Janet Yellen, the Treasury Secretary, is working to mend the shaky but essential relationship between the US and China. Next year, that endeavor will pick up significant speed.
Yellen unveiled her 2024 US-China strategy in a significant address to business leaders on Thursday night. She outlined her goals for strengthening US-China economic ties, which include enhancing communication between the two largest economies in the world, pressuring Beijing to increase transparency, stepping up regulatory cooperation, and tackling difficult problems like fentanyl and terror financing.
Speaking at the 50th anniversary luncheon of the US-China Business Council in Washington, Yellen gave her first explanation of her objectives for the US-China economic partnership in 2024.
We don’t want to settle every argument between us or steer clear of every surprise. This is not practical at all, Yellen declared. However, our goal is to strengthen our communication so that, in the event of disagreement or shock, miscommunication won’t escalate and cause injury.
In 2023, the US-China relationship—possibly the most significant bilateral partnership on Earth—will have significantly improved from its start. When US President Joe Biden ordered the shooting down of a Chinese spy balloon in February, relations reached a low point.
Yellen said that the Trump administration’s “neglecting relationships with our partners and allies” was partly to blame for the deteriorating relationship with China.
She claimed that “it damaged our standing in the world and meant significant missed economic opportunities for American firms and workers.”
Yellen did, however, admit that the US government has “repeatedly” expressed worries about China’s “unfair economic practices,” which have the potential to hurt US workers and businesses.
The easing of tensions in recent months was attributed by Yellen to a change in direction taken by the Biden administration. This move opened the door for high-ranking US officials to visit China, such as Yellen and Secretary of State Antony Blinken, and was marked by a four-hour meeting between Biden and Chinese President Xi Jinping last month.
US officials are currently trying to maintain that momentum.
A person with knowledge of the situation told CNN that Yellen plans to visit China again in the first half of next year, indicating that she is pleased with the recent developments. The insider stated that decisions are still being made about these plans to return to China.
In her statement on Thursday, Yellen stated, “I intend to take my second trip to China as Treasury secretary.”
After meeting with Chinese Vice Premier He Lifeng for two days, Yellen told reporters in November that she was looking forward to visiting China sometime in the upcoming year.
Yellen noted that there are still gaps in the US-China relationship in her statement on Thursday.
“We are aware that difficulties in our relationship will persist. The US and China significantly disagree on a number of issues, according to Yellen. “Shocks that affect both of our countries are also a constant risk.”
For example, Yellen gave a signal that US officials are still committed to placing further restrictions on investments leaving the country and pressing China on issues related to national security.
Yellen stated, “It won’t make news to continue stabilizing our relationship to prevent escalation.” “However, our economies, people, and once more, people and economies worldwide, will be safer and more secure.”
The House Select Committee on the Chinese Communist Party published a report a few days ago, detailing its bipartisan plan to “fundamentally reset” US relations with China. This is when the speaker made their address.
Republican Chairman Mike Gallagher and Democratic Ranking Member Raja Krishnamoorthi said in a statement on Tuesday that “it embraces the clear reality that our current economic relationship with the People’s Republic of China needs to be reset to serve the economic and national security interests of the United States.“
Leaders in business and international investors have been closely observing China’s struggles with a property crisis that is impeding its economic expansion. Given that China is the world’s second-largest economy and a major contributor to global growth, the stakes are high.
Yellen intends to press Beijing for greater information about how its officials will handle these issues, particularly if they get worse.
Yellen stated, “China’s financial shocks and China’s response to them do not occur in isolation.” “For those of us charged with making policy in the United States, it is crucial to understand China’s plans, especially how it intends to respond to challenges with local government debt and the real estate market or how it might react if an unexpected weakness in its economy should arise.”
China and US authorities have recently started cooperating through meetings of working groups with an emphasis on the financial markets and the economy.
Yellen praised the Treasury Department’s initiatives to strengthen cooperation with China on issues related to sovereign debt in developing nations and climate change.
As per Yellen, the United States and China intend to enable financial authorities to exchange information next year. With the United Kingdom and the European Union, US officials already do that.
“It is critical for economic policymakers responding to financial stress to know the counterpart on the other end of the line and be able to make a quick call,” Yellen stated.