Treasury Secretary Janet Yellen Preparing to Make Long-Awaited Trip to China This Week

Treasury Secretary Janet Yellen is preparing to travel to China Thursday as part of an ongoing effort by the Biden administration to thaw U.S.-China relations, said a Treasury official.

Secretary Yellen, who has referred to the notion of an economic decoupling from China as “disastrous,” has often said in the past year that she would like to visit China. She says the two nations “can and need to find a way to live together despite their strained relations over economic development and geopolitics.

Yellen will meet this week with U.S. companies doing business in China, with Chinese people, and with Chinese officials and will stay through July 9, said the official.

Yellen’s visit aims to deepen and increase the frequency of communication between China and the U.S., said the official. There are also significant disagreements set to be resolved through a single trip.

The most recent flareup came after the president referred to Chinese President Xi Jinping as a “dictator” during an earlier June campaign fundraiser. The Chinese protested loudly, but President Biden later said his blunt statements about China are “just not something I’m going to change very much.”

Yellen’s trip would follow Secretary of State Antony Blinken’s two-day stop in Beijing in June, the highest-level meetings in the past five years.

The secretary met with Xi and agreed to stabilize the deteriorated China-U.S. ties. However, better communication between militaries was not an issue that could be decided upon. Treasury officials didn’t specify which officials Yellen would meet with but said it would not be Xi.

The visit by the secretary will be more focused on challenging China’s support of Russia and its ongoing land invasion of Ukraine and stabilizing the global economy. The communist country has developed an uncomfortable closeness with the Kremlin — holding joint military drills and frequently meeting with Russian officials while continuing to claim neutrality in the war.

Still, officials in the U.S. hold out hope that U.S.-China relations will not deteriorate further.
Secretary Yellen met with her previous Chinese counterpart, Vice Premier Liu He, in Switzerland in January band made a speech at Johns Hopkins University in April where she called for “cooperation on the urgent global challenges of our day” between the two countries for the sake of maintaining global stability, while continuing to support economic restrictions on China to advance U.S. national security interests.

At a Paris summit on global finance last week, a deal was brokered that restructured Zambia’s debt with its creditors, including China. The country is Zambia’s biggest creditor, holding $4.1 billion of a total $6.3 billion debt load. The deal could provide a roadmap for how China plans to handle restructuring deals with other nations in debt and shows the Asian superpower is willing to cooperate in negotiations with other Group of 20 nations.

“I am pleased that the international community has come together to support Zambia in its time of need,” said Yellen in a statement last week.

Several tensions continue to impact the relationship between the superpowers

However, there continue to be other tensions that affect the relationship of the superpowers. The discovery of a Chinese surveillance balloon that traveled over sensitive areas of the United States in February put a damper on her previous plans while further straining relations.

Earlier this year, U.S. lawmakers grilled Shou Zi Chew, TikTok CEO, about data security and the social media firm’s ties to China, with some pushing a ban on the app.

Last October, the Biden administration imposed export controls to limit the ability of China to access advanced chips, saying it can be used to make weapons, improve the accuracy and speed of China’s military logistics and commit human rights abuses.

Secretary Yellen’s trip comes as President Biden considers issuing an executive order that would tighten the rules on some investments by American companies overseas to limit China’s ability to acquire technologies that could improve its military aptitude.

Still, trade entwines the Chinese and U.S. economies. Despite strong speeches about the need to rethink the relationship, Yellen said in her Johns Hopkins address that “a full separation of our economies would be disastrous for both countries. It would be destabilizing for the rest of the world. Rather, we know that the health of the Chinese and U.S. economies is closely linked.”

China shipped over $536 billion of goods to the United States last year. In contrast, the U.S. exported $154 billion in goods to China, according to data by the Census Bureau.