Before leaving, Yellen said at a news conference that the United States and China remain at odds on a number of issues, but she expressed confidence that her visit has strengthened US efforts to “put US-China relations on a firmer footing.”
“There are significant differences between the United States and China,” Yellen said at the conference held at the US Embassy in Beijing, citing Washington’s concerns about what she described as “unfair economic practices” and recent punitive measures against US companies.
“But President Joe Biden and I do not see the relationship between the United States and China in terms of a great power struggle. We think the world is big enough for our two countries to thrive,” she added.
With US-China relations deteriorating over security issues, including Taiwan, a US embargo on high-tech exports and China’s state-led industrial policies, Washington is trying to mend relations between the world’s two largest economies.
US Secretary of State Antony Blinken visited China last month, the first by the most senior US diplomat since Biden assumed the presidency, and US climate envoy John Kerry is also expected to visit China this month.
The US diplomatic effort comes ahead of a potential meeting between President Biden and his Chinese counterpart, Xi Jinping, at the G20 summit in September in New Delhi or the Asia-Pacific Economic Cooperation (APEC) meeting scheduled for November in San Francisco.
Yelin said the aim of her visit is to establish and deepen relations with China’s new economic team, reduce the risk of misunderstanding and pave the way for cooperation in such areas as climate change and the debt crisis.
“I think we’ve made some progress and we can have a healthy economic relationship that benefits us and the world,” she added, noting that she expects more and more regular contacts.
She said Chinese officials had raised concerns about an expected executive order restricting overseas investment, but she reassured them that any such measure would be narrow in scope and implemented in a transparent manner, with a decision-making process that allows for public opinion.
Yellen added that she had told Chinese officials that they could raise concerns about US actions and that Washington would be willing to interpret them and “may in some situations address unintended consequences of actions we have taken unless they are carefully directed.”
Disengagement would be disastrous
Yellen met officials including Chinese Premier Li Qiang and deputy governor of the People’s Bank of China Pan Gongshen, whom she referred to as the governor of China’s central bank, apparently confirming his expected promotion.
She also met with US companies working in China and experts in climate finance and economics.
During her meetings with Chinese officials, Yellen urged increased cooperation between the two sides on economic and climate issues, while criticizing what she described as Chinese “punitive measures” against US companies.
She reaffirmed that Washington does not seek to disengage from the Chinese economy, due to “this having a catastrophic impact on the two countries and destabilizing the world.”
The United States imposed export restrictions aimed at limiting Beijing’s ability to obtain electronic chips, which Washington fears could be used in military applications, and is considering measures to limit US investment in sensitive areas in China.
But US lawmakers want stronger action. A bipartisan group has proposed giving the government sweeping powers to stop the flow of billions of dollars in US investment to China.
Yellen said she assured her Chinese counterparts that any investment restrictions “will be carefully targeted, clearly targeted, and limited to a few sectors where we have national security concerns.”
In response to a question about the plans of the BRICS member states, Brazil, India, Russia and China, to launch a new currency, Yellen said she expected the dollar to remain the dominant currency in international transactions.
Regarding the Russia-Ukraine war, Yellen told Chinese reporters that it is “necessary” for Chinese companies to avoid providing tangible support to Moscow in its war or enabling it to evade sanctions.
Both sides played down their expectations of a breakthrough during the talks, while praising the opportunity for a direct diplomatic meeting between them.
“One visit will not solve the challenges facing us overnight. But I expect that this trip will open a flexible and constructive channel of communication,” Yellen said.
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