Janet Yellen Welcomes China’s Chief Economist Ahead of Anticipated Biden-Xi Talks in San Francisco
US Treasury Secretary Janet Yellen and Chinese Vice Premier He Lifeng will hold a two-day meeting in San Francisco to discuss the bilateral relationship between the world's largest economies and global issues
Sign up for CNN's Meanwhile in China newsletter to get insights into the country's growth and its global implications. US Treasury Secretary Janet Yellen is set to engage in a two-day discussion with Chinese Vice Premier He Lifeng, addressing the bilateral ties and other global concerns from Thursday onwards.
Yellen's discussion with China's new economic leader will lay the groundwork for the high-stakes potential meeting between US President Joe Biden and Chinese President Xi Jinping next week at the Asia-Pacific Economic Cooperation forum in San Francisco. The United States is hosting this year's summit, an annual gathering of top government and business leaders from the 21 economies in the Pacific Rim.
Over the past few months, US-China relations have improved following earlier tensions. Both countries' officials aim to strengthen diplomatic ties and enhance cooperation on economic matters. This comes amidst a sluggish global economy and ongoing geopolitical tensions in other regions.
Yellen's last encounter with He took place in Beijing in July, marking the second visit by a US cabinet official to the Chinese capital in a few weeks, demonstrating Washington's efforts to reestablish positive relations. Additionally, Secretary of State Antony Blinken, climate envoy John Kerry, and Commerce Secretary Gina Raimondo have also been dispatched to Beijing since the summer, making a total of four cabinet officials from Washington.
Beijing has also dispatched its top diplomat, Chinese Foreign Minister Wang Yi, to the capital of the United States.
The increased diplomatic efforts seem to have improved the stability of relations between the two parties, which previously had disagreements on various matters such as restrictions on US investments in advanced technology in China and newly imposed limits on the types of semiconductors that American companies can trade there.
Chinese Foreign Minister Wang Yi and US Secretary of State Antony Blinken meet on Thursday, October 26.
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"Both Biden and Xi are motivated to prevent further deterioration, acknowledging the importance of enhancing stability in US-China relations during this critical and unpredictable global moment. Improved relations will ultimately yield benefits for both nations and the world," remarked Mattie Bekink, the Economist Intelligence Corporate Network's China director based in Shanghai.
Bekink emphasized, however, that this does not imply the elimination of tensions. On the contrary, there appears to be a growing transparency regarding the existing challenges while attempting to establish common ground or a framework for engagement in areas such as trade, investment, and climate change."
Earlier this year, Yellen outlined three principles to guide the US relationship with China: prioritizing national security and human rights, promoting a balanced and equitable economic relationship, and cooperating with China on global issues.
At an event in Washington last week, Yellen stated that the United States is not aiming to decouple from China. However, she emphasized the importance of ensuring that the country's economic security is not solely dependent on China for crucial inputs.
Yellen emphasized the significance of the US-China relationship, stating that it is crucial to ensure the well-being of Americans and people worldwide. She expressed concern about the adverse global impact that would result from an economic separation or a situation in which countries, especially in the Indo-Pacific region, are compelled to pick sides. Yellen made it clear that the US does not desire a fragmented world and the devastating consequences it would bring.
US officials are navigating the delicate task of improving the relationship with China, focusing on national security and human rights while avoiding any perception of intentionally undermining China's economic prospects.
Han Zheng, China's vice-president, speaks during the Bloomberg New Economy Forum in Singapore on Wednesday.
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The Treasury Department is responsible for converting the August executive order of the Biden administration, which restricts US investment in China's artificial intelligence, quantum computing, and semiconductor industries, into anticipated guidelines that will come into force next year. US officials have clarified that these limitations aim to prevent US capital from supporting China's military and not to harm China's economy. However, American investors have conveyed to CNN that these rules are considered a significant setback for the US venture capital sector.
China is currently making efforts to recover from a severe economic downturn characterized by elevated levels of youth unemployment and a sluggish real estate market. To achieve this, the government has implemented stimulus measures. The International Monetary Fund has recently raised its projection for China's economic growth as a result of Beijing's initiatives to support the struggling property sector.
