could be even worse next year. We have to survive.”
He said Chinese enterprises should observe the global economy and look ahead and not just look at the water under their feet on rainy days. He said this practice can also be applied in China-US relations.
Prior to meeting with Li, Yellen had a “substantive conversation” with former Chinese vice premier Liu He and outgoing China’s central bank governor Yi Gang, AFP reported. They discussed the global economic outlook and the respective economic outlook for the US and China.
US Treasury Secretary Janet Yellen meets with representatives of China-based US companies in Beijing on July 7, 2023. Photo: Twitter, @SecYellen
Equal relationship
The Chinese Ministry of Finance said this in a Friday rack that Yellen’s visit to China is a concrete measure to implement the important consensus of last November’s Xi-Biden meeting. It said the trip will strengthen communication and financial exchanges between the two countries.
“The essence of Sino-US economic relations is to achieve mutual benefit and win-win results. There will be no winners in trade wars and ‘decoupling’,” said an unnamed Treasury Department spokesman. “We hope that the US will take concrete measures to create a conducive environment for the healthy development of economic and trade relations between the two countries.”
Su Xiaohui, deputy director of the American Studies Department at the China Institute of International Studies, comments in a video released Friday, it was said that Yellen’s trip to China had been decided by both the US and China, was not the result of an invitation from China, meaning Beijing is not asking the US for help anywhere.
Su says that the fact that Yellen will stay in China longer than Blinken means that both the US and China want to discuss matters in detail.
She says Beijing is willing to host US officials because it believes Washington is aware that suppressing and restraining China will have a negative impact on the US. She says Washington clearly knows that US companies want to see stable Sino-US relations.
“From China’s perspective, Yellen’s journey does not mean that the US can make demands on China, or that it can unilaterally pressure China and force it to compromise,” she says. “Her journey should emphasize that the development of the relationship between the two countries should be equal and mutually beneficial.”
She says Beijing’s statement about “no winners in trade wars” may hit Yellen, who once questioned the Trump administration’s tariffs on Chinese imports. She says the so-called “risk reduction” or “decoupling” of the United States from China does not live up to the spirit of mutual benefit and win-win outcomes.
Diversification
In May, G7 leaders met in Japan and agreed that their members would “evade” China. Beijing said there is no difference between “de-risking” and “de-coupling” as both will lead to the departure of foreign companies from China.
Yellen preferred to describe the United States’ strategy as “diversification.”
She told representatives of some China-based US companies at a meeting on Friday that a decoupling of the US and Chinese economies would be “virtually impossible”.
“We try to diversify, not decouple. A decoupling of the world’s two largest economies would destabilize the global economy,” she said, adding that Washington was not seeking a “massive separation of our economies.”
Yellen said the US government is concerned about Beijing’s export controls on metals essential to semiconductor production and is still evaluating the impact of these actions. She said China’s curbs reminded the US of the importance of building resilient and diversified supply chains.
“I also discussed concerns about barriers to market entry, China’s use of non-market tools and punitive action against US companies,” she said. tweeted.
Luo Fuqiang, a military commentator, say in his latest vlog that he is still not convinced that Washington will consider China’s interests and stop its suppression against China.
But he says US officials visiting China will continue to be received by senior Chinese officials as Beijing wants them to help send authoritative messages back to the US.
Some commentators say Beijing does not have high hopes for the outcome of Yellen’s trip, as the conflicts between the US and China are related to the US Department of Commerce and the Office of the US Trade Representative, not the Treasury Department.
Read: China squeezes key metal supplies in chip war escalation
Follow Jeff Pao on Twitter at @jeffpao3
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