U.S. Treasury Secretary Janet Yellen called on Friday for market reforms in China and criticized its recent tough actions against U.S. companies and mineral export controls, while China’s premier called on her to “meet China halfway” and put bilateral relations back on track.
Yellen met with Premier Li Qiang on Friday during a visit to Beijing aimed at repairing fractious U.S.-Chinese economic relations, but made clear in her public remarks that Washington and its Western allies will continue to hit back at what she called China’s “unfair economic practices.”
Despite talk of U.S.-China economic decoupling, recent data show that the world’s two largest economies remain deeply linked, with two-way trade hitting a record $690 billion last year.
“We seek healthy economic competition that is not winner-take-all but that, with a fair set of rules, can benefit both countries over time,” Yellen told Chinese Premier Li Qiang in a meeting on Friday that the Treasury said was “candid and constructive.”
China released a statement from Li calling for strengthened communication, consensus on economic issues and “candid in-depth and pragmatic exchanges, so as to inject stability and positive energy into Sino-U.S. economic ties.”
“China hopes the U.S. will uphold a rational and pragmatic attitude, meet China halfway, and push China-U.S. relations back on track soon,” Li’s statement said.
It made no mention of recent semiconductor-related mineral export controls from both countries.
Yellen is due to meet with Chinese Vice Premier He Lifeng — her direct counterpart as China’s top economic official — on Saturday, a U.S. Treasury official said.
Yellen also spoke to the American Chamber of Commerce in China (AmCham) after what a Treasury official called “substantive” talks with former Chinese economy czar Liu He — He Lifeng’s predecessor — who remains a close confidante of President Xi Jinping. Yellen also met with departing top Chinese central banker Yi Gang.
Yellen and other U.S. officials are walking a diplomatic tightrope, trying to repair ties with China after the U.S. military shot down a Chinese government balloon over the United States while continuing to push Beijing to halt practices they view as harmful to U.S. and Western companies.
Yellen said she hoped her visit would spur more regular communication between the two rivals, and said any targeted actions by Washington to protect its national security should not “needlessly” jeopardize the broader relationship.
U.S. officials have downplayed the prospects for any major breakthroughs, while highlighting the importance of more regular communications between the world’s two biggest economies.
China hopes the United States will take “concrete actions” to create a favourable environment for the healthy development of economic and trade ties, its finance ministry said in a statement on Friday.
“No winners emerge from a trade war or from decoupling and ‘breaking chains’,” the statement added.
Li told Yellen a rainbow that appeared as her plane landed from Washington on Thursday offered hope for the future of U.S.-China ties.
“I think there is more to China-U.S. relations than just wind and rain. We will surely see more rainbows,” he said.
U.S. companies in China hope Yellen’s visit will ensure trade and commercial lanes between the two economies remain open, regardless of the temperature of geopolitical tensions.
AmCham President Michael Hart welcomed Yellen’s “extra firepower” in pressing for changes in China’s policies, and said her visit could pave the way for more exchanges at lower levels between the two sides.
“I think if there was another year of no visits by top U.S. government leaders, the market would get colder,” he added.