Yellen Advocates for Progressive Economic Talks with China

by Wall Street Rebel - Michael London | 04/21/2023 11:18 AM
Yellen Advocates for Progressive Economic Talks with China

The Secretary of the Treasury presented a perspective in which the United States could sustain economic collaboration with China, notwithstanding the perceived severe security risks.


On Thursday, the United States Secretary of the Treasury, Janet L. Yellen, advocated for a "constructive" and "healthy" economic relationship between the United States and China, one in which the two countries could work together to face global issues in spite of the fact that their national security interests are in competition with one another.

Ms. Yellen's remarks, which she gave at the School of Advanced International Studies at Johns Hopkins University, were one of the most extensive articulations yet made by a Biden official of the administration's approach toward China. After many months of heightened tensions between the two countries, especially concerning Chinese espionage and influence activities in the United States, the speech struck a realistic but significantly upbeat tone. This was in response to the situation.

Ms. Yellen emphasized how critical it is to safeguard human rights in addition to preserving the national security objectives of the United States. On the other hand, she maintained that the United States was confident enough in its position as the leader of the world economy to be open to economic rivalry from China, so long as China followed the norms established by the international community.

She made the statement that "China's economic growth does not need to be incompatible with U.S. economic leadership," and she added that "we do not seek to 'decouple' our economy from China's."

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According to her statement, the economic approach of the Biden administration is focused on investment in American infrastructure, clean energy, and technology manufacturing. The objective is not to restrain or subdue any other economy. The speaker implored China to collaborate with the United States in addressing issues such as providing assistance to countries with high levels of debt and reducing the impact of climate change.

According to Scott Kennedy, a senior adviser at the Center for Strategic and International Studies, the speech was incongruous with the prevailing sentiment in both Washington and Beijing that the United States and China are fated to disengage and engage in conflict.

According to Mr. Kennedy, Ms. Yellen presented a favorable justification for establishing a business association with China, which was distinct from the approach taken by the Biden administration in the past. Through this action, the current administration has established a distinct contrast with the previous administration's stance towards China.

The entreaty made by Ms. Yellen for collaboration may have appeared unexceptional ten years ago. However, sentiments in Washington regarding China have notably soured in recent times.

There is a growing sentiment among some that the endeavor to integrate China into the international system governed by established rules has been met with frustration. This is due to the belief that previous attempts to achieve this goal have not yielded sufficient progress in terms of China's conduct. Both the Republican and Democratic parties currently view China as a perilous economic adversary and a potential security hazard.

Officials of the Trump administration have advocated for a policy of "decoupling" the economies of the United States and China, despite having previously signed a trade agreement with the latter. The current administration under President Biden has adopted a more specific strategy aimed at impeding China's access to technologies with military applications and reducing the United States' reliance on China for essential commodities such as car batteries and solar panels.

The diplomatic relations between the United States and China have been strained, especially since February, when a Chinese spy balloon crossed the United States airspace, leading to a significant diplomatic incident. Persistent tensions persist concerning Taiwan, which China asserts as its sovereign territory, and China's intimate alliance with Russia.

Ms. Yellen expressed her intention to engage in a "substantive dialogue on economic issues" during her visit to China at a suitable time. The intended trip to China earlier this year by Secretary of State Antony J. Blinken was ultimately canceled in light of the controversy surrounding the spy balloon. Commerce Secretary Gina Raimondo is exploring the possibility of a visit this year.

According to Jonathan Ward, the author of "The Decisive Decade," which discusses the United States' competition with China, it is imperative to abandon the notion of China being a reliable economic ally for the United States and move beyond optimistic assumptions.

 According to the speaker, economic engagement between the United States and its allies with China is generating significant and systemic hazards for the United States. This engagement is leading to a heightened reliance on China and aiding in the transfer of technology and capital, which in turn is facilitating China's military expansion, the surveillance state, and human rights violations.

Ms. Yellen asserted on Thursday that she and President Biden do not perceive the U.S.-China relationship as a situation in which one party's success necessitates the other's failure.

The speaker expressed the belief that the world has ample space to accommodate both parties.

According to Ms. Yellen, the United States' actions toward China are not intended to harm its economy. Rather, the targeted measures taken by the United States, such as restricting China's access to cutting-edge semiconductors, are solely designed to safeguard U.S. national security.

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The speaker stated that the Biden administration is contemplating additional limitations on China, which may involve a scheme to constrain specific American investments in technologies that have the potential to be utilized for surveillance or warfare purposes. The speaker cautioned China against extending any form of material assistance to Russia in its military conflict with Ukraine, emphasizing that breaching U.S. sanctions on Russia would result in grave repercussions.

The current administration under President Biden has implemented stricter regulations on conducting business with China in relation to specific advanced technologies. This is occurring concurrently with a proactive approach to subsidizing the development of new manufacturing processes for semiconductors, clean cars, and solar panels within the United States. This approach aims to foster alternative industries within the country, thereby reducing reliance on China. The Chinese government has expressed disapproval of the trade limitations imposed by the United States, characterizing them as illegitimate and a clear attempt to undermine the economic strength of China.

Ms. Yellen stated that the national security measures are not intended to secure a competitive economic edge or impede China's economic and technological advancement.

According to Liu Pengyu, a representative of the Chinese Embassy, China endorses a robust and mutually advantageous association with the United States. The speaker stated that China is not hesitant to engage in competition but is against the expansion of national security considerations in trade and any possible risks to worldwide supply chains.

According to Ling Chen, an assistant professor specializing in political economy at the School of Advanced International Studies, a significant obstacle associated with this strategy would be the differentiation of economic growth areas that may potentially jeopardize national security from those that do not. The author observed that China produces a significant quantity of fundamental computer chips that are utilized in a wide range of devices, including automobiles, household appliances, military tanks, and weaponry.

The potential issue at hand pertains to the growing interconnection between security and economic concerns in our contemporary global landscape. Ms. Chen expressed that it is a challenging task to differentiate.


                       Treasury Secretary Yellen delivers remarks on the U.S.-China economic relationship — 4/20/23

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