US, China need ‘healthy economic relations’, Yellen says

In a two-day meeting with Chinese Vice Premier He Lifeng in San Francisco, United States Treasury Secretary Janet Yellen underscored the necessity for maintaining “healthy economic relations” between the US and China.

Yellen clarified that the Biden administration aims to avoid economic decoupling but is prepared to take unilateral action against Chinese firms supporting Russia’s military efforts in Ukraine.

Yellen stated, “We do not seek to decouple our economy from China’s. This would be damaging to both the US and China and destabilizing to the world.” Despite this, she emphasized that evidence has been observed of Chinese firms and banks facilitating the flow of equipment to Moscow, and those involved would face “significant consequences.”

Expressing concerns about the evasion of sanctions, Yellen clarified that the Treasury has evidence of critical equipment reaching Russia despite imposed sanctions. She, however, refrained from accusing the Chinese government of complicity. Yellen accepted an invitation from Vice Premier He to visit China next year, aiming to establish a “regular cadence of contact” between economic leaders.

This meeting precedes upcoming talks between President Biden and Chinese Premier Xi Jinping, set to take place in San Francisco during the Asia-Pacific Economic Cooperation summit. The strained US-China relations, which escalated during the Trump administration, continue under Biden, who maintains efforts to revitalize US manufacturing and address concerns related to Chinese tech firms.

Despite the challenges, Biden’s administration has taken steps to improve relations with China, with Yellen engaging in diplomatic meetings, including a visit to China in July to discuss economic policies, climate change cooperation, and other global challenges.