Treasury Secretary Janet Yellen on Sunday said she agreed Washington will listen to Chinese complaints about security-related curbs on US technology exports and might “respond to unintended consequences” as she ended a visit to Beijing aimed at reviving strained relations. Yellen defended “targeted measures” on trade that China’s leaders complain are aimed at hurting its fledgling tech industries.
She said the Biden administration wants to “avoid unnecessary repercussions” but gave no indication of possible changes.
Relations between the two biggest economies are at their lowest level in decades due to disputes about technology, security and other irritants. A key Chinese complaint is limits on access to processor chips and other US technology on security grounds that threaten to hamper the ruling Communist Party’s development of smartphones, artificial intelligence and other industries.
Yellen talked with China’s No. 2 leader, Premier Li Qiang, and other officials during 10 hours of meetings. She had a five-hour session Saturday with her Chinese counterpart, Vice Premier He Lifeng. Treasury officials said in advance there were no plans for her to meet Chinese leader Xi Jinping. Yellen received a warm welcome and prominent coverage by the state press, but Chinese officials gave no sign they would change industrial or other policies that Washington and other governments say violate Beijing’s free-trade commitments.
On Saturday, He said Washington should “adopt a rational and pragmatic attitude” to improve relations.
On Sunday, Yellen announced no agreements on major disputes or plans for future activity but said her department and Chinese officials would have “more frequent and regular” communication.
US-Chinese political strains are adding to uncertainty that is dampening the willingness of consumers and businesses to spend and invest. China’s economic growth rebounded to 4.5 per cent in the first quarter of 2023 from last year’s 3 per cent after anti-virus controls on travel and business activity were lifted in December. But factory activity and consumer spending decelerated in the quarter ending in June. Xi accused Washington in March of trying to hold back China’s industrial development. Beijing has been slow to retaliate for US technology restrictions, possibly to avoid disrupting its own industries. But three days before Yellen’s arrival, the government announced unspecified controls on exports of gallium and germanium, metals used in making semiconductors and solar panels. China is the biggest producer of both.
