US Treasury Secretary Janet Yellen says ‘impossible to part ways with China’

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Just a day after landing in Beijing for talks with the officials in her four-day trip, US Treasury Secretary Janet Yellen said it was impossible to cut commercial ties with China as it would have repercussions on the global markets.

Her trip comes just a month after a high-level visit of the US Secretary of State Antony Blinken in which he met with President Xi Jinping.

In recent months, the US said it is seeking to “de-risk” from China by limiting the country’s access to advanced technology deemed crucial to Washington’s national security.

The US has banned a number of Chinese firms to prevent them from having access to the most advanced chips while pushing allies to follow suit.

Yellen Friday stressed that the US was not seeking a “wholesale separation of our economies.”

“We seek to diversify, not to decouple. A decoupling of the world’s two largest economies would be destabilising 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.

“And it would be virtually impossible to undertake.”

Ahead of Yellen’s trip, Beijing imposed new export controls on key semiconductor manufacturing metals citing national security concerns.

The Treasury secretary Friday told American businesspeople Washington was “concerned” about the 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 said.

Meetings with officials
Beijing has struck an optimistic tone about the visit, with China’s finance ministry saying Friday that it would serve to “strengthen communication and exchange between the two countries”.

US Treasury Secretary Janet Yellen attends a business round table whit members of the American Chamber of Commerce in China in Beijing on July 7, 2023. — AFP
US Treasury Secretary Janet Yellen attends a business round table whit members of the American Chamber of Commerce in China in Beijing on July 7, 2023. — AFP
“The nature of China-US economic and trade relations is mutually beneficial and win-win, and there is no winner in a trade war or ‘decoupling and breaking chains’,” a ministry official said in a statement.

On Friday morning, Yellen had a “substantive conversation” with her previous counterpart, former Vice Premier Liu He, as well as the outgoing governor of China’s central bank, Yi Gang, a US Treasury official said.

“They discussed the global economic outlook as well as the respective economic outlooks for the US and China,” the official stated.

On Friday afternoon, Yellen is due to meet Premier Li Qiang at Beijing’s Great Hall of the People, providing a chance to discuss the economic relationship, raise concerns and find opportunities for collaboration.

“Yellen actually appears to be a more down-to-earth member of the Biden administration,” Tao Wenzhao, a fellow at the Chinese Academy of Social Sciences, told AFP.

“I think we welcome Yellen’s visit, and this on a functional level should allow both sides to warm up to each other,” he said.

“We are now reshaping, rebuilding China-US relations.”