Janet Yellen to visit China in new US push to ease tensions

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US Treasury secretary Janet Yellen will visit China this week, becoming the second Biden cabinet official to travel to Beijing as the countries boost efforts to stabilise their turbulent relationship.

Yellen will spend four days in Beijing for meetings with top Chinese officials and US business leaders, according to a senior Treasury official, who cautioned that the trip was unlikely to produce “significant breakthroughs”.

The Treasury secretary will arrive in Beijing on Thursday, China’s finance ministry confirmed. She is not expected to meet President Xi Jinping.

Her trip comes just weeks after secretary of state Antony Blinken visited China with the hope of resurrecting efforts to set a “floor” under the relationship, which remains in its worst state since the countries established diplomatic ties in 1979.

The trips by Yellen and Blinken follow an agreement reached between Joe Biden and Xi in Bali in November that was derailed after a suspected Chinese spy balloon flew over the US early this year.

“Through this trip, we seek to deepen and increase the frequency of communication between our countries moving forward and to stabilise the relationship to avoid miscommunication and expand collaboration where we can,” said the Treasury official.

They added that Yellen planned to discuss the three pillars of the US-China economic relationship that she outlined in a speech in April. Yellen said at the time that the US would secure its national security interests, including human rights, but was not using security tools to gain competitive economic advantage.

She added that Washington wanted a healthy economic relationship with China but would respond to its “unfair economic practices”, stressing that the US sought co-operation on global challenges such as debt relief and climate.

Her visit comes as China’s economic recovery from three years of pandemic restrictions is losing momentum, increasing expectations that Beijing will need to implement a stronger stimulus plan.

It also follows China’s announcement over the weekend that Pan Gongsheng, a technocrat who has worked in commercial banking and held research positions at Cambridge and Harvard universities, will take over the top Communist party position at the People’s Bank of China.

Evan Medeiros, a former White House official and a China expert at Georgetown University, said Yellen’s trip was “simply the next step in an uncertain process”.

“It’s good to do but hard to see how it moves the ball in the complex game of great power competition,” said Medeiros. “Given the militarised nature of the competition and the competing world views, it is hard to see how the visit moves the ball forward more than a few metres.”

The US and China remain at odds over issues including Beijing’s military activity around Taiwan and anti-espionage and counter-sanctions laws that complicate American business operations. China meanwhile accuses the US of interfering in Taiwan, over which it claims sovereignty, and imposing sweeping export controls designed to make it harder to secure advanced chips.

The Treasury official said Yellen would raise the anti-espionage law and a foreign relations law passed last week that gives Beijing more power to retaliate against western security-related actions. “We’re concerned about what kind of implications that would have potentially for all foreign firms or . . . US firms in particular,” the official said.

The US official said they would not be surprised if Yellen also discussed Micron, the Idaho-based memory-chip maker that Beijing banned in May from supplying critical Chinese infrastructure operators. US experts viewed the move as retaliation for the export controls Washington has used to target Chinese companies.

In her April speech, Yellen stressed that the US was not pursuing a policy of “decoupling” from China. That message was echoed a week later by national security adviser Jake Sullivan, who said the US was engaging in “de-risking”.

At a World Economic Forum event in Tianjin this week, Chinese premier Li Qiang criticised the rhetoric from the US and its allies about de-risking, saying they were engaging in the “politicisation of economic issues”.

Additional reporting by Joe Leahy in Beijing