APRIL 18, 2023
Janet Yellen, US Treasury secretary, speaks at a Multilateral Development Bank roundtable during the spring meetings of the International Monetary Fund (IMF) and World Bank Group in Washington, DC, US, on Wednesday, April 12, 2023. The IMF trimmed its global-growth projections, warning of high uncertainty and risks as financial-sector stress adds to pressures emanating from tighter monetary policy.
Treasury Secretary Janet Yellen this week will give her most extensive speech on the US-China economic relationship since taking office, as she seeks to balance competition and confrontation with engaging Beijing on global issues that require cooperation.
The remarks, ahead of a Yellen trip to Beijing being planned for coming months, are scheduled for Thursday morning at Johns Hopkins University’s School of Advanced International Studies in Washington. US-China relations have sharply deteriorated recently, with each country increasingly viewing the other as its top strategic and economic threat, even as bilateral trade hits fresh highs.
While Presidents Joe Biden and Xi Jinping appeared to smooth the path to better ties in a face-to-face meeting last November, fresh disputes have arisen over Taiwan, spying allegations, technology security and Russia’s invasion of Ukraine. Those frictions may now weigh on the global economic outlook.
“Secretary Yellen will underscore that in its bilateral relationship with China, the United States proceeds with confidence about the enduring fundamental strength of our economy,” the Treasury said Tuesday in a statement previewing the speech.
The Treasury chief will outline the Biden administration’s principal objectives. They include, according to the statement, defending US national security interests and protecting human rights; seeking “healthy, and mutually beneficial, economic competition with a level playing field;” exchanging more information on global macroeconomic conditions; and cooperating with Beijing to address climate change and debt distress.
The Biden administration’s aim to reduce its dependency on China for critical goods and materials, and to push its allies to do the same, has not only angered Beijing but also ruffled friendly nations who suggest Washington is pushing too hard. French President Emmanuel Macron, during a recent trip to the Chinese capital, said he opposed attempts to “decouple” with China.
The International Monetary Fund also warned this month that tensions between the US and China are driving geopolitical fragmentation and risk damaging the global economy, with foreign direct investment and other capital flows increasingly being channeled toward aligned blocs of countries.
US officials have responded by saying they seek neither to decouple with China nor to limit the country’s economic growth. Jay Shambaugh, the Treasury’s undersecretary for international affairs, told Bloomberg Television last week the US also wants to make sure the two sides can work together on key global challenges.
Yet Yellen has had only limited opportunities to do that. She met her then-Chinese counterpart for the first time in Zurich in January, pledging to improve communication as a way to avoid more serious confrontation.
The contact was part of an effort expected to culminate in Yellen’s visit to Beijing as soon as this spring, but that trip that has not yet been scheduled or finalized.
Courtesy/Source: Bloomberg
