[ad_1]
The United States and China agreed Friday that they will not seek to “decouple” their economies and pledged to take steps to improve the business environment for American and Chinese companies operating in both countries, a major step toward thawing of relations between the world’s largest economies. .
Treasury Secretary Janet L. Yellen said after two days of meetings with Deputy Prime Minister He Lifeng in San Francisco that they had concluded that they should strive for a “healthy economic relationship” and try to work together more constructively.
“We do not seek to decouple our economy from China,” Ms. Yellen said. “This would be damaging to both the US and China and destabilizing to the world.”
She and Mr. He met at a vulnerable time for the global economy, which is struggling with slow growth and wars in Ukraine and the Middle East. While economic strength in the United States has been a bright spot, China’s economy continues to sputter. Official statistics this week show prices in China are falling as households and businesses remain reluctant to spend, even as state-owned banks invest in building more factories.
The talks between Ms. Yellen and Mr. He, China’s top economic official since March, took place before the Asia-Pacific Economic Cooperation summit opens in San Francisco on Saturday, setting the stage for a much-anticipated meeting next week between President Biden and China’s top leader Xi Jinping.
After years of growing acrimony between the two countries, the Biden administration has prioritized stabilizing relations, sending a number of senior officials to Beijing this year in hopes of reopening lines of communication. After Ms. Yellen’s visit in July, the Treasury Department set up economic and financial working groups with China to give both countries a new forum to air complaints and look for ways to cooperate.
Many controversial economic issues continue to cloud the relationship. Biden administration officials have expressed concerns about the mistreatment of U.S. companies operating in China, and there is continued frustration over the theft of U.S. intellectual property and Chinese dominance of the electric vehicle market.
“A healthy economic relationship requires that American workers and businesses are treated fairly,” Ms. Yellen said.
China also has grievances and has expressed frustration over measures the United States has taken to limit U.S. investment in certain Chinese sectors, over tariffs on Chinese imports into the United States, and over the backlash Chinese companies face if they invest in America. The Chinese government has also pushed back against the Biden administration’s rules aimed at blocking China’s access to advanced technologies that the United States fears could be used for military purposes.
Ms. Yellen said she had raised concerns about the extent of China’s non-market policies, which the Biden administration says unfairly subsidizes Chinese exports, and its impact on American workers and businesses. The finance minister also expressed concerns about recent Chinese export controls on graphite and other crucial minerals and urged China not to supply Russia’s defense industrial sector.
The Treasury Secretary said the United States had seen evidence that Chinese companies were supporting Russia’s defense sector and that she had asked Mr. He to do more to crack down on actions by Chinese companies that violated U.S. sanctions.
Ms. Yellen has said that personal contact with China’s new economic team is important as the Biden administration seeks to better understand how China plans to guide its economy out of a difficult post-pandemic recovery. On Friday, she said Chinese officials had expressed confidence in their plans and wanted to avoid taking short-term measures to stimulate the economy that could lead to longer-term problems.
Ms. Yellen said she and Mr. He had also discussed the budget outlook in the United States and that she had assured him that the Biden administration had taken steps to raise more tax revenue and reduce budget deficits. China is one of the largest holders of US government bonds.
The high-level meetings this week come at a time when the politics of improving relations with China are becoming more complicated. During a Republican presidential debate this week, several candidates struck a confrontational tone and called for cutting economic ties with China.
But Ms. Yellen has taken a very different approach. She has explained to her Chinese counterparts that the United States wants to diversify its supply chains, while arguing that the consequences of a further deterioration in economic ties between the two countries would have serious consequences for the global economy.
While no specific policy breakthroughs were announced Friday, Ms. Yellen expressed hope that more dialogue would help avoid the kind of tit-for-tat retaliation that had marred the U.S. relationship with China over the years.
“This isn’t just communication for communication’s sake,” she said. “It allows us to avoid misunderstandings and unintended escalation, make informed decisions and work towards specific policy outcomes.”
Ms. Yellen said the two sides agreed to cooperate on efforts to combat climate change and provide debt relief to low-income countries facing the prospect of default. The Finance Minister added that she and Mr. He had agreed to communicate more regularly and that she expected to travel to China again next year.
