Treasury Secretary Janet Yellen will be heading on a diplomatic mission to China to try to ease tensions between the two countries, even as President Joe Biden moves to decouple the U.S. economy from reliance on China for manufacturing.
The economic rivals find themselves on opposite sides of some major international issues. China’s support of Russia in the face of the Ukraine invasion has aggravated the United States, and the Chinese see the United States’ involvement with the breakaway island country of Taiwan as unacceptable interference in their affairs.
Yellen reportedly intends to establish a foundation for future talks between the world’s two largest economies on issues that include the direction of the global economy, debt relief, and climate change, according to The Washington Post. The modest goal signals just how strained the relationship has become.
As Secretary of State Antony Blinken did in June, Yellen will also inform the Chinese of the United State’s displeasure with China’s ties to the Kremlin, per NPR.
On the economic front, the Biden administration is reportedly looking at weakening its commercial ties with China and pivoting to friendlier nations. The industries that will be impacted include semiconductor manufacturing, pharmaceuticals, and EV batteries, according to the Post. To Beijing, these moves are aimed at containing a rising economic competitor.
China experienced an upturn in its economy after lifting its severe COVID-19-related shutdowns, but that growth has slowed recently, reported the Post. High-interest rates have lowered demand in the United States and Europe, reportedly dragging down the export-dependent Chinese economy.
“The U.S. may say it’s not trying to contain China. But that is the message that, not just the Chinese government, but the Chinese people, perceive,” said David Loevinger, who helped with economic talks between the two nations during the Obama administration, as reported by the Post.
Yellen’s trip was meant to be part of a U.S. diplomatic plan that got underway in November, but the plan was interrupted by the incident earlier in the year involving an alleged Chinese spy balloon floating over the United States, as previously reported by The Dallas Express.
A more recent obstacle appeared when Biden, while commenting on the Chinese spy balloon, called Chinese President Xi Jinping a “dictator.”
Treasury officials said that Xi would not be among the Chinese officials that Yellen planned to meet with, but she is expected to meet with Vice Premier Liu He, according to NPR.
Even with the effort to reduce economic reliance on China, Yellen has emphasized that the two nations still need each other.
“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,” Yellen said back in April, per NPR.
