Yellen sees ‘more work to do’ as China talks end
BEIJING — Four days of top-level economic meetings between the United States and China concluded in Beijing on Monday with no major breakthrough, but the world’s two largest economies agreed to hold more discussions to address rising friction over trade, investment and national security.
The conversation is poised to become even more difficult, however, as hopes of greater economic cooperation collide with a harsh political reality: It is an election year in the United States, and antipathy toward China is running high. At the same time, Chinese officials appeared unmoved by Treasury Secretary Janet Yellen’s urging that China scale back its recent surge of green energy technology exports, which could threaten American jobs.
Despite a warm welcome on her second trip to China as Treasury secretary, which included meetings with the premier and with senior economic and finance officials, it was evident that the level of trust between the two sides does not run deep.
“There is much more work to do,” Ms. Yellen said at a news conference in Beijing on Monday. “And it remains unclear what this relationship will endure in the months and years ahead.”
The Treasury secretary added that she believed that China was engaging in the discussions in good faith and that progress was being made. “I do not want to see the U.S. economic relationship, or the overall relationship with China, deteriorate and fray,” she said.
Her meetings came as the
Tatan Syuflana/Associated Press Treasury Secretary Janet Yellen, right, and U.S. Ambassador
Biden administration announced that it would award up to $6.6 billion in grants to Taiwan Semiconductor Manufacturing Co., the leading maker of the most advanced microchips, in an effort to bring some of the most cutting-edge semiconductor technology to the United States. The administration has been doling out billions of dollars to semiconductor companies as it looks to reduce its reliance on China for critical microchips.
The most pressing matter that is likely to divide the United States and China in the coming months is how the Biden administration plans to address concerns that Chinese exports of electric vehicles, lithium-ion batteries and solar panels pose a threat to the very industries that the United States is spending trillions of dollars to develop domestically.
During her meetings with her Chinese counterparts, Ms. Yellen tried to argue that China should focus more on investing in domestic consumption and warned that flooding markets with exports would disrupt supply chains. Europe, Mexico and Brazil are all pursuing antidumping investigations into China that could lead to new trade restrictions, and Ms. Yellen suggested that the United States was prepared to protect its burgeoning industries.
China has denied illegally subsidizing its new energy exports, and it has raised concerns about what its officials perceive as a wave of unfair protectionism. During a meeting Sunday between Ms. Yellen and Premier Li Qiang in Beijing, Mr. Li pushed back on the question of Chinese exports.
He said the issue should be viewed objectively and from “a market perspective,” pointing to China’s position that the surge in exports is driven by global demand.
“China hopes that the U.S. side will work with the Chinese side to adhere to the basic norms of market economy of fair competition and open cooperation, and refrain from politicizing and national-securitizing economic and trade issues,” Mr. Li was quoted as saying in an official summary of the meeting issued by the Chinese government. (Economists and foreign trade officials, however, argue that China’s industrial policy — including low-interest loans from state banks to factories, and low-cost land transfers — helps the country’s exports.)
In China’s official summary of the talks, the government sought to instill confidence in the country’s economy, saying that it remained an engine of global growth. Beijing emphasized that it continued to push for reform and to open its economy further, which it said would provide more opportunities for companies from all countries, including the United States.
While China made clear that the two sides had not reached much common ground on substantive issues, it also struck a somewhat optimistic tone about the areas where they agree: the importance of strengthening communication and preventing “decoupling.”